# EDGAR Filing Document

**Accession Number:** 0001683471
**File Stem:** 0000894189-26-014063
**Filing Date:** 2026-4
**Character Count:** 1157421
**Document Hash:** 0440ab2e6c9267c2904f52293e7ae6db
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000894189-26-014063.hdr.sgml**: 20260430

**ACCESSION NUMBER**: 0000894189-26-014063

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 39

**FILED AS OF DATE**: 20260430

**DATE AS OF CHANGE**: 20260430

**EFFECTIVENESS DATE**: 20260430

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Listed Funds Trust
- **CENTRAL INDEX KEY:** 0001683471

**ORGANIZATION NAME:**
- **EIN:** 826272597
- **FISCAL YEAR END:** 0831

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-23226
- **FILM NUMBER:** 26924052

**BUSINESS ADDRESS:**
- **STREET 1:** 615 E. MICHIGAN STREET
- **CITY:** MILWAUKEE
- **STATE:** WI
- **ZIP:** 53202
- **BUSINESS PHONE:** 414-765-5144

**MAIL ADDRESS:**
- **STREET 1:** 615 E. MICHIGAN STREET
- **CITY:** MILWAUKEE
- **STATE:** WI
- **ZIP:** 53202

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Active Weighting Funds ETF Trust
- **DATE OF NAME CHANGE:** 20160830
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Listed Funds Trust
- **CENTRAL INDEX KEY:** 0001683471

**ORGANIZATION NAME:**
- **EIN:** 826272597
- **FISCAL YEAR END:** 0831

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-215588
- **FILM NUMBER:** 26924051

**BUSINESS ADDRESS:**
- **STREET 1:** 615 E. MICHIGAN STREET
- **CITY:** MILWAUKEE
- **STATE:** WI
- **ZIP:** 53202
- **BUSINESS PHONE:** 414-765-5144

**MAIL ADDRESS:**
- **STREET 1:** 615 E. MICHIGAN STREET
- **CITY:** MILWAUKEE
- **STATE:** WI
- **ZIP:** 53202

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Active Weighting Funds ETF Trust
- **DATE OF NAME CHANGE:** 20160830

## Series and Classes Contracts Data

### Roundhill Video Games ETF (Series ID: S000065293)

| Class ID   | Class Name                | Ticker Symbol   |
|:---|:---|:---|
| C000211351 | Roundhill Video Games ETF | NERD            |

### Roundhill Sports Betting & iGaming ETF (Series ID: S000068603)

| Class ID   | Class Name                             | Ticker Symbol   |
|:---|:---|:---|
| C000219509 | Roundhill Sports Betting & iGaming ETF | BETZ            |

### Roundhill Ball Metaverse ETF (Series ID: S000072321)

| Class ID   | Class Name                   | Ticker Symbol   |
|:---|:---|:---|
| C000228445 | Roundhill Ball Metaverse ETF | METV            |

### Roundhill Cannabis ETF (Series ID: S000074090)

| Class ID   | Class Name             | Ticker Symbol   |
|:---|:---|:---|
| C000231570 | Roundhill Cannabis ETF | WEED            |

### Roundhill Magnificent Seven ETF (Series ID: S000079576)

| Class ID   | Class Name                      | Ticker Symbol   |
|:---|:---|:---|
| C000240653 | Roundhill Magnificent Seven ETF | MAGS            |

?xml version='1.0' encoding='ASCII'? ck0001683471-20260430

Filed with the U.S. Securities and Exchange Commission on April 30, 2026

Securities Act Registration No. 333-215588

Investment Company Act Reg. No. 811-23226

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM N-1A**

---

| | |
|:---|:---|
| REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | [X] |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-Effective Amendment No.  | [ ] |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Post-Effective Amendment No. <u>529</u> | [X] |
| and |  |
| REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 | [X] |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment No. <u>531</u> | [X] |

---

(Check appropriate box or boxes.)

**<u>LISTED FUNDS TRUST</u>**

**<u>(Exact Name of Registrant as Specified in Charter)</u>**

615 East Michigan Street, Milwaukee, Wisconsin 53202

(Address of Principal Executive Offices)

(Registrant's Telephone Number, including Area Code): (608) 716-8890

---

| | |
|:---|:---|
| Kacie Briody, President | Copy to: |
| Listed Funds Trust | Laura E. Flores |
| c/o U.S. Bancorp Fund Services, LLC | Morgan, Lewis & Bockius LLP |
| 615 East Michigan Street | 1111 Pennsylvania Avenue, NW |
| Milwaukee, Wisconsin 53202 | Washington, DC 20004-2541 |
| (Name and Address of Agent for Service) | |

---

As soon as practical after the effective date of this Registration Statement

(Approximate Date of Proposed Public Offering)

It is proposed that this filing will become effective

[X] immediately upon filing pursuant to paragraph (b)

[ ] on pursuant to paragraph (b)

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

[ ] on pursuant to paragraph (a)(1)

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

[ ] on ______________ pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box

&nbsp;&nbsp;&nbsp;&nbsp;[ ] &nbsp;&nbsp;&nbsp;&nbsp;this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

------

![RH_Wordmark-PrimaryBlue.jpg](ck0001683471-20260430_g1.jpg)

<u>PROSPECTUS</u>

**Roundhill Sports Betting & iGaming ETF (BETZ)**

**Roundhill Ball Metaverse ETF (METV)**

Principal U.S. Listing Exchange: NYSE Arca, Inc.

**Roundhill Video Games ETF (NERD)**

**Roundhill Cannabis ETF (WEED)**

**Roundhill Magnificent Seven ETF (MAGS)**

Principal U.S. Listing Exchange: Cboe BZX Exchange, Inc.

**April 30, 2026**

These securities have not been approved or disapproved by the U.S. Securities and Exchange Commission (the "SEC") or the U.S. Commodity Futures Trading Commission (the "CFTC"), nor have the SEC or CFTC passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

------

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| **[ROUNDHILL VIDEO GAMES ETF -](#id14c414a17ae404298ca0da5d1a82eea_1120)[FUND](#id14c414a17ae404298ca0da5d1a82eea_1120)[SUMMARY](#id14c414a17ae404298ca0da5d1a82eea_1120)** | **[3](#id14c414a17ae404298ca0da5d1a82eea_1120)** |
| **[ROUNDHILL SPORTS BETTING & IGAMING ETF -](#id14c414a17ae404298ca0da5d1a82eea_10)[FUND](#id14c414a17ae404298ca0da5d1a82eea_10)[SUMMARY](#id14c414a17ae404298ca0da5d1a82eea_10)** | **[10](#id14c414a17ae404298ca0da5d1a82eea_10)** |
| **[ROUNDHILL BALL METAVERSE ETF -](#id14c414a17ae404298ca0da5d1a82eea_1239)[FUND](#id14c414a17ae404298ca0da5d1a82eea_1239)[SUMMARY](#id14c414a17ae404298ca0da5d1a82eea_1239)** | **[17](#id14c414a17ae404298ca0da5d1a82eea_1239)** |
| **[ROUNDHILL CANNABIS ETF -](#id14c414a17ae404298ca0da5d1a82eea_1324)[FUND](#id14c414a17ae404298ca0da5d1a82eea_1324)[SUMMARY](#id14c414a17ae404298ca0da5d1a82eea_1324)** | **[28](#id14c414a17ae404298ca0da5d1a82eea_1324)** |
| **[ROUNDHILL MAGNIFICENT SEVEN ETF -](#id14c414a17ae404298ca0da5d1a82eea_1409)[FUND](#id14c414a17ae404298ca0da5d1a82eea_1409)[SUMMARY](#id14c414a17ae404298ca0da5d1a82eea_1409)** | **[37](#id14c414a17ae404298ca0da5d1a82eea_1409)** |
| **[ADDITIONAL INFORMATION ABOUT THE INDEX](#id14c414a17ae404298ca0da5d1a82eea_46)ES** | **[46](#id14c414a17ae404298ca0da5d1a82eea_46)** |
| **[ADDITIONAL INFORMATION ABOUT THE FUND](#id14c414a17ae404298ca0da5d1a82eea_49)S** | **[46](#id14c414a17ae404298ca0da5d1a82eea_49)** |
| &nbsp;&nbsp;&nbsp;&nbsp;[INVESTMENT OBJECTIVE](#id14c414a17ae404298ca0da5d1a82eea_52)S | [46](#id14c414a17ae404298ca0da5d1a82eea_52) |
| &nbsp;&nbsp;&nbsp;&nbsp;[PRINCIPAL INVESTMENT STRATEGIES](#id14c414a17ae404298ca0da5d1a82eea_55) | [46](#id14c414a17ae404298ca0da5d1a82eea_55) |
| &nbsp;&nbsp;&nbsp;&nbsp;[PRINCIPAL INVESTMENT RISKS](#id14c414a17ae404298ca0da5d1a82eea_58) | [47](#id14c414a17ae404298ca0da5d1a82eea_58) |
| **[PORTFOLIO HOLDINGS INFORMATION](#id14c414a17ae404298ca0da5d1a82eea_61)** | **[68](#id14c414a17ae404298ca0da5d1a82eea_61)** |
| **[MANAGEMENT](#id14c414a17ae404298ca0da5d1a82eea_64)** | **[69](#id14c414a17ae404298ca0da5d1a82eea_64)** |
| &nbsp;&nbsp;&nbsp;&nbsp;[INVESTMENT ADVISER](#id14c414a17ae404298ca0da5d1a82eea_67) | [69](#id14c414a17ae404298ca0da5d1a82eea_67) |
| &nbsp;&nbsp;&nbsp;&nbsp;[SUB-ADVISER](#id14c414a17ae404298ca0da5d1a82eea_70) | [69](#id14c414a17ae404298ca0da5d1a82eea_70) |
| &nbsp;&nbsp;&nbsp;&nbsp;[PORTFOLIO MANAGERS](#id14c414a17ae404298ca0da5d1a82eea_73) | [70](#id14c414a17ae404298ca0da5d1a82eea_73) |
| &nbsp;&nbsp;&nbsp;&nbsp;[OTHER SERVICE PROVIDERS](#id14c414a17ae404298ca0da5d1a82eea_76) | [70](#id14c414a17ae404298ca0da5d1a82eea_76) |
| **[HOW TO BUY AND SELL SHARES](#id14c414a17ae404298ca0da5d1a82eea_79)** | **[71](#id14c414a17ae404298ca0da5d1a82eea_79)** |
| &nbsp;&nbsp;&nbsp;&nbsp;[BOOK ENTRY](#id14c414a17ae404298ca0da5d1a82eea_82) | [71](#id14c414a17ae404298ca0da5d1a82eea_82) |
| &nbsp;&nbsp;&nbsp;&nbsp;[FREQUENT PURCHASES AND REDEMPTIONS OF SHARES](#id14c414a17ae404298ca0da5d1a82eea_88) | [71](#id14c414a17ae404298ca0da5d1a82eea_88) |
| &nbsp;&nbsp;&nbsp;&nbsp;[DETERMINATION OF NET ASSET VALUE](#id14c414a17ae404298ca0da5d1a82eea_91) | [71](#id14c414a17ae404298ca0da5d1a82eea_91) |
| &nbsp;&nbsp;&nbsp;&nbsp;[FAIR VALUE PRICING](#id14c414a17ae404298ca0da5d1a82eea_94) | [71](#id14c414a17ae404298ca0da5d1a82eea_94) |
| &nbsp;&nbsp;&nbsp;&nbsp;[INVESTMENTS BY REGISTERED INVESTMENT COMPANIES](#id14c414a17ae404298ca0da5d1a82eea_1565) | [72](#id14c414a17ae404298ca0da5d1a82eea_1565) |
| &nbsp;&nbsp;&nbsp;&nbsp;[DELIVERY OF SHAREHOLDER DOCUMENTS – HOUSEHOLDING](#id14c414a17ae404298ca0da5d1a82eea_1512) | [72](#id14c414a17ae404298ca0da5d1a82eea_1512) |
| **[DIVIDENDS, DISTRIBUTIONS, AND TAXES](#id14c414a17ae404298ca0da5d1a82eea_100)** | **[72](#id14c414a17ae404298ca0da5d1a82eea_100)** |
| &nbsp;&nbsp;&nbsp;&nbsp;[DIVIDENDS AND DISTRIBUTIONS](#id14c414a17ae404298ca0da5d1a82eea_103) | [72](#id14c414a17ae404298ca0da5d1a82eea_103) |
| &nbsp;&nbsp;&nbsp;&nbsp;[TAXES](#id14c414a17ae404298ca0da5d1a82eea_106) | [72](#id14c414a17ae404298ca0da5d1a82eea_106) |
| &nbsp;&nbsp;&nbsp;&nbsp;[TAXES ON DISTRIBUTIONS](#id14c414a17ae404298ca0da5d1a82eea_109) | [72](#id14c414a17ae404298ca0da5d1a82eea_109) |
| &nbsp;&nbsp;&nbsp;&nbsp;[TAXES WHEN SHARES ARE SOLD ON THE EXCHANGE](#id14c414a17ae404298ca0da5d1a82eea_112) | [73](#id14c414a17ae404298ca0da5d1a82eea_112) |
| &nbsp;&nbsp;&nbsp;&nbsp;[TAXES ON PURCHASES AND REDEMPTIONS OF CREATION UNITS](#id14c414a17ae404298ca0da5d1a82eea_115) | [73](#id14c414a17ae404298ca0da5d1a82eea_115) |
| &nbsp;&nbsp;&nbsp;&nbsp;[NET INVESTMENT INCOME TAX](#id14c414a17ae404298ca0da5d1a82eea_1317) | [74](#id14c414a17ae404298ca0da5d1a82eea_1317) |
| &nbsp;&nbsp;&nbsp;&nbsp;[FOREIGN INVESTMENTS BY](#id14c414a17ae404298ca0da5d1a82eea_118)[A](#id14c414a17ae404298ca0da5d1a82eea_118)[FUND](#id14c414a17ae404298ca0da5d1a82eea_118) | [74](#id14c414a17ae404298ca0da5d1a82eea_118) |
| &nbsp;&nbsp;&nbsp;&nbsp;[TAXATION OF REIT INVESTMENTS](#id14c414a17ae404298ca0da5d1a82eea_1402) | [74](#id14c414a17ae404298ca0da5d1a82eea_1402) |
| &nbsp;&nbsp;&nbsp;&nbsp;[TAXATION ON CRYPTOCURRENCY](#id14c414a17ae404298ca0da5d1a82eea_1830) | [74](#id14c414a17ae404298ca0da5d1a82eea_1830) |
| **[DISTRIBUTION PLAN](#id14c414a17ae404298ca0da5d1a82eea_121)** | **[75](#id14c414a17ae404298ca0da5d1a82eea_121)** |
| **[PREMIUM/DISCOUNT INFORMATION](#id14c414a17ae404298ca0da5d1a82eea_124)** | **[75](#id14c414a17ae404298ca0da5d1a82eea_124)** |
| **[ADDITIONAL NOTICES](#id14c414a17ae404298ca0da5d1a82eea_127)** | **[75](#id14c414a17ae404298ca0da5d1a82eea_127)** |
| **[FINANCIAL HIGHLIGHTS](#id14c414a17ae404298ca0da5d1a82eea_54425825577983)** | **[75](#id14c414a17ae404298ca0da5d1a82eea_3115)** |

---

------

**ROUNDHILL VIDEO GAMES ETF - FUND SUMMARY**<br>

**Investment Objective** 

The Roundhill Video Games ETF ("Video Games ETF" or the "Fund") seeks total return.

**Fees and Expenses of the Fund** 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.** 

---

| | |
|:---|:---|
| **Shareholder Fees** *(fees paid directly from your investment)* |  |
| **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* | **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* |
| Management Fee | 0.50% |
| Distribution and/or Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.00% |
| **Total Annual Fund Operating Expenses** | **0.50%** |

---

**Example** 

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **1 Year:** | $51 | **3 Years:** | $160 | **5 Years:** | $280 | **10 Years:** | $628 |

---

**Portfolio Turnover** 

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund's performance. For the fiscal year ended December 31, 2025, the Fund's portfolio turnover rate was 64% of the average value of its portfolio.

**Principal Investment Strategies** 

The Fund is an actively managed exchange-traded fund ("ETF") that seeks to achieve its investment objective by investing in the equity securities of Video Game Companies.

The Fund invests, under normal circumstances, at least 80% of its net assets (plus borrowings for investment purposes) in Video Game Companies. For purposes of the foregoing policy, Video Game Companies are companies that are economically tied to the Video Games industry, and generally include publishers, developers and distributors of interactive gaming software for console, PC, mobile and cloud platforms, as well as providers of related online gaming services and esports. In determining whether a company is economically tied to the Video Games industry, the Fund primarily relies on Bloomberg Industry Classification System ("BICS") classifications, which utilizes a company's primary source of revenue as an input when determining a company's classification. Many Video Game Companies currently are categorized in the Entertainment Industry, a separate industry within the Communication Services Sector. As such, the Fund expects to concentrate in the Entertainment Industry and have significant exposure to the Communication Services Sector, though this exposure may vary over time. Under BICS, the Entertainment Industry includes companies that create, produce or distribute content and/or experiences providing amusement or engagement to consumers designed to elicit an emotional response, and the Communication Services Sector, of which the Entertainment Industry is a segment, more broadly includes technology, telecommunications media and other related companies that facilitate communication, information sharing and the entertainment.

In seeking to achieve the Fund's investment objective, the Fund's adviser, Roundhill Financial, Inc. (the "Adviser"), will construct the portfolio pursuant to its proprietary security selection methodology. Portfolio weights are primarily determined based on each security's market capitalization, with the Adviser employing an actively managed market capitalization adjustment process designed to limit the overweighting of any single security. Generally, companies in the Fund's portfolio have a market capitalization of at least $500 million. From this eligible universe, the Adviser applies a proprietary, rules-based security selection methodology that evaluates companies based on factors such as liquidity, relevance to the video game industry, and overall investability characteristics. The Fund is expected to have approximately 25 to 75 issuers comprise its portfolio.

------

The Adviser generally expects to rebalance the weighting of the companies comprising the Fund's portfolio on at least a quarterly basis. As a result, certain of the companies held by the Fund may have market capitalizations of less than $500 million in between rebalances, but must be at least $250 million at the time of rebalance.

The Fund may invest in non-U.S. securities, including the securities of companies organized in emerging and developing market countries. The Fund generally considers "emerging and developing market" countries to be those countries that have one or more of the following characteristics relative to more developed countries: (i) economies in the process of rapid growth or industrialization, (ii) lower income levels, (iii) underdeveloped but maturing infrastructures, and (iv) functioning but still developing financial systems or markets. Additionally, the Fund may purchase American Depositary Receipts ("ADRs") or Global Depositary Receipts ("GDRs"). As of March 31, 2026, the Fund had significant exposure to companies in Japan, South Korea, Hong Kong, and China.

The Fund is classified as a "non-diversified" investment company under the Investment Company Act of 1940 (the "1940 Act").

**Principal Investment Risks** 

The principal risks of investing in the Fund are summarized below. The principal risks are presented in alphabetical order to facilitate finding particular risks and comparing them with the risks of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears. As with any investment, there is a risk that you could lose all or a portion of your investment in the Fund. Some or all of these risks may adversely affect the Fund's net asset value ("NAV"), trading price, yield, total return and/or ability to meet its investment objective. The following risks could affect the value of your investment in the Fund:

• **Associated Risks of Video Game Companies.** Video game companies face intense competition, both domestically and internationally, may have limited product lines, markets, financial resources, or personnel, may have products that face rapid obsolescence, and are heavily dependent on the protection of patent and intellectual property rights. Such factors may adversely affect the profitability and value of video game companies. These companies also may be subject to increasing regulatory constraints, particularly with respect to cybersecurity and privacy. In addition to the costs of complying with such constraints, the unintended disclosure of confidential information, whether because of an error or a cybersecurity event, could adversely affect the reputation, profitability and value of these companies.

• **Cash Transaction Risk.** The Fund expects to effect certain of its creations and redemptions for cash, rather than in-kind securities. The Fund may be required to sell or unwind portfolio investments to obtain the cash needed to distribute redemption proceeds. This may cause the Fund to recognize a capital gain that it might not have recognized if it had made a redemption in kind. As a result, the Fund may pay out higher annual capital gain distributions than if the in-kind redemption process was used. The use of cash creations and redemptions may also cause the Fund's shares to trade in the market at wider bid-ask spreads or greater premiums or discounts to the Fund's NAV. Further, effecting purchases and redemptions primarily in cash may cause the Fund to incur certain costs, such as portfolio transaction costs. These costs can decrease the Fund's NAV if not offset by an authorized participant transaction fee.

• **Concentration Risk.** The Fund expects to concentrate (i.e., invest more than 25% of its net assets) in the Entertainment Industry. As a result, the Fund is more vulnerable to adverse market, economic, regulatory, political or other developments affecting the industry than a fund that invests its assets in a more diversified manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Entertainment Industry Risk.* The Entertainment Industry is highly competitive and relies on consumer spending and the availability of disposable income for success. The prices of the securities of companies in the Entertainment Industry may fluctuate widely due to competitive pressures, heavy expenses incurred for research and development of products, problems related to bringing products to market, consumer preferences and rapid obsolescence of products. Legislative or regulatory changes and increased government supervision also may affect companies in the Entertainment Industry. The Entertainment Industry is a separate industry within the Communication Services Sector.

• **Currency Exchange Rate Risk.** The Fund may invest in investments denominated in non-U.S. currencies or in securities that provide exposure to such currencies. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the Fund's investment and the value of your Shares. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund may change quickly and without warning and you may lose money.

• **Cybersecurity Risk.** Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets or proprietary information, or cause the Fund, the Adviser (defined below), the Sub-Adviser and/or other service providers (including custodians and financial intermediaries) to suffer data breaches or data corruption. Additionally, cybersecurity failures or breaches of the electronic systems of the Fund, the Adviser, the Sub-Adviser or the Fund's other service providers, market makers, Authorized Participants ("APs"), the Fund's primary listing exchange, or the issuers of securities in which the Fund invests have the ability to disrupt and negatively affect the Fund's business operations, including the ability to purchase and sell Shares, potentially resulting in financial losses to the Fund and its shareholders.

------

• **Depositary Receipt Risk.** Depositary receipts, including ADRs, EDRs and GDRs, involve risks similar to those associated with investments in foreign securities, such as changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. Depositary receipts listed on U.S. exchanges are issued by banks or trust companies, and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares ("Underlying Shares"). GDRs and EDRs are similar to ADRs in that they are certificates evidencing ownership of shares of a foreign issuer; however, GDRs and EDRs may be issued in bearer form and denominated in other currencies and are generally designed for use in specific or multiple securities markets outside the U.S. When the Fund invests in depositary receipts as a substitute for an investment directly in the Underlying Shares, the Fund is exposed to the risk that the depositary receipts may not provide a return that corresponds precisely with that of the Underlying Shares. Because the Underlying Shares trade on foreign exchanges that may be closed when the Fund's primary listing exchange is open, the Fund may experience premiums and discounts greater than those of funds without exposure to such Underlying Shares.

• **Emerging and Developing Markets Risk.** The Fund may invest in companies organized in emerging and developing market nations. Investments in securities and instruments traded in developing or emerging markets, or that provide exposure to such securities or markets, can involve additional risks relating to political, economic, or regulatory conditions not associated with investments in U.S. securities and instruments or investments in more developed international markets. Such conditions may impact the ability of the Fund to buy, sell or otherwise transfer securities, adversely affect the trading market and price for Fund shares and cause the Fund to decline in value.

• **Equity Securities Risk.** The equity securities held in the Fund's portfolio may experience sudden, unpredictable drops in value or long periods of decline in value. This may occur because of factors that affect securities markets generally or factors affecting specific issuers, industries, sectors or companies in which the Fund invests. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change. Preferred stocks are subject to the risk that the dividend on the stock may be changed or omitted by the issuer, and that participation in the growth of an issuer may be limited.

• **ETF Risks.** The Fund is an exchange-traded fund ("ETF") and, as a result of its structure, it is exposed to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk.* The Fund has a limited number of financial institutions that may act as APs. In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. Shares may trade at a material discount to NAV and possibly face delisting if either: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Costs of Buying or Selling Shares Risk.* Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Shares May Trade at Prices Other Than NAV Risk.* As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Fund's NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant. Because securities held by the Fund may trade on foreign exchanges that are closed when the Fund's primary listing exchange is open, the Fund is likely to experience premiums or discounts greater than those of ETFs that invest in and hold only securities and other investments that are listed and trade in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Trading Risk.* Although Shares are listed for trading on the Cboe BZX Exchange, Inc. (the "Exchange") and may be traded on U.S. exchanges other than the Exchange, there can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of the Fund's underlying portfolio holdings, which can be significantly less liquid than the Shares.

• **Foreign Securities Risk.** Investments in non-U.S. securities involve certain risks that may not be present with investments in U.S. securities. These include risks of adverse changes in foreign economic, political, regulatory and other conditions, or changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges). The securities of some foreign companies may be less liquid and, at times, more volatile than securities of comparable U.S. companies. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Non-U.S. issuers may be subject to different accounting, auditing, financial reporting and investor protection standards than U.S. issuers. Investments in non-U.S. securities also may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. With respect to certain countries, there is the possibility of government intervention and expropriation or nationalization of assets. Because legal systems differ, there also is the possibility that it will be difficult to obtain

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or enforce legal judgments in certain countries. Since foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund's portfolio may change on days when shareholders will not be able to purchase or sell the Fund's shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in the Fund more volatile and potentially less liquid than other types of investments.

• **Geographic Investment Risk.** To the extent the Fund invests a significant portion of its assets in the securities of companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Relating to Investing in Asia.* Although many Asian economies have experienced growth and development in recent years, there is no assurance that this growth will continue. Other Asian economies, however, have been and continue to be subject, to some extent, to over-extension of credit, currency devaluations and restrictions, high unemployment, high inflation, decreased exports and economic recessions. Economic events in any one country can have a significant economic effect on the entire Asian region as well as on major trading partners outside Asia. Many Asian countries are subject to political risk, including corruption and conflict with neighboring Asian and non-Asian countries. For instance, the historical tensions between North Korea and South Korea, each of which has substantial military capabilities, present the risk of war and any outbreak of hostility between the two countries could adversely affect Asia as a whole. In addition, in recent years, certain Asian nations have developed strained relations with the United States and, if these relations worsen, they could affect international trade. In addition, many Asian countries are prone to natural disasters such as earthquakes and tsunamis, and the Fund's investments in Asian issuers may be more likely to be affected by such events than its investments in other geographic regions. Any changes or trends in these economic, political and social factors could have a significant impact on Asian economies overall and may negatively affect the Fund's investments. Moreover, the Fund may be more volatile than a geographically diversified equity fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in China*. The Chinese economy is generally considered an emerging market and can be significantly affected by economic and political conditions and policy in China and surrounding Asian countries. A relatively small number of Chinese companies represent a large portion of China's total market and thus may be more sensitive to adverse political or economic circumstances and market movements. The economy of China differs, often unfavorably, from the U.S. economy in such respects as structure, general development, government involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. Under China's political and economic system, the central government has historically exercised substantial control over virtually every sector of the Chinese economy through administrative regulation and/or state ownership. In addition, expropriation, including nationalization, confiscatory taxation, political, economic or social instability or other developments could adversely affect and significantly diminish the values of the Chinese companies in which the Fund invests. Additionally, from time to time, China has experienced outbreaks of infectious illnesses, including the COVID-19 pandemic, and the country may be subject to other public health threats, diseases or similar issues in the future. The Fund may invest in shares of Chinese companies traded on stock markets in Mainland China or Hong Kong. These stock markets have experienced high levels of volatility, which may continue in the future. The Hong Kong stock market may behave differently from the Mainland China stock market and there may be little to no correlation between the performance of the Hong Kong stock market and the Mainland China stock market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in Hong Kong*. Investments in Hong Kong issuers will subject the Fund to legal, regulatory, political, currency, security, and economic risk specific to Hong Kong. China is Hong Kong's largest trading partner, both in terms of exports and imports. Any changes in the Chinese economy, trade regulations or currency exchange rates, or a tightening of China's control over Hong Kong, may have an adverse impact on Hong Kong's economy. Additionally, Hong Kong is a small island state with few raw material resources and limited land area and is reliant on imports for its commodity needs. Any fluctuations or shortages in the commodity markets could have a negative impact on the Hong Kong economy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in Japan*. The Japanese economy may be subject to considerable degrees of economic, political and social instability, which could have a negative impact on Japanese securities. Japan's economic growth rate has remained relatively low for an extended period of time and it may remain low in the future. In addition, Japan is subject to the risk of natural disasters, such as earthquakes, volcanoes, typhoons and tsunamis. Additionally, decreasing U.S. imports, new trade regulations, changes in the U.S. dollar exchange rates, a recession in the United States or continued increases in foreclosure rates may have an adverse impact on the economy of Japan. Japan also has few natural resources, and any fluctuation or shortage in the commodity markets could have a negative impact on Japanese securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks of Investing in South Korea*. Investments in South Korean issuers may subject the Fund to legal, regulatory, political, currency, security, and economic risks that are specific to South Korea. In addition, economic and political developments of South Korea's neighbors may have an adverse effect on the South Korean economy.

• **Illiquidity Risk.** Illiquidity risk exists when particular investments are difficult to purchase or sell, possibly preventing the Fund from selling these illiquid investments at an advantageous price or at the time desired. A lack of liquidity may also cause the value of investments to decline. Illiquid investments may also be difficult to value.

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• **Management Risk.** The Fund is actively managed and may not meet its investment objective based on the Adviser's and Sub-Adviser's success or failure to implement investment strategies for the Fund. The Sub-Adviser's evaluations and assumptions regarding issuers, securities, and other factors may not successfully achieve the Fund's investment objective given actual market conditions.

• **Market Capitalization Risk.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Large-Capitalization Investing Risk.* The securities of large-capitalization companies may be relatively mature compared to smaller companies and, therefore, subject to slower growth during times of economic expansion. Large-capitalization companies also may be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Mid-Capitalization Investing Risk.* The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies. The securities of mid-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large-capitalization stocks or the stock market as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Small-Capitalization Investing Risk.* The securities of small-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large- or mid-capitalization companies. The securities of small-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large- or mid-capitalization stocks or the stock market as a whole. There is typically less publicly available information concerning smaller-capitalization companies than for larger, more established companies.

• **Market Risk.** The trading prices of securities and other instruments fluctuate in response to a variety of factors. These factors include events impacting the entire market or specific market segments, such as political, market and economic developments, as well as events that impact specific issuers. The Fund's NAV and market price, like security and commodity prices generally, may fluctuate significantly in response to these and other factors. As a result, an investor could lose money over short or long periods of time. In addition, government actions or interventions (including, but not limited, to the threat or imposition of tariffs, trade restrictions, currency restrictions or similar actions) as well as developments related to economic, political (including geopolitical), social, public health, market, extreme weather, natural or man-made disasters, or other conditions or events have in the past and may in the future result in volatility in financial markets and reduced liquidity in equity, credit, and/or debt markets, which could adversely impact the Fund and its investments and their value and performance. These developments as well as other events could result in further market volatility and negatively affect financial asset prices, the liquidity of certain securities and the normal operations of securities exchanges and other markets.

• **Non-Diversification Risk.** Because the Fund is "non-diversified," it may invest a greater percentage of its assets in the securities of a single issuer or a lesser number of issuers than if it was a diversified fund. As a result, a decline in the value of an investment in a single issuer or a lesser number of issuers could cause the Fund's overall value to decline to a greater degree than if the Fund held a more diversified portfolio. This may increase the Fund's volatility and have a greater impact on the Fund's performance.

• **Sector Risk.** To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors. The Fund may invest a significant portion of its assets in the following sector and, therefore, the performance of the Fund could be negatively impacted by events affecting this sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**◦** *Communication Services Sector Risk.* The Fund's assets will have significant exposure to the Communication Services Sector, which means the Fund will be more affected by the performance of the Communication Services Sector than a fund that is more diversified. Market or economic factors impacting companies in the Communication Services Sector that rely heavily on technological advances could have a major effect on the value of the Fund's investments. The value of stocks of communication services companies and companies that rely heavily on technology is particularly vulnerable to research and development costs, substantial capital requirements, product and services obsolescence, government regulation, and domestic and international competition, including competition from foreign competitors with lower production costs. Stocks of communication services companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market. Additionally, companies in the Communication Services Sector may face dramatic and often unpredictable changes in growth rates and competition for the services of qualified personnel. While all companies may be susceptible to network security breaches, certain companies in the Communication Services Sector may be particular targets of hacking and potential theft of proprietary or consumer information or disruptions in service, which could have a material adverse effect on their businesses.

• **Securities Lending Risk**. To the extent the Fund engages in securities lending, there are certain risks associated with securities lending, including the risk that the borrower may fail to return the securities on a timely basis or even the loss of rights in the collateral deposited by the borrower, if the borrower should fail financially. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. As a result, the Fund may lose money.

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**Performance** 

The performance information presented below provides some indication of the risks of investing in the Fund by showing the extent to which the Fund's performance can change from year to year and over time. The bar chart below shows the Fund's performance for the most recent calendar years ended December 31. The table illustrates how the Fund's average annual returns for the 1-year, 5-year, and since inception periods compare with those of the Solactive GBS Global Markets All Cap USD Index TR, a broad-based securities market index intended to represent the overall global equity market. The table also shows how the Fund's performance compares to the Roundhill Video Games Blended Index, which represents the underlying indexes tracked by the Fund from inception until September 30, 2025. The Fund's investment objective and principal investment strategies changed on September 30, 2025, when the Fund converted from a passively-managed index fund into an actively managed fund. Prior to that date and beginning September 26, 2022, the Fund sought to track the performance, before fees and expenses, of the Nasdaq CTA Global Video Games Software Index™. Prior to September 26, 2022, the Fund sought to track the total return performance, before fees and expenses, of the Roundhill BITKRAFT Esports Index. Therefore, the performance and average annual total returns shown for periods prior to September 30, 2025 may have differed had the Fund's current investment objective and principal investment strategies been in effect during those periods. The Fund's past performance, before and after taxes, does not necessarily indicate how it will perform in the future. Updated performance information is available on the Fund's website at www.roundhillinvestments.com/etf/NERD.

**Calendar Year Total Returns**

![38482906978843](ck0001683471-20260430_g2.jpg)

The calendar year-to-date total return of the Fund as of March 31, 2026 was -15.05%. During the period of time shown in the bar chart, the highest quarterly return was 48.75% for the quarter ended June 30, 2020, and the lowest quarterly return was -23.79% for the quarter ended June 30, 2022.

**Average Annual Total Returns**

**(for periods ended December 31, 2025)**

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| | | | |
|:---|:---|:---|:---|
| **Roundhill Video Games ETF** | **1 Year** | **5 Years** | **Since Inception**<br>**(6/3/2019)** |
| Return Before Taxes | 22.47% | -3.43% | 8.63% |
| Return After Taxes on Distributions | 22.39% | -3.53% | 8.49% |
| Return After Taxes on Distributions and Sale of Shares | 13.53% | -2.52% | 6.95% |
| **Solactive GBS Global Markets All Cap USD Index TR**<br>(reflects no deduction for fees, expenses, or taxes) | 22.52% | 11.01% | 13.41% |
| **Roundhill Video Games Blended Index\***<br>(reflects no deduction for fees, expenses, or taxes) | 22.37% | -3.01% | 9.24% |

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<sup>\*</sup>The Roundhill Video Games Blended Index represents the linked performance of two different performance benchmarks – for periods prior to September 26, 2022, the Roundhill BITKRAFT Esports Index and for periods thereafter, the Nasdaq CTA Global Video Games Software Index<sup>TM</sup>, the Fund's index until September 30, 2025.

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. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and provides an assumed tax deduction that benefits the investor.

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**Portfolio Management** 

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| | |
|:---|:---|
| **Adviser** | Roundhill Financial Inc. (the "Adviser") |
| **Sub-Adviser** | Exchange Traded Concepts, LLC |
| **Portfolio Managers** | William Hershey, Timothy Maloney and David Mazza, each a portfolio manager for the Adviser, have been portfolio managers of the Fund since March 2025. Andrew Serowik, Todd Alberico, Gabriel Tan, and Brian Cooper are each portfolio managers for the Sub-Adviser. Mr. Serowik has been a portfolio manager of the Fund since its inception in June 2019, Mr. Alberico and Mr. Tan have been portfolio managers of the Fund since July 2021, and Mr. Cooper has been a portfolio manager for the Fund since November 2021. |

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**Purchase and Sale of Shares** 

The Fund issues and redeems Shares at NAV only in large blocks known as "Creation Units," which only APs (typically, broker-dealers) may purchase or redeem. The Fund generally issues and redeems Creation Units in exchange for a portfolio of securities and/or a designated amount of U.S. cash.

Shares are listed on the Exchange, and individual Shares may only be bought and sold in the secondary market through a broker or dealer at market prices, rather than NAV. Because Shares trade at market prices rather than NAV, Shares may trade at a price greater than NAV (premium) or less than NAV (discount).

An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (the "bid" price) and the lowest price a seller is willing to accept for Shares (the "ask" price) when buying or selling Shares in the secondary market. The difference in the bid and ask prices is referred to as the "bid-ask spread."

Recent information regarding the Fund's NAV, market price, how often Shares traded on the Exchange at a premium or discount, and bid-ask spreads can be found on the Fund's website at www.roundhillinvestments.com/etf/NERD.

**Tax Information** 

The Fund's distributions are generally taxable as ordinary income, qualified dividend income, or capital gains (or a combination), unless your investment is held in an IRA or other tax-advantaged account. Distributions on investments made through tax-deferred arrangements may be taxed later upon withdrawal of assets from those accounts.

**Financial Intermediary Compensation** 

If you purchase Shares through a broker-dealer or other financial intermediary (such as a bank) (an "Intermediary"), the Adviser or its affiliates may pay Intermediaries for certain activities related to the Fund, including participation in activities that are designed to make Intermediaries more knowledgeable about exchange-traded products, including the Fund, or for other activities, such as marketing, educational training or other initiatives related to the sale or promotion of Shares. These payments may create a conflict of interest by influencing the Intermediary and your salesperson to recommend the Fund over another investment. Any such arrangements do not result in increased Fund expenses. Ask your salesperson or visit the Intermediary's website for more information.

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**ROUNDHILL SPORTS BETTING & IGAMING ETF – FUND SUMMARY**<br>

**Investment Objective** 

The Roundhill Sports Betting & iGaming ETF ("Sports Betting ETF" or the "Fund") seeks to track the total return performance, before fees and expenses, of the Morningstar<sup>®</sup> Sports Betting & iGaming Select Index (the "Index").

**Fees and Expenses of the Fund** 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.** 

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

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**Example** 

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **1 Year:** | $77 | **3 Years:** | $240 | **5 Years:** | $417 | **10 Years:** | $930 |

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**Portfolio Turnover** 

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund's performance. For the fiscal year ended December 31, 2025, the Fund's portfolio turnover rate was 26% of the average value of its portfolio.

**Principal Investment Strategies** 

The Fund seeks to track the total return performance, before fees and expenses, of the Index.

*Morningstar*<sup>®</sup> *Sports Betting & iGaming Select Index* 

The Index was developed by Morningstar, Inc. (the "Index Provider") and is designed to provide pure exposure to sports and online betting themes. In order to achieve such exposure, the Index is comprised of common stock (or corresponding American Depositary Receipts ("ADRs") or Global Depositary Receipts ("GDRs")) of domestic and foreign sports and online betting (a/k/a iGaming) companies. The Index Provider defines sports betting and iGaming companies as follows (although the definitions may change over time):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Sports Betting Companies** – companies engaged, directly or indirectly, in analyzing sports events and wagering on the outcome, such as online bookmaking.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **iGaming Companies** – companies engaged, directly or indirectly, in betting online in games of chance, such as poker, slots, blackjack, or the lottery.

The composition of the Index is based on the following rules:

Stocks included in the Index must (i) receive a score 1 or higher from the Index Provider on either a Sports Betting or iGaming theme, (ii) have a free-float market capitalization of at least $100 million (USD), and (iii) have a minimum three-month average daily traded value of $250,000 (USD). The Index Provider will assign a score of 1 or higher to a company that the Index Provider has determined (a) is a producer of related goods or services or a supplier of those producers, and (b) is highly likely to enjoy a material net profit increase from its exposure to such Sports Betting or iGaming theme over the next five years. The Index Provider estimates the percent revenue a company will derive from its exposure to each theme at a point in time five years forward, which translates to the following scores: 0 = less than 10% revenue; 1 = 10% - 25% of revenue for a producer or supplier; 2 = 25% - 50% of revenue for a producer or

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supplier; 3 = greater than 50% of revenue for a supplier; 4 = greater than 50% revenue for a producer. Scores are reviewed by the Index Provider's steering committee for quality control and to ensure consistency.

Index components are weighted in proportion to both their combined theme score and their free-float market capitalization, subject to capping constraints. Companies with higher combined theme scores are allocated a greater weight in the Index. Index components are capped to ensure that no Index component has a weight greater than 10% and the sum of components with weights greater than or equal to 5% cannot exceed 40%.

The Index is reconstituted and rebalanced annually on the Monday following the third Friday in December. The number of stocks included in the Index may vary and is subject to the selection and eligibility criteria at the time of reconstitution. As of March 31, 2026, the Index had 28 components.

*The Fund's Investment Strategy* 

The Fund will generally invest all, or substantially all, of its assets in the component securities of the Index, but also may invest in investments that provide comparable exposure, including but not limited to depositary receipts representing Index components and investments in other exchange-traded funds ("ETFs"). Under normal circumstances, at least 80% of the Fund's net assets (plus borrowings for investment purposes) will be invested in securities issued by Sports Betting and iGaming Companies. Sports Betting and iGaming Companies are companies that the Index Provider determines provide exposure to the sports and online betting and iGaming themes and which satisfy the Index Provider's Index security selection criteria, as such criteria may be modified from time to time. Sports Betting Companies generally are engaged, directly or indirectly, in analyzing sports events and wagering on the outcome. Sports Betting Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other Sports Betting Companies; providing marketing solutions and services for other Sports Betting Companies; and investing in Sports Betting Companies, such as owners of investment portfolios comprising companies exposed to sports betting activities or the underlying assets of such companies. Generally, iGaming Companies are engaged, directly or indirectly, in betting online in games of chance, such as poker, slots, blackjack, or the lottery. iGaming Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other iGaming Companies; providing marketing solutions and services for other iGaming Companies; investing in iGaming Companies, such as owners of investment portfolios comprising companies exposed to iGaming activities or the underlying assets of such companies; and developing and/or providing games, such as casino developers and bingo and lottery game developers.

The Fund will generally use a "replication" strategy to achieve its investment objective, meaning the Fund generally will invest in all of the component securities of the Index in approximately the same proportions as in the Index. However, the Fund may use a "representative sampling" strategy, meaning it may invest in a sample of the securities in the Index whose risk, return, and other characteristics closely resemble the risk, return, and other characteristics of the Index as a whole, when Exchange Traded Concepts, LLC (the "Sub-Adviser"), the Fund's sub-adviser, believes it is in the best interests of the Fund (*e.g.*, when replicating the Index involves practical difficulties or substantial costs, an Index component becomes temporarily illiquid, unavailable, or less liquid, or as a result of legal restrictions or limitations that apply to the Fund but not to the Index).

The Fund also may invest in securities or other investments not included in the Index, but which the Sub-Adviser believes will help the Fund track the Index. For example, the Fund may invest in securities that are not components of the Index to reflect various corporate actions and other changes to the Index (such as reconstitutions, additions, and deletions).

To the extent the Index concentrates (*i.e.*, holds more than 25% of its total assets) in the securities of a particular industry or group of related industries, the Fund will concentrate its investments to approximately the same extent as the Index. As of March 31, 2026, the Index was concentrated in the Casinos and Gaming Sub-Industry, a separate industry within the Consumer Discretionary Sector.

The Fund is classified as a "non-diversified" investment company under the Investment Company Act of 1940 (the "1940 Act").

**Principal Investment Risks** 

The principal risks of investing in the Fund are summarized below. The principal risks are presented in alphabetical order to facilitate finding particular risks and comparing them with the risks of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears. As with any investment, there is a risk that you could lose all or a portion of your investment in the Fund. Some or all of these risks may adversely affect the Fund's net asset value ("NAV"), trading price, yield, total return and/or ability to meet its investment objective. The following risks could affect the value of your investment in the Fund:

• **Associated Risks of iGaming and Sports Betting Companies.** The iGaming and sports betting industry is characterized by an increasingly high degree of competition among a large number of participants including from participants performing illegal activities or unregulated companies. Expansion of iGaming and sports betting in other jurisdictions (both regulated and unregulated) could increase competition with traditional betting companies, which could have an adverse impact on their financial

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condition, operations and cash flows. In a broader sense, iGaming and sports betting companies face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts and travel. In addition, established jurisdictions could award additional licenses or permit the expansion or relocation of existing sports betting companies. These companies also may be subject to increasing regulatory constraints, particularly with respect to cybersecurity and privacy. In addition to the costs of complying with such constraints, the unintended disclosure of confidential information, whether because of an error or a cybersecurity event, could adversely affect the reputation, profitability and value of these companies.

• **Concentration Risk.** Because the Fund's assets will be concentrated in an industry or group of industries to the extent the Index concentrates in a particular industry or group of industries, the Fund is subject to loss due to adverse occurrences that may affect that industry or group of industries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Casinos & Gaming Industry.* The Casinos & Gaming Industry includes owners and operators of casinos and gaming facilities, and companies providing lottery and betting services. The Casinos & Gaming Industry is highly competitive and companies operating in the Casinos & Gaming Industry rely heavily on consumer spending and the availability of disposable income for success. In addition, the Casinos & Gaming Industry may be negatively affected by changes in economic conditions, consumer tastes and discretionary income levels, technological developments, limited financial resources, competition from competing entertainment options, and competition for key personnel. Casinos are closely tied to the travel and tourism industry and are particularly sensitive to economic shutdowns and mitigation strategies, such as the COVID-19 pandemic. In addition, Casinos & Gaming Industry companies are highly regulated, and state and federal legislative or regulatory changes and licensing issues (as well as the laws of other countries) can significantly impact their ability to operate in certain jurisdictions. The Casinos & Gaming Industry is a sub-industry of the Hotels, Restaurants & Leisure Industry within the Consumer Discretionary Sector.

• **Currency Exchange Rate Risk.** The Fund may invest in investments denominated in non-U.S. currencies or in securities that provide exposure to such currencies. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the Fund's investment and the value of your Shares. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund may change quickly and without warning and you may lose money.

**• Cybersecurity Risk.** Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets or proprietary information, or cause the Fund, the Adviser (defined below), the Sub-Adviser and/or other service providers (including custodians and financial intermediaries) to suffer data breaches or data corruption. Additionally, cybersecurity failures or breaches of the electronic systems of the Fund, the Adviser, the Sub-Adviser or the Fund's other service providers, market makers, Authorized Participants ("APs"), the Fund's primary listing exchange, or the issuers of securities in which the Fund invests have the ability to disrupt and negatively affect the Fund's business operations, including the ability to purchase and sell Shares, potentially resulting in financial losses to the Fund and its shareholders.

• **Depositary Receipt Risk.** Depositary receipts, including ADRs and GDRs, involve risks similar to those associated with investments in foreign securities, such as changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. Depositary receipts listed on U.S. exchanges are issued by banks or trust companies, and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares ("Underlying Shares"). GDRs are similar to ADRs in that they are certificates evidencing ownership of shares of a foreign issuer; however, GDRs may be issued in bearer form and denominated in other currencies and are generally designed for use in specific or multiple securities markets outside the U.S. When the Fund invests in depositary receipts as a substitute for an investment directly in the Underlying Shares, the Fund is exposed to the risk that the depositary receipts may not provide a return that corresponds precisely with that of the Underlying Shares.

• **Equity Securities Risk.** The equity securities held in the Fund's portfolio may experience sudden, unpredictable drops in value or long periods of decline in value. This may occur because of factors that affect securities markets generally or factors affecting specific issuers, industries, sectors or companies in which the Fund invests. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change. Preferred stocks are subject to the risk that the dividend on the stock may be changed or omitted by the issuer, and that participation in the growth of an issuer may be limited.

• **ETF Risks.** The Fund is an ETF and, as a result of its structure, it is exposed to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk.* The Fund has a limited number of financial institutions that may act as APs. In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. Shares may trade at a material discount to NAV and possibly face delisting if either: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Costs of Buying or Selling Shares Risk.* Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Shares May Trade at Prices Other Than NAV Risk.* As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Fund's NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant. Because securities held by the Fund may trade on foreign exchanges that are closed when the Fund's primary listing exchange is open, the Fund is likely to experience premiums or discounts greater than those of ETFs that invest in and hold only securities and other investments that are listed and trade in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Trading Risk.* Although Shares are listed for trading on the NYSE Arca, Inc. (the "Exchange") and may be traded on U.S. exchanges other than the Exchange, there can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of the Fund's underlying portfolio holdings, which can be significantly less liquid than the Shares.

• **Foreign Securities Risk.** Investments in non-U.S. securities involve certain risks that may not be present with investments in U.S. securities. These include risks of adverse changes in foreign economic, political, regulatory and other conditions, or changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges). The securities of some foreign companies may be less liquid and, at times, more volatile than securities of comparable U.S. companies. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Non-U.S. issuers may be subject to different accounting, auditing, financial reporting and investor protection standards than U.S. issuers. Investments in non-U.S. securities also may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. With respect to certain countries, there is the possibility of government intervention and expropriation or nationalization of assets. Because legal systems differ, there also is the possibility that it will be difficult to obtain or enforce legal judgments in certain countries. Since foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund's portfolio may change on days when shareholders will not be able to purchase or sell the Fund's shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in the Fund more volatile and potentially less liquid than other types of investments.

• **Geographic Investment Risk.** To the extent the Fund invests a significant portion of its assets in the securities of companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region.

• **Illiquidity Risk.** Illiquidity risk exists when particular investments are difficult to purchase or sell, possibly preventing the Fund from selling these illiquid investments at an advantageous price or at the time desired. A lack of liquidity may also cause the value of investments to decline. Illiquid investments may also be difficult to value.

• **Index Provider Risk.** There is no assurance that the Index Provider, or any agents that act on its behalf, will compile the Index accurately, or that the Index will be determined, constructed, reconstituted, rebalanced, composed, calculated or disseminated accurately. The Adviser relies upon the Index Provider and its agents to compile, determine, construct, reconstitute, rebalance, compose, calculate (or arrange for an agent to calculate), and disseminate the Index accurately. Any losses or costs associated with errors made by the Index Provider or its agents generally will be borne by the Fund and its shareholders.

• **Market Capitalization Risk.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Large-Capitalization Investing Risk.* The securities of large-capitalization companies may be relatively mature compared to smaller companies and, therefore, subject to slower growth during times of economic expansion. Large-capitalization companies also may be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Mid-Capitalization Investing Risk.* The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies. The securities of mid-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large-capitalization stocks or the stock market as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Small-Capitalization Investing Risk.* The securities of small-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large- or mid-capitalization companies. The securities of small-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large- or mid-capitalization stocks or the stock market as a whole. There is typically less publicly available information concerning smaller-capitalization companies than for larger, more established companies.

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• **Market Risk.** The trading prices of securities and other instruments fluctuate in response to a variety of factors. These factors include events impacting the entire market or specific market segments, such as political, market and economic developments, as well as events that impact specific issuers. The Fund's NAV and market price, like security and commodity prices generally, may fluctuate significantly in response to these and other factors. As a result, an investor could lose money over short or long periods of time. In addition, government actions or interventions (including, but not limited, to the threat or imposition of tariffs, trade restrictions, currency restrictions or similar actions) as well as developments related to economic, political (including geopolitical), social, public health, market, extreme weather, natural or man-made disasters, or other conditions or events have in the past and may in the future result in volatility in financial markets and reduced liquidity in equity, credit, and/or debt markets, which could adversely impact the Fund and its investments and their value and performance. These developments as well as other events could result in further market volatility and negatively affect financial asset prices, the liquidity of certain securities and the normal operations of securities exchanges and other markets.

• **Non-Diversification Risk.** Because the Fund is "non-diversified," it may invest a greater percentage of its assets in the securities of a single issuer or a lesser number of issuers than if it was a diversified fund. As a result, the Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a lesser number of issuers than a fund that invests more widely. This may increase the Fund's volatility and cause the performance of a relatively small number of issuers to have a greater impact on the Fund's performance.

• **Passive Investment Risk.** The Fund is not actively managed and its Sub-Adviser would not sell an investment designed to provide exposure to the Index or a constituent holding of the Index due to current or projected underperformance of a security industry or sector unless that security is removed from the Index or the selling of shares of that security is otherwise required upon a rebalancing of the Index as addressed in the Index methodology.

• **Sector Risk.** To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors. The Fund may invest a significant portion of its assets in the following sectors and, therefore, the performance of the Fund could be negatively impacted by events affecting each of these sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Consumer Discretionary Sector Risk.* Consumer discretionary companies are companies that provide non-essential goods and services, such as retailers, media companies and consumer services. These companies manufacture products and provide discretionary services directly to the consumer, and the success of these companies tied closely to the performance of the overall domestic and international economy, interest rates, competition and consumer confidence.

• **Securities Lending Risk**. To the extent the Fund engages in securities lending, there are certain risks associated with securities lending, including the risk that the borrower may fail to return the securities on a timely basis or even the loss of rights in the collateral deposited by the borrower, if the borrower should fail financially. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. As a result, the Fund may lose money.

**• Tracking Error Risk.** As with all index funds, the performance of the Fund and its Index may differ from each other for a variety of reasons. For example, the Fund incurs operating expenses and portfolio transaction costs not incurred by the Index. In addition, the Fund may not be fully invested in the securities of the Index at all times or may hold securities not included in the Index.

**Performance**

The performance information presented below provides some indication of the risks of investing in the Fund by showing the extent to which the Fund's performance can change from year to year and over time. The bar chart below shows the Fund's performance for the most recent calendar years ended December 31. The table illustrates how the Fund's average annual returns for the 1-year, 5-year, and since inception periods compare with those of the Index and the Solactive GBS Global Markets All Cap USD Index TR, a broad-based securities market index intended to represent the overall global equity market. The Fund's past performance, before and after taxes, does not necessarily indicate how it will perform in the future. The Fund's investment objective and principal investment strategies changed on October 2, 2023 to track the Index. Prior to October 2, 2023, the Fund sought to track the total return performance, before fees and expenses, of the Roundhill Sports Betting & iGaming Index. Therefore, the performance and average annual total returns shown for periods prior to October 2, 2023 may have differed had the Fund's current investment objective and principal investment strategies been in effect during those periods. Updated performance information is available on the Fund's website at www.roundhillinvestments.com/etf/BETZ.

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**Calendar Year Total Returns**

![38482906977228](ck0001683471-20260430_g3.jpg)

The calendar year-to-date total return of the Fund as of March 31, 2026 was -15.83%. During the period of time shown in the bar chart, the highest quarterly return was 26.03% for the quarter ended June 30, 2025, and the lowest quarterly return was -28.63% for the quarter ended June 30, 2022.

**Average Annual Total Returns**

**(for periods ended December 31, 2025)**

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| | | | |
|:---|:---|:---|:---|
| **Roundhill Sports Betting & iGaming ETF** | **1 Year** | **5 Years** | **Since Inception**<br>**(6/3/2020)** |
| Return Before Taxes | 16.02% | -2.84% | 6.99% |
| Return After Taxes on Distributions | 14.42% | -3.12% | 6.69% |
| Return After Taxes on Distributions and Sale of Shares | 9.93% | -2.17% | 5.47% |
| **Solactive GBS Global Markets All Cap USD Index TR**<br>(reflects no deduction for fees, expenses, or taxes) | 22.52% | 11.01% | 14.22% |
| **Roundhill Sports Betting & iGaming Blended Index\***<br>(reflects no deduction for fees, expenses, or taxes) | 16.90% | -2.33% | 11.74% |

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<sup>\*</sup>The Roundhill Sports Betting & iGaming Blended Index represents the linked performance of two different performance benchmarks – for periods prior to October 2, 2023, the Roundhill Sports Betting & iGaming Index, the Fund's prior index, and for periods thereafter, the Morningstar<sup>®</sup> Sports Betting & iGaming Select Index, the Fund's current 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. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and provides an assumed tax deduction that benefits the investor.

**Portfolio Management** 

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| | |
|:---|:---|
| **Adviser** | Roundhill Financial Inc. (the "Adviser") |
| **Sub-Adviser** | Exchange Traded Concepts, LLC |
| **Portfolio Managers** | William Hershey, Timothy Maloney and David Mazza, each a portfolio manager for the Adviser, have been portfolio managers of the Fund since March 2025. Andrew Serowik, Todd Alberico, Gabriel Tan, and Brian Cooper are each portfolio managers for the Sub-Adviser. Mr. Serowik has been a portfolio manager of the Fund since its inception in June 2020, Mr. Alberico and Mr. Tan have been portfolio managers of the Fund since July 2021, and Mr. Cooper has been a portfolio manager for the Fund since November 2021. |

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**Purchase and Sale of Shares** 

The Fund issues and redeems Shares at NAV only in large blocks known as "Creation Units," which only APs (typically, broker-dealers) may purchase or redeem. The Fund generally issues and redeems Creation Units in exchange for a portfolio of securities and/or a designated amount of U.S. cash.

Shares are listed on the Exchange, and individual Shares may only be bought and sold in the secondary market through a broker or dealer at market prices, rather than NAV. Because Shares trade at market prices rather than NAV, Shares may trade at a price greater than NAV (premium) or less than NAV (discount).

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An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (the "bid" price) and the lowest price a seller is willing to accept for Shares (the "ask" price) when buying or selling Shares in the secondary market. The difference in the bid and ask prices is referred to as the "bid-ask spread."

Recent information regarding the Fund's NAV, market price, how often Shares traded on the Exchange at a premium or discount, and bid-ask spreads can be found on the Fund's website at www.roundhillinvestments.com/etf/BETZ.

**Tax Information** 

The Fund's distributions are generally taxable as ordinary income, qualified dividend income, or capital gains (or a combination), unless your investment is held in an IRA or other tax-advantaged account. Distributions on investments made through tax-deferred arrangements may be taxed later upon withdrawal of assets from those accounts.

**Financial Intermediary Compensation** 

If you purchase Shares through a broker-dealer or other financial intermediary (such as a bank) (an "Intermediary"), the Adviser or its affiliates may pay Intermediaries for certain activities related to the Fund, including participation in activities that are designed to make Intermediaries more knowledgeable about exchange-traded products, including the Fund, or for other activities, such as marketing, educational training or other initiatives related to the sale or promotion of Shares. These payments may create a conflict of interest by influencing the Intermediary and your salesperson to recommend the Fund over another investment. Any such arrangements do not result in increased Fund expenses. Ask your salesperson or visit the Intermediary's website for more information.

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**ROUNDHILL BALL METAVERSE ETF – FUND SUMMARY**<br>

**Investment Objective** 

The Roundhill Ball Metaverse ETF ("Ball Metaverse ETF" or the "Fund") seeks to track the performance, before fees and expenses, of the Ball Metaverse Index (the "Index").

**Fees and Expenses of the Fund** 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.** 

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| | |
|:---|:---|
| **Shareholder Fees** *(fees paid directly from your investment)* |  |
| **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* | **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* |
| Management Fee | 0.59% |
| Distribution and/or Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.00% |
| **Total Annual Fund Operating Expenses**<sup>(1)</sup> | **0.59%** |

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<sup>(1)</sup> The Total Annual Fund Operating Expenses do not correlate to the expense ratio in the Fund's Financial Highlights and financial statements because the Financial Highlights and financial statements reflect the Fund's receipt of a rebate on certain of its investments that had the effect of reducing the Fund's Total Annual Fund Operating Expenses to 0.58%. There is no guarantee that such rebate will be paid to the Fund in the future. The Adviser and the sponsor of certain of the funds in which the Fund invests have established an arrangement whereby the Fund is eligible to receive fee rebates equivalent to a portion of the fees paid on its investments in those funds. In accordance with this arrangement, for the fiscal year ended December 31, 2025, the Fund received a rebate amounting to 0.01% of the Fund's net assets.

**Example** 

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **1 Year:** | $59 | **3 Years:** | $188 | **5 Years:** | $328 | **10 Years:** | $737 |

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**Portfolio Turnover** 

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund's performance. For the fiscal year ended December 31, 2025, the Fund's portfolio turnover rate was 55% of the average value of its portfolio.

**Principal Investment Strategies** 

The Fund seeks to track the performance, before fees and expenses, of the Index. The Index seeks to track the performance of equity securities of foreign and domestic issuers that engage in activities or provide products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues ("Metaverse Companies"). "Metaverse" is a term used to refer to a future iteration of the Internet. Users will primarily engage with the Metaverse through persistent, simultaneous, and shared three-dimensional virtual simulations and spaces. The Metaverse will also connect to physical spaces, two-dimensional Internet experiences (*e.g.,* standard apps, webpages), and finite simulations (*e.g.,* a game). The Metaverse will be supported by a wide range of technologies, tools, and standards that enable high volumes of concurrent users, a rich virtual-only economy of labor, goods, and services, and wide ranging interoperability of data, digital assets, and content. The Index was developed and is owned by Ball Metaverse Research Partners LLC (the "Index Provider").

*Ball Metaverse Index*

To be eligible for inclusion in the Index, issuers generally must have a market capitalization or assets under management ("AUM"), as appropriate, of at least $250 million USD (and thereafter maintain a market capitalization or AUM of $200 million USD) and average daily trading volume ("ADV") of at least $2 million over a trailing 6-month period (or if unavailable, since the issuer's listing date). Such issuers include foreign exchange-traded funds, and, in the future, may include domestic exchange-traded products, that primarily hold cryptocurrencies (each, a "Cryptocurrency ETF") to the extent consistent with U.S. federal securities laws and related guidance

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applicable to the Fund. In addition, Cryptocurrency ETFs may invest in bitcoin, ether, tokens related to the Solana Network ("SOL"), XRP, and any other cryptocurrency eligible to be held by U.S. registered investment companies, and seek to generate income and capital appreciation through staking the underlying cryptocurrency. Cryptocurrency ETFs eligible for inclusion in the Index include both investment companies registered under the Investment Company Act of 1940 ("1940 Act") and exchange-traded products that are not registered under the 1940 Act. Exchange-traded products that are not registered under the 1940 Act do not afford investors, including the Fund, the investor protections available under the 1940 Act. The Index Provider may determine, in its discretion, to retain a Cryptocurrency ETF in the Index should its AUM and/or ADV decline below the referenced thresholds. A committee comprised of representatives from Ball Metaverse Research Partners LLC and external subject matter experts (the "Index Committee") analyzes issuers for their current and future potential to experience profits or earn revenue from their activities or provision of products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues. The Metaverse Companies selected for inclusion in the Index are engaged in activities that fall into one or more of the categories described below. The categories, which may change over time as technology and consumer behavior evolve, are determined by the Index Committee through its analyses of a variety of information, including information derived from corporate announcements and filings, patent filings, third-party industry assessments, third-party usage data and metrics, scientific and technology updates, executive presentations, and consumer interviews. Currently, the seven categories and their descriptions are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Hardware** – The sale and support of physical technologies and devices used to access, interact with or develop the Metaverse. This includes, but is not limited to, consumer-facing hardware, such as virtual reality headsets, mobile phones, and haptic gloves, as well as enterprise hardware such as those used to operate or create virtual or augmented reality-based environments, such as industrial cameras, projection and tracking systems, and scanning sensors. This category does not include compute-specific hardware, such as graphic processing unit chips and servers, or networking-specific hardware, such as fiber optic cabling or wireless chipsets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Compute** – The enablement and supply of computing power to support the Metaverse, supporting such diverse and demanding functions as physics calculation, rendering, data reconciliation and synchronization, artificial intelligence, projection, motion capture and translation. This category may include blockchain-based technologies for the management of marketplaces and networks for decentralized computing capacity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Networking** – The provision of persistent, real-time connections, high bandwidth, and decentralized data transmission by backbone providers (*i.e.*, companies that provide access to high-speed data transmission networks), the networks, exchange centers, and services that route amongst them, as well as those managing "last mile" (*i.e.*, the function of connecting telecommunication services directly to end-users, both businesses and residential customers, usually in a dense area) data to consumers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Virtual Platforms** – The development and operation of immersive digital and often three-dimensional simulations, environments and worlds wherein users and businesses can explore, create, socialize and participate in a wide variety of experiences (*e.g.*, race a car, paint a painting, attend a class, listen to music), and engage in economic activity. These businesses are differentiated from traditional online experiences and multiplayer video games by the existence of a large ecosystem of developers and content creators which generate the majority of content on and/or collect the majority of revenues built on top of the underlying platform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Interchange Standards** – The tools, protocols, formats, services, and engines which serve as actual or de facto standards for interoperability, and enable the creation, operation and ongoing improvements to the Metaverse. These standards support activities such as rendering, physics and artificial intelligence, as well as asset formats and their import/export from experience to experience, forward compatibility management and updating, tooling and authoring activities, and information management.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Payments** – The support of digital payment processes, platforms, and operations, which includes cryptocurrencies, the companies that are fiat on-ramps to those cryptocurrencies, companies that provide or service the infrastructure and technologies to "mint" cryptocurrencies, and companies that provide the financial services necessary to trade and manage cryptocurrencies, as well as issuers of financial products that provide a means of obtaining exposure to cryptocurrencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Content, Assets and Identity Services** – The design/creation, sale, re-sale, storage, secure protection and financial management of digital assets, such as virtual goods, as connected to user data and identity. This contains all business and services "built on top of" and/or which "service" the Metaverse, but which are not vertically integrated into a virtual platform by the platform owner, including content which is built specifically for the Metaverse. This category may include blockchain-based technologies for the decentralized creation and trading of digital assets.

Once identified and allocated to one or more categories, Metaverse Companies are further ranked within the categories as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• "Pure-Play" Companies** – Issuers whose primary business models and/or growth prospects are directly linked to the Metaverse. For these issuers, continued growth in the Metaverse is expected to be critical to their economic success going forward.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• "Core" Companies** – Issuers with substantial operations and/or growth prospects linked to the Metaverse. These issuers have other business units driving their economics, and thus are less affected by the growth of Metaverse than "pure-play" companies. In time, growth in the industry and/or investments in their Metaverse-specific units may lead these issuers to become "pure-play" companies if their Metaverse operations become a primary driver of economic performance. In most cases, the Metaverse-specific offerings of these issuers are core components of the Metaverse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• "Non-Core" Companies** – Issuers with operations and/or growth prospects linked to the Metaverse. These issuers derive the majority of their revenue from business lines not directly related to the Metaverse. In time, growth in the industry and/or investments in their Metaverse-specific units may lead these issuers to become "core" companies if their Metaverse operations become a relevant driver of economic performance. It is unlikely, based on current information, that the Metaverse-specific offerings of "non-core" companies would become the primary driver of such economic performance going forward.

Metaverse Companies are weighted on a tiered basis whereby "pure-play" companies receive two and a half times the initial weighting of "core" companies and five times the initial weighting of "non-core" companies, while "core" companies" receive two times the initial weighting of "non-core" companies. These initial weights are calculated based on the number of issuers in each category in the Index upon rebalancing to ensure the aggregate combined weight of each category equals 100%.

A category may have any number of "pure-play," "core" or "non-core" companies, or none. In the event no issuers are identified for a particular category, the weight for that category will be allocated across the other categories on a pro rata basis. The weight of any category is capped at 25% of the total Index weight upon rebalance.

The weight of any issuer in the Index is capped at 8%. Any issuer weight in excess of 8% will be pro-rated across the remaining Index components, subject to the 25% category cap.

Index component changes resulting from reconstitutions are made after the market close on the third Friday in March, June, September and December and become effective at the market opening on the next trading day. Depending on the number of issuers that qualify as Metaverse Companies, the number of Index components, and therefore the anticipated number of Fund holdings, may range from 25 to 100.

*The Fund's Investment Strategy* 

Under normal circumstances, at least 80% of the Fund's net assets (plus any borrowings for investment purposes) will be invested in Metaverse Companies, which may include investments in American Depository Receipts ("ADRs"). For purposes of this policy, the Fund defines Metaverse Companies as foreign and domestic issuers that engage in activities or provide products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues. Like the Index, the Fund may have indirect exposure to cryptocurrencies, such as bitcoin and ether, through investments in one or more Cryptocurrency ETFs, as well as through publicly traded securities of companies engaged in cryptocurrency-related businesses and activities. The Fund will not invest directly in cryptocurrencies.

The Fund will generally use a "replication" strategy to achieve its investment objective, meaning it generally will invest in all of the component securities of the Index in approximately the same proportions as in the Index. However, the Fund may use a "representative sampling" strategy, meaning it may invest in a sample of the securities in the Index whose risk, return and other characteristics closely resemble the risk, return and other characteristics of the Index as a whole, when Exchange Traded Concepts, LLC (the "Sub-Adviser"), the Fund's sub-adviser, believes it is in the best interests of the Fund (*e.g.*, when replicating the Index involves practical difficulties or substantial costs, an Index constituent becomes temporarily illiquid, unavailable, or less liquid, or as a result of legal restrictions or limitations that apply to the Fund but not to the Index).

The Fund also may invest in securities or other investments not included in the Index, but which the Sub-Adviser believes will help the Fund track the Index. For example, the Fund may invest in securities that are not components of the Index to reflect various corporate actions and other changes to the Index (such as reconstitutions, additions, and deletions).

To the extent the Index concentrates (*i.e.*, holds more than 25% of its total assets) in the securities of a particular industry or group of related industries, the Fund will concentrate its investments to approximately the same extent as the Index. As of March 31, 2026, the Index was concentrated in the Entertainment industry within the Communication Services Sector.

The Fund is classified as a "non-diversified" investment company under the Investment Company Act of 1940 (the "1940 Act").

**Principal Investment Risks** 

The principal risks of investing in the Fund are summarized below. The principal risks are presented in alphabetical order to facilitate finding particular risks and comparing them with the risks of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears. As with any investment, there is a risk that you could lose all or a portion of your investment in the Fund. Some or all of these risks may adversely affect the Fund's net asset value ("NAV"), trading

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price, yield, total return and/or ability to meet its investment objective. The following risks could affect the value of your investment in the Fund:

• **Bitcoin Risk.** Bitcoin is a relatively new innovation and the market for bitcoin is subject to rapid price swings, changes and uncertainty. The value of bitcoin has been and may continue to be substantially dependent on speculation. The further development of the Bitcoin Network and the acceptance and use of bitcoin are subject to a variety of factors that are difficult to evaluate. The slowing, stopping or reversing of the development of the Bitcoin Network or the acceptance of bitcoin may adversely affect the price of bitcoin. Bitcoin is subject to the risk of fraud, theft, manipulation or security failures, operational or other problems that impact bitcoin trading venues. Additionally, if one or a coordinated group of miners were to gain control of 51% of the Bitcoin Network, they would have the ability to manipulate transactions, halt payments and fraudulently obtain bitcoin. A significant portion of bitcoin is held by a small number of holders sometimes referred to as "whales." These holders have the ability to manipulate the price of bitcoin. Unlike the exchanges for more traditional assets, such as equity securities and futures contracts, bitcoin and bitcoin trading venues are largely unregulated. As a result of the lack of regulation, individuals or groups may engage in fraud or market manipulation (including using social media to promote bitcoin in a way that artificially increases the price of bitcoin). Investors may be more exposed to the risk of theft, fraud and market manipulation than when investing in more traditional asset classes. Over the past several years, a number of bitcoin trading venues have been closed due to fraud, failure or security breaches. Investors in bitcoin may have little or no recourse should such theft, fraud or manipulation occur and could suffer significant losses. Legal or regulatory changes may negatively impact the operation of the Bitcoin Network. The realization of any of these risks could result in a decline in the acceptance of bitcoin and consequently a reduction in the value of bitcoin, bitcoin futures, and the Fund. In addition, bitcoin is a bearer asset that can be irrevocably lost or stolen to the extent that private keys are lost or stolen.

The slowness of transaction processing and finality, the variability of transaction fees, and volatility of bitcoin's price could disadvantage or impede the adoption of the Bitcoin Blockchain as a payment network. The further development and use of the Bitcoin Blockchain for its intended purpose and other allowable applications are, and may continue to be, substantially dependent upon "Layer-2" solutions operating on top of the Bitcoin Blockchain, such as the Lightning Network, which is intended to expand the scale and speed of payments across the underlying Bitcoin Blockchain through the use of channels and payment networks outside of the Bitcoin Blockchain. To the extent these Layer-2 solutions have not been developed or have not been fully developed in a way that is adequate to improve scalability, transactions speed or efficiency, the use and/or value of the Bitcoin Blockchain may be limited, which could adversely affect the Fund. Further, the industry is actively researching, investing in and in some cases creating alternative blockchains that are able to support more advanced applications, such as the Ethereum Blockchain. The emergence of other public blockchains and related technologies may compete with bitcoin and result in a reduction in the use of bitcoin, which could reduce its value or increase the volatility of the price of bitcoin due to changes in the supply and demand of bitcoin relative to alternatives, thus negatively impacting investment in the Fund. The Bitcoin Blockchain may also be vulnerable to attacks to the extent a miner or group of miners possess more than 50% of its hashing power and the Bitcoin Blockchain's protocol may contain flaws that can be exploited by attackers.

The Bitcoin Network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and validators adopt the modification. When a modification is introduced and a substantial majority of users and validators consent to the modification, the change is implemented and the network remains uninterrupted. However, if less than a substantial majority of users and validators consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a "fork," with one group running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two, non-interchangeable versions of the Bitcoin Network running in parallel with different native crypto assets and sets of participants. For example, in August 2017, bitcoin "forked" into Bitcoin and a new digital asset, Bitcoin Cash, as a result of a several-year dispute over how to increase the rate of transactions that the Bitcoin Network can process. The creation of a fork or a substantial giveaway of bitcoin (sometimes referred to as an "air drop") may result in significant and unexpected declines in the value of bitcoin, bitcoin futures, and the Fund.

• **Concentration Risk.** Because the Fund's assets will be concentrated in an industry or group of industries to the extent the Index concentrates in a particular industry or group of industries, the Fund is subject to loss due to adverse occurrences that may affect that industry or group of industries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Entertainment Industry Risk*. The Entertainment Industry is highly competitive and relies on consumer spending and the availability of disposable income for success. The prices of the securities of companies in the Entertainment Industry may fluctuate widely due to competitive pressures, heavy expenses incurred for research and development of products, problems related to bringing products to market, consumer preferences and rapid obsolescence of products. Legislative or regulatory changes and increased government supervision also may affect companies in the Entertainment Industry. The Entertainment Industry is a separate industry within the Communication Services Sector.

• **Cryptocurrency Risk.** While the Fund will not invest directly in cryptocurrencies, certain of the Fund's investments in Cryptocurrency ETFs and in publicly traded securities of companies engaged in cryptocurrency-related businesses and activities

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are subject to fluctuations in the value of the cryptocurrencies in which they invest or to which they have exposure, and the value of such cryptocurrencies may be highly volatile. Cryptocurrencies (also referred to as "virtual currencies" and "digital currencies") are digital assets designed to act as a medium of exchange. The value of cryptocurrencies is determined by supply and demand in the global cryptocurrency markets, which consist primarily of transactions of the respective cryptocurrencies on electronic exchanges or trading venues. Cryptocurrencies are relatively new, and their value is influenced by a wide variety of factors that are uncertain and difficult to evaluate, such as the infancy of their development, regulatory changes, a crisis of confidence, their dependence on technologies such as cryptographic protocols, their dependence on the role played by miners and developers and the potential for malicious activity (*e.g.*, theft). Cryptocurrency generally operates without central authority (such as a bank) and is not backed by any government. Cryptocurrency is not legal tender. Currently, there is relatively limited use of cryptocurrency in the retail and commercial marketplaces, which contributes to price volatility. Federal, state and/or foreign governments may restrict the use and exchange of cryptocurrency, and regulation in the U.S. is still developing. The market price of cryptocurrencies has been subject to extreme fluctuations. If cryptocurrency markets continue to be subject to sharp fluctuations, investors may experience losses. Similar to fiat currencies (*i.e.*, a currency that is backed by a central bank or a national, supranational or quasi-national organization), cryptocurrencies are susceptible to theft, loss, and destruction. Cryptocurrency exchanges and other trading venues on which cryptocurrencies trade are relatively new and, in most cases, largely unregulated and may therefore be more exposed to market manipulation, fraud and failure than established, regulated exchanges for securities, derivatives and other currencies. Investors in cryptocurrency may have little or no recourse should such theft, fraud or manipulation occur and could suffer significant losses. Additionally, holders of cryptocurrency may not be able to access their wallets due to the loss, theft, compromise or destruction of the private keys associated with the public addresses that hold the cryptocurrency. The Fund's indirect investment in cryptocurrency subjects it to volatility experienced by the cryptocurrency exchanges and other cryptocurrency trading venues, which may adversely affect the value of the Fund. Cryptocurrency exchanges may stop operating or permanently shut down due to fraud, technical glitches, hackers or malware, which may also affect the price of cryptocurrencies and thus the Fund's investments in cryptocurrency-related instruments or in publicly traded securities of companies engaged in cryptocurrency-related businesses and activities.

The value of one or more cryptocurrencies may be adversely impacted if their respective networks do not develop at the pace of demand; if network participants acquire a significant share that would allow them to have unintended capabilities; and if "forks," as discussed later in this prospectus, or similar events occur.

• **Cryptocurrency ETF Risk.** The Fund may invest in or have exposure to one or more Cryptocurrency ETFs to the extent consistent with U.S. federal securities laws and related guidance applicable to the Fund. Cryptocurrency ETFs are relatively new investment products, with the first domestic cryptocurrency ETFs having commenced trading in January 2024. As a result, the Cryptocurrency ETFs in which the Fund may invest may have limited financial and operating histories. To the extent the Fund invests directly in shares of a Cryptocurrency ETF, the Fund will hold shares representing a fractional undivided beneficial interest in the net assets of the Cryptocurrency ETF and bear its ratable share of the Cryptocurrency ETF's expenses. As a result, Fund shareholders will indirectly pay the fees of any Cryptocurrency ETF to which the Fund has investment exposure in addition to the Fund's total annual fund operating expenses. The Fund's investment exposure to Cryptocurrency ETFs subjects the Fund to many of the same risks as an investment in the reference cryptocurrency itself, including those described elsewhere in this Prospectus. The value of interests in Cryptocurrency ETFs and their reference cryptocurrency is subject to a number of factors, including the capabilities and development of blockchain technologies, cryptocurrencies' dependence on the internet, other technologies, and the role played by key service providers, users, developers and other facilitators (*e.g.*, miners) and the potential for malicious activity at various stages in the cryptocurrency investment cycle. The Fund expects to purchase shares of any Cryptocurrency ETF in the secondary market at its market price, which may be highly volatile and may not closely correspond to either the NAV per share of the Cryptocurrency ETF or the price of the reference cryptocurrency. Shares of Cryptocurrency ETFs may trade at premiums (*i.e.*, the market price of the shares is more than the NAV) or discounts (*i.e.*, the market price of the shares is less than the NAV), which may be significant. The risk that share prices differ from a Cryptocurrency ETF's NAV and/or the price of the Cryptocurrency ETF's reference cryptocurrency is likely to increase during times of market volatility or stressed market conditions. Under such conditions, the market for shares of Cryptocurrency ETFs may become less liquid making it difficult for the Fund to either increase or decrease its investment exposure to Cryptocurrency ETFs. Extreme volatility affecting cryptocurrencies may persist for extended periods and the value of the Fund's investment in a Cryptocurrency ETF may decline significantly without recovery. The shares of certain Cryptocurrency ETFs in which the Fund may invest or to which the Fund may have investment exposure are not registered under the 1940 Act, and therefore, do not afford the Fund the investor protections provided by the 1940 Act.

In addition, Cryptocurrency ETFs may have a limited number of financial institutions that may act as authorized participants ("APs") and which serve as market makers and/or liquidity providers in the marketplace. To the extent that (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform such functions, shares may trade at a material discount to net asset value and could face trading halts and/or delisting.

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Certain of the Cryptocurrency ETFs in which the Fund invests may engage in staking. Staking refers to the process where the holder of a particular cryptocurrency will agree to lock up the cryptocurrency for it to be used in the relevant network's proof-of-stake validation process. In return, the holder will receive staking rewards in the form of the cryptocurrency, which represent portions of the cryptocurrency network's transaction fees. Staking is only available to cryptocurrencies that utilize the proof-of-stake validation process.

When a Cryptocurrency ETF stakes its underlying cryptocurrency, the cryptocurrency is subject to the risks attendant to staking generally, such as illiquidity, reliance on third-party service providers, slashing, missed rewards, and validator problems and errors. Staking requires that the Cryptocurrency ETF lock up the staked cryptocurrency and become subject to an unbonding period to unstake the cryptocurrency, meaning that the Cryptocurrency ETF cannot sell or transfer the staked cryptocurrency during the time that it is staked and during which it is being unbonded. The unbonding period may be longer than anticipated based on network activity. In addition, during the unbonding period, the Cryptocurrency ETF is subject to the market price volatility of the cryptocurrency, and it may miss opportunities to sell the staked cryptocurrency during opportune times. Staking a cryptocurrency may involve the risk of slashing and concentration risk. Slashing is a penalty imposed on network validators for actions that threaten the blockchain's integrity. Slashing serves as an enforcement mechanism to ensure network resilience, but correlated slashing events can be catastrophic. Concentration risks associated with staking include staking activities occurring through a concentrated group of software providers and cloud infrastructure providers. There are a limited number of staking software providers, and over-allocating to validators using the same software increases the risk of a single issue impacting a large amount of staked assets.

• **Currency Exchange Rate Risk.** The Fund may invest in investments denominated in non-U.S. currencies or in securities that provide exposure to such currencies. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the Fund's investment and the value of your Shares. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund may change quickly and without warning and you may lose money.

• **Cybersecurity Risk.** Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets or proprietary information, or cause the Fund, the Adviser (defined below), the Sub-Adviser and/or other service providers (including custodians and financial intermediaries) to suffer data breaches or data corruption. Additionally, cybersecurity failures or breaches of the electronic systems of the Fund, the Adviser, the Sub-Adviser or the Fund's other service providers, market makers, APs, the Fund's primary listing exchange, or the issuers of securities in which the Fund invests have the ability to disrupt and negatively affect the Fund's business operations, including the ability to purchase and sell Shares, potentially resulting in financial losses to the Fund and its shareholders.

**• Depositary Receipt Risk.** Depositary receipts, including ADRs, involve risks similar to those associated with investments in foreign securities, such as changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. Depositary receipts listed on U.S. exchanges are issued by banks or trust companies, and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares ("Underlying Shares"). When the Fund invests in depositary receipts as a substitute for an investment directly in the Underlying Shares, the Fund is exposed to the risk that the depositary receipts may not provide a return that corresponds precisely with that of the Underlying Shares. Because the Underlying Shares trade on foreign exchanges that may be closed when the Fund's primary listing exchange is open, the Fund may experience premiums and discounts greater than those of funds without exposure to such Underlying Shares.

• **Equity Securities Risk.** The equity securities held in the Fund's portfolio may experience sudden, unpredictable drops in value or long periods of decline in value. This may occur because of factors that affect securities markets generally or factors affecting specific issuers, industries, sectors or companies in which the Fund invests. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change. Preferred stocks are subject to the risk that the dividend on the stock may be changed or omitted by the issuer, and that participation in the growth of an issuer may be limited.

**• ETF Risks.** The Fund is an exchange-traded fund ("ETF") and, as a result of its structure, it is exposed to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk.* The Fund has a limited number of financial institutions that may act as APs. In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. Shares may trade at a material discount to NAV and possibly face delisting if either: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Costs of Buying or Selling Shares Risk.* Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Shares May Trade at Prices Other Than NAV Risk.* As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Fund's NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant. Because securities held by the Fund may trade on foreign exchanges that are closed when the Fund's primary listing exchange is open, the Fund is likely to experience premiums or discounts greater than those of ETFs that invest in and hold only securities and other investments that are listed and trade in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Trading Risk.* Although Shares are listed for trading on the NYSE Arca, Inc. (the "Exchange") and may be traded on U.S. exchanges other than the Exchange, there can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of the Fund's underlying portfolio holdings, which can be significantly less liquid than the Shares.

• **Ether Risk.** Ether is a relatively new innovation, and the ether market is subject to rapid price swings, changes and uncertainty and is a largely unregulated marketplace, which may be attributable to a possible lack of regulatory compliance. The value of ether has been and may continue to be, substantially dependent on speculation, such that trading and investing ether generally may not be based on fundamental analysis. The further development of the Ethereum Network and the acceptance and use of ether are subject to various factors that are difficult to evaluate. The slowing, stopping, or reversing of the development of the Ethereum Network or the acceptance of ether may adversely affect the price of ether. Ether is subject to the risk of fraud, theft, manipulation or security failures, operational, or other problems that impact ether trading venues. Unlike the exchanges for more traditional assets, such as equity securities and futures contracts, ether and ether trading platforms are largely unregulated. As a result of the lack of regulation, individuals or groups may engage in fraud or market manipulation, and investors may be more exposed to the risk of theft, fraud, and market manipulation than when investing in more traditional asset classes. Legal or regulatory changes may negatively impact the operation of the Ethereum Network or restrict the use of ether. Realizing any of these risks could result in a decline in the acceptance of ether and, consequently, a reduction in the value of ether, ether futures, and the Fund.

Investors should also know that the Ethereum blockchain faces increased vulnerability to attacks if ownership or staking of ether becomes concentrated in one participant. Like the Bitcoin blockchain, the Ethereum blockchain may be at risk of attacks if there is a high concentration of ether ownership or staking. If an entity controls 33% or more of staked ether, it could execute attacks, with greater risks, including transaction censorship and block reordering, occurring if more than 50% is controlled. Such attacks could negatively impact ether futures and, in turn, the value of the Fund's investments. The risk of such attacks increases as the concentration of staked ether grows. Whales could manipulate transactions, halt payments and fraudulently obtain ether.

Although the price movements of ether and bitcoin have generally been correlated, with both assets experiencing similar trends, ether has historically been more volatile. This means that it tends to rise more than bitcoin during market upswings and fall more sharply during downturns. The differences in the design and use cases of the bitcoin and Ethereum blockchains contribute to these distinct risk profiles. Bitcoin is more established as a store of value and crypto assets, while ether's value is closely tied to its broader use in powering decentralized applications and smart contracts.

• **Foreign Securities Risk.** Investments in non-U.S. securities involve certain risks that may not be present with investments in U.S. securities. These include risks of adverse changes in foreign economic, political, regulatory and other conditions, or changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges). The securities of some foreign companies may be less liquid and, at times, more volatile than securities of comparable U.S. companies. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Non-U.S. issuers may be subject to different accounting, auditing, financial reporting and investor protection standards than U.S. issuers. Investments in non-U.S. securities also may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. With respect to certain countries, there is the possibility of government intervention and expropriation or nationalization of assets. Because legal systems differ, there also is the possibility that it will be difficult to obtain or enforce legal judgments in certain countries. Since foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund's portfolio may change on days when shareholders will not be able to purchase or sell the Fund's shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in the Fund more volatile and potentially less liquid than other types of investments.

• **Index Provider Risk.** There is no assurance that the Index Provider, or any agents that act on its behalf, will compile the Index accurately, or that the Index will be determined, constructed, reconstituted, rebalanced, composed, calculated or disseminated accurately. The Adviser relies upon the Index Provider and its agents to compile, determine, construct, reconstitute, rebalance, compose, calculate, and disseminate the Index accurately. Any losses or costs associated with errors made by the Index Provider or its agents generally will be borne by the Fund and its shareholders.

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• **Market Capitalization Risk.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Large-Capitalization Investing Risk.* The securities of large-capitalization companies may be relatively mature compared to smaller companies and, therefore, subject to slower growth during times of economic expansion. Large-capitalization companies also may be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Mid-Capitalization Investing Risk.* The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies. The securities of mid-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large-capitalization stocks or the stock market as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Small-Capitalization Investing Risk.* The securities of small-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large- or mid-capitalization companies. The securities of small-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large- or mid-capitalization stocks or the stock market as a whole. There is typically less publicly available information concerning smaller-capitalization companies than for larger, more established companies.

• **Market Risk.** The trading prices of securities and other instruments fluctuate in response to a variety of factors. These factors include events impacting the entire market or specific market segments, such as political, market and economic developments, as well as events that impact specific issuers. The Fund's NAV and market price, like security and commodity prices generally, may fluctuate significantly in response to these and other factors. As a result, an investor could lose money over short or long periods of time. In addition, government actions or interventions (including, but not limited, to the threat or imposition of tariffs, trade restrictions, currency restrictions or similar actions) as well as developments related to economic, political (including geopolitical), social, public health, market, extreme weather, natural or man-made disasters, or other conditions or events have in the past and may in the future result in volatility in financial markets and reduced liquidity in equity, credit, and/or debt markets, which could adversely impact the Fund and its investments and their value and performance. These developments as well as other events could result in further market volatility and negatively affect financial asset prices, the liquidity of certain securities and the normal operations of securities exchanges and other markets.

• **Models and Data Risk.** The composition of the Index is heavily dependent on the use of proprietary quantitative models as well as information and data supplied by third parties ("Models and Data"). When Models and Data prove to be incorrect or incomplete, any decisions made in reliance thereon may lead to the inclusion or exclusion of securities from the Index universe that would have been excluded or included had the Models and Data been correct and complete. If the composition of the Index reflects such errors, the Fund's portfolio can be expected to also reflect the errors.

• **Non-Diversification Risk.** Because the Fund is "non-diversified," it may invest a greater percentage of its assets in the securities of a single issuer or a lesser number of issuers than if it was a diversified fund. As a result, the Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a lesser number of issuers than a fund that invests more widely. This may increase the Fund's volatility and cause the performance of a relatively small number of issuers to have a greater impact on the Fund's performance.

• **Passive Investment Risk.** The Fund is not actively managed and its Sub-Adviser would not sell an investment designed to provide exposure to the Index or a constituent holding of the Index due to current or projected underperformance of a security industry or sector unless that security is removed from the Index or the selling of shares of that security is otherwise required upon a rebalancing of the Index as addressed in the Index methodology.

**• Risks Related to Investing in Canada.** The Canadian and U.S. economies are closely integrated. The United States is Canada's largest trading partner and foreign investor and the Canadian economy is significantly affected by developments in the U.S. economy. Canada is a major producer of forest products, metals, agricultural products, and energy-related products, such as oil, gas, and hydroelectricity. As a result, the Canadian economy is very dependent on the demand for, and supply and price of, natural resources, and the Canadian market is relatively concentrated in issuers involved in the production and distribution of natural resources. Canada's economic growth may be significantly affected by disruptions in its relationship with major trading partners, fluctuations in currency, and global demand for commodities.

**• Sector Risk.** To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors. The Fund may invest a significant portion of its assets in the following sector and, therefore, the performance of the Fund could be negatively impacted by events affecting this sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**◦** *Communication Services Sector Risk*. The Fund's assets will have significant exposure to the Communication Services Sector, which means the Fund will be more affected by the performance of the Communication Services Sector than a fund that is more diversified. Market or economic factors impacting companies in the Communication Services Sector that rely heavily on technological advances could have a major effect on the value of the Fund's investments. The value of stocks of communication services companies and companies that rely heavily on technology is particularly vulnerable to research and

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development costs, substantial capital requirements, product and services obsolescence, government regulation, and domestic and international competition, including competition from foreign competitors with lower production costs. Stocks of communication services companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market. Additionally, companies in the Communication Services Sector may face dramatic and often unpredictable changes in growth rates and competition for the services of qualified personnel. While all companies may be susceptible to network security breaches, certain companies in the Communication Services Sector may be particular targets of hacking and potential theft of proprietary or consumer information or disruptions in service, which could have a material adverse effect on their businesses.

• **Securities Lending Risk**. To the extent the Fund engages in securities lending, there are certain risks associated with securities lending, including the risk that the borrower may fail to return the securities on a timely basis or even the loss of rights in the collateral deposited by the borrower, if the borrower should fail financially. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. As a result, the Fund may lose money.

• **Solana Risk.** Similar to bitcoin and ether, SOL and its supporting Solana Network are relatively new innovations. The Solana Network and SOL publicly launched in 2020. SOL has increased in popularity and market value since its inception, however it is not as established or widely accepted as bitcoin or ether. Like other cryptocurrencies, SOL is subject to rapid price swings, uncertainty related to demand, and a largely unregulated but rapidly evolving ecosystem. SOL is also subject to the risks of access loss as it is dependent on the use of private keys and theft. While the Fund will seek to invest in Cryptocurrency ETFs that have adopted security procedures intended to protect its assets, there can be no assurance that those procedures will be successful in preventing such loss, theft or restriction on access. Security breaches, cyber-attacks, computer malware and computer hacking attacks have also been a prevalent concern for digital asset trading platforms on which SOL trades. The further development and acceptance of Solana is subject to a variety of factors that are difficult to evaluate, and the delayed development or a cessation of the development of the Solana Network and SOL may adversely affect the value of the Fund's investments and its performance. A contraction in the use of SOL or its blockchain may result in increased volatility or a reduction in the price of SOL which could have a material adverse effect on the value of a Cryptocurrency ETF held by the Fund.

In addition to utilizing the proof-of-stake mechanism, the Solana Network is unique in that it also uses proof-of-history ("PoH"), which is a new timekeeping blockchain technology created to address scalability limitations associated with certain other cryptocurrency networks. PoH is not widely used, and as such may be more susceptible to undiscovered flaws than more broadly adopted technologies. In the future, there may be network-scale attacks against the Solana Network protocol, which could result in a loss of some or all of the SOL held by a Cryptocurrency ETF in which the Fund may invest.

As a result of the lack of regulation, individuals or groups may engage in fraud or market manipulation, and investors, including the Fund, may be more exposed to the risk of theft, fraud, and market manipulation than when investing in more traditional asset classes. Legal or regulatory changes also may negatively affect the operation of the Solana Network and/or restrict the use and trading of SOL. The realization of any of these risks could result in a decline in the acceptance of SOL and, consequently, a reduction in the value of the Fund's indirect investments in SOL and the value of the Fund.

**• Tax Risk.** The Fund may invest in certain non-U.S. entities that own cryptocurrency. Direct and indirect Investments in cryptocurrencies introduce complexities beyond typical equity investments and may subject the Fund to certain tax risks. In particular, the Fund's exposure to cryptocurrencies is expected to be obtained primarily through its investment in non-U.S. ETFs treated as "passive foreign investment companies" ("PFICs") under the Internal Revenue Code of 1986, as amended (the "Code"), thereby subjecting the Fund to special tax rules applicable to PFIC holdings. If the Fund holds an equity investment in an entity treated as a PFIC, such as investments in certain non-U.S. ETFs that own cryptocurrency, the Fund may be subject to U.S. federal income tax on a portion of any "excess distribution" or gain from the disposition of shares in the PFIC even if such income is distributed as a taxable dividend by the Fund to its shareholders. Additional charges in the nature of interest may be imposed on the Fund in respect of deferred taxes arising from such distributions or gains unless the Fund makes certain elections.

• **Tracking Error Risk.** As with all index funds, the performance of the Fund and its Index may differ from each other for a variety of reasons. For example, the Fund incurs operating expenses and portfolio transaction costs not incurred by the Index. In addition, the Fund may not be fully invested in the securities of the Index at all times or may hold securities not included in the Index.

• **XRP Risk**. XRP is a cryptocurrency and, like other cryptocurrencies, operates without central authority or banks and is not backed by any government. XRP can be highly volatile compared to investments in traditional securities and the markets for XRP and XRP-related investments may become illiquid. XRP is a relatively new technological innovation with a limited operating history. There is a limited established performance record for the price of XRP and, in turn, a limited basis for evaluating an investment in XRP.

Unlike other digital assets such as bitcoin or ether, XRP is not and was not mined gradually over time. Instead, all 100 billion XRP tokens were created at the time of the XRP Ledger's launch in 2012. This means that every XRP token that exists today, or will ever exist, was generated from the outset of the XRP Ledger. As a result, there is no ability for the supply of XRP to be

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adjusted in response to economic conditions. For instance, there is no ability for the supply of XRP to be increased to meet rising demand, which could lead to price volatility. In addition, unlike blockchains that utilize "proof-of-work" or "proof-of-stake" where miners or stakers are rewarded with newly minted coins or tokens, XRP validators are not incentivized by block rewards since there is no new issuance of XRP. Additionally, the fixed supply of XRP, combined with the burning of XRP (permanently destroyed) as transaction fees, could create deflationary pressure over time. A small amount of XRP is burned with every transaction to prevent spam on the network. While the amount of XRP burned per transaction is minuscule, over time, the total supply of XRP will slowly decrease. This could lead to a deflationary environment where the decreasing supply drives up the price of XRP, making it less practical as a medium of exchange. Additionally, as the total supply of XRP slowly shrinks due to burning, liquidity could become an issue in the distant future, potentially making it harder for businesses and users to access sufficient XRP for their transactions.

The fixed supply of XRP could also contribute to price volatility, especially if demand fluctuates significantly. Since the supply of XRP is fixed, any significant surge in demand can result in large price spikes. Digital assets with a flexible supply, such as stablecoins, can adjust to maintain a stable value. XRP, however, could experience price swings that make it less attractive for everyday transactions or long-term financial planning. The fixed supply of XRP may also not scale well with rapidly expanding use cases. To the extent more businesses, financial institutions, and payment providers adopt XRP for cross-border transactions and other use cases, there is a risk that the fixed supply may not meet such growing demand, leading to supply shortages and further price volatility. In the case of massive adoption, the scarcity of XRP could raise its value too much, making it less appealing for day-to-day transactions or use as a liquidity bridge in cross-border payments, as businesses might prefer a more stable and widely available currency.

The continued adoption of XRP will require growth in its usage as a means of exchange and payment. Even if growth in XRP adoption continues in the near or medium-term, there is no assurance that XRP usage will continue to grow over the long-term. A contraction in the use of XRP may result in a lack of liquidity, increased volatility in and a reduction to the price of XRP.

**Performance** 

The performance information presented below provides some indication of the risks of investing in the Fund by showing the extent to which the Fund's performance can change from year to year and over time. The bar chart below shows the Fund's performance for the most recent calendar years ended December 31. The table illustrates how the Fund's average annual returns for the 1-year and since inception periods compare with those of the Index and the Solactive GBS Global Markets All Cap USD Index TR, a broad-based securities market index intended to represent the overall global equity market. The Fund's past performance, before and after taxes, does not necessarily indicate how it will perform in the future. Updated performance information is available on the Fund's website at www.roundhillinvestments.com/etf/METV. Effective June 14, 2024, the Ball Metaverse Index implemented a change to its index methodology to include, as potentially eligible Index components, equity securities of foreign and domestic exchange-traded funds that primarily hold bitcoin or ether. Performance following June 14, 2024 reflects this change to the Index methodology.

**Calendar Year Total Return**

![38482906977093](ck0001683471-20260430_g4.jpg)

The calendar year-to-date total return of the Fund as of March 31, 2026 was -15.68%. During the period of time shown in the bar chart, the highest quarterly return was 30.38% for the quarter ended March 31, 2023, and the lowest quarterly return was -32.88% for the quarter ended June 30, 2022.

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**Average Annual Total Returns**

**(for periods ended December 31, 2025)**

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| | | |
|:---|:---|:---|
| **Roundhill Ball Metaverse ETF** | **1 Year** | **Since Inception**<br>**(6/29/21)** |
| Return Before Taxes | 30.69% | 5.16% |
| Return After Taxes on Distributions | 30.64% | 5.13% |
| Return After Taxes on Distributions and Sale of Shares | 18.21% | 4.00% |
| **Solactive GBS Global Markets All Cap USD Index TR**<br>(reflects no deduction for fees, expenses, or taxes) | 22.52% | 9.25% |
| **Ball Metaverse Index**<br>(reflects no deduction for fees, expenses, or taxes) | 31.69% | 5.77% |

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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. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and provides an assumed tax deduction that benefits the investor.

**Portfolio Management** 

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| | |
|:---|:---|
| **Adviser** | Roundhill Financial Inc. (the "Adviser") |
| **Sub-Adviser** | Exchange Traded Concepts, LLC |
| **Portfolio Managers** | William Hershey, Timothy Maloney and David Mazza, each a portfolio manager for the Adviser, have been portfolio managers of the Fund since March 2025. Andrew Serowik, Todd Albrecio, and Gabriel Tan, each a portfolio manager for the Sub-Adviser, have been portfolio managers of the Fund since its inception in June 2021. Brian Cooper, also a portfolio manager for the Sub-Adviser, has been a portfolio manager of the Fund since November 2021. |

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**Purchase and Sale of Shares** 

The Fund issues and redeems Shares at NAV only in large blocks known as "Creation Units," which only APs (typically, broker-dealers) may purchase or redeem. The Fund generally issues and redeems Creation Units in exchange for a portfolio of securities and/or a designated amount of U.S. cash.

Shares are listed on the Exchange, and individual Shares may only be bought and sold in the secondary market through a broker or dealer at market prices, rather than NAV. Because Shares trade at market prices rather than NAV, Shares may trade at a price greater than NAV (premium) or less than NAV (discount).

An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (the "bid" price) and the lowest price a seller is willing to accept for Shares (the "ask" price) when buying or selling Shares in the secondary market. The difference in the bid and ask prices is referred to as the "bid-ask spread."

Recent information regarding the Fund's NAV, market price, how often Shares traded on the Exchange at a premium or discount, and bid-ask spreads can be found on the Fund's website at www.roundhillinvestments.com.

**Tax Information** 

The Fund's distributions are generally taxable as ordinary income, qualified dividend income, or capital gains (or a combination), unless your investment is held in an IRA or other tax-advantaged account. Distributions on investments made through tax-deferred arrangements may be taxed later upon withdrawal of assets from those accounts.

**Financial Intermediary Compensation** 

If you purchase Shares through a broker-dealer or other financial intermediary (such as a bank) (an "Intermediary"), the Adviser or its affiliates may pay Intermediaries for certain activities related to the Fund, including participation in activities that are designed to make Intermediaries more knowledgeable about exchange-traded products, including the Fund, or for other activities, such as marketing, educational training or other initiatives related to the sale or promotion of Shares. These payments may create a conflict of interest by influencing the Intermediary and your salesperson to recommend the Fund over another investment. Any such arrangements do not result in increased Fund expenses. Ask your salesperson or visit the Intermediary's website for more information.

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**ROUNDHILL CANNABIS ETF – FUND SUMMARY**<br>

**Investment Objective** 

The Roundhill Cannabis ETF ("Cannabis ETF" or the "Fund") seeks capital growth.

**Fees and Expenses of the Fund** 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.** 

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| | |
|:---|:---|
| **Shareholder Fees** *(fees paid directly from your investment)* |  |
| **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* | **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* |
| Management Fee | 0.39% |
| Distribution and/or Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.00% |
| Acquired Fund Fees and Expenses | 0.02% |
| **Total Annual Fund Operating Expenses**<sup>(1)</sup> | **0.41%** |

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<sup>(1)</sup> Total Annual Fund Operating Expenses do not correlate to the expense ratios in the Fund's Financial Highlights and financial statements because the Financial Highlights and financial statements include only the direct operating expenses incurred by the Fund and exclude Acquired Fund Fees and Expenses, which are the indirect costs of investing in other investment companies.

**Example** 

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **1 Year:** | $40 | **3 Years:** | $130 | **5 Years:** | $228 | **10 Years:** | $516 |

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**Portfolio Turnover** 

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund's performance. For the fiscal year ended December 31, 2025, the Fund's portfolio turnover rate was 23% of the average value of its portfolio.

**Principal Investment Strategy**

The Fund is an actively managed exchange-traded fund ("ETF") that seeks to achieve its investment objective by investing primarily in exchange-listed equity securities and total return swaps intended to provide exposure to the cannabis and hemp ecosystem. The cannabis and hemp ecosystem encompasses businesses involved in the production, distribution and marketing of cannabis and hemp and products derived therefrom. Under normal circumstances, at least 80% of the Fund's net assets (plus any borrowings for investment purposes) will be invested in equity securities, including common stock and depositary receipts, of companies and real estate investment trusts ("REITs") that derive at least 50% of their net revenue from, or invest a majority of their assets in, the cannabis and hemp ecosystem ("Cannabis Companies") and in derivatives that have economic characteristics similar to such securities.

The cannabis and hemp ecosystem spans a wide variety of sectors and industries including the agriculture, biotechnology, pharmaceuticals, real estate, retail, and finance sectors and industries. Cannabis Companies may be categorized within any of these sectors and industries and engage in the cannabis and hemp ecosystem in several ways, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** Production and/or distribution of cannabis-related and/or hemp-related products, including those for medical (including research and development) and therapeutic uses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** Business to business providers for the cannabis and hemp ecosystem, including technology, agricultural technology, real estate, financing, and commercial services companies; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** Business to consumer providers for the cannabis industry, including technology and media, consumption devices/mechanisms, and retailing companies.

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Generally, the terms "marijuana" and "cannabis" are used interchangeably and refer to products derived from the cannabis plant, including cannabinoids. Cannabinoids are the chemical compounds secreted by cannabis plants. Cannabinoids can also be synthetically produced chemical compounds and used in lawful research and development of prescription drugs or other products utilizing cannabinoids as an active ingredient. Hemp refers to the industrial/commercial use of the cannabis stalk and seed for textiles, foods, papers, body care products, detergents, plastics and building materials. The Fund will not invest directly in or hold ownership in any companies that engage in cannabis-related business unless such business is permitted by national and local laws of the relevant jurisdiction, including U.S. federal and state laws.

The Adviser uses qualitative factors, such as publicly available company filings, publicly available research, and press releases, to identify a universe of Cannabis Companies by determining a company's thematic relevance to the cannabis and hemp ecosystem. Based on its analysis, each Cannabis Company selected for the Fund will be assigned a weight that generally will be on a modified market capitalization basis, to seek to create a portfolio that reflects companies that contribute to the cannabis and hemp ecosystem through a variety of cannabis-related products and services.

The Fund may invest in securities issued by small, medium and large capitalization companies operating in emerging and developed market countries. The Fund may purchase equity securities that trade on U.S. or non-U.S. securities exchanges and American Depositary Receipts ("ADRs") or Global Depositary Receipts ("GDRs"). The Fund may invest in both equity and mortgage REITs. Further, the Fund may utilize derivative instruments that are available or traded on the over-the-counter ("OTC") market or listed and traded on an exchange to obtain expose to Cannabis Companies. The Fund anticipates investing primarily in total return swaps to obtain such exposure. A total return swap is a contract in which one party agrees to make periodic payments to another party based on the change in market value of the assets underlying the contract, which may include a specified security, basket of securities, or securities indices during the specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets.

The Fund expects to concentrate at least 25% of its investments in the Pharmaceuticals, Biotechnology & Life Sciences Industry Group as defined by the Global Industry Classification (GICS®) or other similar categorization scheme. This level of exposure may change over time and in response to changes in the cannabis and hemp ecosystem. Additionally, the Fund may invest in (1) U.S. Government securities, such as bills, notes and bonds issued by the U.S. Treasury; (2) money market funds; and/or (3) short-term bond ETFs.

**Principal Investment Risks** 

The principal risks of investing in the Fund are summarized below. As with any investment, there is a risk that you could lose all or a portion of your investment in the Fund. Some or all of these risks may adversely affect the Fund's net asset value ("NAV"), trading price, yield, total return and/or ability to meet its investment objective. The following risks could affect the value of your investment in the Fund:

**• United States Regulatory Risks of the Cannabis Industry.** The possession and use of marijuana, even for medical purposes, is illegal under federal and certain states' laws, which may negatively impact the value of the Fund's investments. Use of marijuana is regulated by both the federal government and state governments, and state and federal laws regarding marijuana often conflict. Even in those states in which the use of marijuana has been legalized, its possession and use remains a violation of federal law. Federal law criminalizing the use of marijuana pre-empts state laws that legalize its use for medicinal and recreational purposes. Actions by federal agencies, such as increased enforcement of current federal marijuana laws and the prosecution of nonviolent federal drug crimes by the U.S. Department of Justice ("DOJ"), could produce a chilling effect on the industry's growth and discourage banks from expanding their services to Cannabis Companies where such services are currently limited. Any of these outcomes would negatively affect the profitability and value of the Fund's investments and even its ability to pursue its stated investment objective. The conflict between the regulation of marijuana under federal and state law creates volatility and risk for all Cannabis Companies.

Because marijuana is a Schedule I controlled substance under the Controlled Substances Act ("CSA"), meaning that it has a high potential for abuse, has no currently "accepted medical use" in the United States, lacks accepted safety for use under medical supervision, and may not be prescribed, marketed or sold in the United States, few drug products containing cannabis or cannabis extracts have been approved for use by the Food and Drug Administration ("FDA") or obtained registrations for commercial production from the U.S. Drug Enforcement Agency ("DEA"), and there is no guarantee that such products will ever be legally produced or sold in the U.S. Cannabis Companies in the U.S. that engage in research, manufacturing, distributing, importing or exporting, or dispensing controlled substances must be registered (licensed) to perform these activities and have the security, control, recordkeeping, reporting and inventory mechanisms required by the DEA to prevent drug loss and diversion. Failure to obtain the necessary registrations or comply with necessary regulatory requirements may significantly impair the ability of certain companies in which the Fund invests to pursue medical marijuana research or to otherwise cultivate, possess or distribute marijuana. In addition, because cannabis is a Schedule I controlled substance, Section 280E of the Internal Revenue Code of 1986 ("Code") applies by its terms to the purchase and sale of medical-use cannabis products and provides that no deduction or credit is allowed for expenses incurred during a taxable year "in carrying on any trade or business if such trade or business (or the

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activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the CSA) which is prohibited by federal law or the law of any state in which such trade or business is conducted." The disallowance of such tax deductions will likely affect the value of Cannabis Companies.

On December 18, 2025, the President of the United States issued an Executive Order directing relevant federal agencies to advance medical marijuana and cannabidiol research and complete the administrative process to reschedule marijuana from Schedule I to Schedule III under the CSA. Rescheduling to Schedule III would reflect an accepted medical use under federal law and could reduce certain regulatory and tax burdens applicable to cannabis-related businesses. However, the Executive Order does not itself change marijuana's legal status and any rescheduling remains subject to formal rulemaking, potential delay, modification, or legal challenge. There can be no assurance that rescheduling will be completed or that it will result in reduced legal, regulatory, or financial risks for cannabis securities.

**• Non-U.S. Regulatory Risks of the Cannabis Industry.** Laws and regulations related to the possession, use (medical and recreational), sale, transport and cultivation of marijuana vary throughout the world, and the Fund will only invest in non-U.S. Cannabis Companies if such companies are operating legally in the relevant jurisdiction. Even if a company's operations are permitted under current law, they may not be permitted in the future, in which case such company may not be in a position to carry on its operations in its current locations. Additionally, controlled substance legislation differs between countries and legislation in certain countries may restrict or limit the ability of certain companies in which the Fund invests to sell their products.

**• Operational Risks of the Cannabis Industry.** Companies involved in the cannabis industry face intense competition, may have limited access to the services of banks, may have substantial burdens on company resources due to litigation, complaints or enforcement actions, and are heavily dependent on receiving necessary permits and authorizations to engage in medical cannabis research or to otherwise cultivate, possess or distribute cannabis. Because the cultivation, possession, and distribution of cannabis is in all circumstances illegal under United States federal law, federally regulated banking institutions may be unwilling to make financial services available to growers and sellers of cannabis.

**• United States Regulatory Risks of Hemp.** "Hemp," as defined in the Agriculture Improvement Act of 2018 (the "Farm Bill"), refers to cannabis plants with a tetrahydrocannabinol ("THC") concentration of not more than 0.3% on a dry weight basis, as well as derivatives thereof, whereas "marijuana" refers to all other cannabis plants and derivatives thereof. The Farm Bill effectively removes hemp from the list of controlled substances and allows states to regulate its production, commerce and research with approval from the United States Department of Agriculture ("USDA"). Certain portfolio holdings may sell dietary supplements and/or foods containing CBD within the United States. While the Farm Bill removes hemp and hemp-derived products from the controlled substances list under the CSA, it does not legalize CBD in every circumstance. CBD, depending on the source from which it was derived, can still be classified as a Schedule I substance under the CSA's definition of "marihuana." The exception for CBD from the definition of "marihuana" only applies if the CBD is derived from "hemp." U.S. federal law also requires that: (i) the hemp is produced by a licensed producer; and (ii) in a manner consistent with the applicable federal and state regulations. CBD and other cannabinoids produced from marijuana as defined by the CSA remain an illegal Schedule I substance under federal law. In addition, many state laws include all CBD within definitions of marijuana and some states have policies or laws that otherwise prohibit or restrict CBD sales.

The Farm Bill delegates to the FDA responsibility for regulating products containing hemp or derivatives thereof (including CBD) under the Federal Food, Drug, and Cosmetic Act (the "FD&C"). Under the FD&C, if a substance (such as CBD) is an active ingredient in a drug product that has been approved by the FDA, then the substance cannot be sold in dietary supplements or foods without FDA approval, unless the substance was marketed as a dietary supplement or as a conventional food before the drug was approved or before the new drug investigations were authorized. The FDA has publicly taken the position that CBD cannot be sold in dietary supplements or foods because CBD is an active ingredient in an FDA-approved drug. Future federal and/or state laws or regulations could drastically curtail permissible uses of hemp, which could have an adverse effect of the value of the Fund's investments in companies with business interests in hemp and hemp-based products.

The remaining principal risks are presented in alphabetical order. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears.

**• Cash Transaction Risk.** The Fund expects to effect certain of its creations and redemptions for cash, rather than in-kind securities. The Fund may be required to sell or unwind portfolio investments to obtain the cash needed to distribute redemption proceeds. This may cause the Fund to recognize a capital gain that it might not have recognized if it had made a redemption in kind. As a result, the Fund may pay out higher annual capital gain distributions than if the in-kind redemption process was used. The use of cash creations and redemptions may also cause the Fund's shares to trade in the market at wider bid-ask spreads or greater premiums or discounts to the Fund's NAV. Further, effecting purchases and redemptions primarily in cash may cause the Fund to incur certain costs, such as portfolio transaction costs. These costs can decrease the Fund's NAV if not offset by an authorized participant transaction fee.

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**• Concentration Risk.** The Fund expects to have concentrated (*i.e.*, invest more than 25% of its net assets) investment exposure in the Pharmaceuticals, Biotechnology & Life Sciences Industry Group. As a result, the Fund is more vulnerable to adverse market, economic, regulatory, political or other developments affecting those industries, or groups of related industries, than a fund that invests its assets in a more diversified manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Pharmaceuticals, Biotechnology & Life Sciences Industry Group Risk*. Companies in the Pharmaceuticals, Biotechnology & Life Sciences Industry Group can be significantly affected by, among other things, government approval of products and services, government regulation and reimbursement rates, product liability claims, patent expirations and protection, and intense competition.

**• Counterparty Risk.** The Fund may use swap agreements to gain exposure to a particular group of securities, index, asset class or other reference asset without actually purchasing those securities or investments, to hedge a position, or for other investment purposes. Through these investments and related arrangements (*e.g.,* prime brokerage or securities lending arrangements or derivatives transactions), the Fund is exposed to credit risks that the counterparty may be unwilling or unable to make timely payments or otherwise to meet its contractual obligations. If the counterparty becomes bankrupt or defaults on (or otherwise becomes unable or unwilling to perform) its payment or other obligations to the Fund, the Fund may not receive the full amount that it is entitled to receive or may experience delays in recovering the collateral or other assets held by, or on behalf of, the counterparty. If this occurs, the value of your shares in the Fund will decrease.

• **Currency Exchange Rate Risk.** The Fund may invest in investments denominated in non-U.S. currencies or in securities that provide exposure to such currencies. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the Fund's investment and the value of your Shares. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund may change quickly and without warning and you may lose money.

• **Cybersecurity Risk.** Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets or proprietary information, or cause the Fund, the Adviser, the Sub-Adviser (defined below) and/or other service providers (including custodians and financial intermediaries) to suffer data breaches or data corruption. Additionally, cybersecurity failures or breaches of the electronic systems of the Fund, the Adviser, the Sub-Adviser or the Fund's other service providers, market makers, Authorized Participants ("APs"), the Fund's primary listing exchange, or the issuers of securities in which the Fund invests have the ability to disrupt and negatively affect the Fund's business operations, including the ability to purchase and sell Shares, potentially resulting in financial losses to the Fund and its shareholders.

**• Depositary Receipt Risk**. Depositary receipts, including ADRs and GDRs, involve risks similar to those associated with investments in foreign securities, such as changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. Depositary receipts listed on U.S. exchanges are issued by banks or trust companies, and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares ("Underlying Shares"). When the Fund invests in depositary receipts as a substitute for an investment directly in the Underlying Shares, the Fund is exposed to the risk that the depositary receipts may not provide a return that corresponds precisely with that of the Underlying Shares. Because the Underlying Shares trade on foreign exchanges that may be closed when the Fund's primary listing exchange is open, the Fund may experience premiums and discounts greater than those of funds without exposure to such Underlying Shares.

**• Derivatives Risk.** The Fund intends to invest in total return swaps, which are a type of derivative. Derivatives may pose risks in addition to and greater than those associated with investing directly in securities, currencies or other investments, including risks relating to leverage, imperfect correlations with underlying investments or the Fund's other portfolio holdings, high price volatility, lack of availability, counterparty credit, liquidity, valuation and legal restrictions. Their use is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The Fund's use of derivatives to obtain short exposure, if any, may result in greater volatility of the Fund's NAV per share. If the Adviser and Sub-Adviser are incorrect about their expectations of market conditions, the use of derivatives could also result in a loss, which in some cases may be unlimited. In addition, the Fund's use of derivatives may cause the Fund to realize higher amounts of short-term capital gains (generally taxed at ordinary income tax rates) than if the Fund had not used such instruments. Some of the derivatives in which the Fund invests may be traded (and privately negotiated) in the OTC market. OTC derivatives are subject to heightened counterparty credit, liquidity and valuation risks. Certain risks also are specific to the derivatives in which the Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Swap Agreements Risk.* Swap agreements are contracts among the Fund and a counterparty to exchange the return of the pre-determined underlying investment (such as the rate of return of the underlying index). Swap agreements may be negotiated bilaterally and traded OTC between two parties or, for certain standardized swaps, must be exchange-traded through a futures commission merchant and/or cleared through a clearinghouse that serves as a central counterparty. Risks associated with the use of swap agreements are different from those associated with ordinary portfolio securities transactions, due in part to the fact they could be considered illiquid and many swaps trade on the OTC market. Swaps are particularly subject to counterparty credit, correlation, valuation, liquidity and leveraging risks. While exchange trading and central clearing are

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intended to reduce counterparty credit risk and increase liquidity, they do not make swap transactions risk-free. Additionally, applicable regulators have adopted rules imposing certain margin requirements, including minimums, on OTC swaps, which may result in the Fund and its counterparties posting higher margin amounts for OTC swaps, which could increase the cost of swap transactions to the Fund and impose added operational complexity.

**• Emerging and Developing Markets Risk.** The Fund's direct or indirect investments in securities of issuers in emerging and developing market countries are subject to all of the risks of foreign investing generally, and have additional heightened risks due to a lack of established legal, political, business, and social frameworks to support securities markets, including: delays in settling portfolio securities transactions; currency and capital controls; greater sensitivity to interest rate changes; pervasiveness of corruption and crime; currency exchange rate volatility; and inflation, deflation, or currency devaluation.

**• Equity Securities Risk.** The equity securities held in the Fund's portfolio may experience sudden, unpredictable drops in value or long periods of decline in value. This may occur because of factors that affect securities markets generally or factors affecting specific issuers, industries, sectors or companies in which the Fund invests. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change. Preferred stocks are subject to the risk that the dividend on the stock may be changed or omitted by the issuer, and that participation in the growth of an issuer may be limited.

**• ETF Risks.** The Fund is an ETF, and, as a result of its structure, it is exposed to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk.* The Fund has a limited number of financial institutions that may act as APs. In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. Shares may trade at a material discount to NAV and possibly face delisting if either: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Costs of Buying or Selling Shares Risk.* Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Shares May Trade at Prices Other Than NAV Risk.* As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Fund's NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant. Because securities held by the Fund may trade on foreign exchanges that are closed when the Fund's primary listing exchange is open, the Fund is likely to experience premiums or discounts greater than those of ETFs that invest in and hold only securities and other investments that are listed and trade in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Trading Risk.* Although Shares are listed for trading on the Cboe BZX Exchange, Inc. (the "Exchange") and may be traded on U.S. exchanges other than the Exchange, there can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of the Fund's underlying portfolio holdings, which can be significantly less liquid than the Shares.

• **Fixed Income Risk.** Fixed income securities are subject to call, credit, extension, and interest rate risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Call Risk*. During periods of falling interest rates, an issuer of a callable bond held by the Fund may "call" or repay the security before its stated maturity, and the Fund may have to reinvest the proceeds at lower interest rates, resulting in a decline in the Fund's income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Credit Risk*. An issuer of a fixed income security, such as a corporate bond, may be unable or unwilling to make interest and principal payments when due. The Fund also is subject to the related risk that the value of a fixed income security may decline because of concerns about the issuer's creditworthiness. Credit risk is heightened to the extent the Fund invests in below investment-grade securities, which also are referred to as high-yield securities or junk bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Extension Risk*. During periods of rising interest rates, certain debt obligations will be paid off substantially more slowly than originally anticipated and the value of those securities may fall sharply, resulting in a decline in the Fund's income and potentially in the value of the Fund's investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Income Risk.* The Fund's income may decline if interest rates fall. The risk of decline in income is heightened when fixed income instruments held by the Fund have floating or variable interest rates.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Interest Rate Risk*. Interest rate risk is the risk that interest rates rise and fall over time. For example, the value of fixed-income securities generally decrease when interest rates rise, which may cause the Fund's value to decrease. Also, investments in fixed-income securities with longer maturities fluctuate more in response to interest rate changes. Variable and floating rate securities may increase or decrease in value in response to changes in interest rates, although generally to a lesser degree than fixed-income securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Prepayment Risk.* The risk that changes in interest rates, credit spreads or other factors will result in the call (repayment) of a debt instrument before it is expected. The Fund may have to invest the proceeds in lower yielding securities or that expectations of such early call will negatively impact the market price of the security.

• **Foreign Securities Risk.** Investments in non-U.S. securities involve certain risks that may not be present with investments in U.S. securities. These include risks of adverse changes in foreign economic, political, regulatory and other conditions, or changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges). The securities of some foreign companies may be less liquid and, at times, more volatile than securities of comparable U.S. companies. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Non-U.S. issuers may be subject to different accounting, auditing, financial reporting and investor protection standards than U.S. issuers. Investments in non-U.S. securities also may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. With respect to certain countries, there is the possibility of government intervention and expropriation or nationalization of assets. Because legal systems differ, there also is the possibility that it will be difficult to obtain or enforce legal judgments in certain countries. Since foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund's portfolio may change on days when shareholders will not be able to purchase or sell the Fund's shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in the Fund more volatile and potentially less liquid than other types of investments.

**• Investment Company Risk.** The risks of investing in investment companies, such as ETFs, typically reflect the risks of the types of instruments in which the investment companies invest. By investing in another investment company, the Fund becomes a shareholder of that investment company and bears its proportionate share of the fees and expenses of the other investment company. The Fund may be subject to statutory limits with respect to the amount it can invest in other ETFs, which may adversely affect the Fund's ability to achieve its investment objective. ETFs may be less liquid than other investments, and thus their share values more volatile than the values of the investments they hold. Investments in ETFs are also subject to the "ETF Risks" described above.

**• Limited Issuer Risk.** Because the Fund may invest in a limited number of issuers, it is subject to the risk that the value of the Fund's portfolio may decline due to a decline in value of the equity securities of particular issuers. The value of an issuer's equity securities may decline for reasons directly related to the issuer, such as management performance and reduced demand for the issuer's goods or services.

**• Liquidity and Valuation Risk.** It may be difficult for the Fund to purchase and sell particular investments within a reasonable time at a fair price, or the price at which it has been valued by the Adviser for purposes of the Fund's NAV, causing the Fund to be less liquid and unable to realize what the Adviser believes should be the price of the investment. Valuation of portfolio investments may be difficult, such as during periods of market turmoil or reduced liquidity, and for investments that may, for example, trade infrequently or irregularly. In these and other circumstances, an investment may be valued using fair value methodologies, which are inherently subjective, reflect good faith judgments based on available information and may not accurately estimate the price at which the Fund could sell the investment at that time.

**• Management Risk.** The Fund is actively managed and may not meet its investment objective based on the Adviser's and Sub-Adviser's success or failure to implement investment strategies for the Fund. The Sub-Adviser's evaluations and assumptions regarding issuers, securities, and other factors may not successfully achieve the Fund's investment objective given actual market conditions.

• **Market Capitalization Risk.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Large-Capitalization Investing Risk.* The securities of large-capitalization companies may be relatively mature compared to smaller companies and, therefore, subject to slower growth during times of economic expansion. Large-capitalization companies also may be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Mid-Capitalization Investing Risk.* The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies. The securities of mid-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large-capitalization stocks or the stock market as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Small-Capitalization Investing Risk.* The securities of small-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large- or mid-capitalization companies. The securities

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of small-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large- or mid-capitalization stocks or the stock market as a whole. There is typically less publicly available information concerning smaller-capitalization companies than for larger, more established companies.

• **Market Risk.** The trading prices of securities and other instruments fluctuate in response to a variety of factors. These factors include events impacting the entire market or specific market segments, such as political, market and economic developments, as well as events that impact specific issuers. The Fund's NAV and market price, like security and commodity prices generally, may fluctuate significantly in response to these and other factors. As a result, an investor could lose money over short or long periods of time. In addition, government actions or interventions (including, but not limited, to the threat or imposition of tariffs, trade restrictions, currency restrictions or similar actions) as well as developments related to economic, political (including geopolitical), social, public health, market, extreme weather, natural or man-made disasters, or other conditions or events have in the past and may in the future result in volatility in financial markets and reduced liquidity in equity, credit, and/or debt markets, which could adversely impact the Fund and its investments and their value and performance. These developments as well as other events could result in further market volatility and negatively affect financial asset prices, the liquidity of certain securities and the normal operations of securities exchanges and other markets.

**• Money Market Instrument Risk.** The Fund may use a variety of money market instruments for cash management purposes, including money market funds, depositary accounts and repurchase agreements. Money market funds may be subject to credit risk with respect to the debt instruments in which they invest. Depository accounts may be subject to credit risk with respect to the financial institution in which the depository account is held. Money market instruments may lose money.

**• Real Estate Companies Risk.** The Fund invests in real estate companies, including REITs and real estate holdings companies, which will expose investors to the risks of owning real estate directly, as well as to the risks that relate specifically to the way in which such companies are organized and operated. Real estate is highly sensitive to general and local economic conditions and developments. The U.S. real estate market may experience and has, in the past, experienced a decline in value, with certain regions experiencing significant losses in property values. Many real estate companies, including REITs, utilize leverage (and some may be highly leveraged), which increases investment risk and the risk normally associated with debt financing, and could potentially increase the Fund's volatility and losses. Exposure to such real estate may adversely affect Fund performance.

**• REITs Risk.** REITs are subject to the risks associated with investing in the securities of real property companies. In particular, REITs may be affected by changes in the values of the underlying properties that they own or operate. Residential/diversified REITs and commercial equity REITs may be affected by 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. Further, REITs are dependent upon specialized management skills, and their investments may be concentrated in relatively few properties, or in a small geographic area or a single property type. REITs are also subject to heavy cash flow dependency and, as a result, are particularly reliant on the proper functioning of capital markets. A variety of economic and other factors may adversely affect a lessee's ability to meet its obligations to a REIT. In the event of a default by a lessee, the REIT may experience delays in enforcing its rights as a lessor and may incur substantial costs associated in protecting its investments. In addition, a REIT could fail to qualify for favorable regulatory treatment.

• **Sector Risk.** To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors. The Fund may invest a significant portion of its assets in the following sectors and, therefore, the performance of the Fund could be negatively impacted by events affecting each of these sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***◦*** *Health Care Sector Risk*. Health care companies are subject to extensive government regulation and their profitability can be significantly affected by restrictions on government reimbursement for medical expenses, rising costs of medical products and services, pricing pressure (including price discounting), limited product lines, and an increased emphasis on the delivery of healthcare through outpatient services. Health care companies are heavily dependent on obtaining and defending patents, which may be time consuming and costly, and the expiration of patents may also adversely affect the profitability of the companies. Health care companies are also subject to extensive litigation based on product liability and similar claims. In addition, their products can become obsolete due to industry innovation, changes in technologies, or other market developments. Many new products in the health care field require significant research and development and may be subject to regulatory approvals, all of which may be time consuming and costly with no guarantee that any product will come to market.

• **Securities Lending Risk**. To the extent the Fund engages in securities lending, there are certain risks associated with securities lending, including the risk that the borrower may fail to return the securities on a timely basis or even the loss of rights in the collateral deposited by the borrower, if the borrower should fail financially. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. As a result, the Fund may lose money.

**• Tax Risk.** In order to qualify for the favorable tax treatment generally available to a regulated investment company ("RIC"), the Fund must satisfy certain diversification and other requirements. In particular, at each quarter end (a) at least 50% of the value of

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the Fund's total assets must generally be represented by cash and cash items, U.S. government securities, securities of other RICs and other securities, with such other securities limited, in respect to any one issuer, to an amount not greater than 5% of the value of the Fund's total assets and that does not represent more than 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of the Fund's total assets is invested in the securities (other than U.S. government securities or the securities of other RICs) of any one issuer or the securities (other than the securities of another RIC) of two or more issuers that the Fund controls and which are engaged in the same or similar trades or businesses or related trades or businesses, or the securities of one or more qualified publicly traded partnerships (the "Diversification Requirement"). The Fund anticipates gaining exposure to seven Underlying Issuers. To satisfy the Diversification Requirement, the Fund will gain exposure to the Underlying Issuers by entering into swap agreements and/or forward contracts or by investing in equity securities of an Underlying Issuer. The determination of the value and the identity of the issuer of derivatives, such as swap agreements and forward contracts, is often unclear for purposes of the Diversification Requirement described above. Although the Fund intends to carefully monitor its investments in derivatives to ensure that it is adequately diversified under the Diversification Requirement, there are no assurances that the Internal Revenue Service ("IRS") will agree with the Fund's determination of the issuer and valuation of such derivatives under the Diversification Requirement with respect to such derivatives. The Adviser's and the Sub-Adviser's efforts to satisfy the Fund's Diversification Requirement may compromise their ability to implement the Fund's investment strategy as effectively as they might otherwise have been able to in the absence of such a requirement. If the Fund fails to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation subject to U.S. federal income tax on all its income at the fund level (unless certain relief provisions are available.) The resulting taxes could substantially reduce the Fund's net assets and the amount of income available for distribution to shareholders. In addition, in order to requalify as a RIC, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make certain distributions to its shareholders. In addition, the Fund's use of derivatives may cause the Fund to realize higher amounts of short-term capital gains or otherwise affect the Fund's ability to pay out dividends subject to preferential rates or the dividends received deduction, thereby increasing the amount of taxes payable by some shareholders. ***Please see the section entitled "Federal Income Taxes – Taxation of the Funds" in the SAI for more information.***

• **U.S. Government Securities Risk.** U.S. government securities may or may not be backed by the full faith and credit of the U.S. government. U.S. government securities are subject to the risks associated with fixed-income and debt securities, particularly interest rate risk and credit risk.

**Performance** 

The performance information presented below provides some indication of the risks of investing in the Fund by showing the extent to which the Fund's performance can change from year to year and over time. The bar chart below shows the Fund's performance for the most recent calendar year ended December 31. The table illustrates how the Fund's average annual returns for the 1-year and since inception periods compare with those of the Solactive GBS Global Markets All Cap USD Index TR, a broad-based securities market index intended to represent the overall global equity market. The table also shows how the Fund's performance compares to the North American Cannabis Net Total Return Index, a comparative index that represents the asset classes in which the Fund invests. The Fund's past performance, before and after taxes, does not necessarily indicate how it will perform in the future. Updated performance information is available on the Fund's website at www.roundhillinvestments.com/etf/WEED.

**Calendar Year Total Return**

![38482906975007](ck0001683471-20260430_g5.jpg)

The calendar year-to-date total return of the Fund as of March 31, 2026 was -23.72%. During the period of time shown in the bar chart, the highest quarterly return was 105.33% for the quarter ended September 30, 2025, and the lowest quarterly return was -45.79% for the quarter ended December 31, 2024.

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**Average Annual Total Returns**

**(for periods ended December 31, 2025)**

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| | | |
|:---|:---|:---|
| **Roundhill Cannabis ETF** | **1 Year** | **Since Inception**<br>**(4/19/22)** |
| Return Before Taxes | 22.64% | -30.46% |
| Return After Taxes on Distributions | 22.64% | -30.46% |
| Return After Taxes on Distributions and Sale of Shares | 13.40% | -20.06% |
| **Solactive GBS Global Markets All Cap USD Index TR**<br>(reflects no deduction for fees, expenses, or taxes) | 22.52% | 12.49% |
| **North American Cannabis Net Total Return Index**<br>(reflects no deduction for fees, expenses, or taxes) | 14.69% | -22.92% |

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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. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and provides an assumed tax deduction that benefits the investor.

**Portfolio Management** 

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| | |
|:---|:---|
| **Adviser** | Roundhill Financial Inc. |
| **Sub-Adviser** | Exchange Traded Concepts, LLC (the "Sub-Adviser") |
| **Portfolio Managers** | William Hershey and Timothy Maloney, each a portfolio manager for the Adviser, and Andrew Serowik, Todd Alberico, Gabriel Tan and Brian Copper, each a portfolio manager for the Sub-Adviser, have been portfolio managers of the Fund since its inception in April 2022. David Mazza, also a portfolio manager for the Adviser, has been a portfolio manager of the Fund since March 2025. |

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**Purchase and Sale of Shares** 

The Fund issues and redeems Shares at NAV only in large blocks known as "Creation Units," which only APs (typically, broker-dealers) may purchase or redeem. The Fund generally issues and redeems Creation Units in exchange for a portfolio of securities and/or a designated amount of U.S. cash.

Shares are listed on the Exchange, and individual Shares may only be bought and sold in the secondary market through a broker or dealer at market prices, rather than NAV. Because Shares trade at market prices rather than NAV, Shares may trade at a price greater than NAV (premium) or less than NAV (discount).

An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (the "bid" price) and the lowest price a seller is willing to accept for Shares (the "ask" price) when buying or selling Shares in the secondary market. The difference in the bid and ask prices is referred to as the "bid-ask spread."

Recent information regarding the Fund's NAV, market price, how often Shares traded on the Exchange at a premium or discount, and bid-ask spreads can be found on the Fund's website at www.roundhillinvestments.com/etf/WEED.

**Tax Information** 

The Fund's distributions are generally taxable as ordinary income, qualified dividend income, or capital gains (or a combination), unless your investment is held in an IRA or other tax-advantaged account. Distributions on investments made through tax-deferred arrangements may be taxed later upon withdrawal of assets from those accounts.

**Financial Intermediary Compensation** 

If you purchase Shares through a broker-dealer or other financial intermediary (such as a bank) (an "Intermediary"), the Adviser or its affiliates may pay Intermediaries for certain activities related to the Fund, including participation in activities that are designed to make Intermediaries more knowledgeable about exchange-traded products, including the Fund, or for other activities, such as marketing, educational training or other initiatives related to the sale or promotion of Shares. These payments may create a conflict of interest by influencing the Intermediary and your salesperson to recommend the Fund over another investment. Any such arrangements do not result in increased Fund expenses. Ask your salesperson or visit the Intermediary's website for more information.

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**ROUNDHILL MAGNIFICENT SEVEN ETF – FUND SUMMARY**<br>

**Investment Objective** 

The Roundhill Magnificent Seven ETF ("Magnificent Seven ETF" or the "Fund") seeks growth of capital.

**Fees and Expenses of the Fund** 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund ("Shares"). **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.** 

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| | |
|:---|:---|
| **Shareholder Fees** *(fees paid directly from your investment)* |  |
| **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* | **Annual Fund Operating Expenses** *(expenses that you pay each year as a percentage of the value of your investment)* |
| Management Fee | 0.29% |
| Distribution and/or Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.00% |
| Acquired Fund Fees and Expenses | 0.01% |
| **Total Annual Fund Operating Expenses**<sup>(1)</sup> | **0.30%** |

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<sup>(1)</sup> Total Annual Fund Operating Expenses do not correlate to the expense ratios in the Fund's Financial Highlights and financial statements because the Financial Highlights and financial statements include only the direct operating expenses incurred by the Fund and exclude Acquired Fund Fees and Expenses, which are the indirect costs of investing in other investment companies.

**Example** 

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **1 Year:** | $31 | **3 Years:** | $97 | **5 Years:** | $169 | **10 Years:** | $381 |

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**Portfolio Turnover** 

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund's performance. For the fiscal period ended December 31, 2025, the Fund's portfolio turnover rate was 27% of the average value of its portfolio.

**Principal Investment Strategies** 

The Fund is an actively managed exchange-traded fund ("ETF") that seeks to achieve its investment objective through its investment exposure to the companies comprising the "Magnificent Seven," a group of seven companies commonly recognized for their market dominance in technological innovation. As of March 31, 2026, the seven companies comprising the Magnificent Seven were: Alphabet Inc., Amazon.com, Inc., Apple Inc., Meta Platforms, Inc., Microsoft Corporation, NVIDIA Corporation, and Tesla Inc. (the "Underlying Issuers"). On a quarterly basis, the Fund will rebalance its exposure so that each company is equally-weighted in its portfolio. To the extent the companies that comprise the Magnificent Seven change, the Fund will seek to effect such change as soon as reasonably practical, but in no event later than its next regularly-scheduled quarterly rebalance. The Fund primarily gains exposure to the "Magnificent Seven" companies through its investment in swap agreements and/or forward contracts. However, the Fund will also invest directly in the equity securities issued by such companies.

Exchange Traded Concepts, LLC (the "Sub-Adviser"), the Fund's sub-adviser, positions the Fund's portfolio daily to seek to achieve exposure to the Magnificent Seven companies to the fullest extent possible consistent with the Fund's investment objective. Under normal circumstances, the Fund will invest at least 80% of its assets (plus borrowings for investment purposes) in financial instruments and other investments that provide exposure to, or in combination have economic characteristics similar or equivalent to those of, the largest (*i.e.*, top quartile by market capitalization, revenue, profit, market share or other similar metric) companies in one or more Technology Industries (defined below), as defined by an independent industry classification scheme.

As a result of its investment strategies, the Fund will concentrate (*i.e.*, invest more than 25% of its total assets) its investments in one or more "Technology Industries" (defined by an independent industry classification scheme as the following industries: Automotive Industry; Technology Hardware Industry; E-Commerce Discretionary Industry; Internet Media & Services Industry; Semiconductors

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Industry; and Software Industry) at any given time. The Technology Industries in which the Fund may concentrate may vary over time. Additionally, the Fund may invest up to 100% of the Fund's assets in (1) U.S. Government securities, such as bills, notes and bonds issued by the U.S. Treasury; (2) money market funds; and/or (3) short-term bond ETFs.

The Fund is classified as a "non-diversified" investment company under the Investment Company Act of 1940, as amended (the "1940 Act").

**Principal Investment Risks** 

The principal risks of investing in the Fund are summarized below. The principal risks are presented in alphabetical order to facilitate finding particular risks and comparing them with the risks of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears. As with any investment, there is a risk that you could lose all or a portion of your investment in the Fund. Some or all of these risks may adversely affect the Fund's net asset value ("NAV"), trading price, yield, total return and/or ability to meet its investment objective. The following risks could affect the value of your investment in the Fund:

**• Cash Transaction Risk.** The Fund expects to effect certain creations and redemptions for cash, rather than in-kind securities. The Fund may be required to sell or unwind portfolio investments to obtain the cash needed to distribute redemption proceeds. This may cause the Fund to recognize a capital gain that it might not have recognized if it had made a redemption in kind. As a result, the Fund may pay out higher annual capital gain distributions than if the in-kind redemption process was used. The use of cash creations and redemptions also may cause the Fund's Shares to trade in the market at wider bid-ask spreads or greater premiums or discounts to the Fund's NAV. Further, effecting purchases and redemptions primarily in cash may cause the Fund to incur additional costs, such as portfolio transaction costs. These costs can decrease the Fund's NAV if not offset by an authorized participant transaction fee.

**• Concentration Risk.** The Fund expects to have concentrated (*i.e.*, invest more than 25% of its net assets) investment exposure in one or more of the Technology Industries at any given time, which may vary over time. As a result, the Fund is more vulnerable to adverse market, economic, regulatory, political or other developments affecting those industries or groups of related industries than a fund that invests its assets in a more diversified manner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Automotive Industry Risk*. The automotive industry can be highly cyclical, and companies in the industry may suffer periodic operating losses. The automotive industry also can be significantly affected by labor relations and fluctuating component prices. Companies in the automotive industry, particularly those in the electric vehicles industry, may be affected by the obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants and general economic conditions. While most of the major manufacturers are large, financially strong companies, many others are small and can be non-diversified in both product line and customer base. Additionally, developments in automotive technologies (*e.g.*, autonomous vehicle technologies) may require significant capital expenditures that may not generate profits for several years, if any. Companies in the automotive industry may be significantly subject to government policies and regulations regarding imports and exports of automotive products. Governmental policies affecting the automotive industry, such as taxes, tariffs, duties, subsidies, and import and export restrictions on automotive products can influence industry profitability. In addition, such companies must comply with environmental laws and regulations, for which there may be severe consequences for non-compliance. Legislative or regulatory changes and increased government supervision also may affect companies in the automotive industry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ E-Commerce Discretionary Industry Risk.* The E-Commerce Discretionary Industry includes retailers, retail outlets, and wholesalers offering a wide variety of products or specializing in a single class of goods (*e.g.*, computers, apparel, home improvement, etc.). Companies in the E-Commerce Discretionary Industry are dependent on consumer spending, the availability of disposable income, changing consumer tastes and preferences, consumer demographics, general economic conditions, internal infrastructure and on the availability, reliability and security of the Internet and related systems. Critical systems and operations may be vulnerable to damage or interruption from natural disasters, power loss, telecommunications failure, terrorist attacks, cyber-attacks, acts of war, break-ins, and similar events. In addition, legislative or regulatory changes and increased government supervision may affect companies in the E-Commerce Discretionary Industry. The E-Commerce Discretionary Industry is a separate industry within the Consumer Discretionary Sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Internet Media & Services Industry Risk.* The Internet Media & Services Industry includes companies engaged in content and information creation or distribution through proprietary platforms, where revenues are derived primarily through pay-per-click advertisements, including search engines, social media and networking platforms, online classifieds, and online review companies. The prices of the securities of companies in the Internet Media & Services Industry are closely tied to the performance of the overall economy and may be affected by changes in general economic growth, consumer confidence and consumer spending. Changes in demographics and consumer tastes also may affect the success of companies in the Internet Media & Services Industry. In addition, legislative or regulatory changes and increased government supervision may affect companies in the Internet Media & Services Industry. The Internet Media & Services Industry is a separate industry within the Communications Sector.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Semiconductors Industry Risk*. Competitive pressures may have a significant effect on the financial condition of semiconductor companies and, as product cycles shorten and manufacturing capacity increases, these companies may become increasingly subject to aggressive pricing, which hampers profitability. Reduced demand for end-user products, under-utilization of manufacturing capacity, and other factors could adversely impact the operating results of companies in the Semiconductors Industry. Semiconductor companies typically face high capital costs and may be heavily dependent on intellectual property rights. The Semiconductors Industry is highly cyclical, which may cause the operating results of many semiconductor companies to vary significantly. The stock prices of companies in the Semiconductors Industry have been and likely will continue to be extremely volatile.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Software Industry Risk.* The Software Industry includes companies that publish and distribute software for the business or consumer markets, as well as companies that provide consulting or integration services to other businesses relating to information technology, including computer-system design, system integration, network and systems operations, cloud computing, distributed ledger technology consulting and integration, data management and storage, repair services, and technical support. In addition, the Software Industry includes companies involved in digital platforms that primarily generate revenue from advertising, content delivery, and other virtual products for consumers. Companies in the Software Industry are subject to significant competitive pressures, such as aggressive pricing, new market entrants, competition for market share, short product cycles due to an accelerated rate of technological developments and the potential for limited earnings and/or falling profit margins. These companies also face the risks that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. These factors can affect the profitability of these companies and, as a result, the value of their securities. Patent protection is integral to the success of many companies in this industry. In addition, many software companies have limited operating histories. Prices of these companies' securities historically have been more volatile than other securities, especially over the short term. The Software Industry is a separate industry within the Technology Sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Technology Hardware Industry Risk.* The Technology Hardware Industry includes companies that manufacture and distribute computers, servers, mainframes, peripheral devices (*e.g.*, keyboard, mouse, etc.), high-technology components (*e.g.*, circuit boards), and electronic office equipment. In addition, companies in the Technology Hardware Industry include producers and distributors of semiconductors and other integrated chips, other products related to the semiconductor industry such as motherboards, and manufacturers of high-technology tools and/or equipment used in the creation of semiconductors, photonics, wafers, and other high-technology components. The companies in the Technology Hardware Industry can be significantly affected by competitive pressures, aggressive pricing, technological developments, changing domestic demand, the ability to attract and retain skilled employees and availability and price of components. The market for products produced by companies in the Technology Hardware Industry is characterized by rapidly changing technology, rapid product obsolescence, cyclical market patterns, evolving industry standards and frequent new product introductions. The success of these companies depends in substantial part on the timely and successful introduction of new products. In addition, many of the companies in the Technology Hardware Industry rely on a combination of patents, copyrights, trademarks and trade secret laws to establish and protect their proprietary rights in their products and technologies. The Technology Hardware Industry is a separate industry within the Technology Sector.

**• Counterparty Risk.** Counterparty risk is the risk that a counterparty to Fund transactions (*e.g.*, derivative transactions) will be unable or unwilling to perform its contractual obligation to the Fund. The Fund expects to use derivatives instruments to gain exposure to the Underlying Issuers to seek to achieve its investment objective. Through these investments and related arrangements, the Fund is exposed to the risk that the counterparty may be unwilling or unable to make timely payments or deliver the reference asset contemplated by such arrangements or otherwise to meet its contractual obligations (*i.e.*, counterparty credit risk). If the counterparty becomes bankrupt or defaults on (or otherwise becomes unable or unwilling to perform) its payment, delivery or other obligations to the Fund, the Fund may not receive the full amount it is entitled to receive, may not be able to maintain its desired exposure to the Underlying Issuers, or may experience delays in recovering the collateral or other assets held by, or on behalf of, the counterparty. If this occurs, the value of your Shares in the Fund will decrease.

In addition, the Fund may enter into derivative transactions with a limited number of counterparties, which may increase the Fund's exposure to counterparty credit risk. To the extent the Fund's counterparties are concentrated in the financial services sector, the Fund bears the risk that those counterparties may be adversely affected by legislative or regulatory changes, adverse market conditions, increased competition, and/or wide scale credit losses resulting from financial difficulties or borrowers affecting that economic sector. 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.

• **Cybersecurity Risk.** Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets or proprietary information, or cause the Fund, the Adviser, the Sub-Adviser and/or other service providers (including custodians and financial intermediaries) to suffer data breaches or data corruption. Additionally, cybersecurity failures or breaches of the electronic systems of the Fund, the Adviser, the Sub-Adviser or the Fund's other service providers, market makers, Authorized Participants ("APs"), the Fund's primary listing exchange, or the issuers of securities in which the Fund invests have the ability to disrupt and

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negatively affect the Fund's business operations, including the ability to purchase and sell Shares, potentially resulting in financial losses to the Fund and its shareholders.

**• Derivatives Risk.** The Fund expects to use swap agreements and forward contracts to seek to achieve its investment objective. The Fund's derivative investments have risks, including the imperfect correlation between the value of such instruments and the reference asset; the loss of principal, including the potential loss of amounts greater than the initial amount invested in the derivatives instrument; and illiquidity of the derivative investments. The Fund expects to primarily utilize derivatives instruments that are not designed to produce leverage. The Fund, however, may invest in derivatives that give rise to economic leverage, but expects any such economic leverage to be minimal. Leverage magnifies the potential for gain and may result in greater losses, which in some cases may cause the Fund to liquidate other portfolio investments at inopportune times (*e.g.*, at a loss to comply with limits on leverage imposed by the 1940 Act or when the Adviser otherwise would have preferred to hold the investment) or to meet redemption requests. Certain of the Fund's transactions in derivatives also could affect the amount, timing, and character of distributions to shareholders, which may result in the Fund realizing more short-term capital gain and ordinary income subject to tax at ordinary income tax rates than it would if it did not engage in such transactions, which may adversely impact the Fund's after-tax returns. Any financing, borrowing or other costs associated with using derivatives also may have the effect of lowering the Fund's return. To the extent the Fund invests in derivatives instruments that give rise to economic leverage, the value of the Fund's portfolio is likely to experience greater volatility over short-term periods.

In addition, the Fund's investments in derivatives are subject to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Swap Agreements.* Swap agreements are entered into primarily with major financial intermediaries for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a reference asset. The Fund also will enter into swap agreements that provide for the physical delivery of the reference asset where, instead of exchanging the return earned or realized on the underlying securities, the Fund takes physical delivery of the underlying security. Swap agreements are generally traded over the counter, and therefore, may not receive regulatory protection, which may expose investors, including the Fund, to significant losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Forwards Contracts.* The primary risks associated with the use of forwards contracts, which may adversely affect the Fund's NAV and total return, are: (a) the imperfect correlation between the change in market value of the forward contract and the price of underlying asset; (b) possible lack of a liquid secondary market for a forwards contract and the resulting inability to close a forwards contract when desired; (c) losses caused by unanticipated market movements, which are potentially unlimited; (d) the possibility that the counterparty will default in the performance of its obligations; and (e) if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements, and the Fund may have to sell securities at a time when it maybe disadvantageous to do so.

The Fund is subject to regulatory constraints relating to the level of leverage risk, as measured by value-at-risk (VaR) testing, the Fund may incur through its derivatives investments. To the extent the Fund exceeds these regulatory constraints regularly or over an extended period, the Fund may determine it is necessary to make adjustments to the Fund's investment strategies to reduce its use of derivatives. Any such adjustments may adversely affect the Fund's ability to achieve its investment objective and its performance.

• **Equity Securities Risk.** The equity securities held in the Fund's portfolio may experience sudden, unpredictable drops in value or long periods of decline in value. This may occur because of factors that affect securities markets generally or factors affecting specific issuers, industries, sectors or companies in which the Fund invests. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change. Preferred stocks are subject to the risk that the dividend on the stock may be changed or omitted by the issuer, and that participation in the growth of an issuer may be limited.

**• ETF Risks.** The Fund is an ETF, and, as a result of its structure, it is exposed to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk.* The Fund has a limited number of financial institutions that may act as APs. In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. Shares may trade at a material discount to NAV and possibly face delisting if either: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Costs of Buying or Selling Shares Risk.* Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Shares May Trade at Prices Other Than NAV Risk.* As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Fund's NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Trading Risk.* Although Shares are listed for trading on Cboe BZX Exchange, Inc. (the "Exchange") and may be traded on U.S. exchanges other than the Exchange, there can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of the Fund's underlying portfolio holdings, which can be significantly less liquid than the Shares.

• **Fixed Income Risk.** Fixed income securities are subject to various risks, including the risks described below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Call Risk*. During periods of falling interest rates, an issuer of a callable bond held by the Fund may "call" or repay the security before its stated maturity, and the Fund may have to reinvest the proceeds at lower interest rates, resulting in a decline in the Fund's income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Credit Risk*. An issuer of a fixed income security, such as a corporate bond, may be unable or unwilling to make interest and principal payments when due. The Fund also is subject to the related risk that the value of a fixed income security may decline because of concerns about the issuer's creditworthiness. Credit risk is heightened to the extent the Fund invests in below investment-grade securities, which also are referred to as high-yield securities or junk bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Extension Risk*. During periods of rising interest rates, certain debt obligations will be paid off substantially more slowly than originally anticipated and the value of those securities may fall sharply, resulting in a decline in the Fund's income and potentially in the value of the Fund's investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Income Risk.* The Fund's income may decline if interest rates fall. The risk of decline in income is heightened when fixed income instruments held by the Fund have floating or variable interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Interest Rate Risk*. Interest rate risk is the risk that interest rates rise and fall over time. For example, the value of fixed-income securities generally decrease when interest rates rise, which may cause the Fund's value to decrease. Also, investments in fixed-income securities with longer maturities fluctuate more in response to interest rate changes. Variable and floating rate securities may increase or decrease in value in response to changes in interest rates, although generally to a lesser degree than fixed-income securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Prepayment Risk*. The risk that changes in interest rates, credit spreads or other factors will result in the call (repayment) of a debt instrument before it is expected. The Fund may have to invest the proceeds in lower yielding securities or that expectations of such early call will negatively impact the market price of the security.

• **Investment Company Risk.** The risks of investing in investment companies, such as ETFs, typically reflect the risks of the types of instruments in which the investment companies invest. By investing in another investment company, the Fund becomes a shareholder of that investment company and bears its proportionate share of the fees and expenses of the other investment company. The Fund may be subject to statutory limits with respect to the amount it can invest in other ETFs, which may adversely affect the Fund's ability to achieve its investment objective. ETFs may be less liquid than other investments, and thus their share values more volatile than the values of the investments they hold. Investments in ETFs are also subject to the "ETF Risks" described above.

• **Limited Issuer Risk.** Because the Fund may invest in a limited number of issuers, it is subject to the risk that the value of the Fund's portfolio may decline due to a decline in value of the equity securities of particular issuers. The value of an issuer's equity securities may decline for reasons directly related to the issuer, such as management performance and reduced demand for the issuer's goods or services.

• **Liquidity and Valuation Risk.** It may be difficult for the Fund to purchase and sell particular investments within a reasonable time at a fair price, or the price at which it has been valued by the Adviser for purposes of the Fund's NAV, causing the Fund to be less liquid and unable to realize what the Adviser believes should be the price of the investment. Valuation of portfolio investments may be difficult, such as during periods of market turmoil or reduced liquidity, and for investments that may, for example, trade infrequently or irregularly. In these and other circumstances, an investment may be valued using fair value methodologies, which are inherently subjective, reflect good faith judgments based on available information and may not accurately estimate the price at which the Fund could sell the investment at that time.

• **Management Risk.** The Fund is actively managed and may not meet its investment objective based on the Adviser's and Sub-Adviser's success or failure to implement the Fund's strategies and to efficiently execute investment transactions, respectively. The Fund invests in derivatives instruments, which may create enhanced risks for the Fund and the Adviser's ability to control the Fund's level of risk will depend on the Adviser's skill in managing such instruments. In addition, the Adviser's evaluations and

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assumptions regarding investments, interest rates, inflation, and other factors may not successfully achieve the Fund's investment objective given actual market conditions.

**• Market Capitalization Risk.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Large-Capitalization Investing Risk.* The securities of large-capitalization companies may be relatively mature compared to smaller companies and, therefore, subject to slower growth during times of economic expansion. Large-capitalization companies also may be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes.

• **Market Risk.** The trading prices of securities and other instruments fluctuate in response to a variety of factors. These factors include events impacting the entire market or specific market segments, such as political, market and economic developments, as well as events that impact specific issuers. The Fund's NAV and market price, like security and commodity prices generally, may fluctuate significantly in response to these and other factors. As a result, an investor could lose money over short or long periods of time. In addition, government actions or interventions (including, but not limited, to the threat or imposition of tariffs, trade restrictions, currency restrictions or similar actions) as well as developments related to economic, political (including geopolitical), social, public health, market, extreme weather, natural or man-made disasters, or other conditions or events have in the past and may in the future result in volatility in financial markets and reduced liquidity in equity, credit, and/or debt markets, which could adversely impact the Fund and its investments and their value and performance. These developments as well as other events could result in further market volatility and negatively affect financial asset prices, the liquidity of certain securities and the normal operations of securities exchanges and other markets.

**• Money Market Instrument Risk.** The Fund may use a variety of money market instruments for cash management purposes, including money market funds, depositary accounts and repurchase agreements. Money market funds may be subject to credit risk with respect to the debt instruments in which they invest. Depository accounts may be subject to credit risk with respect to the financial institution in which the depository account is held. Money market instruments may lose money.

• **Non-Diversification Risk.** Because the Fund is "non-diversified," it may invest a greater percentage of its assets in the securities of a single issuer or a lesser number of issuers than if it was a diversified fund. As a result, the Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a lesser number of issuers than a fund that invests more widely. This may increase the Fund's volatility and cause the performance of a relatively small number of issuers to have a greater impact on the Fund's performance.

• **Sector Risk.** To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors. The Fund may invest a significant portion of its assets in the following sectors and, therefore, the performance of the Fund could be negatively impacted by events affecting each of these sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**◦** *Communication Services Sector Risk.* The Fund's assets will have significant exposure to the Communication Services Sector, which means the Fund will be more affected by the performance of the Communication Services Sector than a fund that is more diversified. Market or economic factors impacting companies in the Communication Services Sector that rely heavily on technological advances could have a major effect on the value of the Fund's investments. The value of stocks of communication services companies and companies that rely heavily on technology is particularly vulnerable to research and development costs, substantial capital requirements, product and services obsolescence, government regulation, and domestic and international competition, including competition from foreign competitors with lower production costs. Stocks of communication services companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market. Additionally, companies in the Communication Services Sector may face dramatic and often unpredictable changes in growth rates and competition for the services of qualified personnel. While all companies may be susceptible to network security breaches, certain companies in the Communication Services Sector may be particular targets of hacking and potential theft of proprietary or consumer information or disruptions in service, which could have a material adverse effect on their businesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Consumer Discretionary Sector Risk.* The Fund's investments are exposed to issuers conducting business in the Consumer Discretionary Sector. The manufacturing segment of the Consumer Discretionary Sector includes automotive, household durable goods, leisure equipment and textiles and apparel. The services segment includes hotels, restaurants and other leisure facilities, and consumer retailing and services. The Fund is subject to the risk that the securities of such issuers will underperform the market as a whole due to legislative or regulatory changes, adverse market conditions and/or increased competition affecting the Consumer Discretionary Sector. The performance of companies operating in the Consumer Discretionary Sector has historically been closely tied to the performance of the overall economy, and also is affected by economic growth, consumer confidence, attitudes and spending. Changes in demographics and consumer tastes also can affect the demand for, and success of, consumer products and services in the marketplace. Moreover, the Consumer Discretionary Sector encompasses those businesses that tend to be the most sensitive to economic cycles.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Information Technology Sector Risk.* The Information Technology sector includes companies engaged in internet software and services, technology hardware and storage peripherals, electronic equipment instruments and components, and semiconductors and semiconductor equipment. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. Information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face rapid product obsolescence due to technological developments and frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Failure to introduce new products, develop and maintain a loyal customer base, or achieve general market acceptance for their products could have a material adverse effect on a company's business. Companies in the Information Technology Sector are heavily dependent on intellectual property and the loss of patent, copyright and trademark protections may adversely affect the profitability of these companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**◦** *Technology Sector Risk.* The Fund's investments are exposed to issuers conducting business in the Technology Sector. The Technology Sector includes companies that offer software and information technology services, manufacturers and distributors of technology hardware and equipment such as communications equipment, computers and peripherals, electronic equipment and related instruments and semiconductors. The Fund is subject to the risk that the securities of such issuers will underperform the market as a whole due to legislative or regulatory changes, adverse market conditions and/or increased competition affecting the Technology Sector. The prices of the securities of companies operating in the Technology Sector are closely tied to market competition, increased sensitivity to short product cycles and aggressive pricing, and problems with bringing products to market.

• **Securities Lending Risk**. To the extent the Fund engages in securities lending, there are certain risks associated with securities lending, including the risk that the borrower may fail to return the securities on a timely basis or even the loss of rights in the collateral deposited by the borrower, if the borrower should fail financially. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. As a result, the Fund may lose money.

**• Tax Risk.** In order to qualify for the favorable tax treatment generally available to a regulated investment company ("RIC"), the Fund must satisfy certain diversification and other requirements. In particular, at each quarter end (a) at least 50% of the value of the Fund's total assets must generally be represented by cash and cash items, U.S. government securities, securities of other RICs and other securities, with such other securities limited, in respect to any one issuer, to an amount not greater than 5% of the value of the Fund's total assets and that does not represent more than 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of the Fund's total assets is invested in the securities (other than U.S. government securities or the securities of other RICs) of any one issuer or the securities (other than the securities of another RIC) of two or more issuers that the Fund controls and which are engaged in the same or similar trades or businesses or related trades or businesses, or the securities of one or more qualified publicly traded partnerships (the "Diversification Requirement"). The Fund anticipates gaining exposure to seven Underlying Issuers. To satisfy the Diversification Requirement, the Fund will gain exposure to the Underlying Issuers by entering into swap agreements and/or forward contracts or by investing in equity securities of an Underlying Issuer. The determination of the value and the identity of the issuer of derivatives, such as swap agreements and forward contracts, is often unclear for purposes of the Diversification Requirement described above. Although the Fund intends to carefully monitor its investments in derivatives to ensure that it is adequately diversified under the Diversification Requirement, there are no assurances that the Internal Revenue Service ("IRS") will agree with the Fund's determination of the issuer and valuation of such derivatives under the Diversification Requirement with respect to such derivatives. The Adviser's and the Sub-Adviser's efforts to satisfy the Fund's Diversification Requirement may compromise their ability to implement the Fund's investment strategy as effectively as they might otherwise have been able to in the absence of such a requirement. If the Fund fails to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation subject to U.S. federal income tax on all its income at the fund level (unless certain relief provisions are available.) The resulting taxes could substantially reduce the Fund's net assets and the amount of income available for distribution to shareholders. In addition, in order to requalify as a RIC, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make certain distributions to its shareholders. In addition, the Fund's use of derivatives may cause the Fund to realize higher amounts of short-term capital gains or otherwise affect the Fund's ability to pay out dividends subject to preferential rates or the dividends received deduction, thereby increasing the amount of taxes payable by some shareholders. ***Please see the section entitled "Federal Income Taxes – Taxation of the Funds" in the SAI for more information.***

• **U.S. Government Securities Risk.** U.S. government securities may or may not be backed by the full faith and credit of the U.S. government. U.S. government securities are subject to the risks associated with fixed-income and debt securities, particularly interest rate risk and credit risk.

**Performance** 

The performance information presented below provides some indication of the risks of investing in the Fund by showing the extent to which the Fund's performance can change from year to year and over time. The bar chart below shows the Fund's performance for the

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most recent calendar year ended December 31. The table illustrates how the Fund's average annual returns for the 1-year and since inception periods compare with those of the Solactive GBS Global Markets All Cap USD Index TR, a broad-based securities market index intended to represent the overall global equity market. The Fund's past performance, before and after taxes, does not necessarily indicate how it will perform in the future. Updated performance information is available on the Fund's website at www.roundhillinvestments.com/etf/MAGS.

**Calendar Year Total Return**

![38482906974062](ck0001683471-20260430_g6.jpg)

The calendar year-to-date total return of the Fund as of March 31, 2026 was -12.34%. During the period of time shown in the bar chart, the highest quarterly return was 20.93% for the quarter ended June 30, 2025, and the lowest quarterly return was -15.77% for the quarter ended March 31, 2025.

**Average Annual Total Returns**

**(for periods ended December 31, 2025)**

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| | | |
|:---|:---|:---|
| **Roundhill Magnificent Seven ETF** | **1 Year** | **Since Inception**<br>**(4/10/23)** |
| Return Before Taxes | 22.96% | 44.67% |
| Return After Taxes on Distributions | 22.25% | 44.10% |
| Return After Taxes on Distributions and Sale of Shares | 13.61% | 35.95% |
| **Solactive GBS Global Markets All Cap USD Index TR**<br>(reflects no deduction for fees, expenses, or taxes) | 22.52% | 19.79% |

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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. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and provides an assumed tax deduction that benefits the investor.

**Portfolio Management** 

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| | |
|:---|:---|
| **Adviser** | Roundhill Financial Inc. (the "Adviser") |
| **Sub-Adviser** | Exchange Traded Concepts, LLC |
| **Portfolio Managers** | William Hershey and Timothy Maloney, each a portfolio manager for the Adviser, and Andrew Serowik, Todd Alberico, Gabriel Tan and Brian Cooper, each a portfolio manager for the Sub-Adviser, have been portfolio managers of the Fund since its inception in March 2023. David Mazza, also a portfolio manager for the Adviser, has been a portfolio manager of the Fund since March 2025.  |

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**Purchase and Sale of Shares** 

The Fund issues and redeems Shares at NAV only in large blocks known as "Creation Units," which only APs (typically, broker-dealers) may purchase or redeem. The Fund generally issues and redeems Creation Units in exchange for a portfolio of securities and/or a designated amount of U.S. cash.

Shares are listed on the Exchange, and individual Shares may only be bought and sold in the secondary market through a broker or dealer at market prices, rather than NAV. Because Shares trade at market prices rather than NAV, Shares may trade at a price greater than NAV (premium) or less than NAV (discount).

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An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (the "bid" price) and the lowest price a seller is willing to accept for Shares (the "ask" price) when buying or selling Shares in the secondary market. The difference in the bid and ask prices is referred to as the "bid-ask spread."

Recent information regarding the Fund's NAV, market price, how often Shares traded on the Exchange at a premium or discount, and bid-ask spreads can be found on the Fund's website at www.roundhillinvestments.com/etf/MAGS.

**Tax Information** 

The Fund's distributions are generally taxable as ordinary income, qualified dividend income, or capital gains (or a combination), unless your investment is held in an IRA or other tax-advantaged account. Distributions on investments made through tax-deferred arrangements may be taxed later upon withdrawal of assets from those accounts.

**Financial Intermediary Compensation** 

If you purchase Shares through a broker-dealer or other financial intermediary (such as a bank) (an "Intermediary"), the Adviser or its affiliates may pay Intermediaries for certain activities related to the Fund, including participation in activities that are designed to make Intermediaries more knowledgeable about exchange-traded products, including the Fund, or for other activities, such as marketing, educational training or other initiatives related to the sale or promotion of Shares. These payments may create a conflict of interest by influencing the Intermediary and your salesperson to recommend the Fund over another investment. Any such arrangements do not result in increased Fund expenses. Ask your salesperson or visit the Intermediary's website for more information.

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**ADDITIONAL INFORMATION ABOUT THE INDEXES**

*Morningstar*<sup>®</sup> *Sports Betting & iGaming Select Index* – Morningstar, Inc. serves as the Index Provider and Index Calculation Agent.

*Ball Metaverse Index* – Ball Metaverse Research Partners LLC acts as the Index Provider and Solactive AG serves as the Index Calculation Agent.

Each Index Provider and Index Calculation Agent expects to provide the Adviser with information about its Index methodology and constituents, and does not provide investment advice with respect to the desirability of seeking to track the Index or investing in, purchasing, or selling any Index constituent or securities generally. In addition, each Index Provider and Index Calculation Agent is an independent third party that is not affiliated with the respective Fund, the Adviser, the Sub-Adviser, the Fund's distributor, or any of their respective affiliates.

Each Index is calculated as a gross total return index.

**ADDITIONAL INFORMATION ABOUT THE FUNDS**

**Investment Objectives**

Each Fund's investment objective may be changed by the Board of Trustees (the "Board") of Listed Funds Trust (the "Trust") without shareholder approval upon written notice to shareholders.

**Principal Investment Strategies**

The following information is in addition to, and should be read along with, the description of each Fund's principal investment strategies in each section titled "Fund Summary—Principal Investment Strategies" above.

Each Fund has adopted a policy, as described below, to comply with Rule 35d-1 under the 1940 Act. Each such policy has been adopted as a non-fundamental investment policy and may be changed without shareholder approval upon 60 days' written notice to shareholders. To the extent swaps are used to meet a Fund's Rule 35d-1 policy, the notional value of the swaps will be used when determining the Fund's compliance with its policy.

The Video Games ETF invests, under normal circumstances, at least 80% of its net assets (plus borrowings for investment purposes) in Video Game Companies. For purposes of the foregoing policy, Video Game Companies are companies that are economically tied to the Video Games industry, and generally include publishers, developers and distributors of interactive gaming software for console, PC, mobile and cloud platforms, as well as providers of related online gaming services and esports.

The Sports Betting ETF invests, under normal circumstances, at least 80% of its net assets (plus borrowings for investment purposes) in securities issued by Sports Betting and iGaming Companies. Sports Betting Companies are companies engaged, directly or indirectly, in analyzing sports events and wagering on the outcome. Sports Betting Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other Sports Betting Companies; providing marketing solutions and services for other Sports Betting Companies; and investing in Sports Betting Companies, such as owners of investment portfolios comprising companies exposed to sports betting activities or the underlying assets of such companies. iGaming Companies are companies engaged, directly or indirectly, in betting online in games of chance, such as poker, slots, blackjack, or the lottery. iGaming Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other iGaming Companies; providing marketing solutions and services for other iGaming Companies; investing in iGaming Companies, such as owners of investment portfolios comprising companies exposed to iGaming activities or the underlying assets of such companies; and developing and/or providing games, such as casino developers and bingo and lottery game developers.

The Ball Metaverse ETF invests, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in Metaverse Companies. For purposes of this policy, the Fund defines Metaverse Companies as foreign and domestic issuers that engage in activities or provide products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues. More detailed information about the categories of companies included in the Index is located in the Fund's summary section.

The Cannabis ETF invests, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities, including common stock and depositary receipts, of companies and REITs that derive at least 50% of their net revenue from, or invest a majority of their assets in, the cannabis and hemp ecosystem, and in derivatives that have economic characteristics similar to such securities.

The Magnificent Seven ETF invests, under normal circumstances, at least 80% of its assets (plus borrowings for investment purposes) in financial instruments and other investments that provide exposure to, or in combination have economic characteristics similar or equivalent to those of, the largest (*i.e.*, top quartile by market capitalization, revenue, profit, market share or other similar metric) companies in one or more Technology Industries, as defined by an independent industry classification scheme.

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***Additional Information about the Funds' Investment Strategies***

<u>Sports Betting ETF</u>

The Morningstar<sup>®</sup> Sports Betting & iGaming Index is designed to deliver unparalleled, thematically pure exposure to the sports and online betting themes by drawing on the in-depth knowledge and forward-looking insights of Morningstar's equity research team.

At each reconstitution, securities for the Morningstar Sports Betting & iGaming Select Index are derived from the equity universe scored on the Sports Betting and iGaming themes by Morningstar's equity research team. The index components are weighted in proportion to both their combined theme score (Sports Betting score plus iGaming score) and their free-float market capitalization subject to capping constraints.

The Index is reconstituted and rebalanced annually on the Monday following the third Friday in December. Index components are capped to ensure that no Index component has a weight greater than 10% and the sum of components with weights greater than or equal to 5% cannot exceed 40%.

<u>Ball Metaverse ETF</u>

The Ball Metaverse Index is designed to track the performance of equity securities of foreign and domestic issuers that engage in activities or provide products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues. The Metaverse will be supported by a wide range of technologies, tools, and standards that enable high volumes of concurrent users, a rich virtual-only economy of labor, goods, and services, and wide ranging interoperability of data, digital assets, and content.

The composition of the Index is rebalanced and/or reconstituted quarterly. The Index Provider may make extraordinary adjustments in accordance with the Index's methodology and index calculation agent guidelines.

<u>Cannabis ETF</u>

For temporary defensive purposes, the Fund may invest in short-term instruments such as commercial paper and/or repurchase agreements collateralized by U.S. government securities. Taking a temporary defensive position may result in the Fund not achieving its investment objective.

<u>Magnificent Seven ETF</u>

From time to time, the Fund may invest in shares of another ETF managed by the Adviser ("Affiliated ETF") when the Adviser believes such investment will help the Fund to achieve its investment objective. In such an instance, the Adviser may be subject to a conflict of interest because the Adviser would receive management fees from the Affiliated ETF in addition to a management fee from the Fund.

**Principal Investment Risks**

An investment in a Fund entails risks. A Fund could lose money, or its performance could trail that of other investment alternatives. The following provides additional information about each Fund's principal risks. It is important that investors closely review and understand these risks before making an investment in a Fund. Each risk applies to each Fund unless otherwise specified. Just as in each Fund's summary section, the principal risks below are presented in alphabetical order to facilitate finding particular risks and comparing them with those of other funds. Each risk summarized below is considered a "principal risk" of investing in the applicable Fund, regardless of the order in which it appears.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **NERD** | **BETZ** | **METV** | **WEED** | **MAGS** |
| Associated Risks of iGaming and Sports Betting Companies | | X | | | |
| Associated Risks of Video Game Companies | X | | | | |
| Bitcoin Risk | | | X | | |
| Cash Transaction Risk | X | | | X | X |
| Concentration Risk | X | X | X | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Automotive Industry Risk* | | | | | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Casinos & Gaming Industry Risk* | | X | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*E-Commerce Discretionary Industry Risk* | | | | | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Entertainment Industry Risk* | X | | X | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Internet Media & Services Industry Risk* | | | | | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Pharmaceuticals, Biotechnology & Life Sciences Industry Group Risk* | | | | X | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Semiconductors Industry Risk* | | | | | X |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **NERD** | **BETZ** | **METV** | **WEED** | **MAGS** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Software Industry Risk* | | | | | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Technology Hardware Industry Risk* | | | | | X |
| Counterparty Risk | | | | X | X |
| Cryptocurrency Risk | | | X | | |
| Cryptocurrency ETF Risk | | | X | | |
| Currency Exchange Rate Risk | X | X | X | X | |
| Cybersecurity Risk | X | X | X | X | X |
| Depositary Receipt Risk | X | X | X | X | |
| Derivatives Risk | | | | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Swap Agreements Risk* | | | | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Forwards Contracts* | | | | | X |
| Emerging and Developing Markets Risk | X | | | X | |
| Equity Securities Risk | X | X | X | X | X |
| ETF Risks | X | X | X | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk* | X | X | X | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Costs of Buying or Selling Shares Risk* | X | X | X | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Shares May Trade at Prices Other Than NAV Risk* | X | X | X | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Trading Risk* | X | X | X | X | X |
| Ether Risk | | | X | | |
| Fixed Income Risk | | | | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Call Risk* | | | | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Credit Risk* | | | | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Extension Risk* | | | | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Income Risk* | | | | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Interest Rate Risk* | | | | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Prepayment Risk* | | | | X | X |
| Foreign Securities Risk | X | X | X | X | |
| Geographic Investment Risk | X | X | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Risks Related to Investing in Asia* | X | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Risks Related to Investing in China.* | X | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Risks Related to Investing in Hong Kong* | X | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Risks Related to Investing in Japan* | X | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Risks of Investing in South Korea* | X | | | | |
| Illiquidity Risk | X | X | | | |
| Index Provider Risk | | X | X | | |
| Investment Company Risk | | | | X | X |
| Limited Issuer Risk | | | | X | X |
| Liquidity and Valuation Risk | | | | X | X |
| Management Risk | X | | | X | X |
| Market Capitalization Risk | X | X | X | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Large-Capitalization Investing Risk* | X | X | X | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Mid-Capitalization Investing Risk* | X | X | X | X | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Small-Capitalization Investing Risk* | X | X | X | X | |
| Market Risk | X | X | X | X | X |
| Models and Data Risk | | | X | | |
| Money Market Instrument Risk | | | | X | X |
| Non-Diversification Risk | X | X | X | | X |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **NERD** | **BETZ** | **METV** | **WEED** | **MAGS** |
| Non-U.S. Regulatory Risks of the Cannabis Industry | | | | X | |
| Operational Risks of the Cannabis Industry | | | | X | |
| Passive Investment Risk | | X | X | | |
| Real Estate Companies Risk | | | | X | |
| REITs Risk | | | | X | |
| Risks Related to Investing in Canada | | | X | | |
| Sector Risk | X | X | X | X | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Communications Service Sector Risk* | X | | X | | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Consumer Discretionary Sector Risk* | | X | | | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Health Care Sector Risk* | | | | X | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Information Technology* | | | | | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Technology Sector* | | | | | X |
| Securities Lending Risk | X | X | X | X | X |
| Solana Risk | | | X | | |
| Tax Risk | | | X | X | X |
| Tracking Error Risk | | X | X | | |
| U.S. Government Securities Risk | | | | X | X |
| United States Regulatory Risks of Hemp | | | | X | |
| United States Regulatory Risks of the Cannabis Industry | | | | X | |
| XRP Risk | | | X | | |

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• **Associated Risks of iGaming and Sports Betting Companies**. The iGaming and sports betting industry is characterized by an increasingly high degree of competition among a large number of participants including from participants performing illegal activities or unregulated companies. Expansion of iGaming and sports betting in other jurisdictions (both regulated and unregulated) could increase competition with traditional betting companies, which could have an adverse impact on their financial condition, operations and cash flows. In a broader sense, iGaming and sports betting companies face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts and travel. In addition, established jurisdictions could award additional licenses or permit the expansion or relocation of existing sports betting companies. These companies also may be subject to increasing regulatory constraints, particularly with respect to cybersecurity and privacy. In addition to the costs of complying with such constraints, the unintended disclosure of confidential information, whether because of an error or a cybersecurity event, could adversely affect the reputation, profitability and value of these companies.

**• Associated Risks of Video Game Companies.** Video game companies face intense competition, both domestically and internationally, may have limited product lines, markets, financial resources, or personnel, may have products that face rapid obsolescence, and are heavily dependent on the protection of patent and intellectual property rights. Pure-play companies may be dependent on one or a small number of product or product franchises for a significant portion of their revenue and profits. They may also be subject to shifting consumer preferences, including preferences with respect to gaming console platforms, and changes in consumer discretionary spending. Such factors may adversely affect the profitability and value of video game companies. Video game companies also may be subject to increasing regulatory constraints, particularly with respect to cybersecurity and privacy. In addition to the costs of complying with such constraints, the unintended disclosure of confidential information, whether because of an error or a cybersecurity event, could adversely affect the reputation, profitability and value of these companies. Video game companies may be subject to sophisticated intellectual property infringement schemes and piracy efforts, particularly in foreign markets, which may limit the revenue potential in such markets, and combating such infringement or piracy schemes may require significant expenses. Such anti-piracy programs may not be effective.

**• Bitcoin Risk.** Bitcoin is a relatively new innovation and the market for bitcoin is subject to rapid price swings, changes and uncertainty. The value of bitcoin has been and may continue to be substantially dependent on speculation. The further development of the Bitcoin Network and the acceptance and use of bitcoin are subject to a variety of factors that are difficult to evaluate. The slowing, stopping or reversing of the development of the Bitcoin Network or the acceptance of bitcoin may adversely affect the price of bitcoin. Bitcoin is subject to the risk of fraud, theft, manipulation or security failures, operational or other problems that impact bitcoin trading venues. Additionally, if one or a coordinated group of miners were to gain control of 51% of the Bitcoin Network, they would have the ability to manipulate transactions, halt payments and fraudulently obtain bitcoin. A significant portion of bitcoin is held by a small number of holders sometimes referred to as "whales." These holders have the ability to manipulate the price of bitcoin. Unlike the exchanges for more traditional assets, such as equity securities and

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futures contracts, bitcoin and bitcoin trading venues are largely unregulated. As a result of the lack of regulation, individuals or groups may engage in fraud or market manipulation (including using social media to promote bitcoin in a way that artificially increases the price of bitcoin). Investors may be more exposed to the risk of theft, fraud and market manipulation than when investing in more traditional asset classes. Over the past several years, a number of bitcoin trading venues have been closed due to fraud, failure or security breaches. Investors in bitcoin may have little or no recourse should such theft, fraud or manipulation occur and could suffer significant losses. Legal or regulatory changes may negatively impact the operation of the Bitcoin Network. The realization of any of these risks could result in a decline in the acceptance of bitcoin and consequently a reduction in the value of bitcoin, bitcoin futures, and the Fund. In addition, bitcoin is a bearer asset that can be irrevocably lost or stolen to the extent that private keys are lost or stolen.

The slowness of transaction processing and finality, the variability of transaction fees, and volatility of bitcoin's price could disadvantage or impede the adoption of the Bitcoin Blockchain as a payment network. The further development and use of the Bitcoin Blockchain for its intended purpose and other allowable applications are, and may continue to be, substantially dependent upon "Layer-2" solutions operating on top of the Bitcoin Blockchain, such as the Lightning Network, which is intended to expand the scale and speed of payments across the underlying Bitcoin Blockchain through the use of channels and payment networks outside of the Bitcoin Blockchain. To the extent these Layer-2 solutions have not been developed or have not been fully developed in a way that is adequate to improve scalability, transactions speed or efficiency, the use and/or value of the Bitcoin Blockchain may be limited, which could adversely affect the Fund. Further, the industry is actively researching, investing in and in some cases creating alternative blockchains that are able to support more advanced applications, such as the Ethereum Blockchain. The emergence of other public blockchains and related technologies may compete with bitcoin and result in a reduction in the use of bitcoin, which could reduce its value or increase the volatility of the price of bitcoin due to changes in the supply and demand of bitcoin relative to alternatives, thus negatively impacting investment in the Fund. The Bitcoin Blockchain may also be vulnerable to attacks to the extent a miner or group of miners possess more than 50% of its hashing power and the Bitcoin Blockchain's protocol may contain flaws that can be exploited by attackers.

The Bitcoin Network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and validators adopt the modification. When a modification is introduced and a substantial majority of users and validators consent to the modification, the change is implemented and the network remains uninterrupted. However, if less than a substantial majority of users and validators consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a "fork," with one group running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two, non-interchangeable versions of the Bitcoin Network running in parallel with different native crypto assets and sets of participants. For example, in August 2017, bitcoin "forked" into Bitcoin and a new digital asset, Bitcoin Cash, as a result of a several-year dispute over how to increase the rate of transactions that the Bitcoin Network can process. The creation of a fork or a substantial giveaway of bitcoin (sometimes referred to as an "air drop") may result in significant and unexpected declines in the value of bitcoin, bitcoin futures, and the Fund.

• **Cash Transaction Risk.** Each Fund expects to effect certain of its creations and redemptions for cash, rather than in-kind securities. Cash purchases and redemptions may increase brokerage and other transaction costs. In addition, a Fund may be required to sell or unwind portfolio investments to obtain the cash needed to distribute redemption proceeds. This may cause a Fund to recognize a capital gain that it might not have recognized if it had made a redemption in kind. As a result, a Fund may pay out higher annual capital gain distributions than if the in-kind redemption process was used. The use of cash creations and redemptions also may cause a Fund's Shares to trade in the market at wider bid-ask spreads or greater premiums or discounts to a Fund's NAV, particularly in times of stressed market conditions. As a practical matter, only institutions and large investors, such as market makers or other large broker dealers, create or redeem Shares directly through a Fund. Most investors will buy and sell Shares on an exchange through a broker-dealer. Furthermore, a Fund may not be able to execute cash transactions for creation and redemption purposes at the same price used to determine a Fund's NAV. To the extent that the maximum additional charge for creation or redemption transactions is insufficient to cover the execution shortfall, a Fund's performance could be negatively impacted.

• **Concentration Risk.** To the extent a Fund concentrates in the securities of issuers in a particular industry, such Fund is subject to loss due to adverse occurrences that may affect that industry or group of industries and may face more risks than if it were diversified more broadly over numerous industries. Such industry-based risks, any of which may adversely affect a Fund may include, but are not limited to, the following: general economic conditions or cyclical market patterns that could negatively affect supply and demand in a particular industry; competition for resources, adverse labor relations, political or world events; obsolescence of technologies; and increased competition or new product introductions that may affect the profitability or viability of companies in an industry. In addition, at times, an industry may be out of favor and underperform other industries or the market as a whole. For information about the industries to which a Fund has concentrated exposure, please see such Fund's Summary section.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Automotive Industry Risk.* The automotive industry can be highly cyclical, and companies in the industry may suffer periodic operating losses. The automotive industry also can be significantly affected by labor relations and fluctuating component prices. Companies in the automotive industry, particularly those in the electric vehicles industry, may be affected by the obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants and general economic conditions. While most of the major manufacturers are large, financially strong companies, many others are small and can be non-diversified in both product line and customer base. Additionally, developments in automotive technologies (*e.g.*, autonomous vehicle technologies) may require significant capital expenditures that may not generate profits for several years, if any. Companies in the automotive industry may be significantly subject to government policies and regulations regarding imports and exports of automotive products. Governmental policies affecting the automotive industry, such as taxes, tariffs, duties, subsidies, and import and export restrictions on automotive products can influence industry profitability. In addition, such companies must comply with environmental laws and regulations, for which there may be severe consequences for non-compliance. Legislative or regulatory changes and increased government supervision also may affect companies in the automotive industry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Casinos & Gaming Industry Risk.* The Casinos & Gaming Industry includes owners and operators of casinos and gaming facilities, and companies providing lottery and betting services. The Casinos & Gaming Industry is highly competitive and companies operating in the Casinos & Gaming Industry rely heavily on consumer spending and the availability of disposable income for success. In addition, the Casinos & Gaming Industry may be negatively affected by changes in economic conditions, consumer tastes and discretionary income levels, technological developments, limited financial resources, competition from competing entertainment options, and competition for key personnel. Casinos are closely tied to the travel and tourism industry and are particularly sensitive to economic shutdowns and mitigation strategies, such as the COVID-19 pandemic. In addition, Casinos & Gaming Industry companies are highly regulated, and state and federal legislative or regulatory changes and licensing issues (as well as the laws of other countries) can significantly impact their ability to operate in certain jurisdictions. The Casinos & Gaming Industry is a sub-industry of the Hotels, Restaurants & Leisure Industry within the Consumer Discretionary Sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *E-Commerce Discretionary Industry Risk.* The E-Commerce Discretionary Industry includes retailers, retail outlets, and wholesalers offering a wide variety of products or specializing in a single class of goods (*e.g.*, computers, apparel, home improvement, etc.). Companies in the E-Commerce Discretionary Industry are dependent on consumer spending, the availability of disposable income, changing consumer tastes and preferences, consumer demographics, general economic conditions, internal infrastructure and on the availability, reliability and security of the Internet and related systems. Critical systems and operations may be vulnerable to damage or interruption from natural disasters, power loss, telecommunications failure, terrorist attacks, cyber-attacks, acts of war, break-ins, and similar events. In addition, legislative or regulatory changes and increased government supervision may affect companies in the E-Commerce Discretionary Industry. The E-Commerce Discretionary Industry is a separate industry within the Consumer Discretionary Sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Entertainment Industry Risk.* The Entertainment Industry is highly competitive and relies on consumer spending and the availability of disposable income for success. The prices of the securities of companies in the Entertainment Industry may fluctuate widely due to competitive pressures, heavy expenses incurred for research and development of products, problems related to bringing products to market, consumer preferences and rapid obsolescence of products. Legislative or regulatory changes and increased government supervision also may affect companies in the Entertainment Industry. The Entertainment Industry is a separate industry within the Communication Services Sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Internet Media & Services Industry Risk*. The Internet Media & Services Industry includes companies engaged in content and information creation or distribution through proprietary platforms, where revenues are derived primarily through pay-per-click advertisements, including search engines, social media and networking platforms, online classifieds, and online review companies. The prices of the securities of companies in the Internet Media & Services Industry are closely tied to the performance of the overall economy and may be affected by changes in general economic growth, consumer confidence and consumer spending. Changes in demographics and consumer tastes also may affect the success of companies in the Internet Media & Services Industry. In addition, legislative or regulatory changes and increased government supervision may affect companies in the Internet Media & Services Industry. The Internet Media & Services Industry is a separate industry within the Communications Sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Pharmaceuticals, Biotechnology & Life Sciences Industry Group Risk*. Companies in the Pharmaceuticals, Biotechnology & Life Sciences Industry Group can be significantly affected by, among other things, government approval of products and services, government regulation and reimbursement rates, product liability claims, patent expirations and protection, and intense competition. Companies in this industry group spend heavily on research and development, and their products or services may not prove commercially successful or may become obsolete quickly. This industry is subject to a significant amount of governmental regulation, and changes in governmental policies and the need for regulatory approvals may have a material adverse effect on this industry. The process of obtaining government approvals and maintaining compliance with regulations can be long and costly, and the process is accompanied by significant uncertainty. Companies in which the Fund

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may invest may not be able to maintain any regulatory approvals that they obtain for their products or their products may not be accepted by patients or providers. In addition, unanticipated problems often arise in connection with the development and marketing of new products, and many new products are ultimately unsuccessful. Companies in this industry group may not be able to obtain adequate pricing and reimbursement levels for any marketed products, impeding their ability to generate a profit. Companies also may have difficulty manufacturing, marketing, and distributing their products. Companies may further face product liability and other actions should their products be less safe or efficacious than believed, should they be deemed to have engaged in misleading practices, or should a person that received their product otherwise experience harm or injury.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Semiconductors Industry Risk*. Competitive pressures may have a significant effect on the financial condition of semiconductor companies and, as product cycles shorten and manufacturing capacity increases, these companies may become increasingly subject to aggressive pricing, which hampers profitability. Reduced demand for end-user products, under-utilization of manufacturing capacity, and other factors could adversely impact the operating results of companies in the Semiconductors Industry. Semiconductor companies typically face high capital costs and may be heavily dependent on intellectual property rights. The Semiconductors Industry is highly cyclical, which may cause the operating results of many semiconductor companies to vary significantly. The stock prices of companies in the Semiconductors Industry have been and likely will continue to be extremely volatile.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Software Industry Ris*k. The Software Industry can be significantly affected by intense competition, aggressive pricing, technological innovations, and product obsolescence. Companies in the Software Industry are subject to significant competitive pressures, such as aggressive pricing, new market entrants, competition for market share, short product cycles due to an accelerated rate of technological developments and the potential for limited earnings and/or falling profit margins. These companies also face the risks that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. These factors can affect the profitability of these companies and, as a result, the value of their securities. Also, patent protection is integral to the success of many companies in this industry, and profitability can be affected materially by, among other things, the cost of obtaining (or failing to obtain) patent approvals, the cost of litigating patent infringement and the loss of patent protection for products (which significantly increases pricing pressures and can materially reduce profitability with respect to such products). In addition, many software companies have limited operating histories. Prices of these companies' securities historically have been more volatile than other securities, especially over the short term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Technology Hardware Industry Risk.* The Technology Hardware Industry includes companies that manufacture and distribute computers, servers, mainframes, peripheral devices (*e.g.*, keyboard, mouse, etc.), high-technology components (*e.g.*, circuit boards), and electronic office equipment. In addition, companies in the Technology Hardware Industry include producers and distributors of semiconductors and other integrated chips, other products related to the semiconductor industry such as motherboards, and manufacturers of high-technology tools and/or equipment used in the creation of semiconductors, photonics, wafers, and other high-technology components. The companies in the Technology Hardware Industry can be significantly affected by competitive pressures, aggressive pricing, technological developments, changing domestic demand, the ability to attract and retain skilled employees and availability and price of components. The market for products produced by companies in the Technology Hardware Industry is characterized by rapidly changing technology, rapid product obsolescence, cyclical market patterns, evolving industry standards and frequent new product introductions. The success of these companies depends in substantial part on the timely and successful introduction of new products. An unexpected change in one or more of the technologies affecting an issuer's products or in the market for products based on a particular technology could have a material adverse effect on a participant's operating results.

Many of the companies in the Technology Hardware Industry rely on a combination of patents, copyrights, trademarks and trade secret laws to establish and protect their proprietary rights in their products and technologies. There can be no assurance that the steps taken by the companies to protect their proprietary rights will be adequate to prevent misappropriation of their technology or that competitors will not independently develop technologies that are substantially equivalent or superior to such companies' technology. The Technology Hardware Industry is a separate industry within the Technology Sector.

• **Counterparty Risk*.*** Counterparty risk is the risk that a counterparty is unwilling or unable to make timely payments or deliver the reference asset contemplated by such arrangement to meet its contractual obligations with respect to the amount a Fund expects to receive from a counterparty to a financial instrument entered into by a Fund. A Fund generally enters into derivatives transactions with counterparties such that either party can terminate the contract without penalty prior to the termination date. A Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations under such a contract, or if any collateral posted by the counterparty for the benefit of a Fund is insufficient or there are delays in a Fund's ability to access such collateral. If the counterparty becomes bankrupt or defaults on its payment, delivery or other obligations to a Fund, it may experience significant delays in obtaining any recovery, may obtain only a limited recovery or obtain no recovery, or may not be able to maintain its desired exposure to Underlying Issuers, which may result in a decline in the value of an investment held by a Fund. A Fund also may not be able to exercise remedies, such as the termination of transactions, netting of obligations and realization on collateral, if such remedies are stayed or eliminated under special resolutions adopted in the United

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States, the European Union and various other jurisdictions. European Union rules and regulations intervene when a financial institution is experiencing financial difficulties and could reduce, eliminate, or convert to equity a counterparty's obligations to a Fund (sometimes referred to as a "bail in").

A Fund typically enters into transactions with counterparties that present minimal risks based on the Adviser's assessment of the counterparty's creditworthiness, or its capacity to meet its contractual obligations during the term of the derivative agreement or contract. The Adviser considers factors such as counterparty credit rating among other factors when determining whether a counterparty is creditworthy. The Adviser regularly monitors the creditworthiness of each counterparty with which a Fund transacts. A Fund generally enters into derivative transactions with major financial intermediaries and seeks to mitigate risks by generally requiring that the counterparties for a Fund post collateral, marked to market daily, in an amount approximately equal to what the counterparty owes a Fund, subject to certain minimum thresholds. To the extent any such collateral is insufficient or there are delays in accessing the collateral, a Fund will be exposed to the risks described above. If a counterparty's credit ratings decline, a Fund may be subject to a bail-in, as described above.

In addition, each Fund may enter into derivative transactions with a limited number of counterparties, which may increase a Fund's exposure to counterparty credit risk. The Funds do not specifically limit their counterparty risk with respect to any single counterparty. To the extent a Fund's counterparties are concentrated in the financial services sector, a Fund bears the risk that those counterparties may be adversely affected by legislative or regulatory changes, adverse market conditions, increased competition, and/or wide scale credit losses resulting from financial difficulties or borrowers affecting that economic sector. There is a risk that no suitable counterparties are willing to enter into, or continue to enter into, transactions with a Fund and, as a result, the Fund may not be able to achieve its investment objective.

• **Cryptocurrency Risk.** While the Fund will not invest directly in cryptocurrencies, certain of the Fund's investments in Cryptocurrency ETFs and in publicly traded securities of companies engaged in cryptocurrency-related businesses and activities are subject to fluctuations in the value of the cryptocurrencies in which they invest or to which they have exposure, and the value of such cryptocurrencies may be highly volatile as a result of the following factors.

Cryptocurrencies are digital assets designed to act as a medium of exchange. The value of cryptocurrencies is determined by supply and demand in the global cryptocurrency markets, which consist primarily of transactions of the respective cryptocurrencies on electronic exchanges or trading venues. Cryptocurrencies are relatively new, and their value is influenced by a wide variety of factors that are uncertain and difficult to evaluate, such as the infancy of their development, regulatory changes, a crisis of confidence, their dependence on technologies such as cryptographic protocols, their dependence on the role played by miners and developers and the potential for malicious activity (*e.g.*, theft).

Cryptocurrency generally operates without central authority (such as a bank) and is not backed by any government. Cryptocurrency is not legal tender. Federal, state and/or foreign governments may restrict the use and exchange of cryptocurrency, and regulation in the U.S. is still developing. The market price of cryptocurrencies has been subject to extreme fluctuations. If cryptocurrency markets continue to be subject to sharp fluctuations, investors may experience losses. The market value of cryptocurrencies may be affected by momentum pricing of the market due to speculation about future price appreciation, which may lead to increased volatility. Similar to fiat currencies (*i.e.*, a currency that is backed by a central bank or a national, supra-national or quasi-national organization), cryptocurrencies are susceptible to theft, loss and destruction. Furthermore, if network participants are able to gain a certain level of control over a network, they would be able to execute significant attacks, control transactions, stop payments, and fraudulently obtain such network's cryptocurrency. Cryptocurrency exchanges and other trading venues on which cryptocurrencies trade are relatively new and, in most cases, largely unregulated and may therefore be more exposed to market manipulation, fraud and failure than established, regulated exchanges for securities, derivatives and other currencies. Investors in cryptocurrency may have little or no recourse should such theft, fraud or manipulation occur and could suffer significant losses. Additionally, holders of cryptocurrency may not be able to access their wallets due to the loss, theft, compromise or destruction of the private keys associated with the public addresses that hold the cryptocurrency. A significant portion of a cryptocurrency may be held by a small number of holders, who would have the ability to manipulate the prices of such cryptocurrencies. The Fund's indirect investment in and exposure to cryptocurrency remains subject to volatility experienced by the cryptocurrency exchanges and other cryptocurrency trading venues. Such volatility can adversely affect an investment in the Fund. Cryptocurrency exchanges may stop operating or permanently shut down due to fraud, technical glitches, hackers or malware, which may also affect the price of cryptocurrencies and thus the Fund's investment in cryptocurrency-related instruments or in publicly traded securities of companies engaged in cryptocurrency-related businesses and activities.

Because cryptocurrencies have no physical existence beyond the record of transactions on their respective blockchains, a variety of technical factors related to these blockchains could also impact the price of the cryptocurrencies. For example, malicious attacks by "miners" who validate transactions, inadequate mining fees to incentivize validating of cryptocurrency transactions, and advances in quantum computing could undercut the integrity of the blockchain and negatively affect the price of cryptocurrency. The acceptance of software patches or upgrades by a significant, but not overwhelming, percentage of the users and miners in a digital asset network, such as the bitcoin or Ethereum network, could result in a "fork" in such network's blockchain, resulting in the creation of multiple separate networks, which could compete with one another for users, miners, and

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developers. This could adversely affect the network and the underlying cryptocurrency's price. A fork may be intentional, such as when the Ethereum network shifted from proof-of-work to proof-of-stake. This means that instead of being required to solve complex mathematical problems validators are required to stake ether.

Factors affecting the further development of cryptocurrency include, but are not limited to, continued worldwide growth or possible cessation or reversal in the adoption and use of cryptocurrency and other digital assets; government and quasi-government regulation or restrictions on or regulation of access to and operation of digital asset networks; changes in consumer demographics and public preferences; maintenance and development of open-source software protocol; availability and popularity of other forms or methods of buying and selling goods and services; the use of the networks supporting digital assets, such as those for developing smart contracts and distributed applications; general economic conditions and the regulatory environment relating to digital assets; negative consumer or public perception; general risks tied to the use of information technologies, including cyber risks; and political or economic crises. A hack or failure of one cryptocurrency may lead to a loss in confidence in, and thus decreased usage or and or value of, other cryptocurrencies.

Currently, there is relatively limited use of cryptocurrency in the retail and commercial marketplace, which contributes to price volatility. A lack of expansion by cryptocurrencies into retail and commercial markets, or a contraction of such use, may result in increased volatility or a reduction in the value of cryptocurrencies, either of which could adversely impact the Fund's investment. In addition, to the extent market participants develop a preference for one cryptocurrency over another, the value of the less preferred cryptocurrency would likely be adversely affected.

• **Cryptocurrency ETF Risk.** The Fund may invest in or have exposure to one or more Cryptocurrency ETFs that primarily hold cryptocurrency to the extent consistent with U.S. federal securities laws and related guidance applicable to the Fund. Foreign and domestic Cryptocurrency ETFs are relatively new investment products, with the first domestic cryptocurrency ETFs having commenced trading in January 2024. As a result, the Cryptocurrency ETFs in which the Fund may invest may have limited financial and operating histories. To the extent the Fund invests directly in shares of a Cryptocurrency ETF, the Fund will hold shares representing a fractional undivided beneficial interest in the net assets of the Cryptocurrency ETF and bear its ratable share of the Cryptocurrency ETF's expenses. As a result, Fund shareholders will indirectly pay the fees of any Cryptocurrency ETF to which the Fund has investment exposure in addition to the Fund's total annual fund operating expenses. The Fund's investment exposure to Cryptocurrency ETFs subjects the Fund to many of the same risks as an investment in the reference cryptocurrency itself, including those described elsewhere in this Prospectus. The value of interests in Cryptocurrency ETFs and their reference cryptocurrency is subject to a number of factors, including the capabilities and development of blockchain technologies, cryptocurrencies' dependence on the internet, other technologies, and the role played by key service providers, users, developers and other facilitators (*e.g.*, miners) and the potential for malicious activity at various stages in the cryptocurrency investment cycle. The Fund expects to purchase shares of any Cryptocurrency ETF in the secondary market at its market price, which may be highly volatile and may not closely correspond to either the NAV per share of the Cryptocurrency ETF or the price of the reference cryptocurrency. Shares of Cryptocurrency ETFs may trade at premiums (*i.e.*, the market price of the shares is more than the NAV) or discounts (*i.e.*, the market price of the shares is less than the NAV), which may be significant. The risk that share prices differ from a Cryptocurrency ETF's NAV and/or the price of the Cryptocurrency ETF's reference cryptocurrency is likely to increase during times of market volatility or stressed market conditions. Under such conditions, the market for shares of Cryptocurrency ETFs may become less liquid making it difficult for the Fund to either increase or decrease its investment exposure to Cryptocurrency ETFs. Extreme volatility affecting cryptocurrencies may persist for extended periods and the value of the Fund's investment in a Cryptocurrency ETF may decline significantly without recovery. The cryptocurrency markets and by extension, Cryptocurrency ETFs and the Fund's investments in such Cryptocurrency ETFs, also may be significantly and adversely affected by alleged and actual acts of fraud carried out by cryptocurrency market participants, the bankruptcy or other failure of key cryptocurrency service providers, and regulatory actions that negatively affect or constrain the further development of cryptocurrencies and the cryptocurrency markets. Regulatory and enforcement scrutiny of cryptocurrency market participants and the cryptocurrency markets more generally by, among others, the Department of Justice, the SEC, the CFTC, the White House and Congress, as well as state regulators and authorities has continued to increase. The shares of Cryptocurrency ETFs in which the Fund may invest or to which the Fund may have investment exposure are generally not registered under the 1940 Act, and therefore, do not afford the Fund the investor protections typical of investments in U.S. registered funds.

Certain of the Cryptocurrency ETFs in which the Fund invests may engage in staking. Staking refers to the process where the holder of a particular cryptocurrency will agree to lock up the cryptocurrency for it to be used in the relevant network's proof-of-stake validation process. In return, the holder will receive staking rewards in the form of the cryptocurrency, which represent portions of the cryptocurrency network's transaction fees. Staking is only available to cryptocurrencies that utilize the proof-of-stake validation process.

When a Cryptocurrency ETF stakes its underlying cryptocurrency, the cryptocurrency is subject to the risks attendant to staking generally, such as illiquidity, reliance on third-party service providers, slashing, missed rewards, and validator problems and errors. Staking requires that the Cryptocurrency ETF lock up the staked cryptocurrency and become subject to an unbonding period to unstake the cryptocurrency, meaning that the Cryptocurrency ETF cannot sell or transfer the staked cryptocurrency

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during the time that it is staked and during which it is being unbonded. The unbonding period may be longer than anticipated based on network activity. In addition, during the unbonding period, the Cryptocurrency ETF is subject to the market price volatility of the cryptocurrency, and it may miss opportunities to sell the staked cryptocurrency during opportune times. Staking a cryptocurrency may involve the risk of slashing and concentration risk. Slashing is a penalty imposed on network validators for actions that threaten the blockchain's integrity. For example, slashing can result from isolated validator mistakes, malicious activity, coordinated attacks, software bugs, or provider failures. Slashing serves as an enforcement mechanism to ensure network resilience, but correlated slashing events can be catastrophic. Penalties can scale aggressively, potentially leading to a significant loss of staked principal. Concentration risks associated with staking include staking activities occurring through a concentrated group of software providers and cloud infrastructure providers. There are a limited number of staking software providers, and over-allocating to validators using the same software increases the risk of a single issue impacting a large amount of staked assets. Similarly, complications in specific cloud regions (*i.e.*, a particular geographical area where a cloud provider's data centers are located) can create outages that impact validators. Such complications may include, but are not limited to, compliance and regulatory issues, security breaches such as ransomware threats and attacks, data breaches, and malicious actors, and cloud network and infrastructure performance issues (*e.g.*, network latency and service outages). Staked cryptocurrencies are also subject to security breaches, network downtime or attacks, smart contract vulnerabilities, and validator or custodian failure or compromise, which can result in a complete loss of the staked cryptocurrency or a loss of any rewards. The loss of the staked cryptocurrency (either in whole or partially) during the staking period will have an adverse effect on the Cryptocurrency ETF, and in turn, the Fund.

• **Currency Exchange Rate Risk.** Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of a Fund's investments and the value of your Shares. Because a Fund's NAV is determined on the basis of U.S. dollars, the U.S. dollar value of your investment in a Fund may go down if the value of the local currency of the non-U.S. markets in which a Fund invests depreciates against the U.S. dollar. This is true even if the local currency value of securities in a Fund's holdings goes up. Conversely, the dollar value of your investment in a Fund may go up if the value of the local currency appreciates against the U.S. dollar. The value of the U.S. dollar measured against other currencies is influenced by a variety of factors. These factors include: national debt levels and trade deficits, changes in balances of payments and trade, domestic and foreign interest and inflation rates, global or regional political, economic or financial events, monetary policies of governments, actual or potential government intervention, and global energy prices. Political instability, the possibility of government intervention and restrictive or opaque business and investment policies also may reduce the value of a country's currency. Government monetary policies and the buying or selling of currency by a country's government also may influence exchange rates. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in a Fund may change quickly and without warning, and you may lose money.

• **Cybersecurity Risk.** With the increased use of technologies such as the Internet and the dependence on computer systems to perform business and operational functions, funds (such as a Fund) and their service providers may be prone to operational and information security risks resulting from cyber-attacks and/or technological malfunctions. In general, cyber-attacks are deliberate, but unintentional events may have similar effects. Cyber-attacks include, among others, stealing or corrupting data maintained online or digitally, preventing legitimate users from accessing information or services on a website, releasing confidential information without authorization, and causing operational disruption. Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets or proprietary information, or cause a Fund, the Adviser, the Sub-Adviser and/or other service providers (including custodians and financial intermediaries) to suffer data breaches or data corruption. Additionally, cybersecurity failures or breaches of the electronic systems of a Fund, the Adviser, the Sub-Adviser or a Fund's other service providers, market makers, APs, a Fund's primary listing exchange or the issuers of securities in which such Fund invests have the ability to disrupt and negatively affect the Fund's business operations, including the ability to purchase and sell Shares, potentially resulting in financial losses to the Fund and its shareholders. For instance, cyber-attacks or technical malfunctions may interfere with the processing of shareholder or other transactions, affect a Fund's ability to calculate its NAV, cause the release of private shareholder information or confidential Fund information, impede trading, cause reputational damage, and subject a Fund to regulatory fines, penalties or financial losses, reimbursement or other compensation costs, and additional compliance costs. Cyber-attacks or technical malfunctions may render records of Fund assets and transactions, shareholder ownership of Shares, and other data integral to the functioning of a Fund inaccessible or inaccurate or incomplete. A Fund also may incur substantial costs for cybersecurity risk management to prevent cyber incidents in the future. A Fund and its respective shareholders could be negatively impacted as a result.

• **Depositary Receipt Risk*.*** Each Fund may hold the securities of non-U.S. companies in the form of depositary receipts, including ADRs and GDRs. ADRs are negotiable certificates issued by a U.S. financial institution that represent a specified number of shares in a foreign stock and trade on a U.S. national securities exchange, such as the New York Stock Exchange (the "NYSE"). Sponsored ADRs are issued with the support of the issuer of the foreign stock underlying the ADRs and carry all of the rights of common shares, including voting rights. GDRs are similar to ADRs, but may be issued in bearer form and are typically offered for sale globally and held by a foreign branch of an international bank. The underlying issuers of certain depositary receipts, particularly unsponsored or unregistered depositary receipts, are under no obligation to distribute shareholder communications to

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the holders of such receipts, or to pass through to them any voting rights with respect to the deposited securities. Issuers of unsponsored depositary receipts are not contractually obligated to disclose material information in the U.S. and, therefore, such information may not correlate to the market value of the unsponsored depositary receipt. The Underlying Shares in a Fund's portfolio are usually denominated or quoted in currencies other than the U.S. Dollar. As a result, changes in foreign currency exchange rates may affect the value of such Fund's portfolio. In addition, because the Underlying Shares trade on foreign exchanges at times when the U.S. markets are not open for trading, the value of the Underlying Shares may change materially at times when the U.S. markets are not open for trading, regardless of whether there is an active U.S. market for Shares.

• **Derivatives Risk*.*** Each Fund intends to invest in total return swaps, which are a type of derivative. A Fund may invest in swap agreements to pursue its investment objective and to create economic leverage in a Fund; to seek to enhance total return; to seek to hedge against fluctuations in securities prices, interest rates, currency rates, etc.; to seek to change the effective duration of a Fund's portfolio; to seek to manage certain investment risks; as a substitute for the purchase or sale of securities or currencies; and/or to obtain or replicate market exposure. The use of such derivatives may expose a Fund to risks in addition to and greater than those associated with investing directly in the instruments underlying those derivatives, including risks relating to leverage, correlation (imperfect correlations with underlying instruments or a Fund's other portfolio holdings), high price volatility, lack of availability, counterparty credit, liquidity, valuation and legal restrictions. The use of such derivatives also may expose a Fund to the performance of securities that a Fund does not own. The skills necessary to successfully execute derivatives strategies may be different from those for more traditional portfolio management techniques, and if the Adviser and Sub-Adviser are incorrect about their expectations of market conditions, the use of derivatives also could result in a loss, which in some cases may be unlimited. Use of derivatives also may cause a Fund to be subject to additional regulations, which may generate additional Fund expenses. These practices also entail transactional expenses and may cause a Fund to realize higher amounts of short-term capital gains than if the Fund had not engaged in such transactions. The markets for certain derivatives, including those located in certain foreign countries, are relatively new and still developing, which may expose a Fund to increased counterparty credit and liquidity risks.

Certain of the derivatives in which a Fund invests are traded (and privately negotiated) in the OTC market. OTC derivatives are complex and often valued subjectively, which exposes a Fund to heightened liquidity, mispricing and valuation risks. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to a Fund. In addition, OTC derivative instruments are often highly customized and tailored to meet the needs of a Fund and its trading counterparties. If a derivative transaction is particularly large or if the relevant market is illiquid, it may not be possible to initiate a transaction or liquidate a position at an advantageous time or price. As a result and similar to other privately negotiated contracts, a Fund is subject to counterparty credit risk with respect to such derivative contracts. Certain derivatives are subject to mandatory exchange trading and/or clearing, which exposes a Fund to the credit risk of the clearing broker or clearinghouse. While exchange trading and central clearing are intended to reduce counterparty credit risk and to increase liquidity, they do not make derivatives transactions risk-free. Certain risks also are specific to the derivatives in which a Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Swap Agreements Risk.* Swap agreements are contracts for periods ranging from one day to more than one year and may be negotiated bilaterally and traded OTC between two parties or, for certain standardized swaps, must be exchange-traded through a futures commission merchant or swap execution facility and/or cleared through a clearinghouse that serves as a central counterparty. In a standard swap transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. Each Fund may enter into swap agreements, including, but not limited to total return swaps, index swaps, interest rate swaps, municipal market data rate locks, and credit default swaps. Each Fund may utilize swap agreements in an attempt to gain exposure to certain securities without purchasing those securities to speculate on the movement of such securities or to hedge a position. Risks associated with the use of swap agreements are different from those associated with ordinary portfolio securities transactions, largely due to the fact they could be considered illiquid and many swaps currently trade on the OTC market. Swaps are particularly subject to counterparty credit, correlation, valuation, liquidity and leveraging risks and could result in substantial losses to a Fund.

As noted above, certain standardized swaps are subject to mandatory exchange trading and central clearing. While exchange trading and central clearing are intended to reduce counterparty credit risk and increase liquidity, they do not make swap transactions risk-free. Additionally, the CFTC and other applicable regulators have adopted rules imposing certain margin requirements, including minimums, on OTC swaps, which may result in a Fund and its counterparties posting higher margin amounts for OTC swaps, which could increase the cost of swap transactions to the Fund and impose added operational complexity. The Dodd-Frank Act and related regulatory developments require the clearing and exchange-trading of many OTC derivative instruments that the CFTC and the SEC have defined as "swaps." Mandatory exchange-trading and clearing are occurring on a phased-in basis based on the type of market participant and CFTC approval of contracts for central clearing. The Advisor will continue to monitor developments in this area, particularly to the extent regulatory changes affect a Fund's ability to enter into swap agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Forwards Contracts.* The primary risks associated with the use of forwards contracts, which may adversely affect the Fund's NAV and total return, are: (a) the imperfect correlation between the change in market value of the forward contract and the

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price of underlying asset; (b) possible lack of a liquid secondary market for a forwards contract and the resulting inability to close a forwards contract when desired; (c) losses caused by unanticipated market movements, which are potentially unlimited; (d) the possibility that the counterparty will default in the performance of its obligations; and (e) if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements, and the Fund may have to sell securities at a time when it maybe disadvantageous to do so.

Each Fund is subject to the risk that a change in U.S. law and related regulations will impact the way the Fund operates, increase the particular costs of a Fund's operation and/or change the competitive landscape. In October 2020, the SEC adopted a new rule governing a fund's use of derivatives. The new rule, among other things, generally requires a fund to adopt a derivatives risk management program, appoint a derivatives risk manager to oversee the program and comply with an outer limit on fund leverage risk based on value at risk, or "VaR." Certain funds may be exempted from these requirements if they use derivatives only to a limited extent and in a limited manner and comply with certain other conditions set forth in the new rule. The new rule significantly changes the regulatory framework applicable to a fund's use of derivatives, including by replacing the existing asset segregation regulatory framework in its entirety. The new rule may influence the extent to which a Fund uses derivatives, adversely affect the Fund's performance, and increase costs related to a Fund's use of derivatives.

• **Emerging and Developing Markets Risk.** Emerging markets are subject to greater market volatility, lower trading volume, political and economic instability, uncertainty regarding the existence of trading markets and more governmental limitations on foreign investment than more developed markets. In addition, securities in emerging markets may be subject to greater price fluctuations than securities in more developed markets. Differences in regulatory, accounting, auditing, and financial reporting and recordkeeping standards could impede the Adviser's ability to evaluate local companies and impact a Fund's performance. There also may be limitations on the rights and remedies available to investors in emerging market companies compared to those associated with U.S. companies. In addition, brokerage and other transaction costs on foreign securities exchanges are often higher than in the U.S. and there is generally less government supervision and regulation of exchanges, brokers and issuers in foreign countries.

• **Equity Securities Risk.** The Funds are designed for investors who can accept the risks of investing in a portfolio with significant equity holdings. Equity holdings tend to be more volatile than other investment choices such as bonds and money market instruments because common stockholders, or holders of equivalent interests, generally have inferior rights to receive payments from issuers in comparison with the rights of preferred stockholders, bondholders and other creditors of such issuers. The value of a Fund's Shares will fluctuate as a result of the movement of the overall stock market or of the value of the individual securities held by the Fund, sometimes rapidly or unpredictably, resulting in losses. Equity securities may decline in value due to factors affecting equity securities markets generally or particular industries represented in those markets. The value of an equity security may also decline for a number of reasons, which directly relate to the issuer, such as management performance, changed investor perception financial leverage, and reduced demand for the issuer's goods or services. Investor perceptions are based on various and unpredictable factors including: expectations regarding government, economic, monetary and fiscal policies; inflation and interest rates; economic expansion or contraction; and global or regional political, economic and banking crises.

• **ETF Risks.** Each Fund is an ETF and, as a result of its structure, is exposed to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk.* Each Fund has a limited number of financial institutions that may act as APs. In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. Shares may trade at a material discount to NAV and possibly face delisting if either: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Costs of Buying or Selling Shares Risk.* Investors buying or selling Shares in the secondary market will pay brokerage commissions or other charges imposed by brokers, as determined by that broker. Brokerage commissions are often a fixed amount and may be a significant proportional cost for investors seeking to buy or sell relatively small amounts of Shares. In addition, secondary market investors also will incur the cost of the difference between the price at which an investor is willing to buy Shares (the "bid" price) and the price at which an investor is willing to sell Shares (the "ask" price). This difference in bid and ask prices is often referred to as the "spread" or "bid/ask spread." The bid/ask spread varies over time for Shares based on trading volume and market liquidity and is generally lower if Shares have more trading volume and market liquidity and higher if Shares have little trading volume and market liquidity. Further, a relatively small investor base in a Fund, asset swings in a Fund and/or increased market volatility may cause increased bid/ask spreads. Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Shares May Trade at Prices Other Than NAV Risk.* As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate a Fund's NAV, there may be times

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when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility or periods of steep market declines and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant. The market price of Shares during the trading day, like the price of any exchange-traded security, includes a "bid/ask" spread charged by the exchange specialist, market makers or other participants that trade Shares. In times of severe market disruption, the bid/ask spread can increase significantly. At those times, Shares are most likely to be traded 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 Adviser believes that, under normal market conditions, large market price discounts or premiums to NAV will not be sustained because of arbitrage opportunities. Because securities held by a Fund may trade on foreign exchanges that are closed when such Fund's primary listing exchange is open, such Fund is likely to experience premiums or discounts greater than those of ETFs that invest in and hold only securities and other investments that are listed and trade in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Trading Risk.* Although Shares are listed for trading on the Exchange and may be listed or traded on U.S. and non-U.S. stock exchanges other than the Exchange, there can be no assurance that an active trading market for such Shares will develop or be maintained. Trading in Shares may be halted due to market conditions or for reasons that, in the view of the Exchange, make trading in Shares inadvisable. In addition, trading in Shares on the Exchange is subject to trading halts caused by extraordinary market volatility pursuant to Exchange "circuit breaker" rules, which temporarily halt trading on the Exchange when a decline in the S&P 500<sup>®</sup> Index during a single day reaches certain thresholds (*e.g.*, 7%, 13%, and 20%). Additional rules applicable to the Exchange may halt trading in Shares when extraordinary volatility causes sudden, significant swings in the market price of Shares. There can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of a Fund's underlying portfolio holdings, which can be significantly less liquid than Shares.

**• Ether Risk.** Ether is a relatively new innovation, and the ether market is subject to rapid price swings, changes and uncertainty and is a largely unregulated marketplace, which may be attributable to a possible lack of regulatory compliance. The value of ether has been and may continue to be, substantially dependent on speculation, such that trading and investing ether generally may not be based on fundamental analysis. The further development of the Ethereum Network and the acceptance and use of ether are subject to various factors that are difficult to evaluate. The slowing, stopping, or reversing of the development of the Ethereum Network or the acceptance of ether may adversely affect the price of ether. Ether is subject to the risk of fraud, theft, manipulation or security failures, operational, or other problems that impact ether trading venues. Unlike the exchanges for more traditional assets, such as equity securities and futures contracts, ether and ether trading platforms are largely unregulated. As a result of the lack of regulation, individuals or groups may engage in fraud or market manipulation, and investors may be more exposed to the risk of theft, fraud, and market manipulation than when investing in more traditional asset classes. Legal or regulatory changes may negatively impact the operation of the Ethereum Network or restrict the use of ether. Realizing any of these risks could result in a decline in the acceptance of ether and, consequently, a reduction in the value of ether, ether futures, and the Fund.

Investors should also know that the Ethereum blockchain faces increased vulnerability to attacks if ownership or staking of ether becomes concentrated in one participant. Like the Bitcoin blockchain, the Ethereum blockchain may be at risk of attacks if there is a high concentration of ether ownership or staking. If an entity controls 33% or more of staked ether, it could execute attacks, with greater risks, including transaction censorship and block reordering, occurring if more than 50% is controlled. Such attacks could negatively impact ether futures and, in turn, the value of the Fund's investments. The risk of such attacks increases as the concentration of staked ether grows. Whales could manipulate transactions, halt payments and fraudulently obtain ether.

Although the price movements of ether and bitcoin have generally been correlated, with both assets experiencing similar trends, ether has historically been more volatile. This means that it tends to rise more than bitcoin during market upswings and fall more sharply during downturns. The differences in the design and use cases of the bitcoin and Ethereum blockchains contribute to these distinct risk profiles. Bitcoin is more established as a store of value and crypto assets, while ether's value is closely tied to its broader use in powering decentralized applications and smart contracts.

• **Fixed Income Risk*.*** Fixed income securities are debt obligations issued by corporations, municipalities and other borrowers and are subject to various risks, including call, credit, extension and interest rate risks. Fixed income securities typically do not provide any voting rights, except in cases when interest payments have not been made and the issuer is in default. Fixed income securities with longer maturities or durations may be subject to greater price fluctuations due to interest rate, tax law, and general market changes than securities with shorter maturities or durations. Coupons may be fixed or adjustable, based on a pre-set formula. The prices of high-yield bonds, unlike those of investment-grade bonds, may fluctuate unpredictably and not necessarily inversely with changes in interest rates. Changes in the value of portfolio securities will not affect cash income derived from these securities but will affect a Fund's NAV.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Call Risk.* During periods of falling interest rates, an issuer of a callable bond held by a Fund may "call" or repay the security before its stated maturity, and the Fund may have to reinvest the proceeds at lower interest rates, resulting in a decline in the Fund's income.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Credit Risk.* Credit risk is the risk that a Fund could lose money if an issuer or guarantor of a debt instrument in which the Fund invests becomes unwilling or unable to make timely principal and/or interest payments, or to otherwise meet its obligations. To the extent a Fund has short exposure to the issuers of certain fixed income securities, the Fund is subject to the risk that its investment in a debt instrument could decline because of concerns about the issuer's credit quality or perceived financial condition. Fixed income securities are subject to varying degrees of credit risk, which are sometimes reflected in credit ratings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Extension Risk.* During periods of rising interest rates, certain debt obligations will be paid off substantially more slowly than originally anticipated and the value of those securities may fall sharply, resulting in a decline in a Fund's income and potentially in the value of the Fund's investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Income Risk*. Each Fund's income may decline if interest rates fall. The risk of decline in income is heightened when fixed income instruments held by a Fund have floating or variable interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Interest Rate Risk.* The values of debt securities usually rise and fall in response to changes in interest rates. An increase in interest rates may cause the value of fixed-income securities held by a Fund to decline. Changes in a debt instrument's value usually will not affect the amount of interest income paid to a Fund, but will affect the value of the Fund's shares. Interest rate risk is generally greater for investments with longer maturities. Certain securities pay interest at variable or floating rates. Variable rate securities reset at specified intervals, while floating rate securities reset whenever there is a change in a specified index rate. In most cases, these reset provisions reduce the effect of changes in market interest rates on the value of the security. However, some securities do not track the underlying index directly, but reset based on formulas that can produce an effect similar to leveraging; others also may provide for interest payments that vary inversely with market rates. The market prices of these securities may fluctuate significantly when interest rates change. Interest rate changes can be sudden and unpredictable, and are influenced by a number of factors, including government policy, monetary policy, inflation expectations, perceptions of risk, and supply and demand for bonds. Changes in government or central bank policy, including changes in tax policy or changes in a central bank's implementation of specific policy goals, may have a substantial impact on interest rates. This could lead to heightened levels of interest rate, volatility and liquidity risks for the fixed income markets generally and could have a substantial and immediate effect on the values of a Fund's investments. There can be no guarantee that any particular government or central bank policy will be continued, discontinued or changed, nor that any such policy will have the desired effect on interest rates. A Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates and the effect of potential government fiscal policy initiatives and resulting market reaction to those initiatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Prepayment Risk.* The risk that changes in interest rates, credit spreads or other factors will result in the call (repayment) of a debt instrument before it is expected. A Fund may have to invest the proceeds in lower yielding securities or that expectations of such early call will negatively impact the market price of the security.

• **Foreign Securities Risk*.*** Investments in non-U.S. securities involve certain risks that may not be present with investments in U.S. securities. These include risks of adverse changes in foreign economic, political, regulatory and other conditions, or changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges). The securities of some foreign companies may be less liquid and, at times, more volatile than securities of comparable U.S. companies. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Non-U.S. issuers may be subject to different accounting, auditing, financial reporting and investor protection standards than U.S. issuers. Investments in non-U.S. securities may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. With respect to certain countries, there is the possibility of government intervention and expropriation or nationalization of assets. Because legal systems differ, there also is the possibility that it will be difficult to obtain or enforce legal judgments in certain countries. Since foreign exchanges may be open on days when a Fund does not price its shares, the value of the securities in a Fund's portfolio may change on days when shareholders will not be able to purchase or sell a Fund's shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in a Fund more volatile and potentially less liquid than other types of investments.

• **Geographic Investment Risk.** To the extent that a Fund invests, directly or indirectly, a significant portion of its assets in the securities of companies of a single country or region, it is more likely to be impacted by events or conditions affecting that country or region. For example, political and economic conditions and changes in regulatory, tax, or economic policy in a country could significantly affect the market in that country and in surrounding or related countries and have a negative impact on a Fund's performance. Currency developments or restrictions, political and social instability, and changing economic conditions have resulted in significant market volatility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in Asia*. Investment in securities of issuers in Asia involves risks and special considerations not typically associated with investment in the US securities markets. Certain Asian economies have experienced over-extension of credit, currency devaluations and restrictions, high unemployment, high inflation, decreased exports and economic recessions. Economic events in any one Asian country can have a significant effect on the entire Asian region as well as on

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major trading partners outside Asia, and any adverse effect on some or all of the Asian countries and regions in which a Fund invests. The securities markets in some Asian economies are relatively underdeveloped and may subject the Fund to higher action costs or greater uncertainty than investments in more developed securities markets. Such risks may adversely affect the value of the Fund's investments.

Governments of many Asian countries have implemented significant economic reforms in order to liberalize trade policy, promote foreign investment in their economies, reduce government control of the economy and develop market mechanisms. There can be no assurance these reforms will continue or that they will be effective. Despite recent reform and privatizations, significant regulation of investment and industry is still pervasive in many Asian countries and may restrict foreign ownership of domestic corporations and repatriation of assets, which may adversely affect Fund investments. Governments in some Asian countries are authoritarian in nature, have been installed or removed as a result of military coups or have periodically used force to suppress civil dissent. Disparities of wealth, the pace and success of democratization, and ethnic, religious and racial disaffection have led to social turmoil, violence and labor unrest in some countries. Unanticipated or sudden political or social developments may result in sudden and significant investment losses. Investing in certain Asian countries involves risk of loss due to expropriation, nationalization, or confiscation of assets and property or the imposition of restrictions on foreign investments and on repatriation of capital invested.

Some countries and regions in which the Fund invests have experienced acts of terrorism or strained international relations due to territorial disputes, historical animosities or other defense concerns. For example, North and South Korea each have substantial military capabilities, and historical local tensions between the two countries present the risk of war. Any outbreak of hostilities between the two countries could have a severe adverse effect on the South Korean economy and securities markets. These and other security situations may cause uncertainty in the markets of these geographic areas and may adversely affect the performance of local economies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in China*. The economy of China differs, often unfavorably, from the U.S. economy in such respects as structure, general development, government involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. Under China's political and economic system, the central government has historically exercised substantial control over virtually every sector of the Chinese economy through administrative regulation and/or state ownership. Since 1978, the Chinese government has been, and is expected to continue, reforming its economic policies, which has resulted in less direct central and local government control over the business and production activities of Chinese enterprises and companies. Notwithstanding the economic reforms instituted by the Chinese government and the Chinese Communist Party, actions of the Chinese central and local government authorities continue to have a substantial effect on economic conditions in China, which could affect the public and private sector companies in which the Fund may invest. In the past, the Chinese government has from time to time taken actions that influence the prices at which certain goods may be sold, encourage companies to invest or concentrate in particular industries, induce mergers between companies in certain industries and induce private companies to publicly offer their securities to increase or continue the rate of economic growth, and control the rate of inflation or otherwise regulate economic expansion and it may take such actions in the future as well. Such actions and a variety of other centrally planned or determined activities by the Chinese government could have a significant adverse effect on economic conditions in China and the economic prospects for, and the market prices and liquidity of, the securities of Chinese companies and the payments of dividends and interest by Chinese companies. In addition, expropriation, including nationalization, confiscatory taxation, political, economic or social instability or other developments could adversely affect and significantly diminish the values of the Chinese companies in which the Fund may invest. Additionally, from time to time, China has experienced outbreaks of infectious illnesses, including COVID-19, and the country may be subject to other public health threats, diseases or similar issues in the future. The Fund may invest in shares of Chinese companies traded on stock markets in Mainland China or Hong Kong. These stock markets have experienced high levels of volatility, which may continue in the future. The Hong Kong stock market may behave differently from the Mainland China stock market and there may be little to no correlation between the performance of the Hong Kong stock market and the Mainland China stock market. From time to time, certain of the companies in the Fund's portfolio may operate in, or have dealings with, countries subject to sanctions or embargoes imposed by the U.S. government and the United Nations and/or in countries identified by the U.S. government as state sponsors of terrorism. One or more of these companies may be subject to constraints under U.S. law or regulations which could negatively affect the company's performance. Additionally, one or more of these companies may suffer damage to its reputation if it is identified as a company which invests or deals with countries which are identified by the U.S. government as state sponsors of terrorism or subject to sanctions. As an investor in such companies, an investing fund will be indirectly subject to these risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in Hong Kong*. Investments in Hong Kong issuers will subject the Fund to legal, regulatory, political, currency, security, and economic risk specific to Hong Kong. China is Hong Kong's largest trading partner, both in terms of exports and imports. Any changes in the Chinese economy, trade regulations or currency exchange rates, or a tightening of China's control over Hong Kong, may have an adverse impact on Hong Kong's economy. Additionally, Hong Kong is a small island state with few raw material resources and limited land area and is reliant on imports for its commodity needs. Any fluctuations or shortages in the commodity markets could have a negative impact on the Hong Kong economy.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Risks Related to Investing in Japan*. The Japanese economy may be subject to considerable degrees of economic, political and social instability, which could have a negative impact on Japanese securities. Japan's economic growth rate has remained relatively low for an extended period of time and it may remain low in the future. In addition, Japan is subject to the risk of natural disasters, such as earthquakes, volcanoes, typhoons and tsunamis. Additionally, decreasing U.S. imports, new trade regulations, changes in the U.S. dollar exchange rates, a recession in the United States or continued increases in foreclosure rates may have an adverse impact on the economy of Japan. Japan also has few natural resources, and any fluctuation or shortage in the commodity markets could have a negative impact on Japanese securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*◦ Risks of Investing in South Korea*. Investments in South Korean issuers involve risks that are specific to South Korea, including legal, regulatory, political, currency, security and economic risks. Substantial political tensions exist between North Korea and South Korea and recently these political tensions have escalated. The outbreak of hostilities between the two nations, or even the threat of an outbreak of hostilities, will likely adversely impact the South Korean economy. In addition, South Korea's economic growth potential has recently been on a decline, mainly because of a rapidly aging population and structural problems.

• **Illiquidity Risk.** Illiquidity risk exists when particular investments are difficult to purchase or sell, possibly preventing a Fund from selling these illiquid investments at an advantageous price or at the time desired. A lack of liquidity may also cause the value of investments to decline. Illiquid investments may also be difficult to value.

• **Index Provider Risk.** There is no assurance that the Index Provider, or any agents that act on its behalf, will compile the Index accurately, or that the Index will be determined, constructed, reconstituted, rebalanced, composed, calculated or disseminated accurately. The Adviser relies upon the Index Provider and its agents to compile, determine, construct, reconstitute, rebalance, compose, calculate, and disseminate the Index accurately. Any losses or costs associated with errors made by the Index Provider or its agents generally will be borne by a Fund and its shareholders. To correct any such error, the Index Provider or its agents may carry out an unscheduled rebalance of the Index or other modification of Index constituents or weightings. When a Fund in turn rebalances its portfolio, any transaction costs and market exposure arising from such portfolio rebalancing will be borne by the Fund and its shareholders. Unscheduled rebalances also expose a Fund to additional tracking error risk. Errors in respect of the quality, accuracy, and completeness of the data used to compile the Index may occur from time to time and may not be identified and corrected by the Index Provider for a period of time or at all, particularly where the Index is less commonly used as a benchmark by funds or advisors. For example, during a period where the Index contains incorrect constituents, a Fund tracking the Index would have market exposure to such constituents and would be underexposed to the Index's other constituents. Such errors may negatively impact a Fund and its shareholders. The Index Provider and its agents rely on various sources of information to assess the criteria of issuers included in the Index, including information that may be based on assumptions and estimates. Neither a Fund nor the Adviser can offer assurances that the Index's calculation methodology or sources of information will provide an accurate assessment of included issuers.

• **Investment Company Risk.** A Fund may invest in shares of other investment companies, such as ETFs. The risks of investment in these securities typically reflect the risks of the types of instruments in which the investment company invests. When a Fund invests in investment company securities, shareholders of such Fund bear indirectly their proportionate share of their fees and expenses, as well as their share of such Fund's fees and expenses. As a result, an investment by a Fund in an investment company could cause such Fund's operating expenses (taking into account indirect expenses such as the fees and expenses of the investment company) to be higher and, in turn, performance to be lower than if it were to invest directly in the instruments underlying the investment company. Investments in ETFs are also subject to the "ETF Risks" described above.

• **Limited Issuer Risk.** Because a Fund may invest in a limited number of issuers, it is subject to the risk that the value of a Fund's portfolio may decline due to a decline in value of the equity securities of particular issuers. The value of an issuer's equity securities may decline for reasons directly related to the issuer, such as management performance and reduced demand for the issuer's goods or services.

• **Liquidity and Valuation Risk.** It may be difficult for a Fund to purchase and sell particular investments within a reasonable time at a favorable price. As a result, a Fund may be unable to achieve its desired level of investment exposure. In addition, a Fund may be unable to pay redemption proceeds within the requisite time period because of adverse market conditions, an unusually high volume of redemption requests or other reasons, unless it sells other portfolio investments under unfavorable conditions, thereby adversely affecting the Fund. A Fund's ability to sell an instrument under favorable conditions also may be negatively impacted by, among other things, other market participants selling the same or similar instruments at the same time. If a Fund is unable to sell an investment at its desired time, the Fund may miss other investment opportunities while it holds investments it would prefer to sell, which could adversely affect the Fund's performance. In addition, the liquidity of any Fund investment may change significantly over time as a result of market, economic, trading, issuer-specific and other factors. Dislocations in certain parts of markets are resulting in reduced liquidity for certain investments. It is uncertain when financial markets will improve and economic conditions will stabilize. Liquidity of financial markets also may be affected by government intervention and political, social, public health, economic or market developments.

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In addition, during periods of reduced market liquidity, market turmoil or in the absence of readily available market quotations for particular investments in a Fund's portfolio, the ability of the Fund to assign an accurate daily value to these investments may be difficult and the Adviser may be required to fair value the investments. Fair value determinations are inherently subjective and reflect good faith judgments based on available information. Accordingly, there can be no assurance that the determination of an investment's fair value in accordance with a Fund's valuation procedures will in fact approximate the price at which the Fund could sell that investment at that time (*i.e.*, the sale price could differ, sometimes significantly, from the Fund's last valuation for the investment). The Adviser) relies on various sources of information to value investments and calculate NAV. The Adviser may obtain pricing information from third parties that are believed to be reliable. In certain cases, this information may be unavailable or this information may be inaccurate because of errors by the third parties, technological issues, absence of current market data, or otherwise. As a result, the Adviser's ability to effectively value a Fund's investments or calculate NAV may be adversely affected.

Investors who purchase or redeem Shares of a Fund on days when the Fund is holding fair valued investments may receive fewer or more Shares or lower or higher redemption proceeds than they would have received if the Adviser had not fair valued the investment or had used a different valuation methodology. These risks may be magnified in a rising interest rate environment and, if a Fund holds a significant percentage of fair valued or otherwise difficult to value investments, the Fund may be particularly susceptible to the risks associated with valuation. Proportions of a Fund's investments that are fair valued or difficult to value vary from time to time. In addition, during periods of market stress, a large portion of a Fund's assets could potentially experience significant levels of illiquidity. A Fund's shareholder reports contain more information about the Fund's holdings that are fair valued or difficult to value. Investors should consider consulting these reports for additional information.

• **Management Risk.** Each Fund is actively managed and may not meet their investment objectives based on the Adviser's and Sub-Adviser's success or failure to implement the Funds' strategies and to efficiently execute investment transactions, respectively. The Funds invest in derivatives instruments, which may create enhanced risks for each Fund and the Adviser's ability to control a Fund's level of risk will depend on the Adviser's skill in managing such instruments. In addition, the Adviser's evaluations and assumptions regarding investments, interest rates, inflation, and other factors may not successfully achieve each Fund's investment objective given actual market conditions.

• **Market Capitalization Risk.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**◦** *Large-Capitalization Investing Risk.* The securities of large-capitalization companies may be relatively mature compared to smaller companies and, therefore, subject to slower growth during times of economic expansion. Large-capitalization companies also may be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**◦** *Mid-Capitalization Investing Risk*. The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies. The securities of mid-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large-capitalization stocks or the stock market as a whole. Some mid-capitalization companies have limited product lines, markets, financial resources, and management personnel and tend to concentrate on fewer geographical markets relative to large-capitalization companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**◦** Small-Capitalization Investing Risk. The securities of small-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of larger-capitalization companies. The securities of small-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than larger capitalization stocks or the stock market as a whole. Some small-capitalization companies have limited product lines, markets, and financial and managerial resources and tend to concentrate on fewer geographical markets relative to larger capitalization companies. There is typically less publicly available information concerning smaller-capitalization companies than for larger, more established companies. Small-capitalization companies also may be particularly sensitive to changes in interest rates, government regulation, borrowing costs and earnings.

• **Market Risk.** Market risks, including political, regulatory, market, and economic or other developments, and developments that impact specific economic sectors, industries or segments of the market, can affect the value of a Fund's Shares. Each Fund is subject to the risk that the prices of, and the income generated by, securities held by the Fund may decline significantly and/or rapidly in response to adverse conditions or other developments affecting (or that are perceived to affect) individual companies or issuers, particular industries, or the market generally. Such developments may include real or perceived changes in prevailing interest rates, changes in inflation rates or expectations about inflation rates, deflation, adverse investor confidence or sentiment, general outlook for corporate earnings, changing economic, political (including geopolitical), social or financial market conditions, bank failures, actual or threatened imposition of tariffs (which may be imposed by U.S. and foreign governments) and trade disruptions, recession, changes in currency and inflation rates, increased instability or general uncertainty, environmental or natural disasters, extreme weather or geological events, governmental actions, public health emergencies (such as the spread of infectious diseases, pandemics and epidemics), debt crises, terrorism, actual or threatened wars or other armed conflicts (such as

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the armed conflicts across the Middle East and ongoing Russia-Ukraine war in Europe, and the risk of expansion or collateral economic and other effects thereof) or ratings downgrades, technological developments (including those related to artificial intelligence) or failures (for example, widespread system outages or disruptions or faulty updates to software applications) and other similar events, each of which may be temporary or last for extended periods. For example, the threat or actual imposition of tariffs, trade restrictions, currency restrictions or similar actions (or retaliatory measures taken in response to such actions) could adversely affect a Fund's investments, including by leading to price volatility, overall declines in the U.S. and global investment markets, reduced liquidity and investment losses. These events have caused, and may in the future cause, significant disruptions to business operations, strained healthcare systems, disruptions to supply chains, large expansion of government deficits and debt as a result of government actions to mitigate the effects of such events, and widespread uncertainty regarding the long-term effects of such events. Such events may cause the value of securities owned by a Fund to go up or down, sometimes rapidly or unpredictably. There also is a risk that policy and legislative changes by the U.S. Government and/or Federal Reserve, or certain foreign governments and central banks, could cause increased volatility in financial markets and higher levels of Fund redemptions, which could have a negative impact on a Fund. These events may lead to periods of volatility and increased redemptions, which could cause a Fund to experience a loss when selling securities to meet redemption requests by shareholders. The risk of loss increases if the redemption requests are unusually large or frequent. Markets also tend to move in cycles, with periods of rising and falling prices. If there is a general decline in the securities and other markets, your investment in a Fund may lose value, regardless of the individual results of the securities and other instruments in which a Fund invests.

These or similar events could be prolonged and could adversely affect the value and liquidity of a Fund's investments, impair a Fund's ability to satisfy redemption requests, and negatively impact a Fund's performance. Furthermore, economies and financial markets throughout the world are becoming increasingly interconnected. As a result, whether or not a Fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of a Fund's investments may be negatively affected.

• **Models and Data Risk.** When models and data prove to be incorrect or incomplete, any decisions made in reliance thereon expose the Index and the Fund to potential risks. The model used to construct the Index is predictive in nature. The use of predictive models has inherent risks. For example, such models may incorrectly forecast future behavior, leading to potential losses. In addition, in unforeseen or certain low-probability scenarios (often involving a market disruption of some kind), such models may produce unexpected results, which can result in losses for the Fund. Furthermore, because predictive models are usually constructed based on historical data supplied by third parties, the success of relying on such models may depend heavily on the accuracy and reliability of the supplied historical data. In addition, data and information on non-U.S. countries may be unreliable or outdated or there may be less publicly available data or information about non-U.S. countries due to differences in registration, accounting, audit and financial record keeping standards which creates the potential for errors in Index data, Index computation and/or Index construction and could have an adverse effect on the Fund's performance.

• **Money Market Instrument Risk.** A Fund may use a variety of money market instruments for cash management purposes, including money market funds, depositary accounts and repurchase agreements. Money market funds may be subject to credit risk with respect to the debt instruments in which they invest. Depository accounts may be subject to credit risk with respect to the financial institution in which the depository account is held. Money market instruments may lose money.

• **Non-Diversification Risk.** Each Fund is considered to be non-diversified, which means that they may invest a greater percentage of their assets in the securities of a single issuer or a lesser number of issuers than if they were diversified funds. As a result, a Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a lesser number of issuers than a fund that invests more widely. This may increase a Fund's volatility and cause the performance of a relatively small number of issuers to have a greater impact on such Fund's performance.

• **Non-U.S. Regulatory Risks of the Cannabis Industry*.*** Laws and regulations related to the possession, use (medical and recreational), sale, transport and cultivation of marijuana vary throughout the world, and the Fund will only invest in non-U.S. Cannabis Companies if such companies are operating legally in the relevant jurisdiction. Even if a company's operations are permitted under current law, they may not be permitted in the future, in which case such company may not be in a position to carry on its operations in its current locations. Additionally, controlled substance legislation differs between countries and legislation in certain countries may restrict or limit the ability of certain companies in which the Fund invests to sell their products.

• **Operational Risks of the Cannabis Industry*.*** Companies involved in the cannabis industry face intense competition, may have limited access to the services of banks, may have substantial burdens on company resources due to litigation, complaints or enforcement actions, and are heavily dependent on receiving necessary permits and authorizations to engage in medical cannabis research or to otherwise cultivate, possess or distribute cannabis. Because the cultivation, possession, and distribution of cannabis is in all circumstances illegal under United States federal law, federally regulated banking institutions may be unwilling to make financial services available to growers and sellers of cannabis.

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• **Passive Investment Risk.** Each Fund invests in the securities included in, or representative of, its Index regardless of its investment merit. Each Fund does not attempt to outperform its respective Index or take defensive positions in declining markets. As a result, a Fund's performance may be adversely affected by a general decline in the market segments relating to its Index. The returns from the types of securities in which a Fund invests may underperform returns from the various general securities markets or different asset classes. This may cause a Fund to underperform other investment vehicles that invest in different asset classes. Different types of securities (for example, large-, mid- and small-capitalization stocks) tend to go through cycles of doing better or worse than the general securities markets. In the past, these periods have lasted for as long as several years.

• **Real Estate Companies Risk.** The Fund invests in real estate companies, including REITs and real estate holdings companies, which will expose investors to the risks of owning real estate directly, as well as to the risks that relate specifically to the way in which such companies are organized and operated. Real estate is highly sensitive to general and local economic conditions and developments. The U.S. real estate market may, in the future, experience and has, in the past, experienced a decline in value, with certain regions experiencing significant losses in property values. Many real estate companies, including REITs, utilize leverage (and some may be highly leveraged), which increases investment risk and the risk normally associated with debt financing, and could potentially increase the Fund's volatility and losses. Exposure to such real estate may adversely affect Fund performance.

• **REITs Risk.** Investments in REITs involve unique risks. REITs may have limited financial resources, may trade less frequently and in limited volume, and may be more volatile than other securities. In addition, to the extent the Fund holds interests in REITs, it is expected that investors in the Fund will bear two layers of asset-based management fees and expenses (directly at the Fund level and indirectly at the REIT level). The risks of investing in REITs include certain risks associated with the direct ownership of real estate and the real estate industry in general. These include risks related to general, regional and local economic conditions; fluctuations in interest rates and property tax rates; shifts in zoning laws, environmental regulations and other governmental action such as the exercise of eminent domain; increased operating expenses; lack of availability of mortgage funds or other limits to accessing the credit or capital markets; losses due to natural disasters; overbuilding; losses due to casualty or condemnation; changes in property values and rental rates; and other factors.

In addition to these risks, residential/diversified REITs and commercial equity REITs may be affected by 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. Further, REITs are dependent upon management skills and generally may not be diversified. REITs are also subject to heavy cash flow dependency, defaults by borrowers or lessees and self-liquidation. In addition, U.S. REITs are subject to special U.S. federal tax requirements. A U.S. REIT that fails to comply with such tax requirements may be subject to U.S. federal income taxation, which may affect the value of the REIT and the characterization of the REIT's distributions. The U.S. federal tax requirement that a REIT distributes substantially all of its net income to its shareholders may result in the REIT having insufficient capital for future expenditures. A REIT that successfully maintains its qualification may still become subject to U.S. federal, state and local taxes, including excise, penalty, franchise, payroll, mortgage recording, and transfer taxes, both directly and indirectly through its subsidiaries. In the event of a default by a borrower or lessee, the REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs associated with protecting investments.

**• Risks Related to Investing in Canada.** The Canadian and U.S. economies are closely integrated. The United States is Canada's largest trading partner and foreign investor and the Canadian economy is significantly affected by developments in the U.S. economy. Canada is a major producer of forest products, metals, agricultural products, and energy-related products, such as oil, gas, and hydroelectricity. As a result, the Canadian economy is very dependent on the demand for, and supply and price of, natural resources, and the Canadian market is relatively concentrated in issuers involved in the production and distribution of natural resources. Canada's economic growth may be significantly affected by disruptions in its relationship with major trading partners, fluctuations in currency, and global demand for commodities.

• **Sector Risk.** To the extent a Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors. A Fund may invest a significant portion of its assets in the following sectors and, therefore, the performance of the Fund could be negatively impacted by events affecting each of these sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Communications Service Sector Risk.* Market or economic factors impacting communication services companies and companies that rely heavily on technological advances could have a major effect on the value of a Fund's investments. Communication services companies are particularly vulnerable to the potential obsolescence of products and services due to technological advancement and the innovation of competitors. Companies in the Communication Services Sector may also be affected by other competitive pressures, such as pricing competition, as well as research and development costs, substantial capital requirements and government regulation. Additionally, fluctuating domestic and international demand, shifting demographics and often unpredictable changes in consumer tastes can drastically affect a communication services company's profitability. Stocks of communication services companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market. Additionally, companies in the Communication Services Sector may face dramatic and often unpredictable changes in growth rates and competition for the services of qualified personnel. While all companies may be susceptible to network security breaches, certain companies in

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the Communication Services Sector may be particular targets of hacking and potential theft of proprietary or consumer information or disruptions in service, which could have a material adverse effect on their businesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Consumer Discretionary Sector Risk.* Consumer discretionary companies are companies that provide non-essential goods and services, such as retailers, media companies and consumer services. These companies manufacture products and provide discretionary services directly to the consumer, and the success of these companies is tied closely to the performance of the overall domestic and international economy, interest rates, competition and consumer confidence. Success depends heavily on disposable household income and consumer spending. Changes in demographics and consumer tastes can also affect the demand for, and success of, consumer discretionary products in the marketplace.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Health Care Sector Risk*. Health care companies are subject to extensive government regulation and their profitability can be significantly affected by restrictions on government reimbursement for medical expenses, rising costs of medical products and services, pricing pressure (including price discounting), limited product lines, and an increased emphasis on the delivery of healthcare through outpatient services. Health care companies are heavily dependent on obtaining and defending patents, which may be time consuming and costly, and the expiration of patents may also adversely affect the profitability of the companies. Health care companies are also subject to extensive litigation based on product liability and similar claims. In addition, their products can become obsolete due to industry innovation, changes in technologies, or other market developments. Many new products in the health care field require significant research and development and may be subject to regulatory approvals, all of which may be time consuming and costly with no guarantee that any product will come to market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Information Technology Sector Risk.* The Information Technology sector includes companies engaged in internet software and services, technology hardware and storage peripherals, electronic equipment instruments and components, and semiconductors and semiconductor equipment. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. Information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face rapid product obsolescence due to technological developments and frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Failure to introduce new products, develop and maintain a loyal customer base, or achieve general market acceptance for their products could have a material adverse effect on a company's business. Companies in the Information Technology Sector are heavily dependent on intellectual property and the loss of patent, copyright and trademark protections may adversely affect the profitability of these companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *Technology Sector Risk.* Market or economic factors impacting technology companies and companies that rely heavily on technological advances could have a major effect on the value of the Fund's investments. The value of stocks of technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation and competition, both domestically and internationally, including competition from foreign competitors with lower production costs. Technology companies may have limited product lines, markets, financial resources or personnel. Stocks of information technology companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market. Technology companies are heavily dependent on patent and intellectual property rights, the loss or impairment of which may adversely affect profitability. Additionally, companies in the Technology Sector may face dramatic and often unpredictable changes in growth rates and competition for the services of qualified personnel.

• **Securities Lending Risk**. To the extent a Fund engages in securities lending, there are certain risks associated with securities lending, including the risk that the borrower may fail to return the securities on a timely basis or even the loss of rights in the collateral deposited by the borrower, if the borrower should fail financially. As a result, the Fund may lose money. A Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. These events could also trigger adverse tax consequences for a Fund.

• **Solana Risk.** Similar to bitcoin and ether, SOL and its supporting Solana Network are relatively new innovations. The Solana Network and SOL publicly launched in 2020. SOL has increased in popularity and market value since its inception, however it is not as established or widely accepted as bitcoin or ether. Like other cryptocurrencies, SOL is subject to rapid price swings, uncertainty related to demand, and a largely unregulated but rapidly evolving ecosystem. SOL is also subject to the risks of access loss as it is dependent on the use of private keys and theft. While the Fund will seek to invest in Cryptocurrency ETFs that have adopted security procedures intended to protect its assets, there can be no assurance that those procedures will be successful in preventing such loss, theft or restriction on access. Security breaches, cyber-attacks, computer malware and computer hacking attacks have also been a prevalent concern for digital asset trading platforms on which SOL trades. The further development and acceptance of Solana is subject to a variety of factors that are difficult to evaluate, and the delayed development or a cessation of the development of the Solana Network and SOL may adversely affect the value of the Fund's investments and its performance. A contraction in the use of SOL or its blockchain may result in increased volatility or a reduction in the price of SOL which could have a material adverse effect on the value of a Cryptocurrency ETF held by the Fund.

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In addition to utilizing the proof-of-stake mechanism, the Solana Network is unique in that it also uses proof-of-history ("PoH"), which is a new timekeeping blockchain technology created to address scalability limitations associated with certain other cryptocurrency networks. PoH is not widely used, and as such may be more susceptible to undiscovered flaws than more broadly adopted technologies. In the future, there may be network-scale attacks against the Solana Network protocol, which could result in a loss of some or all of the SOL held by a Cryptocurrency ETF in which the Fund may invest. At its current early stage of development and adoption, the Solana Network may be particularly susceptible to such network-scale attacks. On September 14, 2021, the Solana Network was offline for an extended period of time due to what was later attributed to a type of denial of service attack. Any similar attacks could have a material adverse effect on the value of SOL held by a Cryptocurrency ETF in which the Fund invests.

As a result of the lack of regulation, individuals or groups may engage in fraud or market manipulation, and investors, including the Fund, may be more exposed to the risk of theft, fraud, and market manipulation than when investing in more traditional asset classes. Legal or regulatory changes also may negatively affect the operation of the Solana Network and/or restrict the use and trading of SOL. The realization of any of these risks could result in a decline in the acceptance of SOL and, consequently, a reduction in the value of the Fund's indirect investments in SOL and the value of the Fund.

• **Tax Risk.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**◦** *(Ball Metaverse ETF only)*. The Fund may invest in certain non-U.S. entities that own cryptocurrency. Direct and indirect investments in cryptocurrencies introduce complexities beyond typical equity investments and may subject the Fund to certain tax risks. The Fund's investment exposure to cryptocurrencies is expected to be obtained primarily through its investments in non-U.S. ETFs treated as PFICs under the Code, thereby subjecting the Fund to special tax rules applicable to PFIC holdings. If the Fund holds an equity investment in an entity treated as a PFIC, such as investments in certain non-U.S. ETFs that own cryptocurrency, the Fund may be subject to U.S. federal income tax on a portion of any "excess distribution" or gain from the disposition of shares in the PFIC even if such income is distributed as a taxable dividend by the Fund to its shareholders. Additional charges in the nature of interest may be imposed on the Fund in respect of deferred taxes arising from such distributions or gains unless the Fund makes certain elections. In addition, for the Fund to continue to qualify as a regulated investment company ("RIC"), at least 90% of the Fund's gross income each taxable year must be derived from dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stock, securities, or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies, and net income derived from an interest in a qualified publicly traded partnership. Income from a PFIC is generally expected to be qualifying income for purposes of this requirement. If certain of the Fund's investments were deemed to be direct investments in cryptocurrencies, such investments may not produce qualifying income. The Fund intends to seek to restrict its income from investments that do not generate qualifying income to a maximum of 10% of its gross income (when combined with its other investments that produce non-qualifying income).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ *(Magnificent Seven ETF and Cannabis ETF only).* In order to qualify for the favorable tax treatment generally available to a RIC, a Fund must satisfy certain diversification and other requirements. In particular, at each quarter end (a) at least 50% of the value of a Fund's total assets must generally be represented by cash and cash items, U.S. government securities, securities of other RICs and other securities, with such other securities limited, in respect to any one issuer, to an amount not greater than 5% of the value of a Fund's total assets and that does not represent more than 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of a Fund's total assets is invested in the securities (other than U.S. government securities or the securities of other RICs) of any one issuer or the securities (other than the securities of another RIC) of two or more issuers that a Fund controls and which are engaged in the same or similar trades or businesses or related trades or businesses, or the securities of one or more qualified publicly traded partnerships (*i.e.*, the Diversification Requirement). The Funds anticipate gaining exposure to seven Underlying Issuers. To satisfy the Diversification Requirement, the Funds will gain exposure to the Underlying Issuers by entering into swap agreements and forward contracts (derivatives instruments) or by investing in equity securities of an Underlying Issuer. The determination of the value and the identity of the issuer of derivative investments is often unclear for purposes of the Diversification Requirement described above. Although the Funds intend to carefully monitor its investments to ensure that it is adequately diversified under the Diversification Requirement, there are no assurances that the Internal Revenue Service ("IRS") will agree with a Fund's determination of the issuer and valuation under the Diversification Requirement with respect to such derivatives instruments as the application of the Diversification Requirements to derivative investments is often unclear. A Fund's efforts to satisfy the Diversification Requirement may affect the Fund's execution of its investment strategy. If the Fund fails to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation subject to U.S. federal income tax on all its income at the fund level (unless certain relief provisions are available.) The resulting taxes could substantially reduce the Fund's net assets and the amount of income available for distribution to shareholders. In addition, in order to requalify as a RIC, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make certain distributions. In addition, a Fund's use of derivatives may cause the Fund to realize higher amounts of short-term capital gains or otherwise affect Fund's ability to pay out dividends subject to preferential rates or the dividends received deduction, thereby increasing

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the amount of taxes payable by some shareholders. ***Please see the section entitled "Federal Income Taxes – Taxation of the Funds in the SAI for more information.***

• **Tracking Error Risk.** As with all index funds, the performance of each Fund and its Index may differ from each other for a variety of reasons. For example, a Fund incurs operating expenses and portfolio transaction costs not incurred by its Index. In addition, a Fund may not be fully invested in the securities of its Index at all times or may hold securities not included in the Index. The use of sampling techniques may affect a Fund's ability to achieve close correlation with its Index. Each Fund may use a representative sampling strategy to achieve its investment objective, if the Sub-Adviser believes it is in the best interest of the Fund, which generally can be expected to produce a greater non-correlation risk.

• **U.S. Government Securities Risk.** Different types of U.S. government securities have different relative levels of credit risk depending on the nature of the particular government support for that security. U.S. government securities may be supported by: (i) the full faith and credit of the United States government; (ii) the ability of the issuer to borrow from the U.S. Treasury; (iii) the credit of the issuing agency, instrumentality or government-sponsored entity ("GSE"); (iv) pools of assets (*e.g.*, mortgage-backed securities); or (v) the United States in some other way. The U.S. government and its agencies and instrumentalities do not guarantee the market value of their securities, which may fluctuate in value and are subject to investment risks, and certain U.S. government securities may not be backed by the full faith and credit of the United States government. The value of U.S. government obligations may be adversely affected by changes in interest rates. It is possible that the issuers of some U.S. government securities will not have the funds to timely meet their payment obligations in the future and there is a risk of default. For certain agency and GSE issued securities, there is no guarantee the U.S. government or GSE will support the agency if it is unable to meet its obligations.

• **United States Regulatory Risks of Hemp.** "Hemp," as defined in the Agriculture Improvement Act of 2018 (the "Farm Bill"), refers to cannabis plants with a tetrahydrocannabinol ("THC") concentration of not more than 0.3% on a dry weight basis, as well as derivatives thereof, whereas "marijuana" refers to all other cannabis plants and derivatives thereof. The Farm Bill effectively removes hemp from the list of controlled substances and allows states to regulate its production, commerce and research with approval from the United States Department of Agriculture ("USDA"). Certain portfolio holdings may sell dietary supplements and/or foods containing CBD within the United States. While the Farm Bill removes hemp and hemp-derived products from the controlled substances list under the CSA, it does not legalize CBD in every circumstance. CBD, depending on the source from which it was derived, can still be classified as a Schedule I substance under the CSA's definition of "marihuana." The exception for CBD from the definition of "marihuana" only applies if the CBD is derived from "hemp." U.S. federal law also requires that: (i) the hemp is produced by a licensed producer; and (ii) in a manner consistent with the applicable federal and state regulations. CBD and other cannabinoids produced from marijuana as defined by the CSA remain an illegal Schedule I substance under federal law. In addition, many state laws include all CBD within definitions of marijuana and some states have policies or laws that otherwise prohibit or restrict CBD sales.

The Farm Bill delegates to the FDA responsibility for regulating products containing hemp or derivatives thereof (including CBD) under the Federal Food, Drug, and Cosmetic Act (the "FD&C"). Under the FD&C, if a substance (such as CBD) is an active ingredient in a drug product that has been approved by the FDA, then the substance cannot be sold in dietary supplements or foods without FDA approval, unless the substance was marketed as a dietary supplement or as a conventional food before the drug was approved or before the new drug investigations were authorized. The FDA has publicly taken the position that CBD cannot be sold in dietary supplements or foods because CBD is an active ingredient in an FDA-approved drug. Future federal and/or state laws or regulations could drastically curtail permissible uses of hemp, which could have an adverse effect of the value of the Fund's investments in companies with business interests in hemp and hemp-based products.

• **United States Regulatory Risks of the Cannabis Industry.** The possession and use of marijuana, even for medical purposes, is illegal under federal and certain states' laws, which may negatively impact the value of the Fund's investments. Use of marijuana is regulated by both the federal government and state governments, and state and federal laws regarding marijuana often conflict. Even in those states in which the use of marijuana has been legalized, its possession and use remains a violation of federal law. Federal law criminalizing the use of marijuana pre-empts state laws that legalize its use for medicinal and recreational purposes. Actions by federal agencies, such as increased enforcement of current federal marijuana laws and the prosecution of nonviolent federal drug crimes by the U.S. Department of Justice ("DOJ"), could produce a chilling effect on the industry's growth and discourage banks from expanding their services to Cannabis Companies where such services are currently limited. Any of these outcomes would negatively affect the profitability and value of the Fund's investments and even its ability to pursue its stated investment objective. The conflict between the regulation of marijuana under federal and state law creates volatility and risk for all Cannabis Companies.

Because marijuana is a Schedule I controlled substance under the Controlled Substances Act ("CSA"), meaning that it has a high potential for abuse, has no currently "accepted medical use" in the United States, lacks accepted safety for use under medical supervision, and may not be prescribed, marketed or sold in the United States, few drug products containing cannabis or cannabis extracts have been approved for use by the Food and Drug Administration ("FDA") or obtained registrations for commercial production from the U.S. Drug Enforcement Agency ("DEA"), and there is no guarantee that such products will ever be legally

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produced or sold in the U.S. Cannabis Companies in the U.S. that engage in research, manufacturing, distributing, importing or exporting, or dispensing controlled substances must be registered (licensed) to perform these activities and have the security, control, recordkeeping, reporting and inventory mechanisms required by the DEA to prevent drug loss and diversion. Failure to obtain the necessary registrations or comply with necessary regulatory requirements may significantly impair the ability of certain companies in which the Fund invests to pursue medical marijuana research or to otherwise cultivate, possess or distribute marijuana. In addition, because cannabis is a Schedule I controlled substance, Section 280E of the Code applies by its terms to the purchase and sale of medical-use cannabis products and provides that no deduction or credit is allowed for expenses incurred during a taxable year "in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the CSA) which is prohibited by federal law or the law of any state in which such trade or business is conducted." The disallowance of such tax deductions will likely affect the value of Cannabis Companies.

• **XRP Risk.** XRP is a cryptocurrency and, like other cryptocurrencies, operates without central authority or banks and is not backed by any government. XRP can be highly volatile compared to investments in traditional securities and the markets for XRP and XRP-related investments may become illiquid. XRP is a relatively new technological innovation with a limited operating history. There is a limited established performance record for the price of XRP and, in turn, a limited basis for evaluating an investment in XRP.

Unlike other digital assets such as bitcoin or ether, XRP is not and was not mined gradually over time. Instead, all 100 billion XRP tokens were created at the time of the XRP Ledger's launch in 2012. This means that every XRP token that exists today, or will ever exist, was generated from the outset of the XRP Ledger. As a result, there is no ability for the supply of XRP to be adjusted in response to economic conditions. For instance, there is no ability for the supply of XRP to be increased to meet rising demand, which could lead to price volatility. In addition, unlike blockchains that utilize "proof-of-work" or "proof-of-stake" where miners or stakers are rewarded with newly minted coins or tokens, XRP validators are not incentivized by block rewards since there is no new issuance of XRP. Additionally, the fixed supply of XRP, combined with the burning of XRP (permanently destroyed) as transaction fees, could create deflationary pressure over time. A small amount of XRP is burned with every transaction to prevent spam on the network. While the amount of XRP burned per transaction is minuscule, over time, the total supply of XRP will slowly decrease. This could lead to a deflationary environment where the decreasing supply drives up the price of XRP, making it less practical as a medium of exchange. Additionally, as the total supply of XRP slowly shrinks due to burning, liquidity could become an issue in the distant future, potentially making it harder for businesses and users to access sufficient XRP for their transactions.

The fixed supply of XRP could also contribute to price volatility, especially if demand fluctuates significantly. Since the supply of XRP is fixed, any significant surge in demand can result in large price spikes. For example, during periods of high market activity or speculation, the price of XRP could rapidly increase due to the inability to expand supply to match demand. This volatility could make XRP less predictable for businesses that rely on it for payments. Digital assets with a flexible supply, such as stablecoins, can adjust to maintain a stable value. XRP, however, could experience price swings that make it less attractive for everyday transactions or long-term financial planning.

The fixed supply of XRP may also not scale well with rapidly expanding use cases. To the extent more businesses, financial institutions, and payment providers adopt XRP for cross-border transactions and other use cases, there is a risk that the fixed supply may not meet such growing demand, leading to supply shortages and further price volatility. In the case of massive adoption, the scarcity of XRP could raise its value too much, making it less appealing for day-to-day transactions or use as a liquidity bridge in cross-border payments, as businesses might prefer a more stable and widely available currency.

Ripple Labs holds a large portion of the XRP supply, which has led to concerns about centralization. Despite escrow mechanisms that gradually release XRP into the market, Ripple Labs still retains control over a significant portion of XRP, which can impact market dynamics if large amounts are sold. The concentration of XRP in the hands of Ripple Labs and early stakeholders could affect the market's confidence in XRP as a decentralized asset.

The continued adoption of XRP will require growth in its usage as a means of exchange and payment. Even if growth in XRP adoption continues in the near or medium-term, there is no assurance that XRP usage will continue to grow over the long-term. A contraction in the use of XRP may result in a lack of liquidity, increased volatility in and a reduction to the price of XRP.

**PORTFOLIO HOLDINGS INFORMATION**

Information about each Fund's daily portfolio holdings is available at www.roundhillinvestments.com. A complete description of the Funds' policies and procedures with respect to the disclosure of the Funds' portfolio holdings is available in the Funds' Statement of Additional Information (the "SAI").

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**MANAGEMENT**

**Investment Adviser**

Roundhill Financial Inc., a Delaware corporation located at 154 West 14th Street, 2nd Floor, New York, New York 10011, serves as the investment adviser to the Funds. The Adviser oversees the day-to-day operations of the Funds, subject to the general supervision and oversight of the Board. The Adviser continuously reviews, supervises, and administers each Fund's investment program. In particular, the Adviser provides investment and operational oversight of the Sub-Adviser. The Adviser also arranges for sub-advisory, transfer agency, custody, fund administration, distribution and all other services necessary for the Funds to operate. The Adviser is an SEC-registered investment adviser.

For the services it provides to the Funds, the Adviser is entitled to a unified management fee, which is calculated daily and paid monthly, at an annual rate based on each Fund's average daily net assets as set forth in the table below.

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| | |
|:---|:---|
| **Fund** | **Management Fee** |
| Roundhill Video Games ETF | 0.50% |
| Roundhill Sports Betting & iGaming ETF | 0.75% |
| Roundhill Ball Metaverse ETF | 0.59% |
| Roundhill Cannabis ETF | 0.39% |
| Roundhill Magnificent Seven ETF  | 0.29% |

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Pursuant to an investment advisory agreement between the Trust, on behalf of each Fund, and the Adviser (the "Advisory Agreement"), the Adviser has agreed to pay all expenses of the Funds except the fee payable to the Adviser under the Advisory Agreement, interest charges on any borrowings, dividends, and other expenses on securities sold short, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses, and distribution fees and expenses paid by the Trust under the distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act. The Adviser, in turn, compensates the Sub-Adviser from the management fee it receives.

The Adviser has contractually agreed to waive and/or reimburse expenses to ensure the Roundhill Magnificent Seven ETF's Total Annual Fund Operating Expenses do not exceed 0.30%. The waiver and/or reimbursement may not be terminated prior to May 1, 2027 except by the Board.

A discussion of the basis for the Board's approval of the continuation of the Advisory Agreement, relating to each Fund is available in the Funds' <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001683471/000113322826003213/rl-efp22782_ncsr.htm)</u> filing for the fiscal period ended June 30, 2025.

**Sub-Adviser**

Exchange Traded Concepts, LLC, an Oklahoma limited liability company located at 10900 Hefner Pointe Drive, Suite 400, Oklahoma City, Oklahoma 73120, is responsible for the day-to-day management of the Funds. An SEC-registered investment adviser formed in 2018, the Sub-Adviser is majority owned by Cottonwood ETF Holdings LLC.

Pursuant to an investment sub-advisory agreement between the Trust, on behalf of each Fund, the Adviser, and the Sub-Adviser (the "Sub-Advisory Agreement"), the Sub-Adviser is responsible for trading portfolio securities for each Fund, including selecting broker-dealers to execute purchase and sale transactions or in connection with any rebalancing or reconstitution of each respective Index, subject to the supervision of the Adviser and the Board. For its services, the Sub-Adviser is entitled to a fee paid by the Adviser from its management fee, which fee is calculated daily and paid monthly, at an annual rate based on the accumulative average daily net assets of each fund advised (or sponsored) by the Adviser and sub-advised by the Sub-Adviser, and subject to a minimum annual fee as follows:

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| | |
|:---|:---|
| **Minimum Annual Fee**<sup>\*</sup> | **Asset-Based Fee** |
| $15000 | 4 bps (0.04%) on the first $200 million<br>3.5 bps (0.035%) on the next $800 million<br>3 bps (0.03%) on the next $1 billion<br>2.5 bps (0.025%) on the balance over $2 billion |

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A discussion of the basis for the Board's approval of the continuation of the Sub-Advisory Agreement, relating to each Fund is available in the Funds' <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001683471/000113322826003213/rl-efp22782_ncsr.htm)</u> filing for the fiscal period ended June 30, 2025.

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**Portfolio Managers**

William Hershey, Timothy Maloney and David Mazza, each a portfolio manager of the Adviser, and Andrew Serowik, Todd Alberico, Gabriel Tan and Brian Cooper, each a portfolio manager of the Sub-Adviser, are jointly and primarily responsible for the day-to-day management of the investment portfolios of the Funds.

Mr. Hershey co-founded the Adviser in late 2018. He began his career at Yorkville ETF Advisors, continuing with Yorkville Capital Management after the sale of Yorkville's ETF business. During his career, he held various roles, including Head Trader for a Yorkville's long/short energy hedge fund. He graduated from Vanderbilt University with a degree in Economics. Mr. Hershey is a CFA Charterholder.

Mr. Maloney co-founded the Adviser in late 2018. He began his career at Morgan Stanley as a Foreign-Exchange and Emerging Markets salesperson. He later joined Wells Capital, where he traded investment grade bonds for a $35 billion fixed-income portfolio. He graduated from Vanderbilt University with a degree in Economics and a Masters of Science in Finance (MSF). Mr. Maloney is a CFA Charterholder.

Mr. Mazza joined the Adviser in 2023. He began his career at State Street Global Advisors and had various research, portfolio management, and product development responsibilities including leading the strategy and research team for SPDR ETFs. He later worked in leadership roles at OppenheimerFunds and Rafferty Asset Management. He graduated from the Sawyer Business School at Suffolk University with his Masters of Business Administration (MBA) in Finance and Boston College with a degree in Political Science and Philosophy.

Mr. Serowik joined the Sub-Adviser from Goldman Sachs. He began his career at Spear, Leeds & Kellogg, continuing with Goldman after its acquisition of SLK. During his career of more than 18 years at the combined companies, he held various roles, including managing the global Quant ETF Strats team and One Delta ETF Strats. He designed and developed systems for portfolio risk calculation, algorithmic ETF trading, and execution monitoring, with experience across all asset classes. He graduated from the University of Michigan with a Bachelor of Business Administration degree in Finance.

Mr. Alberico joined the Sub-Adviser in November 2020, having spent the past 14 years in ETF trading at Goldman Sachs, Cantor Fitzgerald, and, most recently, Virtu Financial. He spent most of that time focused on the Trading and Portfolio Risk Management of ETFs exposed to international and domestic equity. He has worked on several different strategies including lead market-making and electronic trading, to customer facing institutional business developing models for block trading as well as transitional trades. Mr. Alberico graduated from St. John's University in New York with a Bachelor of Science degree in Finance.

Mr. Tan joined the Sub-Adviser in May 2019 as an Associate Portfolio Manager and was promoted to Portfolio Manager in December 2020. He began his career at UBS and BBR Partners where he worked as a financial planning analyst and a portfolio strategist for over four years. During his time there, he developed comprehensive wealth management solutions focused on portfolio optimization, trust and estate planning, and tax planning. Mr. Tan graduated from the University of North Carolina at Chapel Hill with a Bachelor of Science in Business Administration with a concentration in Investments, a Bachelor of Arts in Economics, and a Minor in Chinese.

Mr. Cooper joined the Sub-Adviser in November 2021, having spent the previous 14 years working in various operational roles for Falcon Management Corporation, a global macro family office, gaining exposure to a variety of asset classes with a focus on operations, accounting, and technology. He has also had roles in trade operations for Constellation Advisers and QFR Capital Management, and with Elliot Capital Management in their middle office derivatives group. Mr. Cooper graduated from Pennsylvania State University in 2002 with a Bachelor of Science in Finance and a Minor in Business Law.

The Funds' SAI provides additional information about the portfolio managers' compensation structure, other accounts managed by the portfolio managers, and the portfolio managers' ownership of Shares.

**Other Service Providers**

Foreside Fund Services, LLC, a wholly-owned subsidiary of Foreside Financial Group, LLC (doing business as ACA Group) (the "Distributor"), serves as the principal underwriter and distributor of each Fund's Shares. The Distributor's principal address is 190 Middle Street, Suite 301, Portland, Maine 04101. The Distributor will not distribute Shares in less than whole Creation Units, and it does not maintain a secondary market in the Shares. The Distributor is a broker-dealer registered under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Distributor has no role in determining the policies of the Funds or the securities that are purchased or sold by a Fund and is not affiliated with the Adviser, Sub-Adviser, or any of their respective affiliates.

U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services, located at 615 East Michigan Street, Milwaukee, Wisconsin 53202, serves as the administrator and transfer agent (as applicable) for the Funds.

U.S. Bank National Association, located at 1555 North Rivercenter Drive, Suite 302, Milwaukee, Wisconsin 53212, serves as the custodian for the Funds.

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Morgan, Lewis & Bockius LLP, located at 1111 Pennsylvania Avenue, N.W., Washington, D.C. 20004, serves as legal counsel to the Trust.

Cohen & Company, Ltd., located at 1835 Market Street, Suite 310, Philadelphia, Pennsylvania 19103, serves as the Funds' independent registered public accounting firm. The independent registered public accounting firm is responsible for auditing the annual financial statements of the Funds.

**HOW TO BUY AND SELL SHARES**

Each Fund issues and redeems Shares only in Creation Units at the NAV per share next determined after receipt of an order from an AP. Only APs may acquire Shares directly from a Fund, and only APs may tender their Shares for redemption directly to a Fund, at NAV. APs must be a member or participant of a clearing agency registered with the SEC and must execute a Participant Agreement that has been agreed to by the Distributor, and that has been accepted by the Funds' transfer agent, with respect to purchases and redemptions of Creation Units. Once created, Shares trade in the secondary market in quantities less than a Creation Unit.

Most investors buy and sell Shares in secondary market transactions through brokers. Individual Shares are listed for trading on the secondary market on the Exchange and can be bought and sold throughout the trading day like other publicly traded securities.

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 offer price in the secondary market on each leg of a round trip (purchase and sale) transaction. In addition, because secondary market transactions occur at market prices, you may pay more than NAV when you buy Shares and receive less than NAV when you sell those Shares.

**Book Entry**

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

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. DTC's participants 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" through your brokerage account.

**Frequent Purchases and Redemptions of Shares**

The Funds impose no restrictions on the frequency of purchases and redemptions of Shares. In determining not to approve a written, established policy, the Board evaluated the risks of market timing activities by Fund shareholders. Purchases and redemptions by APs, who are the only parties that may purchase or redeem Shares directly from the Funds, are an essential part of the ETF process and help keep Share trading prices in line with NAV. As such, the Funds accommodate frequent purchases and redemptions by APs. However, frequent purchases and redemptions for cash may increase tracking error and portfolio transaction costs and lead to the realization of capital gains. The Funds' fair valuation of their holdings consistent with the 1940 Act and Rule 2a-5 thereunder and their ability to impose transaction fees on purchases and redemptions of Creation Units to cover the custodial and other costs incurred by the Funds in effecting trades help to minimize the potential adverse consequences of frequent purchases and redemptions.

**Determination of Net Asset Value**

Each Fund's NAV is calculated as of the scheduled close of regular trading on the New York Stock Exchange (the "NYSE"), generally 4:00 p.m. Eastern Time, each day the NYSE is open for business. The NAV for a Fund is calculated by dividing the applicable Fund's net assets by its Shares outstanding.

In calculating its NAV, each Fund generally values its assets on the basis of market quotations, last sale prices, or estimates of value furnished by a pricing service or brokers who make markets in such instruments. For example, a Fund generally values equity securities at their readily available market quotations. If such information is not available for an investment held by a Fund or is determined to be unreliable, the investment will be valued by the Adviser at fair value pursuant to procedures established by the Adviser and approved by the Board (as described below).

**Fair Value Pricing**

The Adviser has been designated by the Board as the valuation designee for the Funds pursuant to Rule 2a-5 under the 1940 Act. In its capacity as valuation designee, the Adviser has adopted procedures and methodologies to fair value Fund investments whose market prices are not "readily available" or are deemed to be unreliable. For example, such circumstances may arise when: (i) an investment has been de-listed or has had its trading halted or suspended; (ii) an investment's primary pricing source is unable or unwilling to provide a price; (iii) an investment's primary trading market is closed during regular market hours; or (iv) an investment's value is

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materially affected by events occurring after the close of the investment's primary trading market. Generally, when fair valuing an investment held by a Fund, the Adviser will take into account all reasonably available information that may be relevant to a particular valuation including, but not limited to, fundamental analytical data regarding the issuer, information relating to the issuer's business, recent trades or offers of the investment, general and/or specific market conditions and the specific facts giving rise to the need to fair value the investment. Fair value determinations are made in good faith and in accordance with the fair value methodologies established by the Adviser. Due to the subjective and variable nature of determining the fair value of a security or other investment, there can be no assurance that the Adviser's determined fair value will match or closely correlate to any market quotation that subsequently becomes available or the price quoted or published by other sources. In addition, a Fund may not be able to obtain the fair value assigned to an investment if the Fund were to sell such investment at or near the time its fair value is determined.

**Investments by Registered Investment Companies**

Section 12(d)(1) of the 1940 Act and the rules thereunder limit investments by registered investment companies in the securities of other investment companies. Registered investment companies are permitted to invest in a Fund beyond the limits set forth in section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with such Fund.

**Delivery of Shareholder Documents – Householding** 

Householding is an option available to certain investors of the Funds. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Householding for the Funds is available through certain broker-dealers. If you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, please contact your broker-dealer. If you are currently enrolled in householding and wish to change your householding status, please contact your broker-dealer.

**DIVIDENDS, DISTRIBUTIONS, AND TAXES**

**Dividends and Distributions**

Each Fund intends to pay out dividends, if any, in cash, and distribute any net realized capital gains to its shareholders at least annually. Each Fund will declare and pay capital gain distributions, if any, in cash. Distributions in cash may be reinvested automatically in additional whole Shares only if the broker through whom you purchased Shares makes such option available. Your broker is responsible for distributing the income and capital gain distributions to you.

**Taxes**

The following discussion is a summary of certain important U.S. federal income tax considerations generally applicable to investments in the Funds. Your investment in a Fund may have other tax implications. Please consult your tax advisor about the tax consequences of an investment in Shares, including the possible application of foreign, state, and local tax laws. This summary does not apply to Shares held in an IRA or other tax-qualified plans, which are generally not subject to current tax. Transactions relating to Shares held in such accounts may, however, be taxable at some time in the future. This summary is based on current tax laws, which may change.

Each Fund intends to qualify each year for treatment as a RIC within the meaning of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). If it meets certain minimum distribution requirements, a RIC is not subject to tax at the fund level on income and gains from investments that are timely distributed to shareholders. However, a Fund's failure to qualify as a RIC or to meet minimum distribution requirements would result (if certain relief provisions were not available) in fund-level taxation and, consequently, a reduction in income available for distribution to shareholders.

Unless your investment in Shares is made through a tax-exempt entity or tax-advantaged account, such as an IRA, you need to be aware of the possible tax consequences when the Fund makes distributions, when you sell your Shares listed on an Exchange, and when you purchase or redeem Creation Units (APs only).

**Taxes on Distributions**

Each Fund intends to distribute, at least annually, substantially all of its net investment income and net capital gains. The distributions you receive may be subject to federal, state, and local taxation depending on your tax situation. For federal income tax purposes, distributions of investment income are generally taxable as ordinary income or qualified dividend income. Taxes on distributions of capital gains (if any) are determined by how long a Fund owned the investments that generated them, rather than how long a shareholder has owned his or her Shares. Sales of assets held by a Fund for more than one year generally result in long-term capital gains and losses, and sales of assets held by a Fund for one year or less generally result in short-term capital gains and losses. Distributions of a Fund's net capital gain (the excess of net long-term capital gains over net short-term capital losses) that are reported by such Fund as capital gain dividends ("Capital Gain Dividends") will be taxable as long-term capital gains, which for non-corporate shareholders are subject to tax at reduced rates of up to 20% (lower rates apply to individuals in lower tax brackets). Distributions of short-term capital gain will generally be taxable as ordinary income. Dividends and distributions are generally taxable to you whether you receive them in cash or reinvest them in additional Shares.

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Distributions reported by a Fund as "qualified dividend income" are generally taxed to non-corporate shareholders at rates applicable to long-term capital gains, provided holding period and other requirements are met. "Qualified dividend income" generally is income derived from dividends paid by U.S. corporations or certain foreign corporations that are either incorporated in a U.S. possession or eligible for tax benefits under certain U.S. income tax treaties. In addition, dividends that a Fund receives in respect of stock of certain foreign corporations may be qualified dividend income if that stock is readily tradable on an established U.S. securities market. A Fund's investment strategies may limit its ability to make distributions of qualified dividend income. Corporate shareholders may be entitled to a dividends received deduction for the portion of dividends they receive from a Fund that are attributable to dividends received by the Fund from U.S. corporations, subject to certain limitations. A Fund's investment strategies may limit its ability to make distributions eligible for the dividends received deduction for corporate shareholders.

Shortly after the close of each calendar year, you will be informed of the amount and character of any distributions received from a Fund.

In general, your distributions are subject to federal income tax for the year in which they are paid. Certain distributions paid in January, however, may be treated as paid on December 31 of the prior year. Distributions are generally taxable even if they are paid from income or gains earned by a Fund before your investment (and thus were included in the Shares' NAV when you purchased your Shares).

You may wish to avoid investing in a Fund shortly before a dividend or other distribution, because such a distribution will generally be taxable even though it may economically represent a return of a portion of your investment.

If you are neither a resident nor a citizen of the United States or if you are a foreign entity, distributions (other than Capital Gain Dividends) paid to you by a Fund will generally be subject to a U.S. withholding tax at the rate of 30%, unless a lower treaty rate applies. Gains from the sale or other disposition of your Shares from non-U.S. shareholders generally are not subject to U.S. taxation, unless you are a nonresident alien individual who is physically present in the U.S. for 183 days or more per year. A Fund may, under certain circumstances, report all or a portion of a dividend as an "interest-related dividend" or a "short-term capital gain dividend," which would generally be exempt from this 30% U.S. withholding tax, provided certain other requirements are met. Different tax consequences may result if you are a foreign shareholder engaged in a trade or business within the United States or if a tax treaty applies.

Under legislation generally known as "FATCA" (the Foreign Account Tax Compliance Act), a Fund is required to withhold 30% of certain ordinary dividends it pays to shareholders that are foreign entities and that fail to meet prescribed information reporting or certification requirements.

A Fund (or a financial intermediary, such as a broker, through which a shareholder owns Shares) generally is required to withhold and remit to the U.S. Treasury a percentage of the taxable distributions and sale proceeds paid to any shareholder who fails to properly furnish a correct taxpayer identification number, who has underreported dividend or interest income, or who fails to certify that the shareholder is not subject to such withholding.

**Taxes When Shares Are Sold on the Exchange**

Assuming you hold your Shares as a capital asset, any gain or loss realized upon a sale of Shares generally is treated as a long-term capital gain or loss if Shares have been held for more than one year and as a short-term capital gain or loss if Shares have been held for one year or less. However, any capital loss on a sale of Shares held for six months or less is treated as long-term capital loss to the extent of Capital Gain Dividends paid with respect to such Shares. Any loss realized on a sale will be disallowed to the extent Shares of a Fund are acquired, including through reinvestment of dividends, within a 61-day period beginning 30 days before and ending 30 days after the disposition of Shares. The ability to deduct capital losses may be limited.

The cost basis of Shares of a Fund acquired by purchase will generally be based on the amount paid for the Shares and then may be subsequently adjusted for other applicable transactions as required by the Code. The difference between the selling price and the cost basis of Shares generally determines the amount of the capital gain or loss realized on the sale or exchange of Shares. Contact the broker through whom you purchased your Shares to obtain information with respect to the available cost basis reporting methods and elections for your account. Any loss realized on a sale will be disallowed to the extent Shares of a Fund are acquired, including through reinvestment of dividends, within a 61-day period beginning 30 days before and ending 30 days after the disposition of Shares.

**Taxes on Purchases and Redemptions of Creation Units**

An AP having the U.S. dollar as its functional currency for U.S. federal income tax purposes who exchanges securities for Creation Units generally recognizes a gain or a loss. The gain or loss will be equal to the difference between the value of the Creation Units at the time of the exchange and the exchanging AP's aggregate basis in the securities delivered plus the amount of any cash paid for the Creation Units. An AP who exchanges Creation Units for securities will generally recognize a gain or loss equal to the difference between the exchanging AP's basis in the Creation Units and the aggregate U.S. dollar market value of the securities received, plus any cash received for such Creation Units. The Internal Revenue Service ("IRS") may assert, however, that a loss that is realized upon

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an exchange of securities for Creation Units may not be currently deducted under the rules governing "wash sales" (for an AP who does not mark-to-market their holdings) or on the basis that there has been no significant change in economic position. APs exchanging securities should consult their own tax advisor with respect to whether wash sale rules apply and when a loss might be deductible.

A Fund may include a payment of cash in addition to, or in place of, the delivery of a basket of securities upon the redemption of Creation Units. A Fund may sell portfolio securities to obtain the cash needed to distribute redemption proceeds. This may cause a Fund to recognize investment income and/or capital gains or losses that it might not have recognized if it had completely satisfied the redemption in kind. As a result, a Fund may be less tax efficient if it includes such a cash payment in the proceeds paid upon the redemption of Creation Units.

**Net Investment Income Tax**

U.S. individuals with income exceeding specified thresholds are subject to a 3.8% tax on all or a portion of their "net investment income," which includes interest, dividends, and certain capital gains (generally including capital gains distributions and capital gains realized on the sale of Shares). This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts.

**Foreign Investments by a Fund**

The Funds invest in foreign securities. Interest and other income received by a Fund with respect to foreign securities may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If as of the close of a taxable year more than 50% of the value of a Fund's assets consists of certain foreign stock or securities, each such Fund will be eligible to elect to "pass through" to investors the amount of foreign income and similar taxes (including withholding taxes) paid by such Fund during that taxable year. This means that investors would be considered to have received as additional income their respective shares of such foreign taxes but may be entitled to either a corresponding tax deduction in calculating taxable income, or, subject to certain limitations, a credit in calculating federal income tax. If a Fund does not so elect, each such Fund will be entitled to claim a deduction for certain foreign taxes incurred by such Fund. A Fund (or a financial intermediary, such as a broker, through which a shareholder owns Shares) will notify you if it makes such an election and provide you with the information necessary to reflect foreign taxes paid on your income tax return.

**Taxation of REIT Investments**

The Cannabis ETF invests in U.S. REITs. "Qualified REIT dividends" (*i.e.*, ordinary REIT dividends other than capital gain dividends and portions of REIT dividends designated as qualified dividend income eligible for capital gain tax rates) are eligible for a 20% deduction by non-corporate taxpayers. This deduction, if allowed in full, equates to a maximum effective tax rate of 29.6% (37% top rate applied to income after 20% deduction). Distributions by the Fund to its shareholders that are attributable to qualified REIT dividends received by the Fund and which the Fund properly reports as "section 199A dividends," are treated as "qualified REIT dividends" in the hands of non-corporate shareholders. A section 199A dividend is treated as a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying RIC shares for at least 46 days of the 91-day period beginning 45 days before the shares become ex-dividend, and is not under an obligation to make related payments with respect to a position in substantially similar or related property. The Fund is permitted to report such part of its dividends as section 199A dividends as are eligible but is not required to do so.

REITs in which the Fund invests often do not provide complete and final tax information to the Fund until after the time that the Fund issues a tax reporting statement. As a result, the Fund may at times find it necessary to reclassify the amount and character of its distributions to you after it issues your tax reporting statement. When such reclassification is necessary, the Fund (or a financial intermediary, such as a broker, through which a shareholder owns Shares) will send you a corrected, final Form 1099-DIV to reflect the reclassified information. If you receive a corrected Form 1099-DIV, use the information on this corrected form, and not the information on the previously issued tax reporting statement, in completing your tax returns.

**Taxation of Cryptocurrency**

The Ball Metaverse ETF is expected to make certain investments that indirectly own cryptocurrencies. While the Fund's investments in cryptocurrency are expected to be held through entities treated as passive foreign investment companies ("PFICs") which would generally be expected to produce qualifying income for purposes of ensuring that the Fund maintains its status as a RIC, to the extent that such investments are not treated as PFICs, those investments may not produce qualifying income. The Fund intends to seek to restrict its income from such instruments that do not generate qualifying income to a maximum of 10% of its gross income (when combined with its other investments that produce non-qualifying income).

*The foregoing discussion summarizes some of the possible consequences under current federal tax law of an investment in each Fund. It is not a substitute for personal tax advice. You also may be subject to state and local tax on Fund distributions and sales of Shares. Consult your personal tax advisor about the potential tax consequences of an investment in Shares under all applicable tax laws. For more information, please see the section entitled "Federal Income Taxes" in the SAI.* 

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**DISTRIBUTION PLAN**

The Board has adopted a Distribution and Service Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. In accordance with the Plan, each Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year for certain distribution-related activities and shareholder services.

No Rule 12b-1 fees are currently paid by the Funds, and there are no plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because the fees are paid out of Fund assets, over time these fees will increase the cost of your investment and may cost you more than certain other types of sales charges.

**PREMIUM/DISCOUNT INFORMATION**

Information regarding how often each Fund's Shares traded on the Exchange at a price above (*i.e.*, at a premium) or below (*i.e.*, at a discount) its NAV is available on the Funds' website at www.roundhillinvestments.com.

**ADDITIONAL NOTICES**

Shares are not sponsored, endorsed, or promoted by the Exchange. The Exchange makes no representation or warranty, express or implied, to the owners of Shares or any member of the public regarding the ability of a Fund to track the total return performance of its Index or the ability of the Index identified herein to track the performance of its constituent securities. The Exchange is not responsible for, nor has it participated in, the determination of the compilation or the calculation of the Index, nor in the determination of the timing, prices, or quantities of Shares to be issued, nor in the determination or calculation of the equation by which the Shares are redeemable. The Exchange has no obligation or liability to owners of Shares in connection with the administration, marketing, or trading of Shares.

The Exchange does not guarantee the accuracy and/or the completeness of the Index or the data included therein. The Exchange makes no warranty, express or implied, as to results to be obtained by the Fund, owners of Shares, or any other person or entity from the use of the Index or the data included therein. The Exchange makes no express or implied warranties, and hereby expressly disclaims all warranties of merchantability or fitness for a particular purpose with respect to the Index or the data included therein. Without limiting any of the foregoing, in no event shall the Exchange have any liability for any lost profits or indirect, punitive, special, or consequential damages even if notified of the possibility thereof.

The Adviser, the Sub-Adviser, the Exchange, and the Funds make no representation or warranty, express or implied, to the owners of Shares or any member of the public regarding the advisability of investing in securities generally or in a Fund particularly or the ability of an Index to track general stock market performance. Each Fund, the Adviser, and the Sub-Adviser do not guarantee the accuracy, completeness, or performance of an Index or the data included therein and shall have no liability in connection with the Index or Index calculation. Each Index calculation agent maintains and calculates the Index used by the respective Fund and shall have no liability for any errors or omissions in calculating such Index.

**FINANCIAL HIGHLIGHTS**

The following financial highlights table shows the financial performance information for each Fund's five most recent fiscal years (or the life of a Fund, if shorter). Certain information reflects financial results for a single share of a Fund. The total returns in the table represent the rate that you would have earned or lost on an investment in a Fund (assuming you reinvested all distributions). This information has been audited by Cohen & Company, Ltd., the independent registered public accounting firm of the Funds, whose report, along with each Fund's financial statements, is included in the Funds' most recent<u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001683471/000113322826003213/rl-efp22782_ncsr.htm)</u> filing, which is available upon request and can be found on the SEC's website.

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**Roundhill Sports Betting & iGaming ETF**

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2025** | | **2024** | | **2023** | | **2022** | **2021** | |
| **PER SHARE DATA:** |  |  |  |  |  |  |  |  |  |
| Net asset value, beginning of year | $19.03 |  | $17.41 |  | $14.35 |  | $24.88 | $25.86 |  |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |  |  |  |  |
| Net investment income<sup>(a)</sup> | 0.83 |  | 0.05 |  | 0.08 |  | 0.07 | 0.08 |  |
| Net realized and unrealized gain (loss) on investments<sup>(b)</sup> | 2.22 |  | 1.73 |  | 2.98 |  | (10.51) | (1.06) |  |
| **Total from investment operations** | 3.05 |  | 1.78 |  | 3.06 |  | (10.44) | (0.98) |  |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |  |  |  |  |
| Net investment income | (0.96) |  | (0.16) |  |  |  | (0.04) |  |  |
| Return of capital |  |  |  |  |  |  | (0.05) |  |  |
| **Total distributions** | (0.96) |  | (0.16) |  |  |  | (0.09) |  |  |
| ETF transaction fees per share<sup>(a)</sup> |  |  |  |  | 0.00 | <sup>(c)</sup> |  | 0.00 | <sup>(c)</sup> |
| **Net asset value, end of year** | $21.12 |  | $19.03 |  | $17.41 |  | $14.35 | $24.88 |  |
| Total return | 16.02% |  | 10.24% |  | 21.30% |  | -41.99% | -3.78% |  |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |  |  |  |  |
| Net assets, end of year (in thousands) | $63363 |  | $73252 |  | $100523 |  | $118028 | $290507 |  |
| Ratio of expenses to average net assets | 0.75% |  | 0.75% |  | 0.75% |  | 0.75% | 0.75% |  |
| Ratio of tax expenses to average net assets | 0.00% | <sup>(d)</sup> | 0.00% | <sup>(d)</sup> | —% |  | —% | —% |  |
| Ratio of net investment income to average net assets | 3.83% |  | 0.30% |  | 0.46% |  | 0.38% | 0.26% |  |
| Portfolio turnover rate<sup>(e)</sup> | 26% |  | 20% |  | 64% |  | 43% | 52% |  |

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<sup>(a)</sup>Calculated based on average shares outstanding during the years.

<sup>(b)</sup>Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the periods, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the periods.

<sup>(c)</sup><sup>Amount represents less than $0.005 per share.</sup>

<sup>(d)</sup><sup>Amount represents less than 0.005%.</sup>

<sup>(e)</sup>Portfolio turnover rate excludes in-kind transactions.

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**Roundhill Ball Metaverse ETF**

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | | **Period Ended December 31,** |
| | **2025** | | **2024** | | **2023** | | **2022** | | **2021**<sup>(a)</sup> |
| **PER SHARE DATA:** |  |  |  |  |  |  |  |  |  |
| Net Asset Value, Beginning of Period | $14.43 |  | $11.54 |  | $7.21 |  | $15.17 |  | $15.07 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |  |  |  |  |
| Net investment income (loss)<sup>(b)</sup> | 0.02 |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.00) | <sup>(c)</sup> | 0.02 |  | 0.01 |  | (0.01) |
| Net realized and unrealized gain (loss) on investments<sup>(d)</sup> | 4.40 |  | 2.89 |  | 4.33 |  | (7.96) |  | 0.10 |
| **Total from investment operations**  | 4.42 |  | 2.89 |  | 4.35 |  | (7.95) |  | 0.09 |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |  |  |  |  |
| Net investment income | (0.03) |  |  |  | (0.02) |  | (0.01) |  |  |
| **Total distributions**  | (0.03) |  |  |  | (0.02) |  | (0.01) |  |  |
| ETF transaction fees per share<sup>(b)</sup> | 0.00 | <sup>(c)</sup> | 0.00 | <sup>(c)</sup> | 0.00 | <sup>(c)</sup> | 0.00 | <sup>(c)</sup> | 0.01 |
| **Net Asset Value, End of Period**  | $18.82 |  | $14.43 |  | $11.54 |  | $7.21 |  | $15.17 |
| Total return<sup>(e)</sup>  | 30.69% |  | 25.05% |  | 60.37% |  | -52.44% |  | 0.63% |
| **SUPPLEMENTAL DATA AND RATIOS:**<sup>(f)</sup> |  |  |  |  |  |  |  |  |  |
| Net assets, end of period (in thousands) | $277167 |  | $330767 |  | $463556 |  | $370242 |  | $933059 |
| Ratio of expenses to average net assets: |  |  |  |  |  |  |  |  |  |
| Before expense reimbursement<sup>(g)</sup> | 0.59% |  | 0.59% |  | 0.59% |  | 0.60% |  | 0.75% |
| After expense reimbursement<sup>(g)</sup> | 0.58% |  | 0.59% |  | 0.59% |  | 0.60% |  | 0.75% |
| Ratio of tax expenses to average net assets<sup>(g)</sup> | 0.00% | <sup>(h)</sup> | 0.00% | <sup>(h)</sup> | —% |  | —% |  | —% |
| Ratio of net investment income (loss) to average net assets<sup>(g)</sup> | 0.09% |  | (0.02)% |  | 0.19% |  | 0.06% |  | (0.13)% |
| Portfolio turnover rate<sup>(e)(i)</sup> | 55% |  | 46% |  | 30% |  | 47% |  | 41% |

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<sup>(a)</sup><sup>Inception date of the Fund was June 29, 2021.</sup>

<sup>(b)</sup>Calculated based on average shares outstanding during the periods.

<sup>(c)</sup><sup>Amount represents less than $0.005 per share.</sup>

<sup>(d)</sup>Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the periods, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the periods.

<sup>(e)</sup><sup>Not annualized for periods less than one year.</sup>

<sup>(f)</sup>Ratios do not include the income and expenses of the underlying funds in which the Fund invests.

<sup>(g)</sup><sup>Annualized for periods less than one year.</sup>

<sup>(h)</sup><sup>Amount represents less than 0.005%.</sup>

<sup>(i)</sup>Portfolio turnover rate excludes in-kind transactions.

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**Roundhill Video Games ETF**

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2025** | | **2024** | | **2023** | **2022** | **2021** |
| **PER SHARE DATA:** |  |  |  |  |  |  |  |
| Net asset value, beginning of year | $19.93 |  | $15.73 |  | $14.03 | $24.99 | $30.09 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |  |  |
| Net investment income<sup>(a)</sup> | 0.10 |  | 0.07 |  | 0.11 | 0.14 | 0.05 |
| Net realized and unrealized gain (loss) on investments<sup>(b)</sup> | 4.38 |  | 4.47 |  | 1.75 | (11.01) | (5.17) |
| **Total from investment operations** | 4.48 |  | 4.54 |  | 1.86 | (10.87) | (5.12) |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |  |  |
| Net investment income | (0.15) |  | (0.34) |  | (0.17) | (0.10) | (0.01) |
| **Total distributions** | (0.15) |  | (0.34) |  | (0.17) | (0.10) | (0.01) |
| ETF transaction fees per share<sup>(a)</sup> | 0.00 | <sup>(c)</sup> | 0.00 | <sup>(c)</sup> | 0.01 | 0.01 | 0.03 |
| **Net asset value, end of year** | $24.26 |  | $19.93 |  | $15.73 | $14.03 | $24.99 |
| Total return | 22.47% |  | 28.86% |  | 13.35% | -43.49% | -16.93% |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |  |  |
| Net assets, end of year (in thousands) | $19407 |  | $19931 |  | $20844 | $25250 | $62475 |
| Ratio of expenses to average net assets | 0.50% |  | 0.50% |  | 0.50% | 0.50% | 0.50% |
| Ratio of tax expenses to average net assets | 0.00% | <sup>(d)</sup> | 0.00% | <sup>(d)</sup> | —% | —% | —% |
| Ratio of net investment income to average net assets | 0.40% |  | 0.39% |  | 0.76% | 0.78% | 0.16% |
| Portfolio turnover rate<sup>(e)</sup> | 64% |  | 30% |  | 17% | 83% | 52% |

---

<sup>(a)</sup>Calculated based on average shares outstanding during the years.

<sup>(b)</sup>Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the periods, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the periods.

<sup>(c)</sup><sup>Amount represents less than $0.005 per share.</sup>

<sup>(d)</sup><sup>Amount represents less than 0.005%.</sup>

<sup>(e)</sup>Portfolio turnover rate excludes in-kind transactions.

------

**Roundhill Cannabis ETF**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Period Ended December 31,** |
| | **2025** | | **2024** | **2023** | **2022**<sup>(a)</sup> |
| **PER SHARE DATA:** |  |  |  |  |  |
| Net Asset Value, Beginning of Period | $16.28 |  | $30.14 | $29.95 | $76.60 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |
| Net investment income<sup>(b)</sup> | 0.50 |  | 1.61 | 1.18 | 0.45 |
| Net realized and unrealized gain (loss) on investments<sup>(c)</sup> | 3.16 |  | (15.59) | (0.99) | (47.15) |
| **Total from investment operations**  | 3.66 |  | (13.98) | 0.19 | (46.70) |
| ETF transaction fees per share<sup>(b)</sup> | 0.03 |  | 0.12 |  | 0.05 |
| **Net asset value, end of period** | $19.97 |  | $16.28 | $30.14 | $29.95 |
| Total return<sup>(d)(h)</sup> | 22.64% |  | -45.98% | 0.71% | -60.93% |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |
| Net assets, end of period (in thousands) | $9485 |  | $4966 | $3165 | $1496 |
| Ratio of expenses to average net assets: |  |  |  |  |  |
| Before expense reimbursement<sup>(e)</sup> | 0.39% |  | 0.39% | 0.48% | 0.75% |
| After expense reimbursement<sup>(e)</sup> | (0.01)% |  | 0.22% | 0.39% | 0.52% |
| Ratio of tax expenses to average net assets<sup>(e)</sup> | 0.00% | <sup>(f)</sup> | —% | —% | —% |
| Ratio of net investment income to average net assets<sup>(e)</sup> | 3.19% |  | 5.06% | 4.58% | 1.32% |
| Portfolio turnover rate<sup>(d)(g)</sup> | 23% |  | —% | —% | 65% |

---

<sup>(a)</sup><sup>Inception date of the Fund was April 19, 2022.</sup>

<sup>(b)</sup>Calculated based on average shares outstanding during the periods.

<sup>(c)</sup>Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the periods, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the periods.

<sup>(d)</sup><sup>Not annualized for periods less than one year.</sup>

<sup>(e)</sup><sup>Annualized for periods less than one year.</sup>

<sup>(f)</sup><sup>Amount represents less than 0.005%.</sup>

<sup>(g)</sup>Portfolio turnover rate excludes in-kind transactions.

<sup>(h)</sup>In 2025, 0.33% of the Fund's total return consists of voluntary reimbursements by the Sub-adviser for a realized investment loss incurred from trade errors. Excluding these items, total return would have been 22.31%.

------

**Roundhill Magnificent Seven ETF**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Period Ended December 31,** | |
| | **2025** | | **2024** | | **2023**<sup>(a)</sup> | |
| **PER SHARE DATA:** |  |  |  |  |  |  |
| Net Asset Value, Beginning of Period | $54.45 |  | $33.35 |  | $24.77 |  |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |  |
| Net investment income<sup>(b)</sup> | 1.30 |  | 1.22 |  | 0.67 |  |
| Net realized and unrealized gain (loss) on investments<sup>(c)</sup> | 11.22 |  | 20.32 |  | 8.05 |  |
| **Total from investment operations**  | 12.52 |  | 21.54 |  | 8.72 |  |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |  |
| Net investment income | (0.98) |  | (0.43) |  | (0.14) |  |
| Net realized gains |  |  | (0.01) |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.00) | <sup>(d)</sup> |
| Total distributions | (0.98) |  | (0.44) |  | (0.14) |  |
| Net asset value, end of period | $65.99 |  | $54.45 |  | $33.35 |  |
| Total return<sup>(e)</sup> | 22.96% |  | 64.59% |  | 35.21% |  |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |  |
| Net assets, end of period (in thousands) | $3966415 |  | $1768590 |  | $37349 |  |
| Ratio of expenses to average net assets<sup>(f)</sup> | 0.29% |  | 0.29% |  | 0.29% |  |
| Ratio of interest expense to average net assets<sup>(f)</sup> | 0.00% | <sup>(g)</sup> | 0.00% | <sup>(g)</sup> | —% |  |
| Ratio of net investment income (loss) to average net assets<sup>(f)</sup> | 2.25% |  | 2.59% |  | 2.92% |  |
| Portfolio turnover rate<sup>(e)(h)</sup> | 27% |  | 40% |  | 81% |  |

---

<sup>(a)</sup><sup>Inception date of the Fund was April 10, 2023.</sup>

<sup>(b)</sup>Net investment income per share has been calculated based on average shares outstanding during the periods.

<sup>(c)</sup>Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the periods, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the periods.

<sup>(d)</sup><sup>Amount represents less than $0.005 per share.</sup>

<sup>(e)</sup><sup>Not annualized for periods less than one year.</sup>

<sup>(f)</sup><sup>Annualized for periods less than one year.</sup>

<sup>(g)</sup><sup>Amount represents less than 0.005%.</sup>

<sup>(h)</sup>Portfolio turnover rate excludes in-kind transactions.

------

**Roundhill Video Games ETF**

**Roundhill Sports Betting & iGaming ETF**

**Roundhill Ball Metaverse ETF**

**Roundhill Cannabis ETF**

**Roundhill Magnificent Seven ETF**

---

| | | | |
|:---|:---|:---|:---|
| **Adviser** | &nbsp;&nbsp;**Roundhill Financial Inc.**<br>154 West 14th Street, 2nd Floor<br>New York, New York 10011 | **Transfer Agent, Index Receipt Agent, and Administrator** | &nbsp;&nbsp;**U.S. Bancorp Fund Services, LLC**<br>d/b/a U.S. Bank Global Fund Services<br>615 East Michigan Street<br>Milwaukee, Wisconsin 53202 |
| **Sub-Adviser** | &nbsp;&nbsp;**Exchange Traded Concepts, LLC**<br>10900 Hefner Pointe Drive, Suite 400<br>Oklahoma City, Oklahoma 73120 | **Distributor** | &nbsp;&nbsp;**Foreside Fund Services, LLC**<br>190 Middle Street, Suite 301<br>Portland, Maine 04101 |
| **Custodian** | &nbsp;&nbsp;**U.S. Bank National Association** <br>1555 North Rivercenter Drive, Suite 302<br>Milwaukee, Wisconsin 53212 | **Legal Counsel** | &nbsp;&nbsp;**Morgan, Lewis & Bockius LLP**<br>1111 Pennsylvania Avenue, NW<br>Washington, DC 20004-2541 |
| **Independent Registered Public Accounting Firm** | &nbsp;&nbsp;**Cohen & Company, Ltd.**<br>1835 Market Street, Suite 310<br>Philadelphia, Pennsylvania 19103 |  |  |

---

Investors may find more information about a Fund in the following documents:

**Statement of Additional Information:** The Funds' SAI provides additional details about the investments of each Fund and certain other additional information. The SAI is on file with the SEC and is incorporated herein by reference into this Prospectus. It is legally considered a part of this Prospectus.

**Annual/Semi-Annual Reports and Form N-CSR:** Additional information about each Fund's investments is available in the Funds' Annual and Semi-Annual Reports to shareholders and in <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001683471/000113322826003213/rl-efp22782_ncsr.htm)</u>. In the Annual Report, you will find a discussion of the market conditions and investment strategies that significantly affected a Fund's performance. In Form N-CSR, you will find the Funds' annual and semi-annual financial statements.

You can obtain free copies of these documents, request other information or make general inquiries about the Funds by calling 1-800-617-0004.

Shareholder reports and other information about the Funds also are available:

• Free of charge from the SEC's EDGAR database on the SEC's website at http://www.sec.gov;

• Free of charge from the Funds' Internet web site at www.roundhillinvestments.com; or

• For a fee, by e-mail request to publicinfo@sec.gov.

(SEC Investment Company Act File No. 811-23226)

------

![RH_Wordmark-PrimaryBlue.jpg](ck0001683471-20260430_g1.jpg)

**Roundhill Sports Betting & iGaming ETF (BETZ)**

**Roundhill Ball Metaverse ETF (METV)**

Principal U.S. Listing Exchange: NYSE Arca, Inc.

**Roundhill Video Games ETF (NERD)**

**Roundhill Cannabis ETF (WEED)**

**Roundhill Magnificent Seven ETF (MAGS)**

Principal U.S. Listing Exchange: Cboe BZX Exchange, Inc.

Each a series of Listed Funds Trust

**STATEMENT OF ADDITIONAL INFORMATION**

April 30, 2026

This Statement of Additional Information (the "SAI") is not a prospectus and should be read in conjunction with the prospectus of the Roundhill Video Games ETF (the "Video Games ETF"), Roundhill Sports Betting & iGaming ETF (the "Sports Betting ETF"), Roundhill Ball Metaverse ETF (the "Ball Metaverse ETF"), Roundhill Cannabis ETF (the "Cannabis ETF") and Roundhill Magnificent Seven ETF (the "Magnificent Seven ETF") (each a "Fund" and collectively, the "Funds"), each a series of Listed Funds Trust (the "Trust"), dated April 30, 2026, as may be supplemented from time to time (the "Prospectus"). Capitalized terms used in this SAI that are not defined have the same meaning as in the Prospectus, unless otherwise noted. A copy of the Prospectus may be obtained, without charge, by calling the Funds at 1-800-617-0004 or by visiting www.roundhillinvestments.com.

The Funds' audited financial statements for the most recent fiscal year are included in the Funds' most recent <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001683471/000113322826003213/rl-efp22782_ncsr.htm)</u>, which is incorporated into this SAI by reference (File No. 811-23226). You may obtain a copy of the Funds' Annual Report and Form N-CSR at no charge by contacting the Funds at the phone number noted above.

------

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [GENERAL INFORMATION ABOUT THE TRUST](#ifc3597e51d774fe3ba6d73c0ff4756c5_7) | [4](#ifc3597e51d774fe3ba6d73c0ff4756c5_7) |
| [ADDITIONAL INFORMATION ABOUT INVESTMENT OBJECTIVE](#ifc3597e51d774fe3ba6d73c0ff4756c5_10)[S](#ifc3597e51d774fe3ba6d73c0ff4756c5_10)[,](#ifc3597e51d774fe3ba6d73c0ff4756c5_10)[POLICIES, AND RELATED RISKS](#ifc3597e51d774fe3ba6d73c0ff4756c5_10) | [4](#ifc3597e51d774fe3ba6d73c0ff4756c5_10) |
| &nbsp;&nbsp;&nbsp;&nbsp;[DIVERSIFICATION STATUS](#ifc3597e51d774fe3ba6d73c0ff4756c5_13) | [4](#ifc3597e51d774fe3ba6d73c0ff4756c5_13) |
| &nbsp;&nbsp;&nbsp;&nbsp;[GENERAL RISKS](#ifc3597e51d774fe3ba6d73c0ff4756c5_16) | [5](#ifc3597e51d774fe3ba6d73c0ff4756c5_16) |
| [DESCRIPTION OF PERMITTED INVESTMENTS](#ifc3597e51d774fe3ba6d73c0ff4756c5_19) | [6](#ifc3597e51d774fe3ba6d73c0ff4756c5_19) |
| &nbsp;&nbsp;&nbsp;&nbsp;[BORROWING](#ifc3597e51d774fe3ba6d73c0ff4756c5_22) | [6](#ifc3597e51d774fe3ba6d73c0ff4756c5_22) |
| &nbsp;&nbsp;&nbsp;&nbsp;[CANNABIS-RELATED SECURITIES](#ifc3597e51d774fe3ba6d73c0ff4756c5_1247) | [6](#ifc3597e51d774fe3ba6d73c0ff4756c5_1247) |
| &nbsp;&nbsp;&nbsp;&nbsp;[INVESTMENTS IN CHINA A-SHARES](#ifc3597e51d774fe3ba6d73c0ff4756c5_1455) | [7](#ifc3597e51d774fe3ba6d73c0ff4756c5_1455) |
| &nbsp;&nbsp;&nbsp;&nbsp;[CRYPTOCURRENCY ETFs](#ifc3597e51d774fe3ba6d73c0ff4756c5_1335) | [10](#ifc3597e51d774fe3ba6d73c0ff4756c5_1335) |
| &nbsp;&nbsp;&nbsp;&nbsp;[DEBT SECURITIES](#ifc3597e51d774fe3ba6d73c0ff4756c5_1223) | [15](#ifc3597e51d774fe3ba6d73c0ff4756c5_1223) |
| &nbsp;&nbsp;&nbsp;&nbsp;[DEPOSITARY RECEIPTS](#ifc3597e51d774fe3ba6d73c0ff4756c5_25) | [17](#ifc3597e51d774fe3ba6d73c0ff4756c5_25) |
| &nbsp;&nbsp;&nbsp;&nbsp;[DERIVATIVE INSTRUMENTS](#ifc3597e51d774fe3ba6d73c0ff4756c5_1229) | [17](#ifc3597e51d774fe3ba6d73c0ff4756c5_1229) |
| &nbsp;&nbsp;&nbsp;&nbsp;[DERIVATIVES REGULATORY RISK](#ifc3597e51d774fe3ba6d73c0ff4756c5_1235) | [21](#ifc3597e51d774fe3ba6d73c0ff4756c5_1235) |
| &nbsp;&nbsp;&nbsp;&nbsp;[EQUITY SECURITIES](#ifc3597e51d774fe3ba6d73c0ff4756c5_28) | [21](#ifc3597e51d774fe3ba6d73c0ff4756c5_28) |
| &nbsp;&nbsp;&nbsp;&nbsp;[EXCHANGE-TRADED FUNDS](#ifc3597e51d774fe3ba6d73c0ff4756c5_1173) | [22](#ifc3597e51d774fe3ba6d73c0ff4756c5_1173) |
| &nbsp;&nbsp;&nbsp;&nbsp;[ILLIQUID INVESTMENTS](#ifc3597e51d774fe3ba6d73c0ff4756c5_31) | [23](#ifc3597e51d774fe3ba6d73c0ff4756c5_31) |
| &nbsp;&nbsp;&nbsp;&nbsp;[INVESTMENT COMPANY SECURITIES](#ifc3597e51d774fe3ba6d73c0ff4756c5_34) | [23](#ifc3597e51d774fe3ba6d73c0ff4756c5_34) |
| &nbsp;&nbsp;&nbsp;&nbsp;[MONEY MARKET INSTRUMENTS](#ifc3597e51d774fe3ba6d73c0ff4756c5_1241) | [23](#ifc3597e51d774fe3ba6d73c0ff4756c5_1241) |
| &nbsp;&nbsp;&nbsp;&nbsp;[NON-U.S. SECURITIES](#ifc3597e51d774fe3ba6d73c0ff4756c5_37) | [23](#ifc3597e51d774fe3ba6d73c0ff4756c5_37) |
| &nbsp;&nbsp;&nbsp;&nbsp;[OTHER SHORT-TERM INSTRUMENTS](#ifc3597e51d774fe3ba6d73c0ff4756c5_40) | [24](#ifc3597e51d774fe3ba6d73c0ff4756c5_40) |
| &nbsp;&nbsp;&nbsp;&nbsp;[REAL ESTATE INVESTMENT TRUSTS ("REITS")](#ifc3597e51d774fe3ba6d73c0ff4756c5_43) | [24](#ifc3597e51d774fe3ba6d73c0ff4756c5_43) |
| &nbsp;&nbsp;&nbsp;&nbsp;[REPURCHASE AGREEMENTS](#ifc3597e51d774fe3ba6d73c0ff4756c5_46) | [25](#ifc3597e51d774fe3ba6d73c0ff4756c5_46) |
| &nbsp;&nbsp;&nbsp;&nbsp;[REVERSE REPURCHASE AGREEMENTS](#ifc3597e51d774fe3ba6d73c0ff4756c5_1133) | [25](#ifc3597e51d774fe3ba6d73c0ff4756c5_1133) |
| &nbsp;&nbsp;&nbsp;&nbsp;[SECURITIES LENDING](#ifc3597e51d774fe3ba6d73c0ff4756c5_49) | [25](#ifc3597e51d774fe3ba6d73c0ff4756c5_49) |
| &nbsp;&nbsp;&nbsp;&nbsp;[U.S. GOVERNMENT SECURITIES](#ifc3597e51d774fe3ba6d73c0ff4756c5_52) | [26](#ifc3597e51d774fe3ba6d73c0ff4756c5_52) |
| &nbsp;&nbsp;&nbsp;&nbsp;[WHEN-ISSUED SECURITIES](#ifc3597e51d774fe3ba6d73c0ff4756c5_1187) | [27](#ifc3597e51d774fe3ba6d73c0ff4756c5_1187) |
| [INVESTMENT RESTRICTIONS](#ifc3597e51d774fe3ba6d73c0ff4756c5_55) | [27](#ifc3597e51d774fe3ba6d73c0ff4756c5_55) |
| [EXCHANGE LISTING AND TRADING](#ifc3597e51d774fe3ba6d73c0ff4756c5_58) | [29](#ifc3597e51d774fe3ba6d73c0ff4756c5_58) |
| [MANAGEMENT OF THE TRUST](#ifc3597e51d774fe3ba6d73c0ff4756c5_61) | [29](#ifc3597e51d774fe3ba6d73c0ff4756c5_61) |
| [PRINCIPAL SHAREHOLDERS, CONTROL PERSONS, AND MANAGEMENT OWNERSHIP](#ifc3597e51d774fe3ba6d73c0ff4756c5_64) | [33](#ifc3597e51d774fe3ba6d73c0ff4756c5_64) |
| [CODES OF ETHICS](#ifc3597e51d774fe3ba6d73c0ff4756c5_67) | [35](#ifc3597e51d774fe3ba6d73c0ff4756c5_67) |
| [PROXY VOTING POLICIES](#ifc3597e51d774fe3ba6d73c0ff4756c5_70) | [35](#ifc3597e51d774fe3ba6d73c0ff4756c5_70) |
| [INVESTMENT](#ifc3597e51d774fe3ba6d73c0ff4756c5_73)[MANAGEMENT](#ifc3597e51d774fe3ba6d73c0ff4756c5_73) | [35](#ifc3597e51d774fe3ba6d73c0ff4756c5_73) |
| &nbsp;&nbsp;&nbsp;&nbsp;[INVESTMENT ADVISER](#ifc3597e51d774fe3ba6d73c0ff4756c5_76) | [35](#ifc3597e51d774fe3ba6d73c0ff4756c5_76) |
| &nbsp;&nbsp;&nbsp;&nbsp;[SUB-ADVISER](#ifc3597e51d774fe3ba6d73c0ff4756c5_79) | [36](#ifc3597e51d774fe3ba6d73c0ff4756c5_79) |
| &nbsp;&nbsp;&nbsp;&nbsp;[PORTFOLIO MANAGERS](#ifc3597e51d774fe3ba6d73c0ff4756c5_82) | [36](#ifc3597e51d774fe3ba6d73c0ff4756c5_82) |
| [DISTRIBUTOR](#ifc3597e51d774fe3ba6d73c0ff4756c5_85) | [37](#ifc3597e51d774fe3ba6d73c0ff4756c5_85) |
| T[RANSFER AGENT, INDEX RECEIPT AGENT, AND ADMINISTRATOR](#ifc3597e51d774fe3ba6d73c0ff4756c5_88) | [39](#ifc3597e51d774fe3ba6d73c0ff4756c5_88) |
| [CUSTODIAN](#ifc3597e51d774fe3ba6d73c0ff4756c5_91) | [39](#ifc3597e51d774fe3ba6d73c0ff4756c5_91) |
| [SECURITIES LENDING ACTIVITIES](#ifc3597e51d774fe3ba6d73c0ff4756c5_1146) | [39](#ifc3597e51d774fe3ba6d73c0ff4756c5_1146) |
| [LEGAL COUNSEL](#ifc3597e51d774fe3ba6d73c0ff4756c5_94) | [40](#ifc3597e51d774fe3ba6d73c0ff4756c5_94) |
| [INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM](#ifc3597e51d774fe3ba6d73c0ff4756c5_97) | [40](#ifc3597e51d774fe3ba6d73c0ff4756c5_97) |
| [PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES](#ifc3597e51d774fe3ba6d73c0ff4756c5_100) | [40](#ifc3597e51d774fe3ba6d73c0ff4756c5_100) |
| [DESCRIPTION OF SHARES](#ifc3597e51d774fe3ba6d73c0ff4756c5_103) | [40](#ifc3597e51d774fe3ba6d73c0ff4756c5_103) |
| [LIMITATION OF TRUSTEES' LIABILITY](#ifc3597e51d774fe3ba6d73c0ff4756c5_106) | [41](#ifc3597e51d774fe3ba6d73c0ff4756c5_106) |
| [BROKERAGE TRANSACTIONS](#ifc3597e51d774fe3ba6d73c0ff4756c5_109) | [41](#ifc3597e51d774fe3ba6d73c0ff4756c5_109) |
| [PORTFOLIO TURNOVER RATE](#ifc3597e51d774fe3ba6d73c0ff4756c5_112) | [42](#ifc3597e51d774fe3ba6d73c0ff4756c5_112) |
| [BOOK ENTRY ONLY SYSTEM](#ifc3597e51d774fe3ba6d73c0ff4756c5_115) | [43](#ifc3597e51d774fe3ba6d73c0ff4756c5_115) |
| [PURCHASE AND REDEMPTION OF](#ifc3597e51d774fe3ba6d73c0ff4756c5_118) [CREATION UNITS](#ifc3597e51d774fe3ba6d73c0ff4756c5_118) | [44](#ifc3597e51d774fe3ba6d73c0ff4756c5_118) |
| [DETERMINATION OF NET ASSET VALUE](#ifc3597e51d774fe3ba6d73c0ff4756c5_124) | [50](#ifc3597e51d774fe3ba6d73c0ff4756c5_124) |
| [DIVIDENDS AND DISTRIBUTIONS](#ifc3597e51d774fe3ba6d73c0ff4756c5_127) | [50](#ifc3597e51d774fe3ba6d73c0ff4756c5_127) |
| [FEDERAL INCOME TAXES](#ifc3597e51d774fe3ba6d73c0ff4756c5_130) | [51](#ifc3597e51d774fe3ba6d73c0ff4756c5_130) |
| [FINANCIAL STATEMENTS](#ifc3597e51d774fe3ba6d73c0ff4756c5_133) | [58](#ifc3597e51d774fe3ba6d73c0ff4756c5_133) |

---

------

---

| | |
|:---|:---|
| [APPENDIX A](#ifc3597e51d774fe3ba6d73c0ff4756c5_1461) | [A-1](#ifc3597e51d774fe3ba6d73c0ff4756c5_1461) |
| [A](#ifc3597e51d774fe3ba6d73c0ff4756c5_136)[PPENDIX B](#ifc3597e51d774fe3ba6d73c0ff4756c5_136) | [B-1](#ifc3597e51d774fe3ba6d73c0ff4756c5_136) |

---

------

**GENERAL INFORMATION ABOUT THE TRUST**

The Trust is an open-end management investment company consisting of multiple investment series. This SAI relates only to the Funds. The Trust was organized as a Delaware statutory trust on August 26, 2016. The Trust is registered with the U.S. Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940, as amended (together with the rules and regulations adopted thereunder, the "1940 Act"), as an open-end management investment company, and the offering of each Fund's shares (collectively, the "Shares") is registered under the Securities Act of 1933 (the "Securities Act"). The Trust is governed by its Board of Trustees (the "Board").

Roundhill Financial Inc. (the "Adviser") serves as the Funds' investment adviser, and Exchange Traded Concepts, LLC (the "Sub-Adviser") serves as sub-adviser to the Funds.

Each Fund offers and issues Shares at their net asset value ("NAV") only in aggregations of a specified number of Shares (each, a "Creation Unit"). Each Fund generally offers and issues Shares in exchange for a basket of securities ("Deposit Securities") together with the deposit of a specified cash payment ("Cash Component"). The Trust reserves the right to permit or require the substitution of a "cash in lieu" amount ("Deposit Cash") to be added to the Cash Component to replace any Deposit Security or other instrument in a Fund's portfolio. Shares of each Fund are listed on a national listing exchange (each, an "Exchange" and together, the "Exchanges") and trade on the Exchanges at market prices that may differ from the Shares' NAV. Shares also are redeemable only in Creation Unit aggregations, primarily for a basket of Deposit Securities together with a Cash Component. A Creation Unit of each Fund generally consists of 25,000 Shares for the Video Games ETF, Sports Betting ETF, Ball Metaverse ETF and Cannabis ETF and 50,000 Shares for the Magnificent Seven ETF, though this may change from time to time. As a practical matter, only institutions or large investors purchase or redeem Creation Units. Except when aggregated in Creation Units, Shares are not redeemable securities.

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 at least equal to a specified percentage of the value of the missing Deposit Securities, as set forth in the Participant Agreement (as defined below). The Trust may impose a transaction fee for each creation or redemption. In all cases, such fees will be limited in accordance with the requirements of the SEC applicable to management investment companies offering redeemable securities. As in the case of other publicly traded securities, brokers' commissions on transactions in the secondary market will be based on negotiated commission rates at customary levels.

**ADDITIONAL INFORMATION ABOUT INVESTMENT OBJECTIVES, POLICIES, AND RELATED RISKS**

Each Fund's investment objective and principal investment strategies are described in the Prospectus. The following information supplements, and should be read in conjunction with, the Prospectus. For a description of certain permitted investments, see "<u>Description of Permitted Investments</u>" in this SAI.

With respect to each Fund's investments, unless otherwise noted, if a percentage limitation on investment is adhered to at the time of investment or contract, a subsequent increase or decrease as a result of market movement or redemption will not result in a violation of such investment limitation.

**Diversification Status**

Each Fund, except for the Cannabis ETF, is classified as a non-diversified investment company under the 1940 Act. A "non-diversified" classification means that a Fund is not limited by the 1940 Act with regard to the percentage of its total assets that may be invested in the securities of a single issuer. This means that a Fund may invest a greater portion of its total assets in the securities of a single issuer or a smaller number of issuers than if it was a diversified fund. This may have an adverse effect on a Fund's performance or subject Shares to greater price volatility than more diversified investment companies. Moreover, in pursuing its objective, each Fund may hold the securities of a single issuer in an amount exceeding 10% of the value of the outstanding securities of the issuer, subject to restrictions imposed by the Internal Revenue Code of 1986, as amended (the "Code"). In particular, as a Fund's size grows and its assets increase, it will be more likely to hold more than 10% of the securities of a single issuer if the issuer has a relatively small public float as compared to other components in a Fund's portfolio.

Although each Fund, except for the Cannabis ETF, is non-diversified for purposes of the 1940 Act, the Funds intend to maintain the required level of diversification and otherwise conduct its operations so as to qualify as a "regulated investment company" ("RIC") within the meaning of Subchapter M of the Code. Compliance with the diversification requirements of the Code may limit the investment flexibility of the Funds and may make it less likely that the Funds will meet their investment objectives. To qualify as a RIC under the Code, a Fund must meet the Diversification Requirement described in the section titled "<u>Federal Income Taxes</u>" in this SAI.

The Cannabis ETF Fund is "diversified" within the meaning of the 1940 Act. Under applicable federal laws, to qualify as a diversified fund, the Fund, with respect to 75% of its total assets, may not invest greater than 5% of its total assets in any one issuer and may not hold greater than 10% of the securities of one issuer, other than investments in cash and cash items (including receivables), U.S. government securities, and securities of other investment companies. The remaining 25% of the Fund's total assets does not need to be "diversified" and may be invested in securities of a single issuer, subject to other applicable laws. The diversification of the Fund's holdings is measured at the time the Fund purchases a security. However, if the Fund purchases a security and holds it for a period of

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time, the security may become a larger percentage of the Fund's total assets due to movements in the financial markets. If the market affects several securities held by the Fund, the Fund may have a greater percentage of its assets invested in fewer issuers.

**General Risks**

The value of a Fund's portfolio investments may fluctuate with changes in the financial condition of an issuer or counterparty, changes in specific economic or political conditions that affect a particular investment or issuer, and changes in general economic or political conditions. An investor in a Fund could lose money over short or long periods of time.

There can be no guarantee that a liquid market for the investments held by a Fund will be maintained. The existence of a liquid trading market for certain investments may depend on whether dealers will make a market in such investments. There can be no assurance that a market will be made or maintained or that any such market will be or remain liquid. The price at which investments may be sold and the value of Shares will be adversely affected if trading markets for a Fund's portfolio investments are limited or absent, or if bid/ask spreads are wide.

*Cybersecurity Risk.* Investment companies, such as the Funds, and their service providers may be subject to operational and information security risks resulting from cyber-attacks. Cyber-attacks include, among other behaviors, stealing or corrupting data maintained online or digitally, denial of service attacks on websites, the unauthorized release of confidential information or various other forms of cybersecurity breaches. Cyber-attacks affecting a Fund, the Adviser, the Sub-Adviser, custodian, transfer agent, intermediaries and other third-party service providers may adversely impact a Fund. For instance, cyber-attacks may interfere with the processing of shareholder transactions, impact a Fund's ability to calculate its NAV, cause the release of private shareholder information or confidential company information, impede trading, subject a Fund to regulatory fines or financial losses, and cause reputational damage. A Fund also may incur additional costs for cybersecurity risk management purposes. Similar types of cybersecurity risks also are present for issuers of securities in which a Fund invests, which could result in material adverse consequences for such issuers and may cause a Fund's investments in such portfolio companies to lose value.

*Global Pandemics.* Beginning in the first quarter of 2020, financial markets in the United States and around the world experienced extreme and, in many cases, unprecedented volatility and severe losses due to the global pandemic caused by COVID-19, a novel coronavirus. The pandemic resulted in a wide range of social and economic disruptions, including closed borders, voluntary or compelled quarantines of large populations, stressed healthcare systems, reduced or prohibited domestic or international travel, and supply chain disruptions affecting the United States and many other countries. Some sectors of the economy and individual issuers experienced particularly large losses as a result of these disruptions. Although the immediate effects of the COVID-19 pandemic have dissipated, global markets and economies continue to contend with the ongoing and long-term impact of COVID-19. It is unknown how long events related to the pandemic will persist, whether they will reoccur in the future, and what additional implications may follow from the pandemic. The impact of these events and other epidemics or pandemics in the future could adversely affect Fund performance.

*Recent Geopolitical Events*. Geopolitical tensions introduce uncertainty into global markets. For example, Russia's military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations, and Belarus as a response to Russia's invasion of Ukraine, and may impose sanctions on other countries that provide military or economic support to Russia. The extent and duration of Russia's military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions, including cyber-attacks) are impossible to predict, but could result in significant market disruptions, including in certain industries or sectors, such as the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth.

Similarly, escalations beginning in October 2023 of the ongoing Israel-Hamas conflict present a potential risk for wider conflict that could negatively affect financial markets due to a myriad of interconnected factors. This conflict could disrupt regional trade and supply chains, potentially affecting U.S. businesses with exposure to the region. For example, attacks on commercial vessels transiting through the Red Sea, commonly referred to as the Red Sea crisis, have led to disruption of international maritime trade and the global supply chain, which has had a direct impact on countries and regions that rely on such routes for the supply of energy and/or food and companies that typically ship goods or receive components by way of the Red Sea. In addition, recent U.S. military operations in Iran could lead to significant geopolitical instability, including retaliatory attacks, disruption of critical energy infrastructure and shipping lanes such as the Strait of Hormuz, and broader regional conflict, which in turn may cause sharp volatility across global financial markets and commodity prices. Such developments may adversely affect the Funds through increased market uncertainty, reduced liquidity, higher inflation and interest rate pressures, and potential declines in asset valuations across multiple sectors and geographies. The Middle East plays a pivotal role in the global energy sector, and prolonged instability could impact oil prices, leading to increased costs for businesses and consumers.

These conflicts and others, and any related events could significantly impact a Fund's performance and the value of an investment in a Fund, even if the Fund does not have direct exposure.

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**DESCRIPTION OF PERMITTED INVESTMENTS**

The following are descriptions of the Funds' permitted investments and investment practices and the associated risk factors. A Fund will only invest in any of the following instruments, or exchange-traded funds ("ETFs") that invest in such instruments, or engage in any of the following investment practices if such investment or activity is consistent with that Fund's investment objective and permitted by the Fund's stated investment policies.

**Borrowing**

Although the Funds do not intend to borrow money, a Fund may do so to the extent permitted by the 1940 Act. Under the 1940 Act, a Fund may borrow up to one-third (1/3) of its total assets. A Fund will borrow money only for short-term or emergency purposes. Such borrowing is not for investment purposes and will be repaid by the borrowing Fund promptly. Borrowing will tend to exaggerate the effect on NAV of any increase or decrease in the market value of the borrowing Funds' portfolio. Money borrowed will be subject to interest costs that may or may not be recovered by earnings on the securities purchased. A Fund also may be required to maintain minimum average balances in connection with a borrowing or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.

**Cannabis-Related Securities** *(Cannabis ETF only)*

The Fund intends to invest in securities of companies in the marijuana and hemp business ("Cannabis Companies") and in derivatives or other instruments that have economic characteristics similar to such securities. Cannabis Companies may be categorized among a wide variety of sectors and industries, including agriculture, biotechnology, pharmaceuticals, real estate, retail, and finance. Medical cannabis refers to the use of parts of the marijuana plant, such as hemp and the plant's chemicals, for the treatment of a variety of diseases or medical conditions. Hemp is a type of cannabis plant whose stalks and seeds may contain chemicals (such as CBD) or have other properties that researchers are exploring as potential treatments for certain health conditions. CBD is a chemical naturally found in the cannabis plant or synthetically created that gives cannabis products their primary medical properties. These medical Cannabis Companies include companies that are involved in research and development of CBD; are engaged in the production, supply chain or distribution of medical cannabis and/or medical cannabis-based consumer products; offer agricultural technologies and equipment, including hydroponics; are involved in leasing property to medical-use cannabis growers; and are involved in offering hemp and CBD products with potential medical or therapeutic benefits. The terms "marijuana" and "cannabis" are used interchangeably. Cannabinoids are the chemical compounds secreted by cannabis plants. Cannabinoids can also be synthetically produced chemical compounds and used in lawful research and development of prescription drugs or other products utilizing cannabinoids as an active ingredient. The Advisor believes that continued legislative changes and social acceptance of cannabis in its various formats could lead to significant growth in cannabis-related public corporations.

The Fund will not invest in any Cannabis Company that grows, produces, distributes, or sells cannabis or products derived from cannabis in a country, state, province, locality or other political subdivision where this activity is illegal under applicable law. Cannabis Companies do not include companies that grow, produce, distribute, or sell cannabis or products derived from cannabis inside the U.S. This is the case regardless of whether such a company is listed on a U.S. exchange or an exchange in a country where cannabis is legal. Cannabis Companies do not include companies that grow, produce, distribute, or sell cannabis or products derived from cannabis both in a country where its activities are entirely legal and in the U.S. where its activities are legal under state and local law but not under U.S. federal law. Cannabis Companies do not include those companies whose securities trade on the Canadian Stock Exchange. Cannabis Companies only supply products and/or perform activities that are legal under applicable national and local laws, including U.S. federal, state, and local laws. Cannabis Companies may, however, supply such products and perform such activities in the U.S. to companies that grow, produce, distribute, or sell cannabis or products derived from cannabis in a manner that is legal under state and local law but not under U.S. federal law. Cannabis Companies with a presence in the U.S. may engage in pharmaceutical activities and/or grow, produce, distribute, or sell hemp or products derive from hemp but only if such activities are properly licensed and legal under applicable U.S. federal, state, and local laws. If, after acquiring a Cannabis Company's securities, the Advisor identifies or becomes aware that the company no longer meets the Fund's definition of Cannabis Companies, the Fund will promptly sell that position.

Cannabis Companies are subject to various laws and regulations that may differ at the state/local and federal level. These laws and regulations may (i) significantly affect a Cannabis Company's ability to secure financing, (ii) impact the market for marijuana business sales and services, and (iii) set limitations on marijuana use, production, transportation, and storage. Cannabis Companies may also be required to secure permits and authorizations from government agencies to cultivate or research marijuana. In addition, Cannabis Companies are subject to the risks associated with the greater agricultural industry, including changes to or trends that affect commodity prices, labor costs, weather conditions, and laws and regulations related to environmental protection, health and safety. Cannabis Companies may also be subject to risks associated with the biotechnology and pharmaceutical industries. These risks include increased government regulation, the use and enforcement of intellectual property rights and patents, technological change and obsolescence, product liability lawsuits, and the risk that research and development may not necessarily lead to commercially successful products.

Under the Federal Food, Drug, and Cosmetic Act, if a substance (such as CBD) is an active ingredient in a drug product that has been approved by the FDA, then the substance cannot be sold in dietary supplements or foods without FDA approval, unless the substance

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was marketed as a dietary supplement or as a conventional food before the drug was approved or before the new drug investigations were authorized. The FDA has publicly taken the position that CBD cannot be sold in dietary supplements or foods because CBD is an active ingredient in an FDA-approved drug, while companies that sell CBD in dietary supplements and foods have taken the contrary position. Because the FDA has not brought enforcement action against such companies, this question of fact has not yet been adjudicated. In the absence of a conclusive legal determination to the contrary, as of the date of this prospectus, it has not been determined that the sale of dietary supplements and/or foods containing CBD within the United States would cause a company's securities to be ineligible for inclusion in the Fund's portfolio. It is possible that such a legal determination or future federal and/or state laws or regulations could materially curtail permissible uses of hemp, which could have an adverse effect of the value of the Fund's investments in companies with business interests in hemp and hemp-based products.

**Investments in China A-Shares** *(Video Games ETF only)*

To the extent consistent with its principal investment strategies, a Fund may invest in eligible China A-Shares ("A-shares"). Hong Kong and overseas investors may trade A-Shares issued by companies that are incorporated in mainland China, and listed and traded on the Shanghai Stock Exchange ("SSE") or Shenzhen Stock Exchange ("SZSE") through Northbound trading via the Shanghai-Hong Kong or Shenzhen-Hong Kong Stock Connect ("Stock Connect") programs in Chinese renminbi. In addition to shares of listed companies, ETFs are included as eligible securities to be traded under Stock Connect. Stock Connect is a securities trading and clearing linked program between either SSE or SZSE, and the Stock Exchange of Hong Kong Limited ("SEHK"), Hong Kong Securities Clearing Company Limited ("HKSCC"), and China Securities Depository and Clearing Corporation Limited ("ChinaClear"), with an aim to achieve mutual stock market access between the PRC and Hong Kong. A Fund's ability to invest in China A-Shares and ETFs through Stock Connect, or on such other stock exchanges in China that participate in Stock Connect from time to time or in the future, is subject to trading limits, rules and regulations by the applicable regulatory authority. These restrictions and regulations may adversely affect a Fund's ability to achieve its investment objective.

*Quota limitations risk.* Trading under Stock Connect is subject to daily quota limitations on investments, which may restrict a Fund's ability to invest in China A-Shares and ETFs through Stock Connect on a timely basis, and the Fund may not be able to effectively pursue its investment policies. In addition, an investor cannot purchase and sell the same security on the same trading day, which may restrict a Fund's ability to invest in A-Shares and ETFs through Stock Connect and to enter into or exit trades on a timely basis.

*Suspension risk.* SEHK, SSE, and SZSE reserve the right to suspend trading of a specific security or all securities of the relevant market(s) if necessary to ensure an orderly and fair market and manage risks prudently which could adversely affect a Fund's ability to access the PRC market.

*Differences in trading day.* Stock Connect only operates on days when both the PRC and Hong Kong markets are open for trading and when banks in both markets are open on the corresponding settlement days. So it is possible that there are occasions when it is a normal trading day for the PRC market, but Hong Kong investors (such as a Fund) cannot carry out any China A-Shares trading. A Fund may be subject to a risk of price fluctuations in China A-Shares during the time when Stock Connect is not trading as a result.

Restrictions on selling imposed by front-end monitoring. PRC regulations require that before an investor sells any share, there should be sufficient shares in the account; otherwise, SSE or SZSE will reject the sell order concerned. SEHK will carry out pre-trade checking on China A-Shares sell orders of its participants (*i.e.*, the stock brokers) to ensure there is no over-selling.

*Clearing settlement and custody risks.* HKSCC and ChinaClear establish the clearing links and each is a participant of the other to facilitate clearing and settlement of cross-boundary trades. As the national central counterparty of the PRC's securities market, ChinaClear operates a comprehensive network of clearing, settlement and stock holding infrastructure. ChinaClear has established a risk management framework and measures that are approved and supervised by the China Securities Regulatory Commission ("CSRC"). The chances of a ChinaClear default are considered to be remote.

Should the remote event of a ChinaClear default occur and ChinaClear be declared as a defaulter, HKSCC will, in good faith, seek recovery of the outstanding stocks and monies from ChinaClear through available legal channels or through ChinaClear's liquidation. In that event, a Fund may suffer a delay in the recovery process or may not be able to fully recover its losses from ChinaClear.

The China A-Shares traded through Stock Connect are issued in scriptless form, so investors, such as a Fund, will not hold any physical China A-Shares. Hong Kong and overseas investors, such as a Fund, who have acquired China A-Shares and/or ETFs ("Mainland Securities") through Northbound trading under Stock Connect maintain the Mainland Securities with their brokers' or custodians' stock accounts with the Central Clearing and Settlement System operated by HKSCC for the clearing securities listed or traded on SEHK.

Nominee arrangements in holding China A-Shares. HKSCC is the "nominee holder" of the Mainland Securities acquired by overseas investors (including a Fund) through Stock Connect. The CSRC Stock Connect rules expressly provide that investors enjoy the rights and benefits of the Mainland Securities acquired through Stock Connect in accordance with applicable laws. The CSRC has clarified that (i) the concept of nominee shareholding is recognized in China, (ii) overseas investors shall hold Mainland Securities through HKSCC and are entitled to proprietary interests in such securities as shareholders, (iii) China law does not expressly provide for a beneficial owner under the nominee holding structure to bring legal proceedings, nor does it prohibit a beneficial owner from doing so, (iv) as long as certification issued by HKSCC is treated as lawful proof of a beneficial owner's holding of Mainland Securities under

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the Hong Kong Special Administrative Region law, it would be fully respected by CSRC, and (v) as long as an overseas investor can provide evidential proof of direct interest as a beneficial owner, the investor may take legal actions in its own name in PRC courts. However, the courts in the PRC may consider that any nominee or custodian as registered holder of the Mainland Securities would have full ownership thereof, and even if the concept of beneficial owner is recognized under PRC law, those Mainland Securities would form part of the pool of assets of such entity available for distribution to creditors of such entities and/or that a beneficial owner may have no rights whatsoever in respect thereof. Consequently, neither a Fund nor its custodian can ensure that the Fund's ownership of these securities or title thereto is assured.

Under the rules of the Central Clearing and Settlement System operated by HKSCC for the clearing of securities listed or traded on SEHK, HKSCC as nominee holder shall have no obligation to take any legal action or court proceeding to enforce any rights on behalf of the investors in respect of the Mainland Securities in the PRC or elsewhere. Therefore, although a Fund's ownership may be ultimately recognized and the HKSCC confirmed that it is prepared to provide assistance to the beneficial owners of Mainland Securities where necessary, the Fund may suffer difficulties or delays in enforcing its rights in Mainland Securities. Moreover, whether PRC courts will accept the legal action independently initiated by the overseas investor with the certification of holding Mainland Securities issued by HKSCC has yet to be tested. To the extent that HKSCC is deemed to be performing safekeeping functions with respect to assets held through it, it should be noted that a Fund and its custodian will have no legal relationship with HKSCC and no direct legal recourse against HKSCC in the event that the Fund suffers losses resulting from the performance or insolvency of HKSCC.

*China A-Share market suspension risks.* Only certain A-Shares are eligible to be accessed through Stock Connect. Such securities may lose their eligibility at any time, in which case they could be sold but could no longer be purchased through Stock Connect. China A-Shares may only be bought or sold where the relevant A-Shares are traded on the SSE or the SZSE, as appropriate. Given that the A-Share market is considered volatile and unstable (with the risk of suspension of a particular stock, and/or the whole market, and/or government intervention), the subscription and redemption of shares may also be disrupted. An Authorized Participant is unlikely to redeem or subscribe shares if it considers that A-Shares may not be available.

*Investor compensation.* A Fund will not benefit from the China Securities Investor Protection Fund in mainland China. The China Securities Investor Protection Fund is established to pay compensation to investors in the event that a securities company in mainland China is subject to compulsory regulatory measures (such as dissolution, closure, bankruptcy, and administrative takeover by the CSRC). Since a Fund is carrying out trading of China A-Shares and ETFs through securities brokers in Hong Kong, but not mainland China brokers, it is not protected by the China Securities Investor Protection Fund. That said, if a Fund suffers losses due to default matters of its securities brokers in Hong Kong in relation to the investment of Mainland Securities through Stock Connect, it would be compensated by Hong Kong's Investor Compensation Fund.

*Trading costs.* In addition to paying trading fees and stamp duties in connection with trading of Mainland Securities, a Fund may be subject to new portfolio fees, dividend tax and tax concerned with income arising from stock transfers which are yet to be determined by the relevant authorities.

*Operational risk.* Stock Connect provides a channel for investors from Hong Kong and overseas, such as the Funds, to access the China stock market directly. Stock Connect is premised on the functioning of the operational systems of the relevant market participants. Market participants are able to participate in this program subject to meeting certain information technology capability, risk management and other requirements as may be specified by the relevant exchange and/or clearing house.

The securities regimes and legal systems of the two markets differ significantly and in order for the trial program to operate, market participants may need to address issues arising from the differences on an ongoing basis. Further, the "connectivity" in Stock Connect program requires routing of orders across the border. This has and will continue to require the development of new information technology systems on the part of the SEHK and exchange participants. There is no assurance that the systems of the SEHK and market participants will function properly or will continue to be adapted to changes and developments in both markets. In the event that the relevant systems failed to function properly, trading in both markets through the program could be disrupted. A Fund's ability to access the China A-Share market (and hence to pursue their investment strategy) will be adversely affected.

*Regulatory risk.* The CSRC Stock Connect rules are departmental regulations having legal effect in the PRC. However, the application of such rules is untested, and there is no assurance that PRC courts will recognize such rules, *e.g.*, in liquidation proceedings of PRC companies.

Stock Connect is novel in nature and is subject to regulations promulgated by regulatory authorities and implementation rules made by the stock exchanges in the PRC and Hong Kong. Further, new regulations may be promulgated from time to time by the regulators in connection with operations and cross-border legal enforcement in connection with cross-border trades through Stock Connect.

The regulations are untested so far and there is no certainty as to how they will be applied. Moreover, the current regulations are subject to change. There can be no assurance that Stock Connect will not be abolished. A Fund that may invest in the PRC markets through Stock Connect may be adversely affected as a result of such changes.

*Tax risk.* Uncertainties in PRC tax rules governing taxation of income and gains from investments in A-Shares could result in unexpected tax liabilities for a Fund. A Fund's investments in securities, including A-Shares, issued by PRC companies may cause the

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Fund to become subject to withholding and other taxes imposed by the PRC. If the Fund were considered to be a tax resident of the PRC, it would be subject to PRC corporate income tax at the rate of 25% on its worldwide taxable income. If the Fund were considered to be a non-resident enterprise with a "permanent establishment" in the PRC, it would be subject to PRC corporate income tax of 25% on the profits attributable to the permanent establishment. The Adviser and Sub-Adviser intend to operate such Fund in a manner that will prevent it from being treated as a tax resident of the PRC and from having a permanent establishment in the PRC. It is possible, however, that the PRC could disagree with that conclusion or that changes in PRC tax law could affect the PRC corporate income tax status of the Fund.

The PRC generally imposes withholding income tax at a rate of 10% on dividends, premiums, interest, and capital gains originating in the PRC and paid to a company that is not a resident of the PRC for tax purposes and that has no permanent establishment in China. The withholding is in general made by the relevant PRC tax resident company making such payments. In the event the relevant PRC tax resident company fails to withhold the relevant PRC withholding income tax or otherwise fails to pay the relevant withholding income tax to the PRC tax authorities, the competent PRC tax authorities may, at their sole discretion, impose tax obligations on the Fund.

The Ministry of Finance of the PRC, the State Administration of Taxation of the PRC and the CSRC (collectively, the "PRC Tax Authorities") issued the "Notice on the Pilot Program of Shanghai-Hong Kong Stock Connect" Caishui [2014] No.81 (Notice 81), on October 31, 2014, which states that the capital gain from disposal of A-Shares by foreign investors enterprises via the Shanghai-Hong Kong Stock Connect program will be temporarily exempt from withholding income tax. Notice 81 also states that the dividends derived from A-Shares by foreign investor enterprises is subject to 10% withholding income tax.

The PRC Tax Authorities issued the "Notice on the Pilot Program of Shenzhen-Hong Kong Stock Connect" Caishui [2016] No.127 (Notice 127)" on November 5, 2016, which states that the capital gain from disposal of A-Shares by foreign investors enterprises via the Shenzhen-Hong Kong Stock Connect program will be temporarily exempt from withholding income tax. Notice 127 also states that the dividends derived from A-Shares by foreign investor enterprises is subject to 10% withholding income tax.

There is no indication of how long the temporary exemption will remain in effect and a Fund may be subject to such withholding income tax in the future. If, in the future, China begins applying tax rules regarding the taxation of income from investments through Stock Connect and/or begins collecting capital gains taxes on such investments, the Fund could be subject to withholding income tax liability if the Fund determines that such liability cannot be reduced or eliminated by applicable tax treaties. The PRC Tax Authorities may, in the future, issue further guidance in this regard and with potential retrospective effect. The negative impact of any such tax liability on the Fund's return could be substantial.

In light of the uncertainty as to how gains or income that may be derived from a Fund's investments in the PRC will be taxed, the Fund reserves the right to provide for withholding tax on such gains or income and withhold tax for the account of the Fund. Withholding tax may already be withheld at a broker/custodian level. If the Fund expects such withholding tax on trading in A-Shares to be imposed, it reserves the right to establish a reserve for such tax. If the Fund establishes such a reserve but is not ultimately subject to the tax, shareholders who redeemed or sold their shares while the reserve was in place will effectively bear the tax and may not benefit from the later release, if any, of the reserve. Conversely, if the Fund does not establish such a reserve but ultimately is subject to the tax, shareholders who redeemed or sold their shares prior to the tax being withheld, reserved, or paid will have effectively avoided the tax, even if they benefited from the trading that precipitated the Fund's payment of it. Investors should note that such provision may be excessive or inadequate to meet actual withholding tax liabilities (which could include interest and penalties) on the Fund's investments. As a result, investors may be advantaged or disadvantaged depending on the final rules of the relevant PRC tax authorities.

Any tax provision, if made, will be reflected in the NAV of such Fund at the time of debit or release of such provision and thus will impact shares which remain in the Fund at the time of debit or release of such provision. If the actual applicable tax levied by PRC tax authorities is greater than that provided for by the Fund so that there is a shortfall in the tax provision amount, investors should note that the NAV of the Fund may suffer more than the tax provision amount as the Fund will ultimately have to bear the additional tax liabilities. In this case, the then-existing and subsequent investors will be disadvantaged. On the other hand, if the actual applicable tax levied by PRC tax authorities is less than that provided for by the Fund so that there is an excess in the tax provision amount, investors who have redeemed Fund shares before the PRC tax authorities' ruling, decision or guidance in this respect will be disadvantaged as they would have borne the loss from the Fund's overprovision. In this case, the then-existing and subsequent investors may benefit if the difference between the tax provision and the actual taxation liability can be returned to the account of the Fund as assets thereof. In case of having excess in the tax provision amount (for example, the actual applicable tax levied by PRC tax authorities is less than the tax provision amount or due to a change in provisioning by the Fund), such excess shall be treated as property of the Fund and investors who have already transferred or redeemed their shares in the Fund will not be entitled or have any right to claim any part of the amount representing the excess.

Stamp duty under the PRC laws generally applies to the execution and receipt of taxable documents, which include contracts for the sale of A-Shares traded on PRC stock exchanges. In the case of such contracts, the stamp duty is currently imposed on the seller but not on the purchaser, at the rate of 0.05%. The Funds will not be required to pay stamp duty arising from the transactions of SSE-listed and SZSE-listed ETFs for Northbound Trading Link under the Stock Connect.

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While overseas investors currently are exempt from value added taxes (currently at the rate of 6%) on capital gains derived from trading of A-Shares through Stock Connect, the PRC tax rules could be changed which could result in unexpected tax liabilities for the Fund. In addition, urban maintenance and construction tax (currently at rates ranging from 1% to 7%), educational surcharge (currently at the rate of 3%) and local educational surcharge (currently at the rate of 2%) (collectively, the "surtaxes") are imposed based on value added tax liabilities, so if the Fund were liable for value added tax it would also be required to pay the applicable surtaxes.

The PRC rules for taxation of Stock Connect are evolving and certain of the tax regulations to be issued by the PRC tax authorities to clarify the subject matter may apply retrospectively, even if such rules are adverse to the Fund and its investors. The imposition of such taxes, particularly on a retrospective basis, could have a material adverse effect on the Fund's returns. Before further guidance is issued and is well established in the administrative practice of the PRC tax authorities, the practices of the PRC tax authorities that collect PRC taxes relevant to the Fund may differ from, or be applied in a manner inconsistent with, the practices with respect to the analogous investments described herein or any further guidance that may be issued. The value of the Fund's investment in the PRC and the amount of its income and gains could be adversely affected by an increase in tax rates or change in the taxation basis.

The above information is only a general summary of the potential PRC tax consequences that may be imposed on the Fund and its investors either directly or indirectly and should not be taken as a definitive, authoritative or comprehensive statement of the relevant matter. Investors should seek their own tax advice on their tax position with regard to their investment in the Fund.

The PRC government has implemented a number of tax reform policies in recent years. The current tax laws and regulations may be revised or amended in the future. Any revision or amendment in tax laws and regulations may affect the after-taxation profit of PRC companies and foreign investors in such companies, such as the Funds.

**Cryptocurrency ETFs** *(Ball Metaverse ETF only)*

The Fund may invest, directly or indirectly, in shares of ETFs that primarily hold bitcoin, ether, XRP, tokens related to the Solana Network ("SOL"), or any other cryptocurrency eligible to be held by U.S. registered investment companies, and that seek to generate income and capital appreciation through staking the underlying cryptocurrency (collectively, "Cryptocurrency ETFs"). Cryptocurrency ETFs are relatively new products and, therefore, have limited financial and operating histories. To the extent the Fund invests in Cryptocurrency ETFs, such investment exposure subjects the Fund to many of the same risks as an investment in the reference cryptocurrency, including those described elsewhere in the Prospectus and this SAI. As a shareholder in a Cryptocurrency ETF, the Fund will hold, either directly or indirectly, shares representing a fractional undivided beneficial interest in the net assets of the Cryptocurrency ETF. The Fund expects to purchase shares of Cryptocurrency ETFs in the secondary market at their market prices, which may be highly volatile and may not closely correspond to either the NAV per share of the Cryptocurrency ETF or the price of the reference cryptocurrency. Shares of Cryptocurrency ETFs may trade at premiums (*i.e.*, the market price of the shares is more than the NAV) or discounts (*i.e.*, the market price of the shares is less than the NAV), which may be significant. The risk that share prices differ from the Cryptocurrency ETF's NAV and/or the price of the reference cryptocurrency is likely to increase during times of market volatility or stressed market conditions. Under such conditions, the market for shares of Cryptocurrency ETFs may become less liquid making it difficult for the Fund to either increase or decrease its investment exposure to Cryptocurrency ETFs.

*Bitcoin and the Bitcoin Network*

Bitcoin is a digital asset that is created and transmitted through the operations of the peer-to-peer Bitcoin network, a decentralized network of computers that operates on cryptographic protocols. The Bitcoin network allows people to exchange tokens of value, called bitcoin, which are recorded on a public transaction ledger known as the Bitcoin blockchain. Bitcoin can be used to pay for goods and services, although it is not currently widely accepted, or it can be converted to fiat currencies, such as the U.S. dollar, at rates determined on digital asset trading platforms that enable trading in bitcoin or in individual end-user-to-end-user transactions under a barter system.

The value of bitcoin, like the value of other digital assets, is not backed by any government, corporation, or other identified body. Ownership and the ability to transfer or take other actions with respect to bitcoin is protected through public-key cryptography. The supply of bitcoin is constrained or formulated by its protocol instead of being explicitly delegated to an identified body (*e.g.*, a central bank or corporate treasury) to control. Units of bitcoin are treated as fungible. No single entity owns or operates the Bitcoin network, the infrastructure of which is collectively maintained by (1) a decentralized group of participants who run computer software that results in the recording and validation of transactions (commonly referred to as "miners"), (2) developers who propose improvements to the Bitcoin protocol and the software that enforces the protocol, and (3) users who choose what Bitcoin software to run. Anyone can be a user, developer, or miner.

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which new bitcoin enter circulation. This reward system, called proof of work, also ensures that the local copies of the Bitcoin blockchain maintained by participants in the Bitcoin network are kept in consensus with one another. Copies of the Bitcoin blockchain are stored in a decentralized manner on the computers of each individual Bitcoin network full node (*i.e.*, any user who chooses to maintain on their computer a full copy of the Bitcoin blockchain as well as related software). Each bitcoin is associated with a set of unique cryptographic "keys", in the form of a string of numbers and letters, which allow whoever is in possession of the private key to assign that bitcoin in a transfer that the Bitcoin network will recognize. One or more private keys control the transfer or "spending" of bitcoin from an associated public address. To use bitcoin, a user or a service provider must have access to keys that identify it for its transactions (similar to an ATM card and its related PIN). Bitcoin users keep their keys in electronic "wallets" that can be maintained on their computers, mobile phones, specialized hardware wallets, or wallets provided by online custodians.

Bitcoin is an open source project with no official developer or group of developers that controls the Bitcoin network. However, the Bitcoin network's development is overseen by a core group of developers. The core developers are able to access, and can alter, the Bitcoin network source code and, as a result, they are responsible for quasi-official releases of updates and other changes to the Bitcoin network's source code. The release of updates to the Bitcoin network's source code does not guarantee that the updates will be automatically adopted. Users and miners must accept any changes made to the bitcoin source code by downloading the proposed modification of the Bitcoin network's source code. As a practical matter, a modification to the source code becomes part of the Bitcoin network only if accepted by participants collectively having most of the processing power on the Bitcoin network.

*Ether and the Ethereum Network*

Ether is a digital asset that is created and transmitted through the operations of the Ethereum Network, a peer-to-peer protocol that operates on principles of cryptography. The value of ether is not backed by any government, corporation, or other identified body. No single entity owns or operates the Ethereum Network, the infrastructure of which is open source and collectively maintained by a community of developers. The Ethereum Network allows individuals to make transactions which are recorded on a public ledger commonly known as a blockchain. Ether can be used to pay for goods and services, although it is not widely accepted, or it can be converted to fiat currencies, such as the U.S. dollar, at rates determined on digital asset trading platforms or in individual end-user-to-end-user transactions under a barter system. Furthermore, the Ethereum Network also allows users to write and implement smart contracts—that is, general-purpose code that executes on every computer in the network and can instruct the exchange of information and value based on a sophisticated set of logical conditions. A smart contract operates by a predefined set of rules (*i.e.*, "if/then statements") that allows it to automatically execute code the same way on any Ethereum node on the network. Such actions taken by the predefined set of rules are not necessarily contractual in nature but are intended to eliminate the arbitration of a third party for carrying out code execution on behalf of users, making the system decentralized, while empowering developers to create a wide range of applications layering together different smart contracts. Using smart contracts, users can create markets, store registries of debts or promises, represent the ownership of property, move funds in accordance with conditional instructions and create digital assets other than Ether on the Ethereum Network. Smart contract operations are executed on the Ethereum Blockchain in exchange for payment of ether. The Ethereum Network is one of a number of projects intended to expand blockchain use beyond just a decentralized money system.

The Ethereum Network is decentralized and does not require governmental authorities or financial institution intermediaries to create, transmit or determine the value of ether. Rather, following the initial distribution of ether, ether was created and allocated by the Ethereum Network protocol through a proof-of-work "mining" consensus mechanism until September 2022. In September 2022, the Ethereum Network underwent an upgrade to a proof-of-stake consensus mechanism (referred to as the "Merge"). Proof-of-stake consensus requires network participants to contribute (aka, "stake") a certain amount of the digital asset associated with a given blockchain in order to validate transactions. A participant can be penalized if they attempt to validate transactions in a way that is fraudulent or violates the rules of the underlying blockchain. The value of ether is determined by the supply of and demand for ether on the digital asset trading platforms or in private end-user-to-end-user transactions.

Assets in the Ethereum network are held in accounts. Each account, or "wallet," is made up of at least two components: a public address and a private key. An Ethereum private key controls the transfer or "spending" of ether from its associated public ether address. An ether "wallet" is a collection of public Ethereum addresses and their associated private key(s). This design allows only the owner of ether to send ether, the intended recipient of ether to unlock it, and the validation of the transaction and ownership to be verified by any third party anywhere in the world.

Because the Ethereum network has no central authority, the release of updates to the network's source code by developers does not guarantee that the updates will be automatically adopted by the other participants. Users and validators must accept any changes made to the source code by downloading the proposed modification and that modification is effective only with respect to those users and validators who choose to download it. As a practical matter, a modification to the source code becomes part of the Ethereum network only if it is accepted by participants that collectively have a majority of the processing power on the Ethereum network.

Ether may be regarded as a currency or digital commodity depending on its specific use in particular transactions. Ether may be used as a medium of exchange or unit of account. Although a number of large and small retailers accept ether as a form of payment in the United States and foreign markets, there is relatively limited use of ether for commercial and retail payments. Similarly, ether may be

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used as a store of value (*i.e.*, an asset that maintains its value rather than depreciating), although it has experienced significant periods of price volatility.

*Solana and the Solana Network*

Solana (or SOL) is a digital asset (also referred to as a "cryptocurrency") that is created and transmitted through the operations of the peer-to-peer Solana Network, a decentralized network of computers that operates on cryptographic protocols. No single entity owns or operates the Solana Network, the infrastructure of which is collectively maintained by a decentralized user base. The Solana Network allows people to exchange tokens of value, called SOL, which are recorded on a public transaction ledger known as a blockchain. SOL can be used to pay for goods and services, including computational power on the Solana Network, or it can be converted to fiat currencies, such as the U.S. dollar, at rates determined on digital asset exchanges or in individual end-user-to-end-user transactions under a barter system. The Solana Network was designed to allow users to write and implement smart contracts, which are general-purpose codes that execute on every computer in the network and can instruct the transmission of information and value based on a sophisticated set of logical conditions. Using smart contracts, users can create markets, store registries of debts or promises, represent the ownership of property, move funds in accordance with conditional instructions and create digital assets other than SOL on the Solana Network. Smart contract operations are executed on the Solana blockchain in exchange for payment of SOL. Like the Ethereum network, the Solana Network is one of a number of projects intended to expand blockchain use beyond just a peer-to-peer money system.

The Solana protocol introduced the proof-of-history ("PoH") timestamping mechanism. PoH automatically orders on-chain transactions by creating a historical record that proves an event has occurred at a specific moment in time. PoH is intended to provide a transaction processing speed and capacity advantage over other blockchain networks like Bitcoin and Ethereum, which rely on sequential production of blocks and can lead to delays caused by validator confirmations.

In addition to the PoH mechanism, the Solana Network uses a proof-of-stake consensus mechanism to incentivize SOL holders to validate transactions. Unlike proof-of-work, in which miners expend computational resources to compete to validate transactions and are rewarded coins in proportion to the amount of computational resources expended, in proof-of-stake, validators risk or "stake" coins to compete to be randomly selected to validate transactions and are rewarded coins in proportion to the amount of coins staked. The Cryptocurrency ETF in which the Fund may invest that holds SOL will stake a portion of its SOL tokens in order to earn rewards of additional SOL tokens. Any malicious activity, such as disagreeing with the eventual consensus or otherwise violating protocol rules, results in the forfeiture or "slashing" of a portion of the staked coins. Proof-of-stake is viewed as more energy efficient and scalable than proof-of-work and is sometimes referred to as "virtual mining."

The Solana protocol was first conceived by Anatoly Yakovenko in a 2017 whitepaper. Development of the Solana Network is overseen by the Solana Foundation, a Swiss non-profit organization, and Solana Labs, Inc., a Delaware corporation, which administered the original network launch and token distribution. Although Solana Labs, Inc. and the Solana Foundation continue to exert significant influence over the direction of the development of Solana, the Solana Network is decentralized and does not require governmental authorities or financial institution intermediaries to create, transmit, or determine the value of Solana.

*XRP and the XRP Ledger*

XRP is a digital asset that is created and transmitted through the operations of the XRP Ledger, a distributed ledger upon which XRP transactions are processed and settled. XRP can be used to pay for goods and services or it can be converted to fiat currencies, such as the U.S. dollar. The XRP Ledger is based on a shared public ledger, the XRP Ledger, similar to the Bitcoin network. However, the XRP Ledger differentiates itself from other digital asset networks in that its stated primary function is transactional utility, not store of value. The XRP Ledger is designed to be a global real-time payment and settlement system. As a result, the XRP Ledger and XRP aim to improve the speed at which parties on the network may transfer value while also reducing the fees and delays associated with the traditional methods of interbank payments.

No single entity controls the XRP Ledger. Instead, a network of independent nodes validates transactions pursuant to the Ripple Protocol Consensus Algorithm. It is this mechanism, as opposed to the proof-of-work mechanism utilized by the Bitcoin blockchain, that allows the XRP Ledger to be fast, energy-efficient and scalable, and therefore suitable for its most prominent use case, the facilitation of cross-border financial transactions. Unlike proof-of-work systems, which require massive computational power to secure the network, the Ripple Protocol Consensus Algorithm utilized by the XRP Ledger is extremely lightweight in terms of energy usage, as it relies on trusted validators rather than mining. The XRP Ledger can handle up to 1,500 transactions per second, far more than the Bitcoin or Ethereum blockchain. This makes the XRP Ledger suitable for high-volume use cases, such as cross-border payments. Lastly, because validators do not need to spend resources on mining, transaction fees are extremely low (typically a fraction of a cent per transaction).

Transactions are validated on the XRP Ledger by a network of independent validator nodes. These nodes do not mine new blocks but participate in a consensus process to ensure that transactions are valid and correctly ordered on the XRP Ledger. Any node can be a validator, but for practical purposes, the XRP Ledger depends on a list of trusted validators known as the Unique Node List or "UNL." Validators are entities (which can be individuals, institutions, or other organizations) that run nodes to participate in the consensus process. These validators ensure the integrity and accuracy of the ledger. Each node in the network maintains a Unique Node List — a

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list of other validators that the node trusts to reliably validate transactions. The XRP Ledger's architecture means that different nodes may maintain different UNLs, but there needs to be some overlap in the UNLs for the consensus mechanism to work effectively. Similar to the Bitcoin network, anyone can join and start using the XRP Ledger; however, unlike the Bitcoin network, which operates on a fully permissionless blockchain, the XRP Ledger is maintained by a network of trusted nodes that accept or reject transactions on the XRP Ledger.

Each XRP Ledger address, or wallet, is associated with a unique "public key" and "private key" pair. To receive XRP, the XRP recipient must provide its public key to the party initiating the transfer. This activity is analogous to a recipient for a transaction in U.S. dollars providing a routing address in wire instructions to the payor so that cash may be wired to the recipient's account. The payor approves the transfer to the address provided by the recipient by "signing" a transaction that consists of the recipient's public key with the private key of the address from where the payor is transferring the XRP. The recipient, however, does not make public or provide to the sender its related private key.

*XRP Markets and Exchanges.* XRP can be transferred in direct peer-to-peer transactions through the direct sending of XRP over the XRP Ledger from one XRP address to another. While XRP was originally intended to be used primarily as a means to conduct cross-border payments, XRP can also be used to pay other users of the XRP Ledger for goods and services under what resembles a barter system. Consumers can also pay merchants and other commercial businesses for goods or services through direct peer-to-peer transactions on the XRP Ledger or through third-party service providers.

In addition to using XRP to engage in cross-border transactions or payment for goods and services, investors may purchase and sell XRP to speculate as to the price of XRP in the XRP market, or as a long-term investment to diversify their portfolio. The price of XRP within the market is determined, in part, by the supply of and demand for XRP in the global XRP market, market expectations for the adoption of XRP as a store of value or as a viable cross-border payments facilitator, the number of merchants that accept XRP as a form of payment, the regulatory challenges faced by Ripple Labs and XRP, and the volume of peer-to-peer transactions, among other factors.

*Limits on XRP Supply.* Unlike other digital assets such as bitcoin or ether, XRP was not mined gradually over time. Instead, all 100 billion XRP tokens were created at the time of the XRP Ledger's launch in 2012. This means that every XRP token that exists today was generated from the outset, without the need for a mining process. Of the 100 billion XRP generated by the XRP Ledger's code, the founders of Ripple Labs retained 20 billion XRP and the rest, nearly 80 billion XRP, was provided to Ripple Labs.

In 2017, to address concerns about the large portion of XRP held by Ripple Labs, the company introduced an escrow mechanism to lock up a significant portion of its XRP holdings. Under this mechanism, Ripple Labs placed 55 billion XRP (55% of the total supply) into a series of time-locked escrow accounts. The escrow releases 1 billion XRP per month over 55 months. This process adds a level of predictability and transparency about how much XRP can enter the market each month. If Ripple Labs does not use all of the 1 billion XRP released in a given month, the remaining amount is placed back into escrow for future release. The purpose of this escrow system is to reassure the market that Ripple Labs will not release too much XRP at once, which could potentially disrupt XRP's price or market dynamics.

*XRP Risk.* Investments linked to XRP can be highly volatile compared to investments in traditional securities and the Fund may, through its investments in Cryptocurrency ETFs that hold XRP, experience sudden and large losses. The markets for XRP and XRP-related investments may become illiquid. These markets may fluctuate widely based on a variety of factors including changes in overall market movements, political and economic events, wars, acts of terrorism, natural disasters (including disease, epidemics and pandemics) and changes in interest rates or inflation rates. A number of factors affect the price and market for XRP:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *New Technology:* XRP is a relatively new technological innovation with a limited operating history. XRP has a relatively limited history of existence and operations. There is a limited established performance record for the price of XRP and, in turn, a limited basis for evaluating an investment in XRP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Supply and demand of XRP:* Unlike other digital assets such as bitcoin or ether, XRP is not and was not mined gradually over time. Instead, all 100 billion XRP tokens were created at the time of the XRP Ledger's launch in 2012. This means that every XRP token that exists today, or will ever exist, was generated from the outset of the XRP Ledger. As a result, there is no ability for the supply of XRP to be adjusted in response to economic conditions. For instance, there is no ability for the supply of XRP to be increased to meet rising demand, which could lead to price volatility. In addition, unlike blockchains that utilize "proof-of-work" or "proof-of-stake" where miners or stakers are rewarded with newly minted coins or tokens, XRP validators are not incentivized by block rewards since there is no new issuance of XRP.

Additionally, the fixed supply of XRP, combined with the burning of XRP (permanently destroyed) as transaction fees, could create deflationary pressure over time. A small amount of XRP is burned with every transaction to prevent spam on the network. While the amount of XRP burned per transaction is minuscule, over time, the total supply of XRP will slowly decrease. This could lead to a deflationary environment where the decreasing supply drives up the price of XRP, making it less practical as a medium of exchange. Additionally, as the total supply of XRP slowly shrinks due to burning, liquidity could become an issue in the distant future, potentially making it harder for businesses and users to access sufficient XRP for their transactions.

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The fixed supply of XRP could also contribute to price volatility, especially if demand fluctuates significantly. Since the supply of XRP is fixed, any significant surge in demand can result in large price spikes. For example, during periods of high market activity or speculation, the price of XRP could rapidly increase due to the inability to expand supply to match demand. This volatility could make XRP less predictable for businesses that rely on it for payments. Digital assets with a flexible supply, such as stablecoins, can adjust to maintain a stable value. XRP, however, could experience price swings that make it less attractive for everyday transactions or long-term financial planning.

The fixed supply of XRP may also not scale well with rapidly expanding use cases. As more businesses, financial institutions, and payment providers adopt XRP for cross-border transactions and other use cases, there is a risk that the fixed supply may not meet the growing demand, leading to supply shortages and further price volatility. In the case of massive adoption, the scarcity of XRP could raise its value too much, making it less appealing for day-to-day transactions or use as a liquidity bridge in cross-border payments, as businesses might prefer a more stable and widely available currency.

Ripple Labs holds a large portion of the XRP supply, which has led to concerns about centralization. Despite escrow mechanisms that gradually release XRP into the market, Ripple Labs still retains control over a significant portion of XRP, which can impact market dynamics if large amounts are sold. The concentration of XRP in the hands of Ripple Labs and early stakeholders could affect the market's confidence in XRP as a decentralized asset.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Adoption and use of XRP:* The continued adoption of XRP will require growth in its usage as a means of exchange and payment. Even if growth in XRP adoption continues in the near or medium-term, there is no assurance that XRP usage will continue to grow over the long-term. A contraction in the use of XRP may result in a lack of liquidity, increased volatility in and a reduction to the price of XRP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *The regulatory environment relating to XRP:* Depending on its characteristics, a digital asset, including XRP, may be considered a "security" under U.S. federal securities laws. The test for determining whether a particular digital asset is a "security" is complex and difficult to apply, and the outcome is difficult to predict. Any enforcement action by the SEC or a state securities regulator asserting that XRP is a security, or a court decision to that effect, would be expected to have an immediate material adverse impact on the trading price of XRP. This is because the business models behind most digital assets are incompatible with regulations applying to transactions in securities. If a digital asset is determined to be a security, it is likely to become difficult or impossible for the digital asset to be traded, cleared or custodied in the United States through the same channels used by non-security digital assets, which in addition to materially and adversely affecting the trading value of the digital asset is likely to significantly impact its liquidity and market participants' ability to convert the digital asset into U.S. dollars. Any assertion that a digital asset is a security by the SEC or another regulatory authority may have similar effects.

In December 2020, the SEC filed a complaint against Ripple Labs (the "Ripple Complaint") and two of its executives (the "Ripple Defendants"), in the United States District Court for the Southern District of New York (the "S.D.N.Y.") alleging that the Ripple Defendants had conducted unregistered securities offerings by selling XRP in contravention of Section 5 of the Securities Act. Under Section 5 of the Securities Act, it is unlawful for any person, directly or indirectly to offer to sell, offer to buy or purchase or sell a "security" unless a registration statement is in effect or has been filed with the SEC as to the offer and sale of such security to the public. The Ripple Defendants did not dispute that they had offered to sell and sold XRP through interstate commerce and that they had not filed a registration statement with the SEC for any offer or sale of XRP. Accordingly, the question before the S.D.N.Y. was whether the Ripple Defendants offered to sell or sold XRP as a security.

In the years prior to the filing of the Ripple Complaint, XRP's market capitalization at times reached over $140 billion. However, in the weeks following the Ripple Complaint, XRP's market capitalization fell to less than $10 billion, which was less than half of its market capitalization in the days prior to the complaint.

On July 13, 2023, the S.D.N.Y. issued several key rulings in the case. Most notably, the court did not find that XRP was inherently a security. The court distinguished between the XRP token itself and the manner in which it was sold. This finding was contrary to the SEC's argument, which was that XRP, by its nature, was a security under the definition provided by the Securities Act, notwithstanding the manner in which it was sold. The court found that the direct sale of XRP by the Ripple Defendants to certain sophisticated individuals and entities pursuant to written contracts did constitute the unregistered offer and sale of securities in violation of Section 5 of the Securities Act. However, the court also found that the programmatic sale of XRP by the Ripple Defendants over digital asset trading platforms in the secondary market did not constitute an unregistered sale of securities. Similarly, the court found that the XRP that Ripple Defendants granted to Ripple Labs employees as compensation or to third-party companies to incentivize the development of new applications for XRP and the XRP Ledger also did not constitute an unregistered sale of securities.

The S.D.N.Y. entered a final judgment in the case on August 7, 2024. On October 2, 2024, the SEC filed an appeal to the United States Court of Appeals for the Second Circuit, and on October 10, 2024, Ripple filed a cross-appeal. Any further SEC or state enforcement action asserting that XRP is a security, or a court ruling to that effect, would likely have an immediate and severe negative impact on XRP's trading price and the value of the Fund's shares.

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**Debt Securities**

In general, a debt security represents a loan of money to the issuer by the purchaser of the security. A debt security typically has a fixed payment schedule that obligates the issuer to pay interest to the lender and to return the lender's money over a certain time period. A company typically meets its payment obligations associated with its outstanding debt securities before it declares and pays any dividend to holders of its equity securities. Bonds, notes, and commercial paper are examples of debt securities and differ in the length of the issuer's principal repayment schedule, with bonds carrying the longest repayment schedule and commercial paper the shortest.

Debt securities are all generally subject to interest rate, credit, income, and prepayment risks and, like all investments, are subject to liquidity and market risks to varying degrees depending upon the specific terms and type of security. The Adviser attempts to reduce credit and market risk through diversification of a Fund's portfolio and ongoing credit analysis of each issuer, as well as by monitoring economic developments, but there can be no assurance that it will be successful at doing so.

*Inflation-Indexed Bonds*. Inflation-indexed bonds are debt securities whose principal value is periodically adjusted according to the rate of inflation. Two structures are common. The U.S. Treasury and some other issuers use a structure that accrues inflation into the principal value of the bond. Most other issuers pay out the Consumer Price Index accruals as part of a semi-annual coupon.

Inflation-indexed securities issued by the U.S. Treasury have maturities of five, ten or thirty years, although it is possible that securities with other maturities will be issued in the future. The U.S. Treasury securities pay interest on a semi-annual basis, equal to a fixed percentage of the inflation-adjusted principal amount. For example, if a Fund purchased an inflation-indexed bond with a par value of $1,000 and a 3% real rate of return coupon (payable 1.5% semi-annually), and inflation over the first six months were 1%, the mid-year par value of the bond would be $1,010 and the first semi-annual interest payment would be $15.15 ($1,010 times 1.5%). If inflation during the second half of the year resulted in the whole years' inflation equaling 3%, the end-of-year par value of the bond would be $1,030 and the second semi-annual interest payment would be $15.45 ($1,030 times 1.5%).

If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds, even during a period of deflation. However, the current market value of the bonds is not guaranteed, and will fluctuate. A Fund also may invest in other inflation related bonds which may or may not provide a similar guarantee. If a guarantee of principal is not provided, the adjusted principal value of the bond repaid at maturity may be less than the original principal.

The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates in turn are tied to the relationship between nominal interest rates and the rate of inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real interest rates might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-indexed bonds.

While these securities are expected to be protected from long-term inflationary trends, short-term increases in inflation may lead to a decline in value. If interest rates rise due to reasons other than inflation (for example, due to changes in currency exchange rates), investors in these securities may not be protected to the extent that the increase is not reflected in the bond's inflation measure.

The periodic adjustment of U.S. inflation-indexed bonds is tied to the Consumer Price Index for Urban Consumers ("CPI-U"), which is calculated monthly by the U.S. Bureau of Labor Statistics. The CPI-U is a measurement of changes in the cost of living, made up of components such as housing, food, transportation and energy. Inflation-indexed bonds issued by a foreign government are generally adjusted to reflect a comparable inflation index, calculated by that government. There can be no assurance that the CPI-U or any foreign inflation index will accurately measure the real rate of inflation in the prices of goods and services. Moreover, there can be no assurance that the rate of inflation in a foreign country will be correlated to the rate of inflation in the United States.

Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary income, even though investors do not receive their principal until maturity.

A Fund's investments in debt securities may subject the Fund to the following risks:

*Credit Risk*. Debt securities are subject to the risk of an issuer's (or other party's) failure or inability to meet its obligations under the security. Multiple parties may have obligations under a debt security. An issuer or borrower may fail to pay principal and interest when due. A guarantor, insurer, or credit support provider may fail to provide the agreed upon protection. A counterparty to a transaction may fail to perform its side of the bargain. An intermediary or agent interposed between the investor and other parties may fail to perform the terms of its service. Also, performance under a debt security may be linked to the obligations of other persons who may fail to meet their obligations. The credit risk associated with a debt security could increase to the extent that a Fund's ability to benefit fully from its investment in the security depends on the performance by multiple parties of their respective contractual or other obligations. The market value of a debt security is also affected by the market's perception of the creditworthiness of the issuer.

A Fund may incur substantial losses on debt securities that are inaccurately perceived to present a different amount of credit risk than they actually do by the market, the Adviser, or the rating agencies. Credit risk is generally greater where less information is publicly

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available, where fewer covenants safeguard the investors' interests, where collateral may be impaired or inadequate, where little legal redress or regulatory protection is available, or where a party's ability to meet obligations is speculative. Additionally, any inaccuracy in the information used by a Fund to evaluate credit risk may affect the value of securities held by such Fund.

Obligations under debt securities held by a Fund may never be satisfied or, if satisfied, only satisfied in part.

Some securities are subject to risks as a result of a credit downgrade or default by a government, or its agencies or, instrumentalities. Credit risk is a greater concern for high-yield debt securities and debt securities of issuers whose ability to pay interest and principal may be considered speculative. Debt securities are typically classified as investment grade-quality (medium to highest credit quality) or below investment grade-quality (commonly referred to as high-yield or junk bonds). Many individual debt securities are rated by a third-party source, such as Moody's Investors Service ("Moody's") or Standard & Poor's Financial Services ("S&P<sup>®</sup>"), to help describe the creditworthiness of the issuer.

*Credit Ratings Risk.* The Adviser performs its own independent investment analysis of securities being considered for a Fund's portfolio, which includes consideration of, among other things, the issuer's financial resources, its sensitivity to economic conditions and trends, its operating history, the quality of the issuer's management, and regulatory matters. The Adviser also considers the ratings assigned by various investment services and independent rating agencies, such as Moody's and S&P, that publish ratings based upon their assessment of the relative creditworthiness of the rated debt securities. Generally, a lower rating indicates higher credit risk. Higher yields are ordinarily available from debt securities in the lower rating categories. These ratings are described at the end of this SAI under "<u>Description of Securities Ratings</u>."

Using credit ratings to evaluate debt securities can involve certain risks. For example, ratings assigned by the rating agencies are based upon an analysis completed at the time of the rating of the obligor's ability to pay interest and repay principal. Rating agencies typically rely to a large extent on historical data which may not accurately represent present or future circumstances. Ratings do not purport to reflect the risk of fluctuations in market value of the debt security and are not absolute standards of quality and only express the rating agency's current opinion of an obligor's overall financial capacity to pay its financial obligations. A credit rating is not a statement of fact or a recommendation to purchase, sell, or hold a debt obligation. Also, credit quality can change suddenly and unexpectedly, and credit ratings may not reflect the issuer's current financial condition or events since the security was last rated. Rating agencies may have a financial interest in generating business, including from the arranger or issuer of the security that normally pays for that rating, and providing a low rating might affect the rating agency's prospects for future business. While rating agencies have policies and procedures to address this potential conflict of interest, there is a risk that these policies will fail to prevent a conflict of interest from impacting the rating.

*Extension Risk.* A Fund is subject to extension risk, which is the risk that the market value of some debt securities, particularly mortgage securities and certain asset-backed securities, may be adversely affected when bond calls or prepayments on underlying mortgages or other assets are less or slower than anticipated. Extension risk may result from, for example, rising interest rates or unexpected developments in the markets for the underlying assets or mortgages. As a consequence, the security's effective maturity will be extended, resulting in an increase in interest rate sensitivity to that of a longer-term instrument. Extension risk generally increases as interest rates rise. This is because, in a rising interest rate environment, the rate of prepayment and exercise of call or buy-back rights generally falls, and the rate of default and delayed payment generally rises. When the maturity of an investment is extended in a rising interest rate environment, a below-market interest rate is usually locked-in, and the value of the security is reduced. This risk is greater for fixed-rate than variable-rate debt securities.

*Income Risk.* A Fund is subject to income risk, which is the risk that the Fund's income will decline during periods of falling interest rates or when the Fund experiences defaults on debt securities it holds. A Fund's income declines when interest rates fall because, as the Fund's higher-yielding debt securities mature or are prepaid, the Fund must re-invest the proceeds in debt securities that have lower, prevailing interest rates. The amount and rate of distributions that a Fund's shareholders receive are affected by the income that the Fund receives from its portfolio holdings. If the income is reduced, distributions by a Fund to shareholders may be less.

Fluctuations in income paid to a Fund are generally greater for variable-rate debt securities. A Fund will be deemed to receive taxable income on certain securities which pay no cash payments until maturity, such as zero-coupon securities. A Fund may be required to sell portfolio securities that it would otherwise continue to hold in order to obtain sufficient cash to make the distribution to shareholders required for U.S. tax purposes.

*Inflation Risk.* The market price of debt securities generally falls as inflation increases because the purchasing power of the future income and repaid principal is expected to be worth less when received by a Fund. Debt securities that pay a fixed rather than variable interest rate are especially vulnerable to inflation risk because variable-rate debt securities may be able to participate, over the long term, in rising interest rates which have historically corresponded with long-term inflationary trends.

*Interest Rate Risk.* The market value of debt securities generally varies in response to changes in prevailing interest rates. Interest rate changes can be sudden and unpredictable. In addition, short-term and long-term rates are not necessarily correlated to each other as short-term rates tend to be influenced by government monetary policy while long-term rates are market driven and may be influenced by macroeconomic events (such as economic expansion or contraction), inflation expectations, as well as supply and demand. During periods of declining interest rates, the market value of debt securities generally increases. Conversely, during periods of rising interest

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rates, the market value of debt securities generally declines. This occurs because new debt securities are likely to be issued with higher interest rates as interest rates increase, making the old or outstanding debt securities less attractive. In general, the market prices of long-term debt securities or securities that make little (or no) interest payments are more sensitive to interest rate fluctuations than shorter-term debt securities. The longer a Fund's average weighted portfolio duration, the greater the potential impact a change in interest rates will have on its share price. Also, certain segments of the fixed income markets, such as high-quality bonds, tend to be more sensitive to interest rate changes than other segments, such as lower-quality bonds.

*Prepayment Risk.* Debt securities, especially bonds that are subject to "calls," such as asset-backed or mortgage-backed securities, are subject to prepayment risk if their terms allow the payment of principal and other amounts due before their stated maturity. Amounts invested in a debt security that has been "called" or "prepaid" will be returned to an investor holding that security before expected by the investor. In such circumstances, the investor, such as a Fund, may be required to re-invest the proceeds it receives from the called or prepaid security in a new security which, in periods of declining interest rates, will typically have a lower interest rate. Prepayment risk is especially prevalent in periods of declining interest rates and will result for other reasons, including unexpected developments in the markets for the underlying assets or mortgages. For example, a decline in mortgage interest rates typically initiates a period of mortgage refinancings. When homeowners refinance their mortgages, the investor in the underlying pool of mortgage-backed securities (such as a Fund) receives its principal back sooner than expected, and must reinvest at lower, prevailing rates.

Securities subject to prepayment risk are often called during a declining interest rate environment and generally offer less potential for gains and greater price volatility than other income-bearing securities of comparable maturity.

Call risk is similar to prepayment risk and results from the ability of an issuer to call, or prepay, a debt security early. If interest rates decline enough, the debt security's issuer can save money by repaying its callable debt securities and issuing new debt securities at lower interest rates.

**Depositary Receipts**

To the extent a Fund invests in stocks of foreign corporations, such Fund's investment in securities of foreign companies may be in the form of depositary receipts or other securities convertible into securities of foreign issuers. American Depositary Receipts ("ADRs") are dollar-denominated receipts representing interests in the securities of a foreign issuer, which securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs are receipts typically issued by U.S. banks and trust companies which evidence ownership of underlying securities issued by a foreign corporation. Generally, ADRs in registered form are designed for use in domestic securities markets and are traded on exchanges or over-the-counter in the United States.

Global Depositary Receipts ("GDRs"), European Depositary Receipts ("EDRs"), and International Depositary Receipts ("IDRs") are similar to ADRs in that they are certificates evidencing ownership of shares of a foreign issuer; however, GDRs, EDRs, and IDRs may be issued in bearer form and denominated in other currencies and are generally designed for use in specific or multiple securities markets outside the U.S. EDRs, for example, are designed for use in European securities markets, while GDRs are designed for use throughout the world. Depositary receipts will not necessarily be denominated in the same currency as their underlying securities.

The Funds will not invest in any unlisted depositary receipts or any depositary receipt that the Adviser or Sub-Adviser deems to be illiquid or for which pricing information is not readily available. In addition, all depositary receipts generally must be sponsored. However, a Fund may invest in unsponsored depositary receipts under certain limited circumstances. 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 value of the depositary receipts. With respect to the Sports Betting ETF and Ball Metaverse ETF, the use of a depositary receipt may increase tracking error relative to the Index if the Index includes the foreign security instead of the depositary receipt.

**Derivative Instruments**

Generally, derivatives are financial instruments whose value depends on or is derived from, the value of one or more underlying assets, reference rates, or indices or other market factors (a "reference instrument") and may relate to stocks, bonds, interest rates, credit, currencies, commodities or related indices. Derivative instruments can provide an efficient means to gain or reduce exposure to the value of a reference instrument without actually owning or selling the instrument. Some common types of derivatives include options, futures, forwards, and swaps.

Derivative instruments may be used for "hedging," which means that they may be used when the Sub-Adviser seeks to protect a Fund's investments from a decline in value resulting from changes to interest rates, market prices, currency fluctuations or other market factors. Derivative instruments also may be used for other purposes, including to seek to increase liquidity, provide efficient portfolio management, broaden investment opportunities (including taking short or negative positions), implement a tax or cash management strategy, gain exposure to a particular security or segment of the market, modify the effective duration of the Fund's portfolio investments and/or enhance total return. However derivative instruments are used, their successful use is not assured and will depend upon, among other factors, the Adviser's ability to gauge relevant market movements. Derivative instruments may be used for purposes of direct hedging. Direct hedging means that the transaction must be intended to reduce a specific risk exposure of a portfolio

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security or its denominated currency and must also be directly related to such security or currency. Each Fund's use of derivative instruments may be limited from time to time by policies adopted by the Board or the Adviser.

***Forwards, Futures, Options, and Options on Futures Contracts.*** A Fund may enter into U.S. or foreign forwards contracts, futures contracts, options, and options on futures contracts. When a Fund purchases a forwards or futures contract, it agrees to purchase a specified underlying instrument at a specified future date. When a Fund sells a forwards or futures contract, it agrees to sell the underlying instrument at a specified future date. The price at which the purchase and sale will take place is fixed when a Fund enters into the contract. Forwards and futures can be held until their delivery dates or can be closed out before then if a liquid secondary market is available. To the extent a Fund uses forwards, futures and options, it will do so only in accordance with applicable requirements of the Commodity Exchange Act (CEA) and the rules thereunder.

The risk of loss in trading forwards contracts, futures contracts or uncovered call options in some strategies (*e.g.*, selling uncovered stock index futures contracts) is potentially unlimited. A Fund does not plan to use forwards, futures and options contracts in this way. The risk of a futures position may still be large as traditionally measured due to the low margin deposits required. In many cases, a relatively small price movement in a forwards or futures contract may result in immediate and substantial loss or gain to the investor relative to the size of a required margin deposit.

There is also the risk of loss by a Fund of margin deposits in the event of bankruptcy of a broker with whom such Fund has an open position in the forwards contract, futures contract or option. The purchase of put or call options will be based upon predictions by a Fund as to anticipated trends, which predictions could prove to be incorrect.

The potential for loss related to the purchase of an option on a forwards contract or futures contract is limited to the premium paid for the option plus transaction costs. Because the value of the option is fixed at the point of sale, there are no daily cash payments by the purchaser to reflect changes in the value of the underlying contract; however, the value of the option changes daily and that change would be reflected in the NAV of a Fund. The potential for loss related to writing options may be unlimited.

Although a Fund intends to enter into forwards or futures contracts only if there is an active market for such contracts, there is no assurance that an active market will exist for the contracts at any particular time.

***Options.*** An option is a contract that gives the purchaser of the option, in return for the premium paid, the right to buy an underlying reference instrument, such as a specified security, currency, index, or other instrument, from the writer of the option (in the case of a call option), or to sell a specified reference instrument to the writer of the option (in the case of a put option) at a designated price during the term of the option. The premium paid by the buyer of an option will reflect, among other things, the relationship of the exercise price to the market price and the volatility of the underlying reference instrument, the remaining term of the option, supply, demand, interest rates and/or currency exchange rates. An American-style put or call option may be exercised at any time during the option period while a European-style put or call option may be exercised only upon expiration or during a fixed period prior thereto. Put and call options are traded on national securities exchanges and in the OTC market.

Options traded on national securities exchanges are within the jurisdiction of the SEC or other appropriate national securities regulators, as are securities traded on such exchanges. As a result, many of the protections provided to traders on organized exchanges will be available with respect to such transactions. In particular, all option positions entered into on a national securities exchange in the United States are cleared and guaranteed by the Options Clearing Corporation, thereby reducing the risk of counterparty default. Furthermore, a liquid secondary market in options traded on a national securities exchange may be more readily available than in the OTC market, potentially permitting a Fund to liquidate open positions at a profit prior to exercise or expiration, or to limit losses in the event of adverse market movements. There is no assurance, however, that higher than anticipated trading activity or other unforeseen events might not temporarily render the capabilities of the Options Clearing Corporation inadequate, and thereby result in the exchange instituting special procedures which may interfere with the timely execution of the Fund's orders to close out open options positions.

***Purchasing Call and Put Options.*** As the buyer of a call option, a Fund has a right to buy the underlying reference instrument (*e.g*., a currency or security) at the exercise price at any time during the option period (for American style options). A Fund may enter into closing sale transactions with respect to call options, exercise them, or permit them to expire. For example, a Fund may buy call options on underlying reference instruments that it intends to buy with the goal of limiting the risk of a substantial increase in their market price before the purchase is effected. Unless the price of the underlying reference instrument changes sufficiently, a call option purchased by a Fund may expire without any value to such Fund, in which case the Fund would experience a loss to the extent of the premium paid for the option plus related transaction costs.

As the buyer of a put option, a Fund has the right to sell the underlying reference instrument at the exercise price at any time during the option period (for American style options). Like a call option, a Fund may enter into closing sale transactions with respect to put options, exercise them or permit them to expire. A Fund may buy a put option on an underlying reference instrument owned by the Fund (a protective put) as a hedging technique in an attempt to protect against an anticipated decline in the market value of the underlying reference instrument. Such hedge protection is provided only during the life of the put option when a Fund, as the buyer of the put option, is able to sell the underlying reference instrument at the put exercise price, regardless of any decline in the underlying instrument's market price. A Fund may also seek to offset a decline in the value of the underlying reference instrument through

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appreciation in the value of the put option. A put option may also be purchased with the intent of protecting unrealized appreciation of an instrument when the Adviser deems it desirable to continue to hold the instrument because of tax or other considerations. The premium paid for the put option and any transaction costs would reduce any short-term capital gain that may be available for distribution when the instrument is eventually sold. Buying put options at a time when the buyer does not own the underlying reference instrument allows the buyer to benefit from a decline in the market price of the underlying reference instrument, which generally increases the value of the put option.

If a put option was not terminated in a closing sale transaction when it has remaining value, and if the market price of the underlying reference instrument remains equal to or greater than the exercise price during the life of the put option, the buyer would not make any gain upon exercise of the option and would experience a loss to the extent of the premium paid for the option plus related transaction costs. In order for the purchase of a put option to be profitable, the market price of the underlying reference instrument must decline sufficiently below the exercise price to cover the premium and transaction costs.

***Writing Call and Put Options.*** Writing options may permit the writer to generate additional income in the form of the premium received for writing the option. The writer of an option may have no control over when the underlying reference instruments must be sold (in the case of a call option) or purchased (in the case of a put option) because the writer may be notified of exercise at any time prior to the expiration of the option (for American-style options). In general, though, options are infrequently exercised prior to expiration. Whether or not an option expires unexercised, the writer retains the amount of the premium. Writing "covered" call options means that the writer owns the underlying reference instrument that is subject to the call option. Call options also may be written on reference instruments that the writer does not own.

If a Fund writes a covered call option, any underlying reference instruments that are held by the Fund and are subject to the call option will be earmarked on the books of the Fund to satisfy its obligations under the option. A Fund will be unable to sell the underlying reference instruments that are subject to the written call option until it either effects a closing transaction with respect to the written call, or otherwise satisfies the conditions for release of the underlying reference instruments. As the writer of a covered call option, a Fund gives up the potential for capital appreciation above the exercise price of the option should the underlying reference instrument rise in value. If the value of the underlying reference instrument rises above the exercise price of the call option, the reference instrument will likely be "called away," requiring a Fund to sell the underlying instrument at the exercise price. In that case, a Fund will sell the underlying reference instrument to the option buyer for less than its market value, and the Fund will experience a loss (which will be offset by the premium received by the Fund as the writer of such option). If a call option expires unexercised, a Fund will realize a gain in the amount of the premium received. If the market price of the underlying reference instrument decreases, the call option will not be exercised and the Fund will be able to use the amount of the premium received to hedge against the loss in value of the underlying reference instrument. The exercise price of a call option will be chosen based upon the expected price movement of the underlying reference instrument. The exercise price of a call option may be below, equal to (at-the-money), or above the current value of the underlying reference instrument at the time the option is written.

As the writer of a put option, a Fund has a risk of loss should the underlying reference instrument decline in value. If the value of the underlying reference instrument declines below the exercise price of the put option and the put option is exercised, a Fund, as the writer of the put option, will be required to buy the instrument at the exercise price, which will exceed the market value of the underlying reference instrument at that time. A Fund will incur a loss to the extent that the current market value of the underlying reference instrument is less than the exercise price of the put option. However, the loss will be offset in part by the premium received from the buyer of the put. If a put option written by a Fund expires unexercised, the Fund will realize a gain in the amount of the premium received.

The writing of call options by a Fund may significantly reduce or eliminate its ability to make distributions eligible to be treated as qualified dividend income. Covered call options also may be subject to the federal tax rules applicable to straddles under the Code. If positions held by a Fund were treated as "straddles" for federal income tax purposes, or a Fund's risk of loss with respect to a position was otherwise diminished as set forth in Treasury regulations, dividends on stocks that are a part of such positions would not constitute qualified dividend income subject to such favorable income tax treatment. In addition, generally, straddles are subject to certain rules that may affect the amount, character and timing of a Fund's gains and losses with respect to straddle positions.

***Closing Out Options (Exchange-Traded Options).*** If the writer of an option wants to terminate its obligation, the writer may effect a "closing purchase transaction" by buying an option of the same series as the option previously written. The effect of the purchase is that the clearing corporation will cancel the option writer's position. However, a writer may not effect a closing purchase transaction after being notified of the exercise of an option. Likewise, the buyer of an option may recover all or a portion of the premium that it paid by effecting a "closing sale transaction" by selling an option of the same series as the option previously purchased and receiving a premium on the sale. There is no guarantee that either a closing purchase or a closing sale transaction may be made at a time desired by a Fund. Closing transactions allow a Fund to terminate its positions in written and purchased options. A Fund will realize a profit from a closing transaction if the price of the transaction is less than the premium received from writing the original option (in the case of written options) or is more than the premium paid by a Fund to buy the option (in the case of purchased options). For example, increases in the market price of a call option sold by a Fund will generally reflect increases in the market price of the underlying reference instrument. As a result, any loss resulting from a closing transaction on a written call option is likely to be offset in whole or in part by appreciation of the underlying instrument owned by a Fund.

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***Risks of Options.*** A Fund's options investments involve certain risks, including general risks related to derivative instruments. There can be no assurance that a liquid secondary market on an exchange will exist for any particular option, or at any particular time, and a Fund may have difficulty effecting closing transactions in particular options. Therefore, a Fund would have to exercise the options it purchased in order to realize any profit, thus taking or making delivery of the underlying reference instrument when not desired. A Fund could then incur transaction costs upon the sale of the underlying reference instruments. Similarly, when a Fund cannot effect a closing transaction with respect to a put option it wrote, and the buyer exercises, a Fund would be required to take delivery and would incur transaction costs upon the sale of the underlying reference instruments purchased. If a Fund, as a covered call option writer, is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying reference instrument until the option expires, or it delivers the underlying instrument upon exercise. When trading options on non-U.S. exchanges or in the OTC market, many of the protections afforded to exchange participants will not be available. For example, there may be no daily price fluctuation limits, and adverse market movements could therefore continue to an unlimited extent over an indefinite period of time.

The effectiveness of an options strategy for hedging depends on the degree to which price movements in the underlying reference instruments correlate with price movements in the relevant portion of a Fund's portfolio that is being hedged. In addition, a Fund bears the risk that the prices of its portfolio investments will not move in the same amount as the option it has purchased or sold for hedging purposes, or that there may be a negative correlation that would result in a loss on both the investments and the option. If the Sub-Adviser is not successful in using options in managing a Fund's investments, the Fund's performance will be worse than if the Sub-Adviser did not employ such strategies.

***Swap Agreements.*** A Fund may utilize swap agreements in an attempt to gain exposure to the securities in a market without actually purchasing those securities, or to hedge a position. Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a day to more than one-year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of return) 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 in a basket of securities representing a particular index). Total return swaps are swap agreements in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, to seek exposure to certain securities.

Forms of swap agreements include interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates exceed a specified rate, or "cap" interest rate floors, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates fall below a specified level, or "floor;" and interest rate collars, under which a party sells a cap and purchases a floor or vice versa in an attempt to protect itself against interest rate movements exceeding given minimum or maximum levels.

Because they are two-party contracts which may have terms of greater than seven days, swap agreements may be considered to be illiquid for purposes of a Fund's illiquid investment limitations. A Fund will not enter into any swap agreement unless the Adviser believes that the other party to the transaction is creditworthy. A 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.

A Fund may enter into swap agreements to invest in a market without owning or taking physical custody of the underlying securities in circumstances in which direct investment is restricted for legal reasons or is otherwise impracticable. The counterparty to any swap agreement will typically be a bank, investment banking firm or broker-dealer. The counterparty will generally agree to pay a Fund the amount, if any, by which the notional amount of the swap agreement would have increased in value had it been invested in the particular stocks, plus the dividends that would have been received on those stocks. A Fund will agree to pay to the counterparty a floating rate of interest on the notional amount of the swap agreement plus the amount, if any, by which the notional amount would have decreased in value had it been invested in such stocks. Therefore, the return to a Fund on any swap agreement should be the gain or loss on the notional amount plus dividends on the stocks less the interest paid by the Fund on the notional amount.

Swap agreements typically are settled on a net basis, which means that the two payment streams are netted out, with a Fund receiving or paying, as the case may be, only the net amount of the two payments. Payments may be made at the conclusion of a swap agreement or periodically during its term. Other swap agreements, may require initial premium (discount) payments as well as periodic payments (receipts) related to the interest leg of the swap or to the default of a reference obligation. A Fund will earmark and reserve assets necessary to meet any accrued payment obligations when it is the buyer of a credit default swap.

If a swap counterparty defaults, a Fund's risk of loss consists of the net amount of payments the Fund is contractually entitled to receive, if any, or the failure of the counterparty to deliver the underlying security, depending on the nature of the swap.

The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. As a result, the swap market has become relatively liquid in comparison with the markets for other similar instruments, which are traded in the OTC market. The Adviser, under the supervision of the Board, is responsible for determining and monitoring the liquidity of Fund transactions in swap agreements.

The use of swap agreements is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If a counterparty's creditworthiness declines, the value of the swap would

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likely decline. Moreover, there is no guarantee that a Fund could eliminate its exposure under an outstanding swap agreement by entering into an offsetting swap agreement with the same or another party.

***Counterparty Credit Risk.*** A Fund is subject to counterparty credit risk with respect to its use of derivative and short sale transactions. If a counterparty to a derivatives contract becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, a Fund may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. A Fund may obtain only a limited recovery or may obtain no recovery in such circumstances. To partially mitigate this risk, the Adviser will seek to effect derivative transactions only with counterparties that it believes are creditworthy. However, there is no assurance that a counterparty will remain creditworthy or solvent.

**Derivatives Regulatory Risk** 

New rules and regulations could, among other things, restrict a Fund's ability to engage in, or increase the cost to the Fund of, derivatives transactions, for example, by making some types of derivatives no longer available to the Fund, increasing margin or capital requirements, or otherwise limiting liquidity or increasing transaction costs. The costs of derivatives transactions also may increase due to regulatory requirements imposed on clearing members, which may cause clearing members to raise their fees to cover the costs of additional capital requirements and other regulatory changes applicable to the clearing members. Certain aspects of these regulations are still being implemented, so their potential impact on a Fund and the financial system are not yet known. While the regulations and central clearing of some derivatives transactions are designed to reduce systemic risk (*i.e.*, the risk that the interdependence of large derivatives dealers could cause them to suffer liquidity, solvency or other challenges simultaneously), there is no assurance that the mechanisms imposed under the regulations will achieve that result, and in the meantime, as noted above, central clearing, minimum margin requirements and related requirements expose a Fund to new kinds of risks and costs.

Rule 18f-4 under the 1940 Act ("Rule 18f-4") imposes limits on the amount of leverage risk to which a fund may be exposed through the use of such derivatives and requires the adoption of certain derivatives risk management measures. Under Rule 18f-4, a fund's investment in such derivatives is limited through value-at-risk ("VaR") testing. Specifically, the VaR of the fund's portfolio may not exceed 200% of the VaR of a specific unleveraged designated reference portfolio using relative VaR testing (or 20% of the value of the fund's net assets using absolute VaR testing). Generally, a fund whose derivatives exposure exceeds 10% of its net assets is required to establish and maintain a comprehensive derivatives risk management program, subject to oversight by a fund's board of trustees, and appoint a derivatives risk manager. Funds whose derivatives exposure does not exceed 10% of their net assets may be considered limited derivatives users and are not required to comply with all of the conditions of Rule 18f-4, including the adoption of a derivatives risk management program and appointment of a derivatives risk manager, though they are required to adopt policies and procedures designed to manage derivatives risk. Compliance with Rule 18f-4 may adversely affect the Fund's performance and/or increase costs related to the Fund's use of derivatives.

**Equity Securities**

Equity securities, such as the common stock of an issuer, are subject to stock market fluctuations and, therefore, may experience volatile changes in value as market conditions, consumer sentiment or the financial condition of the issuers change. A decrease in value of the equity securities in a Fund's portfolio may also cause the value of such Fund's Shares to decline. An investment in the Funds should be made with an understanding of the risks inherent in an investment in equity securities, including the risk that the financial condition of issuers may become impaired or that the general condition of the stock market may deteriorate (either of which may cause a decrease in the value of a Fund's portfolio securities and therefore a decrease in the value of Shares).

Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence and perceptions change. These investor perceptions are based on various and unpredictable factors, including expectations regarding government, economic, monetary, and fiscal policies; inflation and interest rates; economic expansion or contraction; and global or regional political, economic, or banking crises.

Holders of common stocks incur more risk than holders of preferred stocks and debt obligations because common stockholders, as owners of the issuer, generally have inferior rights to receive payments from the issuer in comparison with the rights of creditors or holders of debt obligations or preferred stocks. Further, unlike debt securities, which typically have a stated principal amount payable at maturity (whose value, however, is subject to market fluctuations prior thereto), or preferred stocks, which typically have a liquidation preference and which may have stated optional or mandatory redemption provisions, common stocks have neither a fixed principal amount nor a maturity. Common stock values are subject to market fluctuations as long as the common stock remains outstanding.

Types of Equity Securities include:

*Common Stocks —* Common stocks represent units of ownership in a company. Common stocks usually carry voting rights and earn dividends. Unlike preferred stocks, which are described below, dividends on common stocks are not fixed but are declared at the discretion of the company's board of directors.

*Preferred Stocks —* Preferred stocks also are units of ownership in a company. Preferred stocks normally have preference over common stocks in the payment of dividends and the liquidation of the company. However, in all other respects, preferred stocks are

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subordinated to the liabilities of the issuer. Unlike common stocks, preferred stocks are generally not entitled to vote on corporate matters. Types of preferred stocks include adjustable-rate preferred stock, fixed dividend preferred stock, perpetual preferred stock, and sinking fund preferred stock.

Generally, the market values of preferred stocks with a fixed dividend rate and no conversion element vary inversely with interest rates and perceived credit risk.

*Rights and Warrants —* A right is a privilege granted to existing shareholders of a corporation to subscribe to shares of a new issue of common stock before it is issued. Rights normally have a short life of usually two to four weeks, are freely transferable, and entitle the holder to buy the new common stock at a lower price than the public offering price. Warrants are securities that are usually issued together with a debt security or preferred stock and that give the holder the right to buy a proportionate amount of common stock at a specified price. Warrants are freely transferable and are traded on major exchanges. Unlike rights, warrants normally have a life that is measured in years and entitles the holder to buy common stock of a company at a price that is usually higher than the market price at the time the warrant is issued. Corporations often issue warrants to make the accompanying debt security more attractive.

An investment in warrants and rights may entail greater risks than certain other types of investments. Generally, rights and warrants do not carry the right to receive dividends or exercise voting rights with respect to the underlying securities, and they do not represent any rights in the assets of the issuer. In addition, their value does not necessarily change with the value of the underlying securities, and they cease to have value if they are not exercised on or before their expiration date. Investing in rights and warrants increases the potential profit or loss to be realized from the investment as compared with investing the same amount in the underlying securities.

*Large-Capitalization Companies —* Investments in large-capitalization companies may go in and out of favor based on market and economic conditions and may underperform other market segments. Some large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes, and may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. As such, returns on investments in stocks of large-capitalization companies could trail the returns on investments in stocks of small- and mid-capitalization companies.

*Small- and Mid-Capitalization Companies —* The securities of small- and mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of larger-capitalization companies. The securities of small- and mid-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than larger capitalization stocks or the stock market as a whole. Some small- or mid-capitalization companies have limited product lines, markets, and financial and managerial resources and tend to concentrate on fewer geographical markets relative to larger capitalization companies. There is typically less publicly available information concerning small- and mid-capitalization companies than for larger, more established companies. Small- and mid-capitalization companies also may be particularly sensitive to changes in interest rates, government regulation, borrowing costs, and earnings.

*Tracking Stocks —* A tracking stock is a separate class of common stock whose value is linked to a specific business unit or operating division within a larger company and which is designed to "track" the performance of such business unit or division. The tracking stock may pay dividends to shareholders independent of the parent company. The parent company, rather than the business unit or division, generally is the issuer of tracking stock. However, holders of the tracking stock may not have the same rights as holders of the company's common stock.

**Exchange-Traded Funds**

The Funds may invest in shares of other exchange-traded funds ("ETFs"), including ETFs managed by the Adviser ("Affiliated ETFs"). As the shareholder of another ETF, a Fund would bear, along with other shareholders, its pro rata portion of the other ETF's expenses, including advisory fees. Such expenses are in addition to the expenses each Fund pays in connection with its own operations. A Fund's investments in other ETFs may be limited by applicable law. To the extent a Fund invests in an Affiliated ETF, the Adviser or affiliate may receive management or other fees from such Affiliated ETF. Any such fees would be in addition to the management fee earned by the Adviser for its management of an investing Fund. These fees may create a conflict of interest by influencing the Adviser to invest in the shares of Affiliated ETFs. While the Adviser takes steps to address such conflicts of interest, including subjecting Affiliated ETFs to the same investment criteria or conditions as unaffiliated ETFs, it is possible that such conflicts of interest could impact a Fund.

Disruptions in the markets for the securities underlying ETFs purchased or sold by a Fund could result in losses on investments in ETFs. ETFs also carry the risk that the price a Fund pays or receives may be higher or lower than the ETF's NAV. ETFs are also subject to certain additional risks, including the risks of illiquidity and of possible trading halts due to market conditions or other reasons, based on the policies of the relevant exchange. ETFs and other investment companies in which a Fund may invest may be leveraged, which would increase the volatility of a Fund's NAV. The Funds also may invest in ETFs and other investment companies that seek to return the inverse of the performance of an underlying index on a daily, monthly, or other basis, including inverse leveraged ETFs.

Inverse and leveraged ETFs are subject to additional risks not generally associated with traditional ETFs. To the extent that a Fund invests in inverse ETFs, the value of the Fund's investments will decrease when the index underlying the ETF's benchmark rises, a

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result that is the opposite from traditional equity or bond funds. The NAV and market price of leveraged or inverse ETFs are usually more volatile than the value of the tracked index or of other ETFs that do not use leverage. This is because inverse and leveraged ETFs use investment techniques and financial instruments that may be considered aggressive, including the use of derivative transactions and short-selling techniques. The use of these techniques may cause the inverse or leveraged ETFs to lose more money in market environments that are adverse to their investment strategies than other funds that do not use such techniques.

**Illiquid Investments**

A Fund may not acquire any illiquid investment if, immediately after the acquisition, a Fund would have invested more than 15% of its net assets in illiquid investments. An illiquid investment means any investment that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. If illiquid investments exceed 15% of a Fund's net assets, certain remedial actions will be taken as required by Rule 22e-4 under the 1940 Act and a Fund's policies and procedures.

A Fund may not be able to sell illiquid securities when the Adviser or Sub-Adviser, as applicable, considers it desirable to do so or may have to sell such securities at a price that is lower than the price that could be obtained if the securities were more liquid. In addition, the sale of illiquid securities may require more time and may result in higher dealer discounts and other selling expenses than does the sale of securities that are not illiquid. Illiquid securities also may be more difficult to value due to the unavailability of reliable market quotations for such securities, and investment in illiquid securities may have an adverse impact on NAV.

**Investment Company Securities**

The Funds may invest in the securities of other investment companies, including ETFs, mutual funds, and money market funds, subject to applicable limitations under Section 12(d)(1) of the 1940 Act and the rules thereunder. Pursuant to Section 12(d)(1), a Fund may invest in the securities of another investment company (the "acquired company") provided that such Fund, immediately after such purchase or acquisition, does not own in the aggregate: (i) more than 3% of the total outstanding voting stock of the acquired company; (ii) securities issued by the acquired company having an aggregate value in excess of 5% of the value of the total assets of such Fund; or (iii) securities issued by the acquired company and all other investment companies (other than treasury stock of such Fund) having an aggregate value in excess of 10% of the value of the total assets of the applicable Fund. Under certain circumstances, including in compliance with Rule 12d1-4 under the 1940 Act, the Funds may invest its assets in securities of investment companies, including money market funds, in excess of the limits discussed above.

Investing in another pooled vehicle exposes a Fund to all the risks of that pooled vehicle. In addition, if a Fund invests in and, thus, is a shareholder of, another investment company, the Fund's shareholders will indirectly bear the Fund's proportionate share of the fees and expenses paid by such other investment company, including advisory fees, in addition to both the management fees payable directly by the Fund to the Fund's own investment adviser and the other expenses that the Fund bears directly in connection with the Fund's own operations.

**Money Market Instruments**

A Fund may invest a portion of its assets in high-quality money market instruments on an ongoing basis to provide liquidity or for other reasons. The instruments in which a Fund may invest include: (i) short-term obligations issued by the U.S. government; (ii) negotiable certificates of deposit ("CDs"), fixed time deposits and bankers' acceptances of U.S. and foreign banks and similar institutions; (iii) commercial paper rated at the date of purchase "Prime-1" by Moody's or "A-1+" or "A-1" by S&P or, if unrated, of comparable quality as determined by the Fund; and (iv) repurchase agreements. CDs are short-term negotiable obligations of commercial banks. Time deposits are non-negotiable deposits maintained in banking institutions for specified periods of time at stated interest rates. Banker's acceptances are time drafts drawn on commercial banks by borrowers, usually in connection with international transactions.

**Non-U.S. Securities**

Each Fund may invest in issuers located outside the United States directly, or in financial instruments that are indirectly linked to the performance of foreign issuers. Examples of such financial instruments include ADRs, GDRs, EDRs, IDRs, "ordinary shares," and "New York shares" issued and traded in the United States (see "<u>Depositary Receipts</u>" above for more information about ADRs, GDRs, EDRs and IDRs). Such investments may include securities listed and traded in emerging markets, which are subject to additional risks that may not be present for U.S. investments or investments in more developed non-U.S. markets. Investments in non-U.S. securities involve certain risks that may not be present in investments in U.S. securities. For example, non-U.S. securities may be subject to currency risks or to foreign government taxes. There may be less information publicly available about a non-U.S. issuer than about a U.S. issuer, and a foreign issuer may or may not be subject to uniform accounting, auditing and financial reporting standards and practices comparable to those in the U.S. Other risks of investing in such securities include political or economic instability in the country involved, the difficulty of predicting international trade patterns and the possibility of imposition of exchange controls. The prices of such securities may be more volatile than those of domestic securities. With respect to certain foreign countries, there is a possibility of expropriation of assets or nationalization, imposition of withholding taxes on dividend or interest payments, difficulty in obtaining and enforcing judgments against foreign entities or diplomatic developments which could affect investment in these countries. Losses and other expenses may be incurred in converting between various currencies in connection with purchases and sales

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of foreign securities. Since foreign exchanges may be open on days when the Funds do not price their Shares, the value of the securities in a Fund's portfolio may change on days when shareholders will not be able to purchase or sell the Funds' Shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in the Funds more volatile and potentially less liquid than other types of investments.

Non-U.S. stock markets may not be as developed or efficient as, and may be more volatile than, those in the U.S. While the volume of shares traded on non-U.S. stock markets generally has been growing, such markets usually have substantially less volume than U.S. markets. Therefore, a Fund's investment in non-U.S. equity securities may be less liquid and subject to more rapid and erratic price movements than comparable securities listed for trading on U.S. exchanges. Non-U.S. equity securities may trade at price/earnings multiples higher than comparable U.S. securities and such levels may not be sustainable. There may be less government supervision and regulation of foreign stock exchanges, brokers, banks and listed companies abroad than in the U.S. Moreover, settlement practices for transactions in foreign markets may differ from those in U.S. markets. Such differences may include delays beyond periods customary in the U.S. and practices, such as delivery of securities prior to receipt of payment, that increase the likelihood of a failed settlement, which can result in losses to a Fund. The value of non-U.S. investments and the investment income derived from them also may be affected unfavorably by changes in currency exchange control regulations. Foreign brokerage commissions, custodial expenses and other fees also are generally higher than for securities traded in the U.S. This may cause a Fund to incur higher portfolio transaction costs than domestic equity funds. Fluctuations in exchange rates also may affect the earning power and asset value of the foreign entity issuing a security, even one denominated in U.S. dollars. Dividend and interest payments may be repatriated based on the exchange rate at the time of disbursement, and restrictions on capital flows may be imposed.

*Investments in Emerging Markets*. Investments in securities listed and traded in emerging markets are subject to additional risks that may not be present for U.S. investments or investments in more developed non-U.S. markets. Such risks may include: (i) greater market volatility; (ii) lower trading volume; (iii) greater social, political and economic uncertainty; (iv) governmental controls on foreign investments and limitations on repatriation of invested capital; (v) the risk that companies may be held to lower disclosure, corporate governance, auditing and financial reporting standards than companies in more developed markets; (vi) the risk that there may be less protection of property rights than in other countries; and (vii) fewer investor rights and limited legal or practical remedies available to investors against emerging market companies. Emerging markets are generally less liquid and less efficient than developed securities markets.

**Other Short-Term Instruments**

The Funds may invest in short-term instruments, including money market instruments, on an ongoing basis to provide liquidity or for other reasons. Money market instruments are generally short-term investments that may include but are not limited to: (i) shares of money market funds; (ii) obligations issued or guaranteed by the U.S. government, its agencies, or instrumentalities (including government-sponsored enterprises); (iii) negotiable CDs, bankers' acceptances, fixed time deposits and other obligations of U.S. and foreign banks (including foreign branches) and similar institutions; (iv) commercial paper rated at the date of purchase "Prime-1" by Moody's or "A-1" by S&P or, if unrated, of comparable quality as determined by the Sub-Adviser; (v) non-convertible corporate debt securities (*e.g.*, bonds and debentures) with remaining maturities at the date of purchase of not more than 397 days and that satisfy the rating requirements set forth in Rule 2a-7 under the 1940 Act; and (vi) short-term U.S. dollar-denominated obligations of foreign banks (including U.S. branches) that, in the opinion of the Sub-Adviser, are of comparable quality to obligations of U.S. banks which may be purchased by a Fund. Any of these instruments may be purchased on a current or a forward-settled basis. Money market instruments also include shares of money market funds. Time deposits are non-negotiable deposits maintained in banking institutions for specified periods of time at stated interest rates. Bankers' acceptances are time drafts drawn on commercial banks by borrowers, usually in connection with international transactions.

**Real Estate Investment Trusts ("REITs")**

A U.S. REIT is a corporation or business trust (that would otherwise be taxed as a corporation) which meets the definitional requirements of the Code. The Code permits a qualifying REIT to deduct from taxable income the dividends paid, thereby effectively eliminating corporate level federal income tax. To meet the definitional requirements of the Code, a REIT must, among other things: invest substantially all of its assets in interests in real estate (including mortgages and other REITs), cash and government securities; derive most of its income from rents from real property or interest on loans secured by mortgages on real property; and, in general, distribute annually 90% or more of its taxable income (other than net capital gains) to shareholders.

REITs are sometimes informally characterized as Equity REITs and Mortgage REITs. An Equity REIT invests primarily in the fee ownership or leasehold ownership of land and buildings (*e.g.*, commercial equity REITs and residential equity REITs). A Mortgage REIT invests primarily in mortgages on real property, which may secure construction, development, or long-term loans.

REITs may be affected by changes in underlying real estate values, which may have an exaggerated effect to the extent that REITs in which a Fund invests may concentrate investments in particular geographic regions or property types. Additionally, rising interest rates may cause investors in REITs to demand a higher annual yield from future distributions, which may in turn decrease market prices for equity securities issued by REITs. Rising interest rates also generally increase the costs of obtaining financing, which could cause the value of a Fund's investments to decline. During periods of declining interest rates, certain Mortgage REITs may hold mortgages that the mortgagors elect to prepay, which prepayment may diminish the yield on securities issued by such Mortgage

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REITs. In addition, Mortgage REITs may be affected by the ability of borrowers to repay when due the debt extended by the REIT and Equity REITs may be affected by the ability of tenants to pay rent.

Certain REITs have relatively small market capitalization, which may tend to increase the volatility of the market price of securities issued by such REITs. Furthermore, REITs are dependent upon specialized management skills, have limited diversification and are, therefore, subject to risks inherent in operating and financing a limited number of projects. By investing in REITs indirectly through a Fund, a shareholder will bear not only his or her proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the REITs. REITs depend generally on their ability to generate cash flow to make distributions to shareholders.

In addition to these risks, Equity REITs may be affected by 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. Further, Equity and Mortgage REITs are dependent upon management skills and generally may not be diversified. Equity and Mortgage REITs are also subject to heavy cash flow dependency defaults by borrowers and self-liquidation. In addition, Equity and Mortgage REITs could possibly fail to qualify for the favorable U.S. federal income tax treatment generally available to U.S. REITs under the Code or fail to maintain their exemptions from registration under the 1940 Act. The above factors also may adversely affect a borrower's or a lessee's ability to meet its obligations to the REIT. In the event of default by a borrower or lessee, the REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs associated with protecting its investments.

**Repurchase Agreements**

Each Fund may invest in repurchase agreements with commercial banks, brokers, or dealers to generate income from its excess cash balances and to invest in securities lending cash collateral. A repurchase agreement is an agreement under which a Fund acquires a financial instrument (*e.g.*, a security issued by the U.S. government or an agency thereof, a banker's acceptance or a certificate of deposit) from a seller, subject to resale to the seller at an agreed-upon price and date (normally, the next business day). A repurchase agreement may be considered a loan collateralized by securities. The resale price reflects an agreed-upon interest rate effective for the period the instrument is held by the applicable Fund and is unrelated to the interest rate on the underlying instrument.

In these repurchase agreement transactions, the securities acquired by a Fund (including accrued interest earned thereon) must have a total value in excess of the value of the repurchase agreement and are held by the Funds' custodian until repurchased. No more than an aggregate of 15% of a Fund's net assets will be invested in illiquid investments, including repurchase agreements having maturities longer than seven days and securities subject to legal or contractual restrictions on resale, or for which there are no readily available market quotations.

The use of repurchase agreements involves certain risks. For example, if the other party to the agreement defaults on its obligation to repurchase the underlying security at a time when the value of the security has declined, a Fund may incur a loss upon disposition of the security. If the other party to the agreement becomes insolvent and subject to liquidation or reorganization under the U.S. Bankruptcy Code or other laws, a court may determine that the underlying security is collateral for a loan by a Fund not within the control of the Fund and, therefore, the Fund may not be able to substantiate its interest in the underlying security and may be deemed an unsecured creditor of the other party to the agreement.

**Reverse Repurchase Agreements**

A Fund may enter into reverse repurchase agreements, which involve the sale of securities held by the Fund subject to its agreement to repurchase the securities at an agreed-upon date or upon demand and at a price reflecting a market rate of interest. Reverse repurchase agreements may be entered into only with banks or securities dealers or their affiliates. While a reverse repurchase agreement is outstanding, a Fund will, for all of its reverse repurchase agreements, either (i) consistent with Section 18 of the 1940 Act, maintain asset coverage of at least 300% of the value of the repurchase agreement or (ii) treat the reverse repurchase agreement as a derivatives transaction for purposes of Rule 18f-4, including, as applicable, the VaR-based limit on leverage risk.

Reverse repurchase agreements involve the risk that the buyer of the securities sold by a Fund might be unable to deliver them when the Fund seeks to repurchase. If the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the buyer, trustee, or receiver may receive an extension of time to determine whether to enforce the Fund's obligation to repurchase the securities, and the Fund's use of the proceeds of the reverse repurchase agreement may effectively be restricted pending such decision.

**Securities Lending**

Each Fund may lend portfolio securities in an amount up to one-third of its total assets to brokers, dealers, and other financial institutions. In a portfolio securities lending transaction, a Fund receives from the borrower an amount equal to the interest paid or the dividends declared on the loaned securities during the term of the loan as well as the interest on the collateral securities, less any fees (such as finder's or administrative fees) the Fund pays in arranging the loan. A Fund may share the interest it receives on the collateral securities with the borrower. The terms of each Fund's loans permit it to reacquire loaned securities on five business days' notice or in time to vote on any important matter. Loans are subject to termination at the option of the applicable Fund or borrower at any time, and the borrowed securities must be returned when the loan is terminated. The Funds may pay fees to arrange for securities loans.

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The SEC currently requires that the following conditions must be met whenever a Fund's portfolio securities are loaned: (1) the Fund must receive at least 100% cash collateral from the borrower; (2) the borrower must increase such collateral whenever the market value of the securities rises above the level of such collateral; (3) the Fund must be able to terminate the loan at any time; (4) the Fund must receive reasonable interest on the loan, as well as any dividends, interest or other distributions on the loaned securities, and any increase in market value; (5) the Fund may pay only reasonable custodian fees approved by the Board in connection with the loan; (6) while voting rights on the loaned securities may pass to the borrower, the Board must terminate the loan and regain the right to vote the securities if a material event adversely affecting the investment occurs; and (7) the Fund may not loan its portfolio securities so that the value of the loaned securities is more than one-third of its total asset value, including collateral received from such loans. These conditions may be subject to future modification. Such loans will be terminable at any time upon specified notice. A Fund might experience the risk of loss if the institution with which it has engaged in a portfolio loan transaction breaches its agreement with the Fund. In addition, the Funds will not enter into any portfolio security lending arrangement having a duration of longer than one year. The principal risk of portfolio lending is potential default or insolvency of the borrower. In either of these cases, a Fund could experience delays in recovering securities or collateral or could lose all or part of the value of the loaned securities. As part of participating in a lending program, the applicable Fund may be required to invest in collateralized debt or other securities that bear the risk of loss of principal. In addition, all investments made with the collateral received are subject to the risks associated with such investments. If such investments lose value, a Fund will have to cover the loss when repaying the collateral.

Any loans of portfolio securities are fully collateralized based on values that are marked-to-market daily. Any securities that a Fund may receive as collateral will not become part of a Fund's investment portfolio at the time of the loan and, in the event of a default by the borrower, the Fund will, if permitted by law, dispose of such collateral except for such part thereof that is a security in which the Fund is permitted to invest. During the time securities are on loan, the borrower will pay a Fund any accrued income on those securities, and the Fund may invest the cash collateral and earn income or receive an agreed-upon fee from a borrower that has delivered cash-equivalent collateral.

**U.S. Government Securities**

Each Fund may invest in U.S. government securities. Securities issued or guaranteed by the U.S. government, or its agencies or instrumentalities, include U.S. Treasury securities, which are backed by the full faith and credit of the U.S. Treasury, and which differ only in their interest rates, maturities, and times of issuance. U.S. Treasury bills have initial maturities of one year or less; U.S. Treasury notes have initial maturities of one to ten years; and U.S. Treasury bonds generally have initial maturities of greater than ten years. Certain U.S. government securities are issued or guaranteed by agencies or instrumentalities of the U.S. government, including, but not limited to, obligations of U.S. government agencies or instrumentalities such as the Federal National Mortgage Association ("Fannie Mae"), the Government National Mortgage Association ("Ginnie Mae"), the Small Business Administration, the Federal Farm Credit Administration, the Federal Home Loan Banks, Banks for Cooperatives (including the Central Bank for Cooperatives), the Federal Land Banks, the Federal Intermediate Credit Banks, the Tennessee Valley Authority, the Export-Import Bank of the United States, the Commodity Credit Corporation, the Federal Financing Bank, the Student Loan Marketing Association, the National Credit Union Administration, and the Federal Agricultural Mortgage Corporation.

Some obligations issued or guaranteed by U.S. government agencies and instrumentalities, including, for example, Ginnie Mae pass- through certificates, are supported by the full faith and credit of the U.S. Treasury. Other obligations issued by or guaranteed by federal agencies, such as those securities issued by Fannie Mae, are supported by the discretionary authority of the U.S. government to purchase certain obligations of the federal agency, while other obligations issued by or guaranteed by federal agencies, such as those of the Federal Home Loan Banks, are supported by the right of the issuer to borrow from the U.S. Treasury. While the U.S. government provides financial support to such U.S. government-sponsored federal agencies, no assurance can be given that the U.S. government will always do so, since the U.S. government is not so obligated by law. U.S. Treasury notes and bonds typically pay coupon interest semi-annually and repay the principal at maturity.

On September 7, 2008, the U.S. Treasury announced a federal takeover of Fannie Mae and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), placing the two federal instrumentalities in conservatorship. Under the takeover, the U.S. Treasury agreed to acquire $1 billion of senior preferred stock of each instrumentality and obtained warrants for the purchase of common stock of each instrumentality (the "Senior Preferred Stock Purchase Agreement" or "Agreement"). Under the Agreement, the U.S. Treasury pledged to provide up to $200 billion per instrumentality as needed, including the contribution of cash capital to the instrumentalities in the event their liabilities exceed their assets. This was intended to ensure that the instrumentalities maintain a positive net worth and meet their financial obligations, preventing mandatory triggering of receivership. On December 24, 2009, the U.S. Treasury announced that it was amending the Agreement to allow the $200 billion cap on the U.S. Treasury's funding commitment to increase as necessary to accommodate any cumulative reduction in net worth over the next three years. As a result of this Agreement, the investments of holders, including a Fund, of mortgage-backed securities and other obligations issued by Fannie Mae and Freddie Mac are protected.

The total public debt of the United States as a percentage of gross domestic product has grown rapidly since the beginning of the 2008-2009 financial downturn. Although high debt levels do not necessarily indicate or cause economic problems, they may create certain systemic risks if sound debt management practices are not implemented. A high national debt can raise concerns that the U.S. government will not be able to make principal or interest payments when they are due. In August 2011, S&P lowered its long-term

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sovereign credit rating on the U.S. In explaining the downgrade at that time, S&P cited, among other reasons, controversy over raising the statutory debt limit and growth in public spending. In August 2023, Fitch Ratings also downgraded its U.S. debt rating from AAA to AA+, citing expected fiscal deterioration over the next three years and repeated down-to-the-wire debt ceiling negotiations. In May 2025, Moody's lowered the long-term issuer rating of the U.S. to Aa1 from Aaa to reflect over a decade of increasing government debt and high interest payment ratios relative to similarly rated sovereigns.

An increase in national debt levels also may necessitate the need for the U.S. Congress to negotiate adjustments to the statutory debt ceiling to increase the cap on the amount the U.S. government is permitted to borrow to meet its existing obligations and finance current budget deficits. Future downgrades could increase volatility in domestic and foreign financial markets, result in higher interest rates, lower prices of U.S. Treasury securities and increase the costs of different kinds of debt. Any controversy or ongoing uncertainty regarding the statutory debt ceiling negotiations may impact the U.S. long-term sovereign credit rating and may cause market uncertainty. As a result, market prices and yields of securities supported by the full faith and credit of the U.S. government may be adversely affected.

**When-Issued Securities**

A when-issued security is one whose terms are available and for which a market exists, but which has not been issued. When a Fund engages in when-issued transactions, it relies on the other party to consummate the sale. If the other party fails to complete the sale, a Fund may miss the opportunity to obtain the security at a favorable price or yield.

When purchasing a security on a when-issued basis, a Fund assumes the rights and risks of ownership of the security, including the risk of price and yield changes. At the time of settlement, the value of the security may be more or less than the purchase price. The yield available in the market when the delivery takes place also may be higher than those obtained in the transaction itself. Because a Fund does not pay for the security until the delivery date, these risks are in addition to the risks associated with its other investments.

Decisions to enter into "when-issued" transactions will be considered on a case-by-case basis when necessary to maintain continuity in a company's index membership.

**INVESTMENT RESTRICTIONS**

The Trust has adopted the following investment restrictions as fundamental policies with respect to each Fund. These restrictions cannot be changed with respect to a Fund without the approval of the holders of a majority of the Fund's outstanding voting securities. For the purposes of the 1940 Act, a "majority of outstanding shares" means the vote of the lesser of: (1) 67% or more of the voting securities of the Fund present at the meeting if the holders of more than 50% of the Fund's outstanding voting securities are present or represented by proxy; or (2) more than 50% of the outstanding voting securities of the Fund.

Under these restrictions, each Fund may not:

1. Borrow money or issue senior securities (as defined under the 1940 Act), except to the extent permitted under the 1940 Act.

2. Make loans, except to the extent permitted under the 1940 Act.

3. Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments, except to the extent permitted under the 1940 Act. This shall not prevent the Fund from investing in securities or other instruments backed by real estate, REITs or securities of companies engaged in the real estate business.

4. Purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments, except to the extent permitted under the 1940 Act. This shall not prevent the Fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities.

5. Underwrite securities issued by other persons, except to the extent permitted under the 1940 Act.

6.*(Cannabis ETF only)* With respect to 75% of its total assets, (i) purchase securities of any issuer (except securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or shares of investment companies) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, or (ii) acquire more than 10% of the outstanding voting securities of any one issuer.<sup>\*</sup>

<sup>\*</sup> For purposes of this policy, the issuer of the underlying security will be deemed to be the issuer of any respective depositary receipt.

In addition, each Fund has adopted a fundamental policy to:

7. With respect to the Sports Betting ETF and Ball Metaverse ETF not concentrate its investments (*i.e.*, hold more than 25% of its total assets) in any industry or group of related industries, except that each Fund will concentrate to approximately the same extent that the Index concentrates in the securities of such particular industry or group of related industries. For purposes of this limitation, securities of the U.S. government (including its agencies and instrumentalities), repurchase agreements collateralized by U.S. government securities, investment companies, and tax-exempt securities of state or municipal governments and their political subdivisions are not considered to be issued by members of any industry.<sup>1</sup>

<sup>1</sup> For purposes of this policy, the issuer of the underlying security will be deemed to be the issuer of any respective depositary receipt.

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8. Prior to September 30, 2025, the Video Games ETF sought to track the total return performance, before fees and expenses, of the Nasdaq CTA Global Video Games Software Index. As such, the Fund's holdings, similar to the Index constituents, were concentrated in securities issued by companies in the Entertainment Industry, a separate industry within the Communication Services Sector. On September 30, 2025, the Fund revised its investment objective and investment strategy to reflect that the Fund no longer seeks to track the performance of the Nasdaq CTA Global Video Games Software Index or pursues a passive investment strategy. The Fund, however, expects to continue to concentrate its investments in the Entertainment Industry.

9. With respect to the Cannabis ETF, concentrate its investments in the Pharmaceuticals, Biotechnology & Life Sciences Industry Group as defined by the Global Industry Classification (GICS®) or other similar categorization scheme. For purposes of this limitation, securities of the U.S. government (including its agencies and instrumentalities), repurchase agreements collateralized by U.S. government securities, investment companies, and tax-exempt securities of state or municipal governments and their political subdivisions are not considered to be issued by members of any industry.<sup>1</sup>

10. With respect to the Magnificent Seven ETF, concentrate its investments in one or more of the Technology Industries.

In addition to the investment restrictions adopted as fundamental policies as set forth above, the Funds observe the following non-fundamental restrictions, which may be changed without a shareholder vote.

1. The Video Games ETF invests, under normal circumstances, at least 80% of its net assets (plus borrowings for investment purposes) in Video Game Companies. For purposes of the foregoing policy, Video Game Companies are companies that are economically tied to the Video Games industry, and generally include publishers, developers and distributors of interactive gaming software for console, PC, mobile and cloud platforms, as well as providers of related online gaming services and esports.

2. The Sports Betting ETF invests, under normal circumstances, at least 80% of its net assets (plus borrowings for investment purposes) in securities issued by Sports Betting and iGaming Companies.<sup>\*</sup>

3. The Ball Metaverse ETF invests, under normal circumstances, at least 80% of its net assets (plus borrowings for investment purposes) in Metaverse Companies. For purposes of this policy, the Fund defines Metaverse Companies as foreign and domestic issuers that engage in activities or provide products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues.

4. The Cannabis ETF invests, under normal circumstances, at least 80% of the Fund's net assets (plus any borrowings for investment purposes) will be invested in equity securities, including common stock and depositary receipts, of companies and REITs that derive at least 50% of their net revenue from, or invest a majority of their assets in, the cannabis and hemp ecosystem and in derivatives that have economic characteristics similar to such securities.

5. The Magnificent Seven ETF invests, under normal circumstances, at least 80% of its assets (plus borrowings for investment purposes) in financial instruments and other investments that provide exposure to, or in combination have economic characteristics similar or equivalent to those of, the largest (*i.e.*, top quartile by market capitalization, revenue, profit, market share or other similar metric) companies in one or more Technology Industries, each as defined by an independent industry classification scheme.

\* For purposes of this policy, Sports Betting and iGaming Companies are companies that the Index Provider determines provide exposure to the sports and online betting and iGaming themes and which satisfy the Index Provider's Index security selection criteria, as such criteria may be modified from time to time. Sports Betting Companies generally are engaged, directly or indirectly, in analyzing sports events and wagering on the outcome. Sports Betting Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other Sports Betting Companies; providing marketing solutions and services for other Sports Betting Companies; and investing in Sports Betting Companies, such as owners of investment portfolios comprising companies exposed to sports betting activities or the underlying assets of such companies. Generally, iGaming Companies are engaged, directly or indirectly, in betting online in games of chance, such as poker, slots, blackjack, or the lottery. iGaming Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other iGaming Companies; providing marketing solutions and services for other iGaming Companies; investing in iGaming Companies, such as owners of investment portfolios comprising companies exposed to iGaming activities or the underlying assets of such companies; and developing and/or providing games, such as casino developers and bingo and lottery game developers.

The following descriptions of certain provisions of the 1940 Act may assist investors in understanding the above policies and restrictions:

<u>Borrowing</u>. The 1940 Act presently allows a fund to borrow from any bank (including pledging, mortgaging, or hypothecating assets) in an amount up to 33 1/3% of its total assets (not including temporary borrowings not in excess of 5% of its total assets).

<u>Senior Securities</u>. For purposes of fundamental policy no. 1 above, senior securities may include any obligation or instrument constituting a security issued by a Fund and evidencing indebtedness or a future payment obligation. The 1940 Act generally prohibits funds from issuing senior securities other than borrowing from a bank subject to specific asset coverage requirements. The 1940 Act

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prohibitions and restrictions on the issuance of senior securities are designed to protect shareholders from the potentially adverse effects of a fund's issuance of senior securities, including, in particular, the risks associated with excessive leverage of a fund's assets. Certain types of derivatives give rise to future payment obligations and therefore also may be considered to be senior securities. Rule 18f-4 under the 1940 Act permits funds that comply with the conditions therein to enter into certain types of derivatives transactions notwithstanding the prohibitions and restrictions on the issuance of senior securities under the 1940 Act. To the extent consistent with its investment strategies, a Fund may invest in derivatives in compliance with the conditions set forth in Rule 18f-4 under the 1940 Act.

<u>Lending</u>. Under the 1940 Act, a fund may only make loans if expressly permitted by its investment policies.

<u>Real Estate and Commodities</u>. The 1940 Act does not directly restrict an investment company's ability to invest in real estate or commodities, but does require that every investment company have a fundamental investment policy governing such investments.

<u>Underwriting</u>. Under the 1940 Act, underwriting securities involves a fund purchasing securities directly from an issuer for the purpose of selling (distributing) them or participating in any such activity either directly or indirectly.

If a percentage limitation is adhered to at the time of investment or contract, a later increase or decrease in percentage resulting from any change in value or total or net assets will not result in a violation of such restriction, except that the percentage limitation with respect to the borrowing of money will be observed continuously.

**EXCHANGE LISTING AND TRADING**

Shares are listed for trading and trade throughout the day on the Exchanges.

There can be no assurance that a Fund will continue to meet the requirements of an Exchange necessary to maintain the listing of Shares. The Exchanges will consider the suspension of trading in, and will initiate delisting proceedings of, the Shares under any of the following circumstances: (i) if any of the requirements set forth in the Exchange rules are not continuously maintained, including compliance with Rule 6c-11(c) under the 1940 Act; (ii) if, following the initial 12-month period beginning at the commencement of trading of a Fund, there are fewer than 50 beneficial owners of the Shares of such Fund; or (iii) if such other event shall occur or condition shall exist that, in the opinion of an Exchange, makes further dealings on an Exchange inadvisable. The Exchanges will remove the Shares of a Fund from listing and trading upon termination of such Fund.

The Trust reserves the right to adjust the price levels of Shares in the future to help maintain convenient trading ranges for investors. Any adjustments would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of the applicable Fund.

**MANAGEMENT OF THE TRUST**

**Board Responsibilities.** The management and affairs of the Trust and its series are overseen by the Board, which elects the officers of the Trust who are responsible for administering the day-to-day operations of the Trust and the Funds. The Board has approved contracts, as described below, under which certain companies provide essential services to the Trust.

The day-to-day business of the Trust, including the management of risk, is performed by third-party service providers, such as the Adviser, the Sub-Adviser, the Distributor, and the Administrator. The Board is responsible for overseeing the Trust's service providers and, thus, has oversight responsibility with respect to risk management performed by those service providers. Risk management seeks to identify and address risks, *i.e.*, events or circumstances that could have material adverse effects on the business, operations, shareholder services, investment performance or reputation of a Fund. The Funds and their service providers employ a variety of processes, procedures and controls to identify various of those possible events or circumstances, to lessen the probability of their occurrence and/or to mitigate the effects of such events or circumstances if they do occur. Each service provider is responsible for one or more discrete aspects of the Trust's business (*e.g.,* the Adviser is responsible for the day-to-day management of each Fund's portfolio investments) and, consequently, for managing the risks associated with that business. The Board has emphasized to the Funds' service providers the importance of maintaining vigorous risk management.

The Board's role in risk oversight begins before the inception of the Funds, at which time certain of the Funds' service providers present the Board with information concerning the investment objectives, strategies and risks of the Funds as well as proposed investment limitations for the Funds. Additionally, the Adviser and the Sub-Adviser provide the Board with an overview of, among other things, its investment philosophy, brokerage practices and compliance infrastructure. Thereafter, the Board continues its oversight function of various personnel, including the Trust's Chief Compliance Officer, as well as personnel of the Sub-Adviser, and other service providers such as the Funds' independent registered public accounting firm, who make periodic reports to the Audit Committee or to the Board with respect to various aspects of risk management. The Board and the Audit Committee oversee efforts by management and service providers to manage risks to which the Funds may be exposed.

The Board is responsible for overseeing the nature, extent, and quality of the services provided to the Funds by the Adviser and the Sub-Adviser and receives information about those services at its regular meetings. In addition, on an annual basis (following the initial two-year period), in connection with its consideration of whether to renew the Advisory Agreement (defined below) with the Adviser, and the Sub-Advisory Agreement with the Sub-Adviser, the Board or its designee may meet with the Adviser and/or the Sub-Adviser

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to review such services. Among other things, the Board regularly considers the Adviser's and the Sub-Adviser's adherence to each Fund's investment restrictions and compliance with various Fund policies and procedures and with applicable securities regulations. The Board also reviews information about each Fund's performance and investments, including, for example, portfolio holdings schedules.

The Trust's Chief Compliance Officer reports regularly to the Board to review and discuss compliance issues and Fund and Adviser or Sub-Adviser risk assessments. At least annually, the Trust's Chief Compliance Officer provides the Board with a report reviewing the adequacy and effectiveness of the Trust's policies and procedures and those of its service providers, including the Adviser and the Sub-Adviser. The report addresses the operation of the policies and procedures of the Trust and each service provider since the date of the last report; any material changes to the policies and procedures since the date of the last report; any recommendations for material changes to the policies and procedures; and any material compliance matters since the date of the last report.

The Board receives reports from the Funds' service providers regarding operational risks and risks related to the valuation and liquidity of portfolio securities. Annually, the Funds' independent registered public accounting firm reviews with the Audit Committee its audit of the Funds' financial statements, focusing on major areas of risk encountered by the Funds and noting any significant deficiencies or material weaknesses in the Funds' internal controls. Additionally, in connection with its oversight function, the Board oversees Fund management's implementation of disclosure controls and procedures, which are designed to ensure that information required to be disclosed by the Trust in its periodic reports with the SEC are recorded, processed, summarized, and reported within the required time periods. The Board also oversees the Trust's internal controls over financial reporting, which comprise policies and procedures designed to provide reasonable assurance regarding the reliability of the Trust's financial reporting and the preparation of the Trust's financial statements.

From their review of these reports and discussions with the Adviser, the Sub-Adviser, the Chief Compliance Officer, the independent registered public accounting firm and other service providers, the Board and the Audit Committee learn in detail about the material risks of each Fund, thereby facilitating a dialogue about how management and service providers identify and mitigate those risks.

The Board recognizes that not all risks that may affect a Fund can be identified and/or quantified, that it may not be practical or cost-effective to eliminate or mitigate certain risks, that it may be necessary to bear certain risks (such as investment-related risks) to achieve a Fund's goals, and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness. Moreover, reports received by the Board as to risk management matters are typically summaries of the relevant information. Most of the Funds' investment management and business affairs are carried out by or through the Adviser, the Sub-Adviser, and other service providers, each of which has an independent interest in risk management but whose policies and the methods by which one or more risk management functions are carried out may differ from the Trust's and each other's in the setting of priorities, the resources available or the effectiveness of relevant controls. As a result of the foregoing and other factors, the Board's ability to monitor and manage risk, as a practical matter, is subject to limitations.

**Members of the Board.** There are three members of the Board, none of whom are interested persons of the Trust, as that term is defined in the 1940 Act (the "Independent Trustees").

There is an Audit Committee of the Board that is chaired by an Independent Trustee and comprised solely of Independent Trustees. The Audit Committee chair presides at the Audit Committee meetings, participates in formulating agendas for Audit Committee meetings, and coordinates with management to serve as a liaison between the Independent Trustees and management on matters within the scope of responsibilities of the Audit Committee as set forth in its Board-approved charter. The Trust has not designated a lead Independent Trustee but has determined its leadership structure is appropriate given the specific characteristics and circumstances of the Trust. The Trust made this determination in consideration of, among other things, the fact that the Independent Trustees of the Trust constitute a super-majority of the Board, the number of Independent Trustees that constitute the Board, the amount of assets under management in the Trust, and the number of funds overseen by the Board. The Board also believes that its leadership structure facilitates the orderly and efficient flow of information to the Independent Trustees from Fund management.

Additional information about each Trustee of the Trust is set forth below. The address of each Trustee of the Trust is c/o U.S. Bank Global Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name and Year of Birth** | **Position Held with the Trust** | **Term of Office and Length of Time Served** | **Principal Occupation(s) During Past 5 Years** | **Number of Portfolios in Fund Complex\* Overseen by Trustee** | **Other Directorships Held by Trustee During Past 5 Years** |
| &nbsp;&nbsp;John L. Jacobs<br>Year of birth: 1959 | Trustee and Audit Committee Chair | Indefinite term; since 2017\*\* | &nbsp;&nbsp;Founder and CEO of Q3 Advisors, LLC (financial consulting firm) (since 2015); Chairman of VettaFi, LLC (2018-2024); Executive Director of Center for Financial Markets and Policy (2016–2022); Distinguished Policy Fellow and Executive Director, Center for Financial Markets and Policy, Georgetown University (2015–2022) | 44 | &nbsp;&nbsp;Independent Trustee, TEMA ETF Trust (since 2023) (1 portfolio); NEOS ETF Trust (since 2021) (3 portfolios); Director, tZERO Group, Inc. (since 2020); Independent Trustee, Procure ETF Trust II (since 2018) (2 portfolios) |
| &nbsp;&nbsp;Koji E. Felton<br>Year of birth: 1961 | Trustee | Indefinite term; since 2019 | &nbsp;&nbsp;Retired; formerly Counsel, Kohlberg Kravis Roberts & Co. L.P. (investment firm) (2013–2015) | 44 | &nbsp;&nbsp;Independent Trustee, Series Portfolios Trust (since 2015) (19 portfolios) |
| &nbsp;&nbsp;Pamela H. Conroy<br>Year of birth: 1961 | Trustee, Chair, and Nominating and Governance Committee Chair | Indefinite term; since 2019 | &nbsp;&nbsp;Retired; formerly Executive Vice President, Chief Operating Officer & Chief Compliance Officer, Institutional Capital Corporation (investment firm) (1994–2008) | 44 | &nbsp;&nbsp;Independent Trustee, Frontier Funds, Inc. (since 2020) (4 portfolios) |

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\*&nbsp;&nbsp;&nbsp;&nbsp;The Trust is the only registered investment company in the Fund Complex.

\*\*&nbsp;&nbsp;&nbsp;&nbsp;Mr. Jacobs began serving as a Trustee when the Trust was known by its former name, Active Weighting Funds ETF Trust.

**Individual Trustee Qualifications.** The Trust has concluded that each of the Trustees should serve on the Board because of their ability to review and understand information about the Funds provided to them by management, to identify and request other information they may deem relevant to the performance of their duties, to question management and other service providers regarding material factors bearing on the management and administration of the Funds, and to exercise their business judgment in a manner that serves the best interests of the Funds' shareholders. The Trust has concluded that each of the Trustees should serve as a Trustee based on his or her own experience, qualifications, attributes and skills as described below.

The Trust has concluded that Mr. Jacobs should serve as a Trustee because of his substantial industry experience. He most recently served as the CEO of Q3 Advisors, LLC and as the Distinguished Policy Fellow and Executive Director of the Center for Financial Markets and Policy, and as Adjunct Professor of Finance at the McDonough School of Business at Georgetown University. He also served as Senior Advisor and principal consultant to Nasdaq's CEO and President. Mr. Jacobs has been determined to qualify as an Audit Committee Financial Expert for the Trust.

The Trust has concluded that Mr. Felton should serve as a Trustee because of his substantial industry experience, including over two decades working in the asset management industry providing legal, regulatory compliance, governance and risk management advice to registered investment companies, their advisers and boards. Prior to that, he gained experience and perspective as a regulator while serving as an enforcement attorney and branch chief for the SEC. He also represented public companies and their boards of directors in securities class actions, derivative litigation and SEC investigations as a litigation associate at a national law firm. Mr. Felton currently serves as an independent trustee and chair of the nominating and governance committee of a mutual fund complex.

The Trust has concluded that Ms. Conroy should serve as a Trustee because of her substantial industry experience, including over 25 years of achievements at both a large, multi-location financial institution as well as a small, entrepreneurial firm. She has expertise in all facets of portfolio accounting, securities processing, trading operations, marketing, as well as legal and compliance.

In its periodic assessment of the effectiveness of the Board, the Board considers the complementary individual skills and experience of the individual Trustees primarily in the broader context of the Board's overall composition so that the Board, as a body, possesses the appropriate (and appropriately diverse) skills and experience to oversee the business of the series of the Trust.

**Board Committees.** The Board has established the following standing committees of the Board:

<u>Audit Committee</u>. The Board has a standing Audit Committee that is composed of each of the Independent Trustees of the Trust. The Audit Committee operates under a written charter approved by the Board. The principal responsibilities of the Audit Committee include: recommending which firm to engage as the Funds' independent registered public accounting firm and when and whether to terminate this relationship, as necessary; reviewing the independent registered public accounting firm's compensation, the proposed scope and terms of its engagement, and the firm's independence; pre-approving audit and non-audit services provided by the Funds' independent registered public accounting firm to the Trust and certain other affiliated entities; serving as a channel of communication between the independent registered public accounting firm and the Trustees; reviewing the results of each external audit, including any qualifications in the independent registered public accounting firm's opinion, any related management letter, management's responses to recommendations made by the independent registered public accounting firm in connection with the audit, reports submitted to the

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Audit Committee by the internal auditing department of the Trust's Administrator that are material to the Trust as a whole, if any, and management's responses to any such reports; reviewing the Funds' audited financial statements and considering any significant disputes between the Trust's management and the independent registered public accounting firm that arose in connection with the preparation of those financial statements; considering, in consultation with the independent registered public accounting firm and the Trust's senior internal accounting executive, if any, the independent registered public accounting firms' report on the adequacy of the Trust's internal financial controls; reviewing, in consultation with the Funds' independent registered public accounting firm, major changes regarding auditing and accounting principles and practices to be followed when preparing the Funds' financial statements; and other audit related matters. During the fiscal year ended December 31, 2025, the Audit Committee met four times.

The Audit Committee also serves as the Qualified Legal Compliance Committee ("QLCC") for the Trust for the purpose of compliance with Rules 205.2(k) and 205.3(c) of the Code of Federal Regulations, regarding alternative reporting procedures for attorneys retained or employed by an issuer who appear and practice before the SEC on behalf of the issuer (the "issuer attorneys"). An issuer attorney who becomes aware of evidence of a material violation by the Trust, or by any officer, director, employee, or agent of the Trust, may report evidence of such material violation to the QLCC as an alternative to the reporting requirements of Rule 205.3(b) (which requires reporting to the chief legal officer and potentially "up the ladder" to other entities).

<u>Nominating and Governance Committee</u>. The Board has a standing Nominating and Governance Committee that is composed of each of the Independent Trustees of the Trust. The Nominating and Governance Committee operates under a written charter approved by the Board. The principal responsibility of the Nominating and Governance Committee is to consider, recommend and nominate candidates to fill vacancies on the Board, if any. The Nominating and Governance Committee generally will not consider nominees recommended by shareholders. The Nominating and Governance Committee meets periodically, as necessary. During the fiscal year ended December 31, 2025, the Nominating and Governance Committee met once.

**Principal Officers of the Trust.** The officers of the Trust conduct and supervise the Trust's and each Fund's daily business. The address of each officer of the Trust is c/o U.S. Bank Global Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202. Additional information about each officer of the Trust is as follows:

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| | | | |
|:---|:---|:---|:---|
| **Name and Year of Birth** | **Position(s) Held with the Trust** | **Term of Office and Length of Time Served** | **Principal Occupation(s) During Past 5 Years** |
| Kacie G. Briody<br>Year of birth: 1992 | President and Principal Executive Officer | Indefinite term,<br>March 2025 | Vice President, U.S. Bancorp Fund Services, LLC (since 2025); Assistant Vice President, U.S. Bancorp Fund Services, LLC (2021-2025) |
| Travis G. Babich<br>Year of birth: 1980 | Treasurer and Principal Financial Officer | Indefinite term,<br>September 2019 | Vice President, U.S. Bancorp Fund Services, LLC (since 2005) |
| David J. Rantisi<br>Year of birth: 1992 | Assistant Treasurer | Indefinite term,<br>March 2025 | Assistant Vice President, U.S. Bancorp Fund Services, LLC (since 2014) |
| Chad E. Fickett<br>Year of birth: 1973 | Secretary | Indefinite term,<br>June 2024 | Vice President, U.S. Bancorp Fund Services, LLC (since 2024); Assistant General Counsel, The Northwestern Mutual Life Insurance Company (2007 to 2024) |
| Anjali E. Connors<br>Year of birth: 1982 | Chief Compliance Officer and Anti-Money Laundering Officer | Indefinite term,<br>January 2026 | Vice President, U.S. Bancorp Fund Services, LLC (since 2025); Associate Director, Investment Advisory Compliance, Robert W. Baird & Co. (2022 to 2025); Chief Compliance Officer, Strategas Asset Management, LLC (wholly owned by Baird Financial Corporation) (2022 to 2025); Director, Governance and Controls Advisor, CIBC Private Wealth Management (2018 to 2022) |
| Marissa J. Pawlinski<br>Year of birth: 1996 | Assistant Secretary | Indefinite term,<br>June 2025 | Assistant Vice President, U.S. Bancorp Fund Services, LLC (since 2023); Regulatory Administration Attorney, U.S. Bancorp Fund Services, LLC (since 2022); Judicial Law Clerk, Milwaukee County Circuit Court (2021-2022) |

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**Trustee Ownership of Shares.** The Funds are required to show the dollar amount ranges of each Trustee's "beneficial ownership" of Shares and each other series of the Trust as of the end of the most recently completed calendar year. Dollar amount ranges disclosed are established by the SEC. "Beneficial ownership" is determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934 (the "Exchange Act").

As of December 31, 2025, no Trustee or officer of the Trust owned Shares of the Funds or any other fund within the Trust's Fund Complex.

**Board Compensation.** Each Independent Trustee receives an annual stipend of $145,000 (prior to January 1, 2026, the annual stipend was $125,000) and reimbursement for all reasonable travel expenses relating to their attendance at Board Meetings. The chair of the Audit Committee receives an annual stipend of $5,000 and the chair of the Nominating and Governance Committee receives an annual stipend of $2,500. Pursuant to the Advisory Agreement, the Adviser has agreed to pay all expenses of the Funds, except those specified in the Funds' Prospectus. As a result, the Adviser is responsible for compensating the Independent Trustees. Trustee compensation disclosed in the table does not include reimbursed reasonable travel expenses relating to their attendance at Board Meetings. The following table shows the compensation earned by each Trustee during the fiscal year ended December 31, 2025:

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| | | |
|:---|:---|:---|
| **Name** | **Aggregate Compensation** <br>**From the Funds** | **Total Compensation From Fund Complex** <br>**Paid to Trustees**<sup>\*</sup> |
| John L. Jacobs | $0 | $130000 |
| Koji Felton | $0 | $125000 |
| Pamela H. Conroy | $0 | $127500 |

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<sup>\*</sup>The Trust is the only registered investment company in the Fund Complex.

**PRINCIPAL SHAREHOLDERS, CONTROL PERSONS, AND MANAGEMENT OWNERSHIP**

A principal shareholder is any person who owns of record or beneficially 5% or more of the outstanding Shares. A control person is a shareholder that owns beneficially or through controlled companies more than 25% of the voting securities of a company or acknowledges the existence of control. Shareholders owning voting securities in excess of 25% may determine the outcome of any matter affecting and voted on by shareholders of a Fund. As of April 1, 2026, the Trustees and officers, as a group, owned less than 1% of the Shares of the Funds, and the following shareholders were considered to be principal shareholders of each Fund:

**Roundhill Video Games ETF** 

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| | | |
|:---|:---|:---|
| **Name and Address** | **% Ownership** | **Type of Ownership** |
| Charles Schwab & Co., Inc.<br>211 Main Street<br>San Francisco, CA 94105-1905 | 20.62% | Record |
| National Financial Services, LLC<br>200 Liberty Street<br>New York, NY 10281 | 19.68% | Record |
| Morgan Stanley Smith Barney, LLC<br>Harborside Financial Center Plaza, 23rd Floor<br>Jersey City, NJ 07311 | 8.32% | Record |
| Citibank, N.A.<br>388 Greenwich Street<br>New York, NY 10113 | 8.21% | Record |
| J.P. Morgan Securities LLC<br>383 Madison Avenue<br>New York, NY 10179 | 7.80% | Record |
| BOFA Securities, Inc.<br>One Bryant Park<br>New York, NY 10036 | 7.77% | Record |

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**Roundhill Sports Betting & iGaming ETF**

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| | | |
|:---|:---|:---|
| **Name and Address** | **% Ownership** | **Type of Ownership** |
| Charles Schwab & Co., Inc.<br>211 Main Street<br>San Francisco, CA 94105-1905 | 24.46% | Record |
| National Financial Services, LLC<br>200 Liberty Street<br>New York, NY 10281 | 21.45% | Record |
| Morgan Stanley Smith Barney, LLC<br>Harborside Financial Center Plaza, 23rd Floor<br>Jersey City, NJ 07311 | 7.40% | Record |

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**Roundhill Ball Metaverse ETF**

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| | | |
|:---|:---|:---|
| **Name and Address** | **% Ownership** | **Type of Ownership** |
| Charles Schwab & Co., Inc.<br>211 Main Street<br>San Francisco, CA 94105-1905 | 19.00% | Record |
| National Financial Services, LLC<br>200 Liberty Street<br>New York, NY 10281 | 16.25% | Record |
| Citibank, N.A.<br>388 Greenwich Street<br>New York, NY 10113 | 14.38% | Record |
| Pershing LLC<br>One Pershing Plaza<br>Jersey City, NJ 07399 | 7.77% | Record |
| RobinHood Securities, LLC<br>500 Colonial Center Parkway, Suite 100<br>Lake Mary, FL 32746 | 6.03% | Record |
| Morgan Stanley Smith Barney, LLC<br>Harborside Financial Center Plaza, 23rd Floor<br>Jersey City, NJ 07311 | 5.57% | Record |

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**Roundhill Cannabis ETF**

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| | | |
|:---|:---|:---|
| **Name and Address** | **% Ownership** | **Type of Ownership** |
| Charles Schwab & Co., Inc.<br>211 Main Street<br>San Francisco, CA 94105-1905 | 24.55% | Record |
| National Financial Services, LLC<br>200 Liberty Street<br>New York, NY 10281 | 22.86% | Record |
| Morgan Stanley Smith Barney, LLC<br>Harborside Financial Center Plaza, 23rd Floor<br>Jersey City, NJ 07311 | 15.03% | Record |
| Canadian Imperial Bank of Commerce<br>161 Bay Street, Brookfield Place<br>Toronto, Ontario M5J 2S8 | 11.85% | Record |
| Robinhood Securities, LLC<br>500 Colonial Center Parkway, Suite 100<br>Lake Mary, FL 32746 | 5.16% | Record |
| J.P. Morgan Securities LLC<br>383 Madison Avenue<br>New York, NY 10179 | 5.05% | Record |

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**Roundhill Magnificent Seven ETF** 

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| | | |
|:---|:---|:---|
| **Name and Address** | **% Ownership** | **Type of Ownership** |
| Bank of New York Mellon<br>240 Greenwich Street<br>New York, NY 10286 | 17.36% | Record |
| Charles Schwab & Co., Inc.<br>211 Main Street<br>San Francisco, CA 94105-1905 | 17.09% | Record |
| National Financial Services, LLC<br>200 Liberty Street<br>New York, NY 10281 | 15.91% | Record |
| Citibank, N.A.<br>388 Greenwich Street<br>New York, NY 10113 | 8.98% | Record |
| U.S. Bank N.A.<br>800 Nicollet Mall<br>Minneapolis, MN 55402 | 7.34% | Record |

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**CODES OF ETHICS** 

The Trust, the Adviser, and the Sub-Adviser have each adopted codes of ethics pursuant to Rule 17j-1 of the 1940 Act. These codes of ethics are designed to prevent affiliated persons of the Trust, the Adviser, and the Sub-Adviser from engaging in deceptive, manipulative or fraudulent activities in connection with securities held or to be acquired by the Funds (which also may be held by persons subject to the codes of ethics). Each code of ethics permits personnel subject to that code of ethics to invest in securities for their personal investment accounts, subject to certain limitations, including limitations related to securities that may be purchased or held by the Funds. The Distributor (as defined below) relies on the principal underwriters exception under Rule 17j-1(c)(3), specifically where the Distributor is not affiliated with the Trust, the Adviser, or the Sub-Adviser, and no officer, director, or general partner of the Distributor serves as an officer, director, or general partner of the Trust, the Adviser, or the Sub-Adviser.

There can be no assurance that the codes of ethics will be effective in preventing such activities. Each code of ethics may be examined at the office of the SEC in Washington, D.C. or on the Internet at the SEC's website at https://www.sec.gov.

**PROXY VOTING POLICIES**

The Funds have delegated proxy voting responsibilities to the Adviser, subject to the Board's oversight. In delegating proxy responsibilities, the Board has directed that proxies be voted consistent with each Fund's and its shareholders' best interests and in compliance with all applicable proxy voting rules and regulations. The Adviser has engaged Institutional Shareholder Services Inc. ("ISS") to make recommendations to the Adviser on the voting of proxies relating to securities held by each Fund and has adopted the ISS Proxy Voting Guidelines as part of the Adviser's proxy voting policies (the "Proxy Voting Policies") for such purpose.

A copy of the ISS Proxy Voting Guidelines is set forth in <u>Appendix A</u> to this SAI. The Trust's Chief Compliance Officer is responsible for monitoring the effectiveness of the Proxy Voting Policies. The Proxy Voting Policies have been adopted by the Trust as the policies and procedures that the Adviser will use when voting proxies on behalf of the Funds.

When available, information on how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will be available (1) without charge, upon request, by calling 1-800-617-0004, and (2) on the SEC's website at https://www.sec.gov.

**INVESTMENT MANAGEMENT**

**Investment Adviser** 

Roundhill Financial Inc., a Delaware corporation, serves as the investment adviser to the Funds. The Adviser is located at 154 West 14<sup>th</sup> Street, 2<sup>nd</sup> Floor, New York, New York 10011. The Adviser is controlled by its founding members, William Hershey and Timothy Maloney and is an SEC-registered investment adviser.

The Adviser arranges for sub-advisory, transfer agency, custody, fund administration, distribution, and all other services necessary for the Funds to operate. The Adviser oversees the day-to-day operations of the Funds, subject to the general supervision and oversight of the Board of the Trust. The Adviser, in addition to maintaining its overall responsibility to manage the Funds, oversees the investment and reinvestment of the assets of each Fund by the Sub-Adviser, in accordance with the investment objective, policies, and limitations of each Fund.

For the services it provides to the Funds, the Adviser is entitled to a unified management fee, which is calculated daily and paid monthly, at an annual rate based on each Fund's average daily net assets as set forth in the table below.

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| | |
|:---|:---|
| **Fund** | **Management Fee** |
| Roundhill Video Games ETF | 0.50% |
| Roundhill Sports Betting & iGaming ETF | 0.75% |
| Roundhill Ball Metaverse ETF | 0.59% |
| Roundhill Cannabis ETF | 0.39% |
| Roundhill Magnificent Seven ETF  | 0.29% |

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Pursuant to an investment advisory agreement between the Trust, on behalf of the Funds, and the Adviser (the "Advisory Agreement"), the Adviser has agreed to pay all expenses of the Funds except the fee payable to the Adviser under the Advisory Agreement, interest charges on any borrowings, dividends and other expenses on securities sold short, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses, and distribution fees and expenses paid by the Trust under the distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act. The Adviser, in turn, compensates the Sub-Adviser from the management fee it receives from each Fund.

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The table below shows advisory fees paid by the Funds for the fiscal years ended December 31, as applicable to each Fund.

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| | | | |
|:---|:---|:---|:---|
| **Fund** | **2025** | **2024** | **2023** |
| Roundhill Video Games ETF | $114966 | $96860 | $118919 |
| Roundhill Sports Betting & iGaming ETF | $558208 | $635245 | $875903 |
| Roundhill Ball Metaverse ETF | $1792354 | $2289487 | $2607603 |
| Roundhill Cannabis ETF<sup>(1)</sup>  | $24782<sup>(4)</sup> | $11930<sup>(3)</sup> | $8819<sup>(2)</sup> |
| Roundhill Magnificent Seven ETF  | $7501117 | $1590920 | $14517<sup>(5)</sup> |

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<sup>(1)</sup> From April 20, 2022 (commencement of operations) through April 30, 2023, the Adviser received a unified management fee, which was calculated daily and paid monthly, at an annual rate of 0.75% of the Fund's average daily net assets. Effective May 1, 2023, the Board approved a reduction in the unified management fee from 0.75% to 0.39% to be paid by the Fund to the Adviser.

<sup>(2)</sup> The Adviser waived $1,959 during the year ended December 31, 2023.

<sup>(3)</sup> The Adviser waived $9,618 during the year ended December 31, 2024.

<sup>(4)</sup> The Adviser waived $25,768 during the year ended December 31, 2025.

<sup>(5)</sup> For the fiscal period April 10, 2023 (commencement of operations) through December 31, 2023.

**Sub-Adviser** 

Exchange Traded Concepts, LLC, an Oklahoma limited liability company located at 10900 Hefner Pointe Drive, Suite 400, Oklahoma City, Oklahoma 73120, serves as the sub-adviser to the Funds. The Sub-Adviser is majority owned by Cottonwood ETF Holdings LLC. Pursuant to an investment sub-advisory agreement between the Trust, on behalf of each Fund, the Adviser, and the Sub-Adviser (the "Sub-Advisory Agreement"), the Sub-Adviser is responsible for trading portfolio securities for the Funds, including selecting broker-dealers to execute purchase and sale transactions as instructed by the Adviser or, with respect to the Sports Betting ETF and Ball Metaverse ETF, in connection with any rebalancing or reconstitution of each Fund's respective Index, subject to the supervision of the Adviser and the Board.

For its services, the Sub-Adviser is entitled to a fee by the Adviser, which fee is calculated daily and paid monthly, at an annual rate based on the accumulative average daily net assets of each fund advised (or sponsored) by the Adviser and sub-advised by the Sub-Adviser, and subject to a minimum annual fee as follows:

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| | |
|:---|:---|
| **Minimum Annual Fee**<sup>\*</sup> | **Asset-Based Fee** |
| $15000 | 4 bps (0.04%) on the first $200 million<br>3.5 bps (0.035%) on the next $800 million<br>3 bps (0.03%) on the next $1 billion<br>2.5 bps (0.025%) on the balance over $2 billion |

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<sup>\*</sup> The minimum annual fee for the Magnificent Seven ETF is $20,000.

The table below shows sub-advisory fees paid by the Adviser for the fiscal years ended December 31, as applicable to each Fund.

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| | | | |
|:---|:---|:---|:---|
| **Fund** | **2025** | **2024** | **2023** |
| Roundhill Video Games ETF | $8464 | $7130 | $8698 |
| Roundhill Sports Betting & iGaming ETF | $27357 | $31111 | $42716 |
| Roundhill Ball Metaverse ETF | $111600 | $142601 | $161946 |
| Roundhill Cannabis ETF  | $2339 | $2014 | $833 |
| Roundhill Magnificent Seven ETF  | $783728 | $201163 | $2163<sup>(1)</sup> |

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<sup>(1)</sup> For the fiscal period April 10, 2023 (commencement of operations) through December 31, 2023.

**Portfolio Managers**

William Hershey, Timothy Maloney and David Mazza, each a portfolio manager of the Adviser, and Andrew Serowik, Todd Alberico, Gabriel Tan and Brian Cooper, each a portfolio of the Sub-Adviser, are jointly and primarily responsible for the day-to-day management of the investment portfolios of the Funds. This section includes information about the Portfolio Managers, including information about compensation, other accounts managed, and the dollar range of Shares owned.

*Share Ownership*

A Fund is required to show the dollar ranges of the Portfolio Managers' "beneficial ownership" of Shares as of the end of the most recently completed fiscal year or a more recent date for a new portfolio manager. Dollar amount ranges disclosed are established by the SEC. "Beneficial ownership" is determined in accordance with Rule 16a-1(a)(2) under the Exchange Act. As of December 31, 2025, Mr. Hershey owned $10,001 - $50,000 worth of Shares of MAGS. The other Portfolio Managers did not beneficially own any Shares of the Funds.

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*Other Accounts*

In addition to the Funds, the following Portfolio Managers co-managed the following other accounts for the Adviser as of December 31, 2025, none of which were subject to a performance-based fee:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Registered**<br>**<u>Investment Companies</u>** | **Registered**<br>**<u>Investment Companies</u>** | **Other Pooled**<br>**<u>Investment Vehicles</u>** | **Other Pooled**<br>**<u>Investment Vehicles</u>** | <br>**<u>Other Accounts</u>** | <br>**<u>Other Accounts</u>** |
| **Portfolio Manager** | **Number of Accounts** | **Total Assets in the Accounts** | **Number of Accounts** | **Total Assets in the Accounts** | **Number of Accounts** | **Total Assets in the Accounts** |
| William Hershey | 28 | $4.311 billion | 0 | $0 | 0 | $0 |
| Timothy Maloney | 28 | $4.311 billion | 0 | $0 | 0 | $0 |
| David Mazza | 28 | $4.311 billion | 0 | $0 | 0 | $0 |

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In addition to the Funds, the following Portfolio Managers co-managed the following other accounts for the Sub-Adviser as of December 31, 2025, none of which were subject to a performance-based fee:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Registered**<br>**<u>Investment Companies</u>** | **Registered**<br>**<u>Investment Companies</u>** | **Other Pooled**<br>**<u>Investment Vehicles</u>** | **Other Pooled**<br>**<u>Investment Vehicles</u>** | <br>**<u>Other Accounts</u>** | <br>**<u>Other Accounts</u>** |
| **Portfolio Manager** | **Number of Accounts** | **Total Assets in the Accounts** | **Number of Accounts** | **Total Assets in the Accounts** | **Number of Accounts** | **Total Assets in the Accounts** |
| Andrew Serowik | 125 | $21.3 million | 0 | $0 | 0 | $0 |
| Todd Alberico | 125 | $21.3 million | 0 | $0 | 0 | $0 |
| Gabriel Tan | 125 | $21.3 million | 0 | $0 | 0 | $0 |
| Brian Cooper | 125 | $21.3 million | 0 | $0 | 0 | $0 |

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*Compensation*

The Portfolio Managers of the Adviser and Sub-Adviser are compensated by the Adviser or Sub-Adviser, as applicable, and receive a fixed base salary and discretionary bonus that are not tied to the performance of the Funds. The discretionary bonus is based on the overall performance of the Adviser or Sub-Adviser, as applicable, and each individual's contribution to that performance across all duties.

*Conflicts of Interest*

A Portfolio Manager's management of "other accounts" may give rise to potential conflicts of interest in connection with their management of a Fund's investments, on the one hand, and the investments of the other accounts, on the other. The other accounts may have similar investment objectives or strategies as the Funds. A potential conflict of interest may arise as a result, whereby a Portfolio Manager could favor one account over another. Another potential conflict could include a Portfolio Manager's knowledge about the size, timing, and possible market impact of fund trades, whereby the Portfolio Manager could use this information to the advantage of other accounts and to the disadvantage of the Funds. However, the Sub-Adviser has established policies and procedures to ensure that the purchase and sale of securities among all accounts the Sub-Adviser manages are fairly and equitably allocated.

**DISTRIBUTOR**

The Trust and Foreside Fund Services, LLC, a wholly-owned subsidiary of Foreside Financial Group, LLC (doing business as ACA Group) (the "Distributor"), are parties to a distribution agreement (the "Distribution Agreement"), whereby the Distributor acts as principal underwriter for the Trust and distributes Shares. Shares are continuously offered for sale by the Distributor only in Creation Units. The Distributor will not distribute Shares in amounts less than a Creation Unit and does not maintain a secondary market in Shares. The principal business address of the Distributor is 190 Middle Street, Suite 301, Portland, Maine 04101.

Under the Distribution Agreement, the Distributor, as agent for the Trust, will receive orders for the purchase and redemption of Creation Units, provided that any subscriptions and orders will not be binding on the Trust until accepted by the Trust. The Distributor is a broker-dealer registered under the Exchange Act and a member of the Financial Industry Regulatory Authority ("FINRA").

The Distributor also may enter into agreements with securities dealers ("Soliciting Dealers") who will solicit purchases of Creation Units of Shares. Such Soliciting Dealers also may be Authorized Participants (as discussed in "<u>Procedures for Purchase of Creation Units</u>" below) or DTC participants (as defined below).

The Distribution Agreement will continue for two years from its effective date and is renewable annually thereafter. The continuance of the Distribution Agreement must be specifically approved at least annually (i) by the vote of the Trustees or by a vote of the shareholders of a Fund and (ii) by the vote of a majority of the Independent Trustees who have no direct or indirect financial interest in the operations of the Distribution Agreement or any related agreement, cast in person at a meeting called for the purpose of voting on such approval. The Distribution Agreement is terminable without penalty by the Trust on 60 days' written notice when authorized either by majority vote of its outstanding voting Shares or by a vote of a majority of the Board (including a majority of the

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Independent Trustees), or by the Distributor on 60 days' written notice, and will automatically terminate in the event of its assignment. The Distribution Agreement provides that in the absence of willful misfeasance, bad faith or gross negligence on the part of the Distributor, or reckless disregard by it of its obligations thereunder, the Distributor shall not be liable for any action or failure to act in accordance with its duties thereunder.

***Intermediary Compensation.*** The Adviser, the Sub-Adviser, or their affiliates, out of their own resources and not out of Fund assets (*i.e.*, without additional cost to a Fund or its shareholders), may pay certain broker dealers, banks and other financial intermediaries ("Intermediaries") for certain activities related to a Fund, including participation in activities that are designed to make Intermediaries more knowledgeable about exchange-traded products, including the Fund, or for other activities, such as marketing and educational training or support. These arrangements are not financed by a Fund and, thus, do not result in increased Fund expenses. They are not reflected in the fees and expenses listed in the fees and expenses sections of a Fund's Prospectus and they do not change the price paid by investors for the purchase of Shares or the amount received by a shareholder as proceeds from the redemption of Shares.

Such compensation may be paid to Intermediaries that provide services to a Fund, including marketing and education support (such as through conferences, webinars and printed communications). The Adviser and the Sub-Adviser will periodically assess the advisability of continuing to make these payments. Payments to an Intermediary may be significant to the Intermediary, and amounts that Intermediaries pay to your adviser, broker or other investment professional, if any, also may be significant to such adviser, broker or investment professional. Because an Intermediary may make decisions about what investment options it will make available or recommend, and what services to provide in connection with various products, based on payments it receives or is eligible to receive, such payments create conflicts of interest between the Intermediary and its clients. For example, these financial incentives may cause the Intermediary to recommend a Fund rather than other investments. The same conflict of interest exists with respect to your financial adviser, broker or investment professional if he or she receives similar payments from his or her Intermediary firm.

Intermediary information is current only as of the date of this SAI. Please contact your adviser, broker, or other investment professional for more information regarding any payments his or her Intermediary firm may receive. Any payments made by the Adviser, the Sub-Adviser, or their affiliates to an Intermediary may create the incentive for an Intermediary to encourage customers to buy Shares.

If you have any additional questions, please call 1-800-617-0004.

***Distribution and Service Plan.*** The Board has adopted a Distribution and Service Plan (the "Plan") in accordance with the provisions of Rule 12b-1 under the 1940 Act, which regulates circumstances under which an investment company may directly or indirectly bear expenses relating to the distribution of its shares. No payments pursuant to the Plan are expected to be made during the twelve (12) month period from the date of this SAI. Rule 12b-1 fees to be paid by a Fund under the Plan may only be imposed after approval by the Board.

Continuance of the Plan must be approved annually by a majority of the Trustees of the Trust and by a majority of the Trustees who are not interested persons (as defined in the 1940 Act) of the Trust and have no direct or indirect financial interest in the Plan or in any agreements related to the Plan ("Qualified Trustees"). The Plan requires that quarterly written reports of amounts spent under the Plan and the purposes of such expenditures be furnished to and reviewed by the Trustees. The Plan may not be amended to increase materially the amount that may be spent thereunder without approval by a majority of the outstanding shares of a Fund. All material amendments of the Plan will require approval by a majority of the Trustees of the Trust and of the Qualified Trustees.

The Plan provides that each Fund pays the Distributor an annual fee of up to a maximum of 0.25% of the average daily net assets of its Shares. Under the Plan, the Distributor may make payments pursuant to written agreements to financial institutions and intermediaries such as banks, savings and loan associations and insurance companies including, without limit, investment counselors, broker-dealers and the Distributor's affiliates and subsidiaries (collectively, "Agents") as compensation for services and reimbursement of expenses incurred in connection with distribution assistance. The Plan is characterized as a compensation plan since the distribution fee will be paid to the Distributor without regard to the distribution expenses incurred by the Distributor or the amount of payments made to other financial institutions and intermediaries. The Trust intends to operate the Plan in accordance with its terms and with FINRA's rules concerning sales charges.

Under the Plan, subject to the limitations of applicable law and regulations, each Fund is authorized to compensate the Distributor up to the maximum amount to finance any activity primarily intended to result in the sale of Creation Units of the Fund or for providing or arranging for others to provide shareholder services and for the maintenance of shareholder accounts. Such activities may include, but are not limited to: (i) delivering copies of a Fund's then current reports, prospectuses, notices, and similar materials, to prospective purchasers of Creation Units; (ii) marketing and promotional services, including advertising; (iii) paying the costs of and compensating others, including Authorized Participants with whom the Distributor has entered into written Authorized Participant Agreements, for performing shareholder servicing on behalf of a Fund; (iv) compensating certain Authorized Participants for providing assistance in distributing the Creation Units of a Fund, including the travel and communication expenses and salaries and/or commissions of sales personnel in connection with the distribution of the Creation Units of a Fund; (v) payments to financial institutions and intermediaries such as banks, savings and loan associations, insurance companies and investment counselors, broker-dealers, mutual fund supermarkets and the affiliates and subsidiaries of the Trust's service providers as compensation for services or reimbursement of expenses incurred in connection with distribution assistance; (vi) facilitating communications with beneficial

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owners of Shares, including the cost of providing (or paying others to provide) services to beneficial owners of Shares, including, but not limited to, assistance in answering inquiries related to Shareholder accounts; and (vii) such other services and obligations as are set forth in the Distribution Agreement.

**TRANSFER AGENT, INDEX RECEIPT AGENT, AND ADMINISTRATOR**

U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services ("Fund Services" or the "Transfer Agent"), located at 615 East Michigan Street, Milwaukee, Wisconsin 53202, serves as the Funds' transfer agent, index receipt agent (as applicable), and administrator.

Pursuant to an agreement between the Trust and Fund Services (the "Fund Servicing Agreement"), Fund Services provides the Trust with administrative and management services (other than investment advisory services) and accounting services, including portfolio accounting services, tax accounting services, and furnishing financial reports. Under the Fund Servicing Agreement, Fund Services does not have any responsibility or authority for the management of the Funds, the determination of investment policy, or for any matter pertaining to the distribution of Shares. As compensation for the administration, accounting and management services, the Adviser pays Fund Services a fee based on each Fund's average daily net assets, subject to a minimum annual fee. Fund Services also is entitled to certain out-of-pocket expenses for the services mentioned above, including pricing expenses.

The Adviser was responsible for paying the amounts in the table below to Fund Services for the fiscal years ended December 31, as applicable to each Fund.

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| | | | |
|:---|:---|:---|:---|
| **Fund** | **2025** | **2024** | **2023** |
| Roundhill Video Games ETF | $66354 | $65260 | $53714 |
| Roundhill Sports Betting & iGaming ETF | $83217 | $81508 | $55937 |
| Roundhill Ball Metaverse ETF | $134579 | $91178 | $67359 |
| Roundhill Cannabis ETF  | $69231 | $79843 | $50756 |
| Roundhill Magnificent Seven ETF  | $727915 | $152714 | $34125<sup>(1)</sup> |

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<sup>(1)</sup> For the fiscal period April 10, 2023 (commencement of operations) through December 31, 2023.

**CUSTODIAN**

Pursuant to a custody agreement between the Trust and U.S. Bank National Association ("U.S. Bank" or the "Custodian") (the "Custody Agreement"), U.S. Bank, located at 1555 North Rivercenter Drive, Suite 302, Milwaukee, Wisconsin 53212, serves as the custodian of the Funds' assets. The Custodian holds and administers the assets in each Fund's portfolio. Pursuant to the Custody Agreement, U.S. Bank receives an annual fee from the Adviser based on the Trust's total average daily net assets, subject to a minimum annual fee, and certain settlement charges. The Custodian is also entitled to certain out-of-pocket expenses.

**SECURITIES LENDING ACTIVITIES** 

U.S. Bank (the "Securities Lending Agent") serves as securities lending agent to the Funds. The Securities Lending Agent is responsible for the implementation and administration of the applicable Fund's securities lending program pursuant to an agreement between the Trust, on behalf of the applicable Fund, and the Securities Lending Agent (each, a "Securities Lending Agreement"). The Securities Lending Agent acts as agent to the applicable Fund to lend available securities with any person on its list of approved borrowers and (i) determines whether a loan shall be made and negotiates and establishes the terms and conditions of the loan with the borrower; (ii) ensures that all substitute interest, dividends, and other distributions paid with respect to loan securities is credited to the applicable Fund's relevant account on the date such amounts are delivered by the borrower to the Securities Lending Agent; (iii) receives and holds, on the applicable Fund's behalf, collateral from borrowers to secure obligations of borrowers with respect to any loan of available securities; (iv) marks loaned securities and collateral to their market value each business day based upon the market value of the loaned securities and collateral at the close of business employing the most recently available pricing information and receives and delivers collateral to maintain the value of the collateral at no less than 100% of the market value of the loaned securities; (v) at the termination of a loan, returns the collateral to the borrower upon the return of the loaned securities to the Securities Lending Agent; (vi) invests cash collateral in accordance with the applicable Securities Lending Agreement; and (viii) maintains such records as are reasonably necessary to account for loans that are made and the income derived therefrom and makes available to the applicable Fund a monthly statement describing the loans outstanding, including an accounting of all securities lending transactions.

The dollar amounts of gross and net income from securities lending activities received and the related fees and/or compensation paid by each applicable Fund during the most recent fiscal year are set forth in the following table.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Roundhill Video Games ETF**  | **Roundhill Sports Betting & iGaming ETF** | **Roundhill Ball Metaverse ETF** | **Roundhill Cannabis ETF** | **Roundhill Magnificent Seven ETF** |
| **Gross Income from securities lending activities** (including income from cash collateral reinvestment)  | $60446 | $387283 | $799867 | N/A | $1901613 |
| *Fees and/or compensation for securities lending activities and related services* |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Fees paid to securities lending agent from a revenue split | ($512) | ($4442) | ($15774) | N/A | ($10821) |
| &nbsp;&nbsp;&nbsp;Fees paid for any cash collateral management services (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in the revenue split | ($407) | ($2654) | ($5340) | N/A | ($13343) |
| &nbsp;&nbsp;&nbsp;Administrative fees not included in revenue split |  |  |  | N/A |  |
| &nbsp;&nbsp;&nbsp;Indemnification fee not included in revenue split |  |  |  | N/A |  |
| &nbsp;&nbsp;&nbsp;Rebate (paid to borrower) | ($57478) | ($362416) | ($715655) | N/A | ($1834164) |
| &nbsp;&nbsp;&nbsp;Other fees not included in revenue split |  |  |  | N/A |  |
| **Aggregate fees/compensation for securities lending activities** | ($58397) | ($369512) | ($736769) | N/A | ($1858328) |
| **Net Income from securities lending activities** | $2048 | $17771 | $63098 | N/A | $43284 |

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**LEGAL COUNSEL**

Morgan, Lewis & Bockius LLP, located at 1111 Pennsylvania Avenue, NW, Washington, DC 20004-2541, serves as legal counsel for the Trust.

**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Cohen & Company, Ltd., located at 1835 Market Street, Suite 310, Philadelphia, Pennsylvania 19103, serves as the independent registered public accounting firm for the Funds. Its services include auditing the Funds' financial statements. Cohen & Co Advisory, LLC, an affiliate of Cohen & Company, Ltd., provides tax services as requested.

**PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES**

The Board has adopted a policy regarding the disclosure of information about each Fund's security holdings. Each Fund's entire portfolio holdings are publicly disseminated each day a Fund is open for business and may be available through financial reporting and news services, including publicly available internet web sites. In addition, the composition of the Deposit Securities (defined below) is publicly disseminated daily prior to the opening of the Exchange via the facilities of the National Securities Clearing Corporation ("NSCC").

**DESCRIPTION OF SHARES**

The Declaration of Trust authorizes the issuance of an unlimited number of funds and shares. Each share represents an equal proportionate interest in the applicable Fund with each other share. Shares are entitled upon liquidation to a pro rata share in the net assets of the applicable Fund. Shareholders have no preemptive rights. The Declaration of Trust provides that the Trustees may create additional series or classes of shares. All consideration received by the Trust for shares of any additional funds and all assets in which such consideration is invested would belong to that fund and would be subject to the liabilities related thereto. Share certificates representing Shares will not be issued. Shares, when issued, are fully paid and non-assessable.

Each Share has one vote with respect to matters upon which a shareholder vote is required, consistent with the requirements of the 1940 Act and the rules promulgated thereunder. Shares of all funds in the Trust vote together as a single class, except that if the matter being voted on affects only a particular fund it will be voted on only by that fund and if a matter affects a particular fund differently from other funds, that fund will vote separately on such matter. As a Delaware statutory trust, the Trust is not required, and does not intend, to hold annual meetings of shareholders. Approval of shareholders will be sought, however, for certain changes in the operation of the Trust and for the election of Trustees under certain circumstances. Upon the written request of shareholders owning at least 10% of the Trust's shares, the Trust will call for a meeting of shareholders to consider the removal of one or more Trustees and other certain matters. In the event that such a meeting is requested, the Trust will provide appropriate assistance and information to the shareholders requesting the meeting.

Under the Declaration of Trust, the Trustees have the power to liquidate a Fund without shareholder approval. While the Trustees have no present intention of exercising this power, they may do so if a Fund fails to reach a viable size within a reasonable amount of time or for such other reasons as may be determined by the Board.

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**LIMITATION OF TRUSTEES' LIABILITY**

The Declaration of Trust provides that a Trustee shall be liable only for his or her own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee and shall not be liable for errors of judgment or mistakes of fact or law. The Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, adviser or principal underwriter of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee. The Declaration of Trust also provides that the Trust shall indemnify each person who is, or has been, a Trustee, officer, employee or agent of the Trust, any person who is serving or has served at the Trust's request as a Trustee, officer, trustee, employee or agent of another organization in which the Trust has any interest as a shareholder, creditor or otherwise to the extent and in the manner provided in the Amended and Restated By-laws. However, nothing in the Declaration of Trust shall protect or indemnify a Trustee against any liability for his or her willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee. Nothing contained in this section attempts to disclaim a Trustee's individual liability in any manner inconsistent with the federal securities laws.

**BROKERAGE TRANSACTIONS**

The policy of the Trust regarding purchases and sales of securities for a Fund is that primary consideration will be given to obtaining the most favorable prices and efficient executions of transactions. Consistent with this policy, when securities transactions are effected on a stock exchange, the Trust's policy is to pay commissions which are considered fair and reasonable without necessarily determining that the lowest possible commissions are paid in all circumstances. The Trust believes that a requirement always to seek the lowest possible commission cost could impede effective portfolio management and preclude the Funds from obtaining a high quality of brokerage and research services. In seeking to determine the reasonableness of brokerage commissions paid in any transaction, the Sub-Adviser will rely on its experience and knowledge regarding commissions generally charged by various brokers and on its judgment in evaluating the brokerage services received from the broker effecting the transaction. Such determinations are necessarily subjective and imprecise, as in most cases, an exact dollar value for those services is not ascertainable. The Trust has adopted policies and procedures that prohibit the consideration of sales of Shares as a factor in the selection of a broker or dealer to execute its portfolio transactions.

The Sub-Adviser owes a fiduciary duty to its clients to seek to provide best execution on trades effected. In selecting a broker-dealer for each specific transaction, the Sub-Adviser chooses the broker-dealer deemed most capable of providing the services necessary to obtain the most favorable execution. "Best execution" is generally understood to mean the most favorable cost or net proceeds reasonably obtainable under the circumstances. The full range of brokerage services applicable to a particular transaction may be considered when making this judgment, which may include, but is not limited to: liquidity, price, commission, timing, aggregated trades, capable floor brokers or traders, competent block trading coverage, ability to position, capital strength and stability, reliable and accurate communications and settlement processing, use of automation, knowledge of other buyers or sellers, arbitrage skills, administrative ability, underwriting and provision of information on a particular security or market in which the transaction is to occur. The specific criteria will vary depending upon the nature of the transaction, the market in which it is executed, and the extent to which it is possible to select from among multiple broker-dealers. The Sub-Adviser also will use electronic crossing networks ("ECNs") when appropriate.

Subject to the foregoing policies, brokers or dealers selected to execute a Fund's portfolio transactions may include such Fund's Authorized Participants (as discussed in "<u>Procedures for Purchase of Creation Units</u>" below) or their affiliates. An Authorized Participant or its affiliates may be selected to execute a Fund's portfolio transactions in conjunction with an all-cash creation unit order or an order including "cash-in-lieu" (as described below under "<u>Purchase and Redemption of Creation Units</u>"), so long as such selection is in keeping with the foregoing policies. As described below under "<u>Purchase and Redemption of Creation Units</u> — <u>Creation Unit Transaction Fee</u>" and "— <u>Redemption Transaction Fee</u>", each Fund may determine to not charge a variable fee on certain orders when the Adviser has determined that doing so is in the best interests of Fund shareholders, *e.g.*, for creation orders that facilitate the rebalance of the applicable Fund's portfolio in a more tax efficient manner than could be achieved without such order, even if the decision to not charge a variable fee could be viewed as benefiting the Authorized Participant or its affiliate selected to execute a Fund's portfolio transactions in connection with such orders.

The Sub-Adviser may use a Fund's assets for, or participate in, third-party soft dollar arrangements, in addition to receiving proprietary research from various full-service brokers, the cost of which is bundled with the cost of the broker's execution services. The Sub-Adviser does not "pay up" for the value of any such proprietary research. Section 28(e) of the Exchange Act permits the Sub-Adviser, under certain circumstances, to cause a Fund to pay a broker or dealer a commission for effecting a transaction in excess of the amount of commission another broker or dealer would have charged for effecting the transaction in recognition of the value of brokerage and research services provided by the broker or dealer. The Sub-Adviser may receive a variety of research services and information on many topics, which it can use in connection with its management responsibilities with respect to the various accounts over which it exercises investment discretion or otherwise provides investment advice. The research services may include qualifying order management systems, portfolio attribution and monitoring services and computer software and access charges which are directly related to investment research. Accordingly, a Fund may pay a broker commission higher than the lowest available in recognition of the broker's provision of such services to the Sub-Adviser, but only if the Sub-Adviser determines the total commission (including the soft dollar benefit) is comparable to the best commission rate that could be expected to be received from other brokers. The amount of

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soft dollar benefits received depends on the amount of brokerage transactions effected with the brokers. A conflict of interest exists because there is an incentive to: 1) cause clients to pay a higher commission than the firm might otherwise be able to negotiate; 2) cause clients to engage in more securities transactions than would otherwise be optimal; and 3) only recommend brokers that provide soft dollar benefits.

The Sub-Adviser faces a potential conflict of interest when it uses client trades to obtain brokerage or research services. This conflict exists because the Sub-Adviser can use the brokerage or research services to manage client accounts without paying cash for such services, which reduces the Sub-Adviser's expenses to the extent that the Sub-Adviser would have purchased such products had they not been provided by brokers. Section 28(e) permits the Sub-Adviser to use brokerage or research services for the benefit of any account it manages. Certain accounts managed by the Sub-Adviser may generate soft dollars used to purchase brokerage or research services that ultimately benefit other accounts managed by the Sub-Adviser, effectively cross subsidizing the other accounts managed by the Sub-Adviser that benefit directly from the product. The Sub-Adviser may not necessarily use all of the brokerage or research services in connection with managing a Fund whose trades generated the soft dollars used to purchase such products.

The Sub-Adviser is responsible, subject to oversight by the Adviser and the Board, for placing orders on behalf of each Fund for the purchase or sale of portfolio securities. If purchases or sales of portfolio securities of a Fund and one or more other investment companies or clients supervised by the Sub-Adviser are considered at or about the same time, transactions in such securities are allocated among the several investment companies and clients in a manner deemed equitable and consistent with its fiduciary obligations to all by the Sub-Adviser. In some cases, this procedure could have a detrimental effect on the price or volume of the security so far as a 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 a Fund. The primary consideration is prompt execution of orders at the most favorable net price.

A Fund may deal with affiliates in principal transactions to the extent permitted by exemptive order or applicable rule or regulation.

The table below shows the aggregate brokerage commissions paid by the Funds for the fiscal years ended December 31, as applicable to each Fund.

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| | | | |
|:---|:---|:---|:---|
| **Fund** | **2025** | **2024** | **2023** |
| Roundhill Video Games ETF | $16696 | $6809 | $6140 |
| Roundhill Sports Betting & iGaming ETF | $20072 | $16593 | $100768 |
| Roundhill Ball Metaverse ETF | $181267 | $155478 | $141412 |
| Roundhill Cannabis ETF  | $41467 | $24759 | $7098 |
| Roundhill Magnificent Seven ETF  | $318554 | $155177 | $2169<sup>(1)</sup> |

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<sup>(1)</sup> For the fiscal period April 10, 2023 (commencement of operations) through December 31, 2023.

**Directed Brokerage.** For the fiscal year ended December 31, 2025, the Funds did not pay any commissions on brokerage transactions directed to brokers pursuant to an agreement or understanding whereby the broker provides research or other brokerage services to the Sub-Adviser.

**Brokerage with Fund Affiliates.** A Fund may execute brokerage or other agency transactions through registered broker-dealer affiliates of the Funds, the Adviser, the Sub-Adviser, or the Distributor for a commission in conformity with the 1940 Act, the Exchange Act and rules promulgated by the SEC. These rules require that commissions paid to the affiliate by the Funds for exchange transactions not exceed "usual and customary" brokerage commissions. The rules define "usual and customary" commissions to include amounts which are "reasonable and fair compared to the commission, fee or other remuneration received or to be received by other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time." The Trustees, including those who are not "interested persons" of the Funds, have adopted procedures for evaluating the reasonableness of commissions paid to affiliates and review these procedures periodically. During the fiscal years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Funds did not pay brokerage commissions to any registered broker-dealer affiliates of the Funds, the Adviser, the Sub-Adviser, or the Distributor.

**Securities of "Regular Broker-Dealers."** Each Fund is required to identify any securities of its "regular brokers or dealers" (as such term is defined in the 1940 Act) that it may hold at the close of its most recent fiscal year. "Regular brokers or dealers" of a Fund are the ten brokers or dealers that, during the most recent fiscal year: (i) received the greatest dollar amounts of brokerage commissions from the Fund's portfolio transactions; (ii) engaged as principal in the largest dollar amounts of portfolio transactions of the Fund; or (iii) sold the largest dollar amounts of Shares. As of December 31, 2025, the Funds did not hold any securities of their "regular broker-dealers."

**PORTFOLIO TURNOVER RATE**

Portfolio turnover may vary from year to year, as well as within a year. High turnover rates are likely to result in comparatively greater brokerage expenses. The overall reasonableness of brokerage commissions is evaluated by the Sub-Adviser based upon its knowledge of available information as to the general level of commissions paid by other institutional investors for comparable services.

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The Funds' portfolio turnover rates for the fiscal years ended December 31, 2025 and 2024 were as follows:

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| | | |
|:---|:---|:---|
| **Fund** | **2025** | **2024** |
| Roundhill Video Games ETF | 64% | 30% |
| Roundhill Sports Betting & iGaming ETF | 26% | 20% |
| Roundhill Ball Metaverse ETF | 55% | 46% |
| Roundhill Cannabis ETF  | 23% | 0% |
| Roundhill Magnificent Seven ETF  | 27% | 40% |

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**BOOK ENTRY ONLY SYSTEM**

The Depository Trust Company ("DTC") acts as securities depositary for Shares. Shares are represented by securities registered in the name of DTC or its nominee, Cede & Co., and deposited with, or on behalf of, DTC. Except in limited circumstances set forth below, certificates will not be issued for Shares.

DTC is a limited-purpose trust company that 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 the New York Stock Exchange ("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 in this SAI 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 of Shares. The Trust recognizes DTC or its nominee as the record owner of all Shares for all purposes. Beneficial Owners of Shares are not entitled to have Shares registered in their names and will not receive or be entitled to physical delivery of Share certificates. Each Beneficial Owner must rely on the procedures of DTC and any DTC Participant and/or Indirect Participant through which such Beneficial Owner holds its interests, to exercise any rights of a holder of Shares.

Conveyance of all notices, statements, and other communications to Beneficial Owners is effected as described in the ensuing paragraphs. DTC will make available to the Trust upon request and for a fee a listing of Shares held by each DTC Participant. The Trust shall obtain from each such DTC Participant 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.

Share 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 credit immediately DTC Participants' accounts with payments in amounts proportionate to their respective beneficial interests in a 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, as is now the case with securities held for the accounts of customers in bearer form or registered in a "street name," 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 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 determine to discontinue providing its service with respect to a Fund at any time by giving reasonable notice to the Fund and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the applicable Fund shall take action either to find a replacement for DTC to perform its functions at a comparable cost or, if such replacement is unavailable, to issue and deliver printed certificates representing ownership of Shares, unless the Trust makes other arrangements with respect thereto satisfactory to an Exchange.

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**PURCHASE AND REDEMPTION OF CREATION UNITS**

Each Fund issues and redeems its shares on a continuous basis, at NAV, only in a large, specified number of shares called a "Creation Unit," either principally in-kind for securities or in cash for the value of such securities. The NAV of a Fund's Shares is determined once each Business Day, as described below under "<u>Determination of Net Asset Value</u>." The Creation Unit size may change. Authorized Participants will be notified of such change.

The Adviser, Sub-Adviser, or their affiliates (the "Selling Shareholder") may purchase Creation Unit aggregations through a broker-dealer to "seed" (in whole or in part) funds, including a Fund, as they are launched or thereafter, may purchase shares from other broker-dealers or other investors that have previously provided "seed" for funds, including a Fund, when they were launched or otherwise in secondary market transactions, and because the Selling Shareholder may be deemed an affiliate of such funds, the shares are being registered to permit the resale of these shares from time to time after purchase. No Fund will receive any of the proceeds from the resale by the Selling Shareholders of such shares.

The Selling Shareholder intends to sell all or a portion of the shares owned by it and offered hereby from time to time directly or through one or more broker-dealers, and may also hedge such positions. The shares may be sold on any national securities exchange on which the shares may be listed or quoted at the time of sale, in the OTC market or in transactions other than on these exchanges or systems at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions. The Selling Shareholder may use any one or more of the following methods when selling shares:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.ordinary brokerage transactions through brokers or dealers (who may act as agents or principals) or directly to one or more purchasers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.privately negotiated transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.any other method permitted pursuant to applicable law.

The Selling Shareholder may also loan or pledge shares to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law. The Selling Shareholder may also enter into options or other transactions with broker-dealers or other financial institutions, or create one or more derivative securities which require delivering shares to a broker-dealer or other financial institution (these shares may then be sold by such broker-dealer or other financial institution).

The Selling Shareholder has informed each Fund that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the shares. Upon a Fund being notified in writing by the Selling Shareholder that any material arrangement has been entered into with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution, or a purchase by a broker or dealer, a supplement to this SAI will be filed, if required, pursuant to Rule 497 under the Securities Act, disclosing (i) the name of each Selling Shareholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such shares were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in a Fund's Prospectus and SAI, and (vi) other facts material to the transaction.

The Selling Shareholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares by the Selling Shareholder and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares to engage in market-making activities with respect to the shares. All of the foregoing may affect the marketability of the shares and the ability of any person or entity to engage in market-making activities with respect to the shares. There is a risk that the Selling Shareholder may redeem its investments in a Fund or otherwise sell its shares to a third party that may redeem. As with redemptions by other large shareholders, such redemptions could have a significant negative impact on applicable Fund and its shares.

**Purchase (Creation).** The Trust issues and sells Shares only in Creation Units on a continuous basis through the Distributor, without a sales load (but subject to transaction fees, if applicable), at the NAV per share next determined after receipt, on any Business Day, of an order in proper form. The NAV of Shares is calculated each Business Day as of the scheduled close of regular trading on the NYSE, generally 4:00 p.m., Eastern Time. The Funds will not issue fractional Creation Units. 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, President's Day (Washington's Birthday), Good Friday, Memorial Day, Juneteenth Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

**Fund Deposit.** Each Fund has adopted policies and procedures governing the process of constructing baskets of Deposit Securities (defined below), Fund Securities (defined below) and/or cash, and acceptance of the same (the "Basket Procedures"). The consideration for purchase of a Creation Unit of a Fund generally consists of either: (i) the in-kind deposit of a designated portfolio of

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securities (the "Deposit Securities") per each Creation Unit, constituting a substantial replication, or a portfolio sampling representation, of the securities included in a Fund's portfolio and the Cash Component (defined below), computed as described below, or (ii) the cash value of the Deposit Securities ("Deposit Cash") and the Cash Component to replace any Deposit Security. When accepting purchases of Creation Units for cash, a Fund may incur additional costs associated with the acquisition of Deposit Securities that would otherwise be provided by an in-kind purchaser. These additional costs may be recoverable from the purchaser of Creation Units.

Together, the Deposit Securities or Deposit Cash, as applicable, and the Cash Component constitute the "Fund Deposit," which represents the minimum initial and subsequent investment amount for a Creation Unit of a Fund. The "Cash Component" is an amount equal to the difference between the NAV of Shares (per Creation Unit) and the market value of the Deposit Securities or Deposit Cash, as applicable. If the Cash Component is a positive number (*i.e.*, the NAV per Creation Unit exceeds the value of the Deposit Securities or Deposit Cash, as applicable), the Cash Component shall be such positive amount. If the Cash Component is a negative number (*i.e.*, the NAV per Creation Unit is less than the value of the Deposit Securities or Deposit Cash, as applicable), the Cash Component shall be such negative amount and the creator will be entitled to receive cash in an amount equal to the Cash Component. The Cash Component serves the function of compensating for any differences between the NAV per Creation Unit and the market value of the Deposit Securities or Deposit Cash, as applicable. Computation of the Cash Component excludes any stamp duty or other similar fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities, if applicable, which shall be the sole responsibility of the Authorized Participant (as defined below).

The Funds, through NSCC, makes available on each Business Day, prior to the opening of business on the Exchanges (currently, 9:30 a.m., Eastern Time), the list of the names and the required number of Shares of each Deposit Security or the required amount of Deposit Cash, as applicable, to be included in the current Fund Deposit (based on information at the end of the previous Business Day) for a Fund. Such Fund Deposit is subject to any applicable adjustments as described below, to effect purchases of Creation Units of a Fund until such time as the next-announced composition of the Deposit Securities or the required amount of Deposit Cash, as applicable, is made available.

The identity and number of Shares of the Deposit Securities or the amount of Deposit Cash, as applicable, required for a Fund Deposit for a Fund may be changed from time to time by the Adviser, in accordance with the Basket Procedures, with a view to the investment objective of such Fund. Information regarding the Fund Deposit necessary for the purchase of a Creation Unit is made available to Authorized Participants and other market participants seeking to transact in Creation Unit aggregations. The composition of the Deposit Securities also may change in response to portfolio adjustments, interest payments and corporate action events.

The Trust reserves the right to permit or require the substitution of Deposit Cash to replace any Deposit Security, which shall be added to the Cash Component, including, without limitation, in situations where the Deposit Security: (i) may not be available in sufficient quantity for delivery; (ii) may not be eligible for transfer through the systems of DTC for corporate securities and municipal securities; (iii) may not be eligible for trading by an Authorized Participant or the investor for which it is acting; (iv) would be restricted under the securities laws or where the delivery of the Deposit Security to the Authorized Participant would result in the disposition of the Deposit Security by the Authorized Participant becoming restricted under the securities laws; or (v) in certain other situations (collectively, "custom orders"). The Trust also reserves the right to permit or require the substitution of Deposit Securities in lieu of Deposit Cash.

**Cash Purchase.** The Trust may at its discretion permit full or partial cash purchases of Creation Units of a Fund. When full or partial cash purchases of Creation Units are available or specified for a Fund, they will be effected in essentially the same manner as in-kind purchases thereof. In the case of a full or partial cash purchase, the Authorized Participant must pay the cash equivalent of the Deposit Securities it would otherwise be required to provide through an in-kind purchase, plus the same Cash Component required to be paid by an in-kind purchaser together with a creation transaction fee and non-standard charges, as may be applicable.

**Procedures for Purchase of Creation Units.** To be eligible to place orders with the Distributor to purchase a Creation Unit of a Fund, an entity must be (i) a "Participating Party" (*i.e.*, a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the NSCC (the "Clearing Process")), a clearing agency that is registered with the SEC; or (ii) a DTC Participant (see "<u>Book Entry Only System</u>"). In addition, each Participating Party or DTC Participant (each, an "Authorized Participant") must execute a Participant Agreement that has been agreed to by the Distributor, and that has been accepted by the Transfer Agent, with respect to purchases and redemptions of Creation Units. Each Authorized Participant will agree, pursuant to the terms of a Participant Agreement, on behalf of itself or any investor on whose behalf it will act, to certain conditions, including that it will pay to the Trust, an amount of cash sufficient to pay the Cash Component together with the creation transaction fee (described below), if applicable, and any other applicable fees and taxes.

All orders to purchase Shares directly from a Fund, including custom orders, must be placed for one or more Creation Units and in the manner and by the time set forth in the Participant Agreement. The order cut-off time for the Funds for orders to purchase Creation Units on the same Business Day is 2:00 p.m. Eastern Time. In addition, orders to purchase Creation Units on the next Business Day may be submitted as a "Future Dated Trade" between 4:00 p.m. Eastern Time and 5:00 p.m. Eastern Time on the prior Business Day. Such times may be modified by the Funds from time-to-time by amendment to the Participant Agreement. The date on which an order

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to purchase Creation Units (or an order to redeem Creation Units, as set forth below) is received and accepted is referred to as the "Order Placement Date."

An Authorized Participant may require an investor to make certain representations or enter into agreements with respect to the order (*e.g.*, to provide for payments of cash, when required). Investors should be aware that their particular broker may not have executed a Participant Agreement and that, therefore, orders to purchase Shares directly from a Fund in Creation Units have to be placed by the investor's broker through an Authorized Participant that has executed a Participant Agreement. In such cases there may be additional charges to such investor. At any given time, there may be only a limited number of broker-dealers that have executed a Participant Agreement and only a small number of such Authorized Participants may have international capabilities.

On days when an Exchange closes earlier than normal, the Funds may require orders to create Creation Units to be placed earlier in the day. In addition, if a market or markets on which a Fund's investments are primarily traded is closed, such Fund also will generally not accept orders on such day(s). Orders must be transmitted by an Authorized Participant by telephone or other transmission method acceptable to the Transfer Agent pursuant to procedures set forth in the Participant Agreement. On behalf of the Funds, the Transfer Agent will notify the Custodian of such order. The Custodian will then provide such information to the appropriate local sub-custodian(s). Those placing orders through an Authorized Participant should allow sufficient time to permit proper submission of the purchase order to the Transfer Agent by the cut-off time on such Business Day. Economic or market disruptions or changes, or telephone or other communication failure may impede the ability to reach the Transfer Agent or an Authorized Participant.

Fund Deposits must be delivered by an Authorized Participant through the Federal Reserve System (for cash) or through DTC (for corporate securities), through a sub-custody agent (for foreign securities) and/or through such other arrangements allowed by the Trust or its agents. With respect to foreign Deposit Securities, the Custodian shall cause the sub-custodian of the applicable Fund to maintain an account into which the Authorized Participant shall deliver, on behalf of itself or the party on whose behalf it is acting, such Deposit Securities (or Deposit Cash for all or a part of such securities, as permitted or required), with any appropriate adjustments as advised by the Trust. Foreign Deposit Securities must be delivered to an account maintained at the applicable local sub-custodian. A Fund Deposit transfer must be ordered by the Authorized Participant in a timely fashion to ensure the delivery of the requisite number of Deposit Securities or Deposit Cash, as applicable, to the account of the applicable Fund or its agents by no later than 12:00 p.m. Eastern Time (or such other time as specified by the Trust) on the Settlement Date. If a Fund or its agents do not receive all of the Deposit Securities, or the required Deposit Cash in lieu thereof, by such time, then the order may be deemed rejected and the Authorized Participant shall be liable to such Fund for losses, if any, resulting therefrom. The "Settlement Date" for a Fund is generally the next Business Day after the Order Placement Date. All questions as to the number of Deposit Securities or Deposit Cash to be delivered, as applicable, and the validity, form and eligibility (including time of receipt) for the deposit of any tendered securities or cash, as applicable, will be determined by the Trust, whose determination shall be final and binding. The amount of cash represented by the Cash Component must be transferred directly to the Custodian through the Federal Reserve Bank wire transfer system in a timely manner to be received by the Custodian no later than the Settlement Date. If the Cash Component and the Deposit Securities or Deposit Cash, as applicable, are not received by the Custodian in a timely manner by the Settlement Date, the creation order may be cancelled. Upon written notice to the Transfer Agent, such canceled order may be resubmitted the following Business Day using a Fund Deposit as newly constituted to reflect the then current NAV of the applicable Fund.

The order shall be deemed to be received on the Business Day on which the order is placed provided that the order is placed in proper form prior to the applicable cut-off time and the federal funds in the appropriate amount are deposited with the Custodian on the Settlement Date. If the order is not placed in proper form as required, or federal funds in the appropriate amount are not received on the Settlement Date, then the order may be deemed to be rejected and the Authorized Participant shall be liable to the applicable Fund for losses, if any, resulting therefrom. A creation request is in "proper form" if all procedures set forth in the Participant Agreement and this SAI are properly followed.

**Issuance of a Creation Unit.** Except as provided in this SAI, Creation Units will not be issued until the transfer of good title to the Trust of the Deposit Securities or payment of Deposit Cash, as applicable, and the payment of the Cash Component have been completed. When the subcustodian has confirmed to the Custodian that the required Deposit Securities (or the cash value thereof) have been delivered to the account of the relevant subcustodian or subcustodians, the Distributor and the Adviser shall be notified of such delivery, and the Trust will issue and cause the delivery of the Creation Units. The delivery of Creation Units so created generally will occur no later than the first Business Day following the day on which the purchase order is deemed received by the Transfer Agent. However, a Fund reserves the right to settle Creation Unit transactions on a basis other than the first Business Day following the day on which the purchase order is deemed received by the Transfer Agent 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 Authorized Participant shall be liable to the applicable Fund for losses, if any, resulting from unsettled orders.

In instances where the Trust accepts Deposit Securities for the purchase of a Creation Unit, the Creation Units may be purchased in advance of receipt by the Trust of all or a portion of the applicable Deposit Securities as described below. In these circumstances, the initial deposit will have a value greater than the NAV of Shares on the date the order is placed in proper form since, in addition to available Deposit Securities, cash must be deposited in an amount equal to the sum of (i) the Cash Component, plus (ii) an additional

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amount of cash equal to a percentage of the value as set forth in the Participant Agreement, of the undelivered Deposit Securities (the "Additional Cash Deposit"), which shall be maintained in a separate non-interest bearing collateral account. The Authorized Participant must deposit with the Custodian the Additional Cash Deposit, as applicable, by 12:00 p.m. Eastern Time (or such other time as specified by the Trust) on the Settlement Date. If a Fund or its agents do not receive the Additional Cash Deposit in the appropriate amount, by such time, then the order may be deemed rejected and the Authorized Participant shall be liable to the applicable Fund for losses, if any, resulting therefrom. An additional amount of cash shall be required to be deposited with the Trust, pending delivery of the missing Deposit Securities to the extent necessary to maintain the Additional Cash Deposit with the Trust in an amount at least equal to the applicable percentage, as set forth in the Participant Agreement, of the daily market value of the missing Deposit Securities. The Participant Agreement will permit the Trust to buy the missing Deposit Securities at any time. Authorized Participants will be liable to the Trust for the costs incurred by the Trust in connection with any such purchases. These costs will be deemed to include the amount by which the actual purchase price of the Deposit Securities exceeds the value of such Deposit Securities on the day the purchase order was deemed received by the Transfer Agent plus the brokerage and related transaction costs associated with such purchases. The Trust will return any unused portion of the Additional Cash Deposit once all of the missing Deposit Securities have been properly received by the Custodian or purchased by the Trust and deposited into the Trust. In addition, a transaction fee, as described below under "Creation Unit Transaction Fee," may be charged an additional variable charge also may be applied, as described below. The delivery of Creation Units so created generally will occur no later than the Settlement Date.

**Acceptance of Orders of Creation Units.** Provided that such action does not result in a suspension of sales of Creation Units in contravention of Rule 6c-11 under the 1940 Act and the SEC's positions thereunder, the Trust reserves the right to reject an order for Creation Units transmitted in respect of a Fund at its discretion, including, without limitation, if (a) the order is not in proper form or the Fund Deposit delivered does not consist of the securities the Custodian specified; (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 or Deposit Cash, as applicable, delivered by the Authorized Participant are not as disseminated through the facilities of the NSCC for that date by the Custodian; (d) the acceptance of the Fund Deposit would, in the opinion of counsel, be unlawful; (e) the acceptance or receipt of the order for a Creation Unit would, in the opinion of counsel, be unlawful; or (f) in the event that circumstances outside the control of the Trust, the Custodian, the Transfer Agent, the Distributor and/or the Adviser make it for all practical purposes not feasible to process orders for Creation Units. Examples of such circumstances include acts of God or public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures; market conditions or activities causing trading halts; systems failures involving computer or other information systems affecting the Trust, the Distributor, the Custodian, the Transfer Agent, DTC, NSCC, Federal Reserve System, or any other participant in the creation process, and other extraordinary events. The Trust or its agents shall communicate to the Authorized Participant its rejection of an order. The Trust, the Transfer Agent, the Custodian and the Distributor are under no duty, however, to give notification of any defects or irregularities in the delivery of Fund Deposits nor shall either of them incur any liability for the failure to give any such notification. The Trust, the Transfer Agent, the Custodian and the Distributor shall not be liable for the rejection of any purchase order for Creation Units. Given the importance of the ongoing issuance of Creation Units to maintaining a market price that is at or close to the underlying NAV of a Fund, the Trust does not intend to suspend the acceptance of orders for Creation Units, unless it believes doing so would be in the best interests of the Fund.

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, and the Trust's determination shall be final and binding.

**Creation Unit Transaction Fee.** A fixed purchase (*i.e.*, creation) transaction fee, payable to the Funds' custodian, may be imposed for the transfer and other transaction costs associated with the purchase of Creation Units ("Creation Order Costs"). The standard fixed creation unit transaction fee for each Fund, regardless of the number of Creation Units created in the transaction, can be found in the table below. Each Fund may adjust the standard fixed creation unit transaction fee from time to time. The fixed creation unit transaction fee may be waived on certain orders if the applicable Fund's custodian has determined to waive some or all of the Creation Order Costs associated with the order or another party, such as the Adviser, has agreed to pay such fee.

In addition, a variable fee, payable to the Funds, of up to the maximum percentage listed in the table below of the value of the Creation Units subject to the transaction may be imposed for cash purchases, non-standard orders, or partial cash purchases of Creation Units. The variable charge is primarily designed to cover additional costs (*e.g.*, brokerage, taxes) involved with buying the securities with cash. Each Fund may determine to not charge a variable fee on certain orders when the Adviser has determined that doing so is in the best interests of Fund shareholders, *e.g.*, for creation orders that facilitate the rebalance of the applicable Fund's portfolio in a more tax efficient manner than could be achieved without such order.

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| | | |
|:---|:---|:---|
| **Name of Fund** | **Fixed Creation Transaction Fee** | **Maximum Variable Transaction Fee** |
| Roundhill Video Games ETF | $500 | 2% |
| Roundhill Sports Betting & iGaming ETF | $500 | 2% |
| Roundhill Ball Metaverse ETF | $500 | 2% |
| Roundhill Cannabis ETF  | $300 | 2% |
| Roundhill Magnificent Seven ETF  | $300 | 2% |

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Investors who use the services of a broker or other such intermediary may be charged a fee for such services. Investors are responsible for the fixed costs of transferring the Fund Securities from the Trust to their account or on their order.

**Risks of Purchasing Creation Units.** There are certain legal risks unique to investors purchasing Creation Units directly from a Fund. Because Shares may be issued on an ongoing basis, a "distribution" of Shares could be occurring at any time. Certain activities that a shareholder performs as a dealer could, depending on the circumstances, result in the shareholder being deemed a participant in the distribution in a manner that could render the shareholder a statutory underwriter and subject to the prospectus delivery and liability provisions of the Securities Act. For example, a shareholder could be deemed a statutory underwriter if it purchases Creation Units from a Fund, breaks them down into the constituent Shares, and sells those Shares directly to customers, or if a shareholder chooses to couple the creation of a supply of new Shares with an active selling effort involving solicitation of secondary-market demand for Shares. In such event, any commissions paid to any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Whether a person is an underwriter depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could cause you to be deemed an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary-market transactions), and thus dealing with Shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.

**Redemption.** Shares may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by a Fund through the Transfer Agent and only on a Business Day. EXCEPT UPON LIQUIDATION OF A FUND, THE TRUST WILL NOT REDEEM SHARES IN AMOUNTS LESS THAN CREATION UNITS. Investors must accumulate enough Shares in the secondary market to constitute a Creation Unit in order to have such Shares redeemed by the Trust. There can be no assurance, however, that there will be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit. Investors should expect to incur brokerage and other costs in connection with assembling a sufficient number of Shares to constitute a redeemable Creation Unit.

With respect to the Funds, the Custodian, through the NSCC, makes available prior to the opening of business on the Exchanges (currently, 9:30 a.m., Eastern Time) on each Business Day, the list of the names and Share quantities of each Fund's portfolio securities that will be applicable (subject to possible amendment or correction) to redemption requests received in proper form (as defined below) on that day ("Fund Securities"). Fund Securities received on redemption may not be identical to Deposit Securities.

Redemption proceeds for a Creation Unit are paid either in kind or in cash, or a combination thereof, as determined by the Trust in accordance with the Basket Procedures. With respect to in-kind redemptions of a Fund, redemption proceeds for a Creation Unit will consist of Fund Securities—as announced by the Custodian on the Business Day of the request for redemption received in proper form plus cash in an amount equal to the difference between the NAV of Shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Fund Securities (the "Cash Redemption Amount"), less a fixed redemption transaction fee, as applicable, and additional variable charge as set forth below. In the event that the Fund Securities have a value greater than the NAV of Shares, a compensating cash payment equal to the differential is required to be made by or through an Authorized Participant by the redeeming shareholder. Notwithstanding the foregoing, at the Trust's discretion, an Authorized Participant may receive the corresponding cash value of the securities in lieu of the in-kind securities value representing one or more Fund Securities.

**Cash Redemption.** Full or partial cash redemptions of Creation Units will be effected in essentially the same manner as in-kind redemptions thereof. In the case of full or partial cash redemptions, the Authorized Participant receives the cash equivalent of the Fund Securities it would otherwise receive through an in-kind redemption, plus the same Cash Redemption Amount to be paid to an in-kind redeemer.

**Redemption Transaction Fee.** A fixed redemption transaction fee, payable to the Funds' custodian, may be imposed for the transfer and other transaction costs associated with the redemption of Creation Units ("Redemption Order Costs"). The standard fixed redemption transaction fee for each Fund, regardless of the number of Creation Units redeemed in the transaction, can be found in the table below. Each Fund may adjust the redemption transaction fee from time to time. The fixed redemption fee may be waived on certain orders if the applicable Fund's custodian has determined to waive some or all of the Redemption Order Costs associated with the order or another party, such as the Adviser, has agreed to pay such fee.

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In addition, a variable fee, payable to the Funds, of up to the maximum percentage listed in the table below of the value of the Creation Units subject to the transaction may be imposed for cash redemptions, non-standard orders, or partial cash redemptions (when cash redemptions are available) of Creation Units. The variable charge is primarily designed to cover additional costs (*e.g.*, brokerage, taxes) involved with selling portfolio securities to satisfy a cash redemption. Each Fund may determine to not charge a variable fee on certain orders when the Adviser has determined that doing so is in the best interests of Fund shareholders, *e.g.*, for redemption orders that facilitate changes to the Funds' portfolio in a more tax efficient manner than could be achieved without such order.

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| | | |
|:---|:---|:---|
| **Name of Fund** | **Fixed Redemption Transaction Fee** | **Maximum Variable Transaction Fee** |
| Roundhill Video Games ETF | $500 | 2% |
| Roundhill Sports Betting & iGaming ETF | $500 | 2% |
| Roundhill Ball Metaverse ETF | $500 | 2% |
| Roundhill Cannabis ETF  | $300 | 2% |
| Roundhill Magnificent Seven ETF  | $300 | 2% |

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Investors who use the services of a broker or other such intermediary may be charged a fee for such services. Investors are responsible for the fixed costs of transferring the Fund Securities from the Trust to their account or on their order.

**Procedures for Redemption of Creation Units.** Orders to redeem Creation Units must be submitted in proper form to the Transfer Agent prior to 2:00 p.m. Eastern Time. In addition, orders to redeem Creation Units on the next Business Day may be submitted as a "Future Dated Trade" between 4:00 p.m. Eastern Time and 5:00 p.m. Eastern Time on the prior Business Day. A redemption request is considered to be in "proper form" if (i) an Authorized Participant has transferred or caused to be transferred to the Trust's Transfer Agent the Creation Unit(s) being redeemed through the book-entry system of DTC so as to be effective by the time as set forth in the Participant Agreement and (ii) a request in form satisfactory to the Trust is received by the Transfer Agent from the Authorized Participant on behalf of itself or another redeeming investor within the time periods specified in the Participant Agreement. If the Transfer Agent does not receive the investor's Shares through DTC's facilities by the times and pursuant to the other terms and conditions set forth in the Participant Agreement, the redemption request shall be rejected.

The Authorized Participant must transmit the request for redemption, in the form required by the Trust, to the Transfer Agent in accordance with procedures set forth in the Authorized Participant Agreement. Investors should be aware that their particular broker may not have executed an Authorized Participant Agreement, and that, therefore, requests to redeem Creation Units may have to be placed by the investor's broker through an Authorized Participant who has executed an Authorized Participant Agreement. Investors making a redemption request should be aware that such request must be in the form specified by such Authorized Participant. Investors making a request to redeem Creation Units should allow sufficient time to permit proper submission of the request by an Authorized Participant and transfer of the Shares to the Transfer Agent; such investors should allow for the additional time that may be required to effect redemptions through their banks, brokers or other financial intermediaries if such intermediaries are not Authorized Participants.

**Additional Redemption Procedures.** In connection with taking delivery of Shares of Fund Securities upon redemption of Creation Units, a redeeming shareholder or Authorized Participant acting on behalf of such shareholder must maintain appropriate custody arrangements with a qualified broker-dealer, bank, or other custody providers in each jurisdiction in which any of the Fund Securities are customarily traded, to which account such Fund Securities will be delivered. Deliveries of redemption proceeds generally will be made within one business day of the trade date.

However, due to the schedule of holidays in certain countries, the different treatment among foreign and U.S. markets of dividend record dates and dividend ex-dates (that is the last date the holder of a security can sell the security and still receive dividends payable on the security sold), and in certain other circumstances, the delivery of in-kind redemption proceeds by a Fund may take longer than one Business Day after the day on which the redemption request is received in proper form. If neither the redeeming Shareholder nor the Authorized Participant acting on behalf of such redeeming Shareholder has appropriate arrangements to take delivery of the Fund Securities in the applicable foreign jurisdiction and it is not possible to make other such arrangements, or if it is not possible to effect deliveries of the Fund Securities in such jurisdiction, the Trust may, in its discretion, exercise its option to redeem such Shares in cash, and the redeeming Shareholders will be required to receive its redemption proceeds in cash.

The Trust may, in its discretion and in accordance with the Basket Procedures, exercise its option to redeem such Shares in cash, and the redeeming investor will be required to receive its redemption proceeds in cash. In addition, an investor may request a redemption in cash that a Fund may, in its sole discretion, permit. In either case, the investor will receive a cash payment equal to the NAV of its Shares based on the NAV of Shares of the applicable Fund next determined after the redemption request is received in proper form (minus a redemption transaction fee, if applicable, and additional charge for requested cash redemptions specified above, to offset the Trust's brokerage and other transaction costs associated with the disposition of Fund Securities). A Fund may also, in its sole discretion, and in accordance with the Basket Procedures, upon request of a shareholder, provide such redeemer a portfolio of securities that differs from the exact composition of the Fund Securities but does not differ in NAV.

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Redemptions of Shares for Fund Securities will be subject to compliance with applicable federal and state securities laws and the Funds (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Units for cash to the extent that the Trust could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities under such laws. An Authorized Participant or an investor for which it is acting subject to a legal restriction with respect to a particular security included in the Fund Securities applicable to the redemption of Creation Units may be paid an equivalent amount of cash. The Authorized Participant may request the redeeming investor of the Shares or to enter into agreements with respect to such matters as compensating cash payment. Further, an Authorized Participant that is not a "qualified institutional buyer," ("QIB") as such term is defined under Rule 144A of the Securities Act, will not be able to receive Fund Securities that are restricted securities eligible for resale under Rule 144A. An Authorized Participant may be required by the Trust to provide a written confirmation with respect to QIB status to receive Fund Securities.

Because the portfolio securities of the Funds may trade on other exchanges on days that the Exchanges are closed or are otherwise not Business Days for such Fund, shareholders may not be able to redeem their Shares, or to purchase or sell Shares on an Exchange, on days when the NAV of the applicable Fund could be significantly affecting by events in the relevant foreign markets.

The right of redemption may be suspended or the date of payment postponed with respect to a Fund (1) for any period during which an Exchange is closed (other than customary weekend and holiday closings); (2) for any period during which trading on an Exchange is suspended or restricted; (3) for any period during which an emergency exists as a result of which disposal of the Shares of the applicable Fund or determination of the NAV of the Shares is not reasonably practicable; or (4) in such other circumstance as is permitted by the SEC.

**DETERMINATION OF NET ASSET VALUE**

NAV per Share for a Fund is computed by dividing the value of the net assets of the applicable Fund (*i.e.*, the value of its total assets less total liabilities) by the total number of Shares outstanding, rounded to the nearest cent. Expenses and fees, including the management fees, are accrued daily and taken into account for purposes of determining NAV. The NAV of each Fund is calculated by Fund Services and determined at the scheduled close of the regular trading session on the NYSE (ordinarily 4:00 p.m., Eastern Time) on each day that the NYSE is open, provided that fixed-income assets may be valued as of the announced closing time for trading in fixed-income instruments on any day that the Securities Industry and Financial Markets Association ("SIFMA") announces an early closing time.

In calculating each Fund's NAV per Share, the Fund's investments are generally valued using market quotations to the extent such market quotations are readily available. If market quotations are not readily available, or are deemed to be unreliable by the Adviser, a Fund will value such investments at fair value, as determined by the Adviser, for purposes of calculating such Fund's NAV. Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Adviser to perform the fair value determinations for each Fund's portfolio holdings subject to the Board's oversight. The Adviser has established procedures for its fair valuation of each Fund's portfolio investments. These procedures address, among other things, determining when market quotations are not readily available or reliable and the methodologies to be used for determining the fair value of investments, as well as the use and oversight of third-party pricing services for fair valuation. The Adviser's fair value determinations will be carried out in compliance with Rule 2a-5 and based on fair value methodologies established and applied by the Adviser and periodically tested to ensure such methodologies are appropriate and accurate with respect to a Fund's portfolio investments. The Adviser's fair value methodologies may involve obtaining inputs and prices from third-party pricing services.

When fair value pricing is employed, the prices of securities used by the Funds to calculate their NAV may differ from quoted or published prices for the same securities. Due to the subjective and variable nature of fair value pricing, it is possible that the fair value determined for a particular security may be materially different (higher or lower) from the price of the security quoted or published by others, or the value when trading resumes or is realized upon its sale. There may be multiple methods that can be used to value a portfolio investment when market quotations are not readily available. The value established for any portfolio investment at a point in time might differ from what would be produced using a different methodology or if it had been priced using market quotations.

**DIVIDENDS AND DISTRIBUTIONS**

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

<u>General Policies</u>. Dividends from net investment income, if any, are declared and paid at least annually by each Fund. Distributions of net realized securities gains, if any, generally are declared and paid once a year, but a Fund may make distributions on a more frequent basis to improve index tracking for the Fund, where applicable, or to comply with the distribution requirements of the Code, in all events in a manner consistent with the provisions of the 1940 Act.

Dividends and other distributions on Shares are distributed, as described below, on a pro rata basis to Beneficial Owners of such Shares. Dividend payments are made through DTC Participants and Indirect Participants to Beneficial Owners then of record with proceeds received from the Trust.

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Each Fund makes additional distributions to the extent necessary (i) to distribute the entire annual taxable income of the applicable Fund, plus any net capital gains and (ii) to avoid imposition of the excise tax imposed by Section 4982 of the Code. Management of the Trust reserves the right to declare special dividends if, in its reasonable discretion, such action is necessary or advisable to preserve a Fund's eligibility for treatment as a RIC or to avoid imposition of income or excise taxes on undistributed income.

<u>Dividend Reinvestment Service</u>. The Trust will not make the DTC book-entry dividend reinvestment service available for use by Beneficial Owners for reinvestment of their cash proceeds, but certain individual broker-dealers may make available the DTC book-entry Dividend Reinvestment Service for use by Beneficial Owners of the Funds through DTC Participants for reinvestment of their dividend distributions. Investors should contact their brokers to ascertain the availability and description of these services. Beneficial Owners should be aware that each broker may require investors to adhere to specific procedures and timetables to participate in the dividend reinvestment service and investors should ascertain from their brokers such necessary details. If this service is available and used, dividend distributions of both income and realized gains will be automatically reinvested in additional whole Shares issued by the Trust of the applicable Fund at NAV per Share. Distributions reinvested in additional Shares will nevertheless be taxable to Beneficial Owners acquiring such additional Shares to the same extent as if such distributions had been received in cash.

**FEDERAL INCOME TAXES**

The following is only a summary of certain important U.S. federal income tax considerations generally affecting a Fund and its shareholders that supplements the discussion in the Prospectus. No attempt is made to present a comprehensive explanation of the federal, state, local or foreign tax treatment of a Fund or its shareholders, and the discussion here and in the Prospectus is not intended to be a substitute for careful tax planning. In particular, it does not address tax consequences to investors subject to special rules, such as investors who hold Shares through individual retirement accounts ("IRAs"), 401(k) plans, or other tax-advantaged accounts.

The following general discussion of certain U.S. federal income tax consequences is based on provisions of the Code and the regulations issued thereunder as in effect on the date of this SAI. New legislation, as well as administrative changes or court decisions, may significantly change the conclusions expressed herein, and may have a retroactive effect with respect to the transactions contemplated herein.

Unless your investment in Shares is made through a tax-exempt entity or tax-deferred retirement account, such as an IRA, you need to be aware of the possible tax consequences when the Fund makes distributions or you sell Shares.

Shareholders are urged to consult their own tax advisors regarding the application of the provisions of tax law described in this SAI in light of the particular tax situations of the shareholders and regarding specific questions as to federal, state, foreign or local taxes.

<u>Taxation of the Funds</u>. Each Fund intends to qualify each year to be treated as a separate RIC under Subchapter M of the Code. As such, the Funds should not be subject to federal income taxes on their net investment income and capital gains, if any, to the extent that they timely distribute such income and capital gains to their shareholders. To qualify for treatment as a RIC, a Fund must distribute annually to its shareholders at least the sum of 90% of its net investment income (generally including dividends, taxable interest, and the excess of net short-term capital gains over net long-term capital losses, less operating expenses) and at least 90% of its net tax-exempt interest income, if any (the "Distribution Requirement") and must meet several additional requirements. Among these requirements are the following: (i) at least the sum of 90% of a Fund's gross income each taxable year must be derived from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income derived with respect to its business of investing in such stock, securities or foreign currencies and net income derived from interests in qualified publicly traded partnerships (the "Qualifying Income Requirement"); and (ii) at the end of each quarter of such Fund's taxable year, such Fund's assets must be diversified so that (a) at least 50% of the value of the Fund's total assets is represented by cash and cash items, U.S. government securities, securities of other RICs, and other securities, with such other securities limited, in respect to any one issuer, to an amount not greater in value than 5% of the value of the Fund's total assets and to not more than 10% of the outstanding voting securities of such issuer, including the equity securities of a qualified publicly traded partnership, and (b) not more than 25% of the value of its total assets is invested, including through corporations in which the Fund owns a 20% or more voting stock interest, in the securities (other than U.S. government securities or securities of other RICs) of any one issuer, the securities (other than securities of other RICs) of two or more issuers which such Fund controls and which are engaged in the same, similar, or related trades or businesses, or the securities of one or more qualified publicly traded partnerships (the "Diversification Requirement").

To the extent a Fund makes investments that may generate income that is not qualifying income, including certain derivatives, the Fund will seek to restrict the resulting income from such investments so that such Fund's non-qualifying income does not exceed 10% of its gross income.

Although the Funds intend to distribute substantially all of their net investment income and may distribute their capital gains for any taxable year, the Funds will be subject to federal income taxation to the extent any such income or gains are not distributed. Each Fund is treated as a separate corporation for federal income tax purposes. A Fund therefore is considered a separate entity in determining its treatment under the rules for RICs described herein, *i.e.*, losses in one Fund do not offset gains in another fund. The requirements (other than certain organizational requirements) for qualifying RIC status are determined at the Fund level rather than at the Trust level.

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If a Fund fails to satisfy the Qualifying Income Requirement or the Diversification Requirement in any taxable year, such Fund may be eligible for relief provisions if the failures are due to reasonable cause and not willful neglect and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements. Additionally, relief is provided for certain *de minimis* failures of the Diversification Requirement where a Fund corrects the failure within a specified period of time. To be eligible for the relief provisions with respect to a failure to meet the Diversification Requirement, a Fund may be required to dispose of certain assets. If these relief provisions were not available to a Fund and it were to fail to qualify for treatment as a RIC for a taxable year, all of its taxable income would be subject to federal income tax at the regular 21% corporate rate without any deduction for distributions to shareholders, and its distributions (including capital gains distributions) generally would be taxable to the shareholders of the applicable Fund as dividends to the extent of the Fund's current and accumulated earnings and profits, subject to the dividends received deduction for corporate shareholders and the lower tax rates on qualified dividend income received by non-corporate shareholders, subject to certain limitations. To requalify for treatment as a RIC in a subsequent taxable year, a Fund would be required to satisfy the RIC qualification requirements for that year and to distribute any earnings and profits from any year in which the applicable Fund failed to qualify for tax treatment as a RIC. If a Fund failed to qualify as a RIC for a period greater than two taxable years, it would generally be required to pay a Fund-level tax on certain net built-in gains recognized with respect to certain of its assets upon disposition of such assets within five years of qualifying as a RIC in a subsequent year. The Board reserves the right not to maintain the qualification of a Fund for treatment as a RIC if it determines such course of action to be beneficial to shareholders. If a Fund determines that it will not qualify as a RIC, the applicable Fund will establish procedures to reflect the anticipated tax liability in the Fund's NAV.

A Fund may elect to treat part or all of any "qualified late year loss" as if it had been incurred in the succeeding taxable year in determining such Fund's taxable income, net capital gain, net short-term capital gain, and earnings and profits. The effect of this election is to treat any such "qualified late year loss" as if it had been incurred in the succeeding taxable year in characterizing Fund distributions for any calendar year. A "qualified late year loss" generally includes net capital loss, net long-term capital loss, or net short-term capital loss incurred after October 31 of the current taxable year (commonly referred to as "post-October losses") and certain other late-year losses.

Capital losses in excess of capital gains ("net capital losses") are not permitted to be deducted against a RIC's net investment income. Instead, for U.S. federal income tax purposes, potentially subject to certain limitations, a Fund may carry a net capital loss from any taxable year forward indefinitely to offset its capital gains, if any, in years following the year of the loss. To the extent subsequent capital gains are offset by such losses, they will not result in U.S. federal income tax liability to the applicable Fund and may not be distributed as capital gains to its shareholders. Generally, a Fund may not carry forward any losses other than net capital losses. The carryover of capital losses may be limited under the general loss limitation rules if a Fund experiences an ownership change as defined in the Code.

For the fiscal period or year ended December 31, 2025, the Funds' accumulated short-term and long-term capital loss carryforwards in the amounts provided in the table below. These amounts do not expire.

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| | | |
|:---|:---|:---|
| **Fund** | **Short-Term Capital Loss Carryforward** | **Long-Term Capital Loss Carryforward** |
| Roundhill Video Games ETF | $6890002 | $33200005 |
| Roundhill Sports Betting & iGaming ETF | $41445821 | $111516693 |
| Roundhill Ball Metaverse ETF | $160720914 | $117057157 |
| Roundhill Cannabis ETF  |  |  |
| Roundhill Magnificent Seven ETF  | $21151617 |  |

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A Fund will be subject to a nondeductible 4% federal excise tax on certain undistributed income if it does not distribute to its shareholders in each calendar year an amount at least equal to 98% of its ordinary income for the calendar year plus 98.2% of its capital gain net income for the one-year period ending on October 31 of that year, subject to an increase for any shortfall in the prior year's distribution. For this purpose, any ordinary income or capital gain net income retained by a Fund and subject to corporate income tax will be considered to have been distributed. The Funds intend to declare and distribute dividends and distributions in the amounts and at the times necessary to avoid the application of the excise tax but can make no assurances that all such tax liability will be eliminated. For example, a Fund may receive delayed or corrected tax reporting statements from its investments that cause such Fund to accrue additional income and gains after such Fund has already made its excise tax distributions for the year. In such a situation, a Fund may incur an excise tax liability resulting from such delayed receipt of such tax information statements. In addition, a Fund may in certain circumstances be required to liquidate Fund investments to make sufficient distributions to avoid federal excise tax liability at a time when the investment adviser might not otherwise have chosen to do so, and liquidation of investments in such circumstances may affect the ability of the Fund to satisfy the requirement for qualification as a RIC.

If a Fund meets the Distribution Requirement but retains some or all of its income or gains, it will be subject to federal income tax to the extent that any such income or gains are not distributed. A Fund may designate certain amounts retained as undistributed net capital gain in a notice to its shareholders, who (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their proportionate shares of the undistributed amount so designated, (ii) will be entitled to credit their proportionate

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shares of the income tax paid by the Fund on that undistributed amount against their federal income tax liabilities and to claim refunds to the extent such credits exceed their tax liabilities, and (iii) will be entitled to increase their tax basis, for federal income tax purposes, in their Shares by an amount equal to the excess of the amount of undistributed net capital gain included in their respective income over their respective income tax credits.

<u>Taxation of Shareholders – Distributions</u>. Each Fund intends to distribute annually to its shareholders substantially all of its investment company taxable income (computed without regard to the deduction for dividends paid), its net tax-exempt income, if any, and any net capital gain (net recognized long-term capital gains in excess of net recognized short-term capital losses, taking into account any capital loss carryforwards). The distribution of investment company taxable income (as so computed) and net realized capital gain will be taxable to Fund shareholders regardless of whether the shareholder receives these distributions in cash or reinvests them in additional Shares.

Each Fund (or your broker) will report to shareholders annually the amounts of dividends paid from ordinary income, the amount of distributions of net capital gain, the portion of dividends which may qualify for the dividends received deduction for corporations, and the portion of dividends which may qualify for treatment as qualified dividend income, which, subject to certain limitations and requirements, is taxable to non-corporate shareholders at rates of up to 20%.

Qualified dividend income includes, in general, subject to certain holding period and other requirements, dividend income from taxable domestic corporations and certain foreign corporations. Subject to certain limitations, eligible foreign corporations include those incorporated in possessions of the United States, those incorporated in certain countries with comprehensive tax treaties with the United States, and other foreign corporations if the stock with respect to which the dividends are paid is readily tradable on an established securities market in the United States. Dividends received by a Fund from an underlying fund taxable as a RIC or from a REIT may be treated as qualified dividend income generally only to the extent so reported by such underlying fund or REIT. If 95% or more of a Fund's gross income (calculated without taking into account net capital gain derived from sales or other dispositions of stock or securities) consists of qualified dividend income, the Fund may report all distributions of such income as qualified dividend income. A Fund's investment strategies may limit its ability to make distributions of qualified dividend income.

Fund dividends will not be treated as qualified dividend income if a Fund does not meet holding period and other requirements with respect to dividend paying stocks in its portfolio, and the shareholder does not meet holding period and other requirements with respect to the Shares on which the dividends were paid. Distributions by a Fund of its net short-term capital gains will be taxable as ordinary income. Distributions from a Fund's net capital gain will be taxable to shareholders at long-term capital gains rates, regardless of how long shareholders have held their Shares. Distributions may be subject to state and local taxes.

In the case of corporate shareholders, certain dividends received by a Fund from U.S. corporations (generally, dividends received by the Fund in respect of any share of stock (1) with a tax holding period of at least 46 days during the 91-day period beginning on the date that is 45 days before the date on which the stock becomes ex-dividend as to that dividend and (2) that is held in an unleveraged position) and distributed and appropriately so reported by the Fund may be eligible for the 50% dividends received deduction. Certain preferred stock must have a holding period of at least 91 days during the 181-day period beginning on the date that is 90 days before the date on which the stock becomes ex-dividend as to that dividend to be eligible. Capital gain dividends distributed to a Fund from other RICs, and dividends distributed to a Fund from REITs are generally not eligible for the dividends received deduction. To qualify for the deduction, corporate shareholders must meet the minimum holding period requirement stated above with respect to their Shares, taking into account any holding period reductions from certain hedging or other transactions or positions that diminish their risk of loss with respect to their Shares, and, if they borrow to acquire or otherwise incur debt attributable to Shares, they may be denied a portion of the dividends received deduction with respect to those Shares. A Fund's investment strategies may limit its ability to make distributions eligible for the dividends received deduction for corporate shareholders.

Although dividends generally will be treated as distributed when paid, any dividend declared by a Fund in October, November or December and payable to shareholders of record in such a month that is paid during the following January will be treated for U.S. federal income tax purposes as received by shareholders on December 31 of the calendar year in which it was declared.

A RIC that receives business interest income may pass through its net business interest income for purposes of the tax rules applicable to the interest expense limitations under Section 163(j) of the Code. A RIC's total "Section 163(j) Interest Dividend" for a tax year is limited to the excess of the RIC's business interest income over the sum of its business interest expense and its other deductions properly allocable to its business interest income. A RIC may, in its discretion, designate all or a portion of ordinary dividends as Section 163(j) Interest Dividends, which would allow the recipient shareholder to treat the designated portion of such dividends as interest income for purposes of determining such shareholder's interest expense deduction limitation under Section 163(j) of the Code. This can potentially increase the amount of a shareholder's interest expense deductible under Section 163(j) of the Code. In general, to be eligible to treat a Section 163(j) Interest Dividend as interest income, you must have held your shares in a Fund for more than 180 days during the 361-day period beginning on the date that is 180 days before the date on which the share becomes ex-dividend with respect to such dividend. Section 163(j) Interest Dividends, if so designated by a Fund, will be reported to your financial intermediary or otherwise in accordance with the requirements specified by the Internal Revenue Service ("IRS").

Shareholders who have not held Shares for a full year should be aware that a Fund may report and distribute, as ordinary dividends or capital gain dividends, a percentage of income that is not equal to the percentage of a Fund's ordinary income or net capital gain,

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respectively, actually earned during the applicable shareholder's period of investment in the Fund. A taxable shareholder should note that if it purchases shares just before a distribution, the purchase price would reflect the amount of the upcoming distribution. In this case, the shareholder would be taxed on the entire amount of the distribution received, even though, as an economic matter, the distribution simply constitutes a return of its investment. This is known as "buying a dividend" and should generally be avoided by taxable investors.

To the extent that a Fund makes a distribution of income received by such Fund in lieu of dividends (a "substitute payment") with respect to securities on loan pursuant to a securities lending transaction, such income will not constitute qualified dividend income to individual shareholders and will not be eligible for the dividends received deduction for corporate shareholders.

If a Fund's distributions exceed its current and accumulated earnings and profits for the taxable year (as calculated for federal income tax purposes), all or a portion of the distributions made for the taxable year may be recharacterized as a return of capital to shareholders. A return of capital distribution will generally not be taxable but will reduce each shareholder's cost basis in a Fund and result in a higher capital gain or lower capital loss when the Shares on which the distribution was received are sold. After a shareholder's basis in the Shares has been reduced to zero, distributions in excess of earnings and profits will be treated as gain from the sale of the shareholder's Shares.

<u>Taxation of Shareholders – Sale or Exchange of Shares</u>. A sale or exchange of Shares may give rise to a gain or loss for federal and state income tax purposes. Assuming a shareholder holds Shares as a capital asset, any gain or loss realized upon a taxable disposition of Shares will be treated as long-term capital gain or loss if Shares have been held for more than 12 months. Otherwise, the gain or loss on the taxable disposition of Shares will generally be treated as short-term capital gain or loss. Any loss realized upon a taxable disposition of Shares held for six months or less will be treated as long-term capital loss, rather than short-term capital loss, to the extent of any amounts treated as distributions to the shareholder of long-term capital gain (including any amounts credited to the shareholder as undistributed capital gains). All or a portion of any loss realized upon a taxable disposition of Shares may be disallowed if substantially identical Shares of a Fund are acquired (through the reinvestment of dividends or otherwise) within a 61-day period beginning 30 days before and ending 30 days after the disposition. In such a case, the basis of the newly acquired Shares will be adjusted to reflect the disallowed loss.

The cost basis of Shares acquired by purchase will generally be based on the amount paid for Shares and then may be subsequently adjusted for other applicable transactions as required by the Code. The difference between the selling price and the cost basis of Shares generally determines the amount of the capital gain or loss realized on the sale or exchange of Shares. Contact the broker through whom you purchased your Shares to obtain information with respect to the available cost basis reporting methods and elections for your account.

An Authorized Participant who exchanges securities for Creation Units generally will recognize a gain or a loss. The gain or loss will be equal to the difference between the market value of the Creation Units at the time and the sum of the exchanger's aggregate basis in the securities surrendered plus the amount of cash paid for such Creation Units. The ability of Authorized Participants to receive a full or partial cash redemption of Creation Units of a Fund may limit the tax efficiency of the Fund. An Authorized Participant who redeems Creation Units 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 any securities received plus the amount of any cash received for such Creation Units. The IRS, however, may assert that a loss realized upon an exchange of securities for Creation Units cannot currently be deducted, under the rules governing "wash sales" (for a person who does not mark-to-market its portfolio) or, on the basis that there has been no significant change in economic position.

Any gain or loss realized upon a creation or redemption of Creation Units will be treated as capital or ordinary gain or loss, depending on the holder's circumstances.

The Trust, on behalf of the Funds, has the right to reject an order for Creation Units if the purchaser (or a group of purchasers) would, upon obtaining the Creation Units so ordered, own 80% or more of the outstanding Shares and if, pursuant to Section 351 of the Code, a Fund would have a basis in the deposit securities different from the market value of such securities on the date of deposit. The Trust also has the right to require the provision of information necessary to determine beneficial Share ownership for purposes of the 80% determination. If a Fund does issue Creation Units to a purchaser (or a group of purchasers) that would, upon obtaining the Creation Units so ordered, own 80% or more of the outstanding Shares, the purchaser (or a group of purchasers) will not recognize gain or loss upon the exchange of securities for Creation Units.

Authorized Participants purchasing or redeeming Creation Units should consult their own tax advisors with respect to the tax treatment of any creation or redemption transaction and whether the wash sales rule applies and when a loss may be deductible.

<u>Taxation of Shareholders – Net Investment Income Tax</u>. U.S. individuals with adjusted gross income (subject to certain adjustments) exceeding certain threshold amounts ($250,000 if married filing jointly or if considered a "surviving spouse" for federal income tax purposes, $125,000 if married filing separately, and $200,000 in other cases) are subject to a 3.8% tax on all or a portion of their "net investment income," which includes taxable interest, dividends, and certain capital gains (generally including capital gain distributions and capital gains realized on the sale of Shares). This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts.

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<u>Foreign Investments</u>. Dividends and interest received by a Fund from sources within foreign countries may be subject to withholding and other taxes imposed by such countries. Tax treaties between certain countries and the United States may reduce or eliminate such taxes. Each Fund does not expect to satisfy the requirements for passing through to its shareholders any share of foreign taxes paid by the Fund, with the result that shareholders will not include such taxes in their gross incomes and will not be entitled to a tax deduction or credit for such taxes on their own tax returns.

If more than 50% of the value of a Fund's assets at the close of any taxable year consists of stock or securities of foreign corporations, which for this purpose may include obligations of foreign governmental issuers, the Fund may elect, for U.S. federal income tax purposes, to treat any foreign income or withholding taxes paid by the Fund as paid by its shareholders. For any year that a Fund is eligible for and makes such an election, each shareholder of the Fund will be required to include in income an amount equal to his or her allocable share of qualified foreign income taxes paid by the Fund, and shareholders will be entitled, subject to certain holding period requirements and other limitations, to credit their portions of these amounts against their U.S. federal income tax due, if any, or to deduct their portions from their U.S. taxable income, if any. No deductions for foreign taxes paid by a Fund may be claimed, however, by non-corporate shareholders who do not itemize deductions. No deduction for such taxes will be permitted to individuals in computing their alternative minimum tax liability. Shareholders that are not subject to U.S. federal income tax, and those who invest in a Fund through tax-advantaged accounts (including those who invest through IRAs or other tax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction passed through by the Fund. Foreign taxes paid by a Fund will reduce the return from the Fund's investments. If a Fund makes the election, the Fund's shareholders will be notified annually by the Fund (or their broker) of the respective amounts per share of the Fund's income from sources within, and taxes paid to, foreign countries and U.S. possessions. If a Fund does not hold sufficient foreign securities to meet the above threshold, then shareholders will not be entitled to claim a credit or further deduction with respect to foreign taxes paid by the Fund.

If a Fund holds shares in a "passive foreign investment company" ("PFIC"), it may be subject to U.S. federal income tax on a portion of any "excess distribution" or gain from the disposition of such shares even if such income is distributed as a taxable dividend by the Fund to its shareholders. Additional charges in the nature of interest may be imposed on a Fund in respect of deferred taxes arising from such distributions or gains.

Each Fund may be eligible to treat a PFIC as a "qualified electing fund" ("QEF") under the Code in which case, in lieu of the foregoing requirements, the Fund will be required to include in income each year a portion of the ordinary earnings and net capital gains of the QEF, even if not distributed to the Fund, and such amounts will be subject to the 90% and excise tax distribution requirements described above. In order to make this election, a Fund would be required to obtain certain annual information from the PFICs in which it invests, which may be difficult or impossible to obtain. Alternatively, a Fund may make a mark-to-market election that will result in such Fund being treated as if it had sold and repurchased its PFIC stock at the end of each year. In such case, a Fund would report any gains resulting from such deemed sales as ordinary income and would deduct any losses resulting from such deemed sales as ordinary losses to the extent of previously recognized gains. The election must be made separately for each PFIC owned by a Fund and, once made, is effective for all subsequent taxable years, unless revoked with the consent of the IRS. By making the election, a Fund could potentially ameliorate the adverse tax consequences with respect to its ownership of shares in a PFIC, but in any particular year may be required to recognize income in excess of the distributions it receives from PFICs and its proceeds from dispositions of PFIC stock. A Fund may have to distribute this excess income to satisfy the 90% distribution requirement and to avoid imposition of the 4% excise tax. In order to distribute this income and avoid a tax at the fund level, a Fund might be required to liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss. Each Fund intends to make the appropriate tax elections, if possible, and take any additional steps that are necessary to mitigate the effect of these rules. Amounts included in income each year by a Fund arising from a QEF election, will be "qualifying income" under the Qualifying Income Requirement (as described above) even if not distributed to such Fund, if such Fund derives such income from its business of investing in stock, securities or currencies.

Under Section 988 of the Code, gains or losses attributable to fluctuations in exchange rates which occur between the time a Fund accrues income or other receivables or accrues expenses or other liabilities denominated in a foreign currency and the time the Fund actually collects such income or receivables or pays such expenses or liabilities generally are treated as ordinary income or loss. Similarly, on disposition of debt securities denominated in a foreign currency and on disposition of certain other financial instruments (such as forward currency contracts and currency swaps), gains or losses attributable to fluctuations in the value of the foreign currency between the date of acquisition of the security or contract and the date of settlement or disposition also are treated as ordinary gain or loss. The gains and losses may increase or decrease the amount of a Fund's income to be distributed to its shareholders as ordinary income. Each Fund may elect out of the application of Section 988 of the Code with respect to the tax treatment of each of its foreign currency forward contracts to the extent that (i) such contract is a capital asset in the hands of the Fund and is not part of a straddle transaction and (ii) the Fund makes an election by the close of the day the contract is entered into to treat the gain or loss attributable to such contract as capital gain or loss.

The U.S. Treasury Department has authority to issue regulations that would exclude foreign currency gains from the Qualifying Income Requirement described above if such gains are not directly related to a Fund's business of investing in stock or securities (or options and futures with respect to stock or securities). Accordingly, regulations may be issued in the future that could treat some or all

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of a Fund's non-U.S. currency gains as non-qualifying income, thereby potentially jeopardizing the Fund's status as a RIC for all years to which the regulations are applicable.

<u>Tax Treatment of Complex Securities</u>. Certain of a Fund's investments may be subject to complex provisions of the Code (including provisions relating to hedging transactions, straddles, integrated transactions, foreign currency contracts, forward foreign currency contracts, and notional principal contracts) that, among other things, may affect a Fund's ability to qualify as a RIC, may affect the character of gains and losses realized by the applicable Fund (*e.g.*, may affect whether gains or losses are ordinary or capital), accelerate recognition of income to the applicable Fund and defer losses. These rules could therefore affect the character, amount and timing of distributions to shareholders. These provisions also may require a Fund to mark-to-market certain types of positions in its portfolio *(i.e.*, treat them as if they were closed out) which may cause a Fund to recognize income without the applicable Fund receiving cash with which to make distributions in amounts sufficient to enable the applicable Fund to satisfy the RIC distribution requirements for avoiding income and excise taxes. A Fund intends to monitor its transactions, intends to make appropriate tax elections, and intends to make appropriate entries in its books and records to mitigate the effect of these rules and preserve the applicable Fund's qualification for treatment as a RIC.

A Fund is required for federal income tax purposes to mark-to-market and recognize as income for each taxable year its net unrealized gains and losses on certain futures and options contracts subject to section 1256 of the Code ("Section 1256 Contracts") as of the end of the year as well as those actually realized during the year. Gain or loss from Section 1256 Contracts on broad-based indexes required to be marked to market will be 60% long-term and 40% short-term capital gain or loss. Application of this rule may alter the timing and character of distributions to shareholders. A Fund may be required to defer the recognition of losses on Section 1256 Contracts to the extent of any unrecognized gains on offsetting positions held by the applicable Fund. These provisions also may require a Fund to mark-to-market certain types of positions in its portfolio (*i.e.*, treat them as if they were closed out), which may cause the applicable Fund to recognize income without receiving cash with which to make distributions in amounts necessary to satisfy the Distribution Requirement and for avoiding the excise tax discussed above. Accordingly, to avoid certain income and excise taxes, a Fund may be required to liquidate its investments at a time when the investment adviser might not otherwise have chosen to do so.

A Fund may invest in U.S. REITs. Investments in REIT equity securities may require a Fund to accrue and distribute income not yet received. To generate sufficient cash to make the requisite distributions, a Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have continued to hold. A Fund's investments in REIT equity securities may at other times result in the Fund's receipt of cash in excess of the REIT's earnings; if the Fund distributes these amounts, these distributions could constitute a return of capital to such Fund's shareholders for federal income tax purposes. Dividends paid by a REIT, other than capital gain distributions, will be taxable as ordinary income up to the amount of the REIT's current and accumulated earnings and profits. Capital gain dividends paid by a REIT to a Fund will be treated as long-term capital gains by the Fund and, in turn, may be distributed by the Fund to its shareholders as a capital gain distribution. Dividends received by a Fund from a REIT generally will not constitute qualified dividend income or qualify for the dividends received deduction. If a REIT is operated in a manner such that it fails to qualify as a REIT, an investment in the REIT would become subject to double taxation, meaning the taxable income of the REIT would be subject to federal income tax at the regular corporate rate without any deduction for dividends paid to shareholders and the dividends would be taxable to shareholders as ordinary income (or possibly as qualified dividend income) to the extent of the REIT's current and accumulated earnings and profits.

REITs in which a Fund invests often do not provide complete and final tax information to the Fund until after the time that the Fund issues a tax reporting statement. As a result, a Fund may at times find it necessary to reclassify the amount and character of its distributions to you after it issues your tax reporting statement. When such reclassification is necessary, you will be sent a corrected, final Form 1099-DIV to reflect the reclassified information. If you receive a corrected Form 1099-DIV, use the information on this corrected form, and not the information on the previously issued tax reporting statement, in completing your tax returns.

"Qualified REIT dividends" (*i.e.*, ordinary REIT dividends other than capital gain dividends and portions of REIT dividends designated are qualified dividend income eligible for capital gain tax rates) are eligible for a 20% deduction by non-corporate taxpayers. This deduction, if allowed in full, equates to a maximum effective tax rate of 29.6% (37% top rate applied to income after 20% deduction). Distributions by the Fund to its shareholders that are attributable to qualified REIT dividends received by such Fund and which such Fund properly reports as "section 199A dividends," are treated as "qualified REIT dividends" in the hands of non-corporate shareholders. A section 199A dividend is treated as a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying RIC shares for at least 46 days of the 91-day period beginning 45 days before the shares become ex-dividend, and is not under an obligation to make related payments with respect to a position in substantially similar or related property. A Fund is permitted to report such part of its dividends as section 199A dividends as are eligible, but is not required to do so.

<u>Backup Withholding</u>. Each Fund will be required in certain cases to withhold (as "backup withholding") on amounts payable to any shareholder who (1) fails to provide a correct taxpayer identification number certified under penalty of perjury; (2) is subject to backup withholding by the IRS for failure to properly report all payments of interest or dividends; (3) fails to provide a certified statement that he or she is not subject to "backup withholding"; or (4) fails to provide a certified statement that he or she is a U.S. person (including a U.S. resident alien). The backup withholding rate is currently 24%. Backup withholding is not an additional tax and any amounts

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withheld may be credited against the shareholder's ultimate U.S. tax liability. Backup withholding will not be applied to payments that have been subject to the 30% withholding tax on shareholders who are neither citizens nor permanent residents of the U.S.

<u>Non-U.S. Shareholders</u>. Any non-U.S. investors in a Fund may be subject to U.S. withholding and estate tax and are encouraged to consult their tax advisors prior to investing in the Fund. Foreign shareholders (*i.e.*, nonresident alien individuals and foreign corporations, partnerships, trusts and estates) are generally subject to U.S. withholding tax at the rate of 30% (or a lower tax treaty rate) on distributions derived from taxable ordinary income. Each Fund may, under certain circumstances, report all or a portion of a dividend as an "interest-related dividend" or a "short-term capital gain dividend," which would generally be exempt from this 30% U.S. withholding tax, provided certain other requirements are met. Short-term capital gain dividends received by a nonresident alien individual who is present in the U.S. for a period or periods aggregating 183 days or more during the taxable year are not exempt from this 30% withholding tax. Gains realized by foreign shareholders from the sale or other disposition of Shares of a Fund generally are not subject to U.S. taxation, unless the recipient is an individual who is physically present in the U.S. for 183 days or more per year. Foreign shareholders who fail to provide an applicable IRS form may be subject to backup withholding on certain payments from a Fund. Backup withholding will not be applied to payments that are subject to the 30% (or lower applicable treaty rate) withholding tax described in this paragraph. Different tax consequences may result if the foreign shareholder is engaged in a trade or business within the United States. In addition, the tax consequences to a foreign shareholder entitled to claim the benefits of a tax treaty may be different than those described above.

Under legislation generally known as "FATCA" (the Foreign Account Tax Compliance Act), a Fund is required to withhold 30% of certain ordinary dividends it pays to shareholders that fail to meet prescribed information reporting or certification requirements. In general, no such withholding will be required with respect to a U.S. person or non-U.S. person that timely provides the certifications required by a Fund or its agent on a valid IRS Form W-9 or applicable series of IRS Form W-8, respectively. Shareholders potentially subject to withholding include foreign financial institutions ("FFIs"), such as non-U.S. investment funds, and non-financial foreign entities ("NFFEs"). To avoid withholding under FATCA, an FFI generally must enter into an information sharing agreement with the IRS in which it agrees to report certain identifying information (including name, address, and taxpayer identification number) with respect to its U.S. account holders (which, in the case of an entity shareholder, may include its direct and indirect U.S. owners), and an NFFE generally must identify and provide other required information to a Fund or other withholding agent regarding its U.S. owners, if any. Such non-U.S. shareholders also may fall into certain exempt, excepted or deemed compliant categories as established by regulations and other guidance. A non-U.S. shareholder resident or doing business in a country that has entered into an intergovernmental agreement with the United States to implement FATCA will be exempt from FATCA withholding provided that the shareholder and the applicable foreign government comply with the terms of the agreement.

A non-U.S. entity that invests in a Fund will need to provide the fund with documentation properly certifying the entity's status under FATCA in order to avoid FATCA withholding. Non-U.S. investors in the Funds should consult their tax advisors in this regard.

A Fund's shares held in a tax-qualified retirement account will generally not be subject to federal taxation on income and capital gains distributions from the Fund until a shareholder begins receiving payments from their retirement account.

<u>Certain Potential Tax Reporting Requirements</u>. Under U.S. Treasury regulations, if a shareholder recognizes a loss on disposition of Shares of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder (or certain greater amounts over a combination of years), the shareholder must file with the IRS a disclosure statement on IRS Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a RIC are not excepted. Significant penalties may be imposed for the failure to comply with the reporting requirements. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer's treatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of these regulations in light of their individual circumstances.

<u>Other Issues</u>. In those states which have income tax laws, the tax treatment of a Fund and of Fund shareholders with respect to distributions by such Fund may differ from federal tax treatment.

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The foregoing discussion is based on U.S. federal tax laws and regulations which are in effect on the date of this SAI. Such laws and regulations may be changed by legislative or administrative action. Shareholders are advised to consult their tax advisors concerning their specific situations and the application of foreign, federal, state, or local taxes.

**FINANCIAL STATEMENTS**

The Funds' most recent <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001683471/000113322826003213/rl-efp22782_ncsr.htm)</u> for the fiscal year ended December 31, 2025 is a separate document and the financial statements and accompanying notes appearing therein are incorporated by reference into this SAI. You may request a copy of the Funds' Form N-CSR at no charge by calling 1-800-617-0004 or through the Funds' website at www.roundhillinvestments.com.

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**APPENDIX A**

**DESCRIPTION OF SECURITIES RATINGS**

<u>Short-Term Credit Ratings</u>

An ***S&P Global Ratings*** short-term issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with respect to a specific financial obligation a specific class of financial obligations, or a specific financial program (including ratings on medium-term note programs and commercial paper programs). Short-term issue credit ratings are generally assigned to those obligations considered short-term in the relevant market, typically with an original maturity of no more than 365 days. Short-term issue credit ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. The following summarizes the rating categories used by S&P Global Ratings for short-term issues:

"A-1" – A short-term obligation rated "A-1" is rated in the highest category by S&P Global Ratings. The obligor's capacity to meet its financial commitments on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitments on these obligations is extremely strong.

"A-2" – A short-term obligation rated "A-2" is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitments on the obligation is satisfactory.

"A-3" – A short-term obligation rated "A-3" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken an obligor's capacity to meet its financial commitments on the obligation.

"B" – A short-term obligation rated "B" is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties that could lead to the obligor's inadequate capacity to meet its financial commitments.

"C" – A short-term obligation rated "C" is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitments on the obligation.

"D" – A short-term obligation rated "D" is in default or in breach of an imputed promise. For non-hybrid capital instruments, the "D" rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to "D" if it is subject to a distressed debt restructuring.

"NR" – This indicates that a rating has not been assigned or is no longer assigned.

Local Currency and Foreign Currency Ratings – S&P Global Ratings' issuer credit ratings make a distinction between foreign currency ratings and local currency ratings. A foreign currency rating on an issuer can differ from the local currency rating on it when the obligor has a different capacity to meet its obligations denominated in its local currency versus obligations denominated in a foreign currency.

***Moody's Investors Service ("Moody's")*** short-term ratings are forward-looking opinions of the relative credit risks of financial obligations s issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.

The following summarizes the ratings categories used by Moody's for short-term issues:

"P-1" – Ratings of Prime-1 reflect a superior ability to repay short-term obligations.

"P-2" – Ratings of Prime-2 reflect a strong ability to repay short-term obligations.

"P-3" – Ratings of Prime-3 reflect an acceptable ability to repay short-term obligations.

"NP" – Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.

***Fitch, Inc. / Fitch Ratings Ltd. ("Fitch")*** short-term issuer or obligation ratings are based in all cases on the short-term vulnerability to default of the rated entity and relates to the capacity to meet financial obligations in accordance with the documentation governing the relevant obligation. Short-term deposit ratings may be adjusted for loss severity. Short-term ratings are assigned to obligations whose initial maturity is viewed as "short-term" based on market convention (a long-term rating can also be used to rate an issue with short maturity). Typically, this means a timeframe of up to 13 months for corporate, sovereign, and structured obligations, and up to 36 months for obligations in U.S. public finance markets. The following summarizes the rating categories used by Fitch for short-term obligations:

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"F1" – Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added '+' to denote any exceptionally strong credit feature.

"F2" – Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments.

"F3" – Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate.

"B" – Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.

"C" – High short-term default risk. Default is a real possibility.

"RD" – Restricted Default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Typically applicable to entity ratings only.

"D" – Default. Indicates a broad-based default event for an entity, or the default of a short-term obligation.

The ***DBRS, Inc. ("Morningstar DBRS")*** short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner. Ratings are based on quantitative and qualitative considerations relevant to the issuer and the relative ranking of claims. The R-1 and R-2 rating categories are further denoted by the sub-categories "(high)", "(middle)", and "(low)".

The following summarizes the ratings used by Morningstar DBRS for commercial paper and short-term debt:

"R-1 (high)" - Highest credit quality. The capacity for the payment of short-term financial obligations as they fall due is exceptionally high. Unlikely to be adversely affected by future events.

"R-1 (middle)" – Superior credit quality. The capacity for the payment of short-term financial obligations as they fall due is very high. Differs from "R-1 (high)" by a relatively modest degree. Unlikely to be significantly vulnerable to future events.

"R-1 (low)" – Good credit quality. The capacity for the payment of short-term financial obligations as they fall due is substantial. Overall strength is not as favorable as higher rating categories. May be vulnerable to future events, but qualifying negative factors are considered manageable.

"R-2 (high)" – Upper end of adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events.

"R-2 (middle)" – Adequate credit quality. The capacity for the payment of short- term financial obligations as they fall due is acceptable. May be vulnerable to future events or may be exposed to other factors that could reduce credit quality.

"R-2 (low)" – Lower end of adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events. A number of challenges are present that could affect the issuer's ability to meet such obligations.

"R-3" – Lowest end of adequate credit quality. There is a capacity for the payment of short-term financial obligations as they fall due. May be vulnerable to future events and the certainty of meeting such obligations could be impacted by a variety of developments.

"R-4" – Speculative credit quality. The capacity for the payment of short-term financial obligations as they fall due is uncertain.

"R-5" – Highly speculative credit quality. There is a high level of uncertainty as to the capacity to meet short-term financial obligations as they fall due.

"D" – When the issuer has filed under any applicable bankruptcy, insolvency or winding up statute or there is a failure to satisfy an obligation after the exhaustion of grace periods, a downgrade to "D" may occur. Morningstar DBRS may also use "SD" (Selective Default) in cases where only some securities are impacted, such as the case of a distressed exchange.

<u>Long-Term Credit Ratings</u>

An ***S&P Global Ratings*** long-term issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including ratings on medium-term note programs and commercial paper programs). ***S&P Global Ratings*** typically assign a long-term issue credit rating to an obligation with an original maturity of greater than 365 days. The following summarizes the ratings used by ***S&P Global Ratings*** for long-term issues:

"AAA" – An obligation rated "AAA" has the highest rating assigned by S&P Global Ratings. The obligor's capacity to meet its financial commitments 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 commitments on the obligation is very strong.

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"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 commitments 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 weaken the obligor's capacity to meet its financial commitments on the obligation.

"BB," "B," "CCC," "CC" and "C" – 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 exposure 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 that could lead to the obligor's inadequate capacity to meet its financial commitments 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 commitments on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitments 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 commitments 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 commitments on the obligation.

"CC" – An obligation rated "CC" is currently highly vulnerable to nonpayment. The "CC" rating is used when a default has not yet occurred, but S&P Global Ratings expects default to be a virtual certainty, regardless of the anticipated time to default.

"C" – An obligation rated "C" is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared with obligations that are rated higher.

"D" – An obligation rated "D" is in default or in breach of an imputed promise. For non-hybrid capital instruments, the "D" rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within the next five business days in the absence of a stated grace period or within the earlier of the stated grace period or the next 30 calendar days. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation rating is lowered to "D" if it is subject to a distressed debt restructuring.

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 rating categories.

"NR" – This indicates that a rating has not been assigned or is no longer assigned.

Local Currency and Foreign Currency Ratings - S&P Global Ratings' issuer credit ratings make a distinction between foreign currency ratings and local currency ratings. A foreign currency rating on an issuer can differ from the local currency rating on it when the obligor has a different capacity to meet its obligations denominated in its local currency versus obligations denominated in a foreign currency.

***Moody's*** long-term ratings are forward-looking opinions of the relative credit risks issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Long-term ratings are assigned to issuers or obligations with an original maturity of eleven months or more and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment. The following summarizes the ratings used by Moody's for long-term debt:

"Aaa" – Obligations rated "Aaa" are judged to be of the highest quality, subject to the lowest level of 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 judged to be upper-medium grade and are subject to low credit risk.

"Baa" – Obligations rated "Baa" are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.

"Ba" – Obligations rated "Ba" are judged to be speculative 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 speculative 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.

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"C" – Obligations rated "C" are the lowest rated 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. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms. By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.

The following summarizes long-term issuer default ratings used by ***Fitch***:

"AAA" – Highest credit quality. "AAA" ratings denote the lowest expectation of default risk. They are assigned only in cases 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 default 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 default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.

"BBB" – Good credit quality. "BBB" ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.

"BB" – Speculative. "BB" ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial alternatives may be available to allow financial commitments.

"B" – Highly speculative. "B" ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.

"CCC" – Substantial credit risk. "CCC" ratings indicate a very low margin for safety. Default is a real possibility.

"CC" – Very high levels of credit risk. "CC" ratings indicate a default of some kind appears probable.

"C" – Near default. "C" ratings indicate a default or default-like process has begun, or for a closed funding vehicle, payment capacity is irrevocably impaired. Conditions that are indicative of a 'C' category rating for an issuer include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; •&nbsp;&nbsp;&nbsp;&nbsp;The issuer has entered into a grace or cure period following non-payment of a material financial obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;The formal announcement by the issuer or their agent of a distressed debt exchange ("DDE"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;A closed financing vehicle where payment capacity is irrevocably impaired such that it is not expected to pay interest and/or principal in full during the life of the transaction, but where no payment default is imminent.

"RD" - Restricted default. 'RD' ratings indicate an issuer that in Fitch's opinion has experienced:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;An uncured payment default or DDE on a bond, loan or other material financial obligation, but

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Has not entered into bankruptcy filings, administration, receivership, liquidation, or other formal winding-up procedure, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Has not otherwise ceased operating. This would include:

-&nbsp;&nbsp;&nbsp;&nbsp;The selective payment default on a specific class or currency of debt;

-&nbsp;&nbsp;&nbsp;&nbsp;The uncured expiry of any applicable original grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation.

"D" – Default. "D" ratings indicate an issuer that in Fitch's opinion has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure or that has otherwise ceased business and debt is still outstanding. Default ratings are not assigned prospectively to entities or their obligations; within this context, non-payment on an instrument that contains a deferral feature or grace period will generally not be considered a default until after the expiration of the deferral or grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a DDE. In all cases, the assignment of a default rating reflects the agency's opinion as to the most appropriate rating category consistent with the rest of its universe of ratings and may differ from the definition of default under the terms of an issuer's financial obligations or local commercial practice

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The ***Morningstar DBRS*** long-term rating scale provides an opinion on the risk of default. That is, the risk that an issuer will fail to satisfy its financial obligations in accordance with the terms under which a long-term obligation has been issued. Credit ratings are based on quantitative and qualitative considerations relevant to the issuer, and the relative ranking of claims. All rating categories from AA to CCC contain the subcategories "(high)" and "(low)". The absence of either a "(high)" or "(low)" designation indicates the credit rating is in the middle of the category. The following summarizes the ratings used by Morningstar DBRS for long-term debt:

"AAA" – Highest credit quality. The capacity for the payment of financial obligations is exceptionally high and unlikely to be adversely affected by future events.

"AA" – Superior credit quality. The capacity for the payment of financial obligations is considered high. Credit quality differs from "AAA" only to a small degree. Unlikely to be significantly vulnerable to future events.

"A" – Good credit quality. The capacity for the payment of financial obligations is substantial, but of lesser credit quality than "AA." May be vulnerable to future events, but qualifying negative factors are considered manageable.

"BBB" – Adequate credit quality. The capacity for the payment of financial obligations is considered acceptable. May be vulnerable to future events.

"BB" **–** Speculative, non-investment grade credit quality. The capacity for the payment of financial obligations is uncertain. Vulnerable to future events.

"B" – Highly speculative credit quality. There is a high level of uncertainty as to the capacity to meet financial obligations.

"CCC", "CC" and "C" – Very highly speculative credit quality. In danger of defaulting on financial obligations. There is little difference between these three categories, although "CC" and "C" ratings categories are normally applied to obligations that are seen as highly likely to default, or subordinated to obligations rated in the "CCC" to "B" range. Obligations in respect of which default has not technically taken place but is considered inevitable may be rated in the "C" category.

"D" **–** When the issuer has filed under any applicable bankruptcy, insolvency or winding up statute or there is a failure to satisfy an obligation after the exhaustion of grace periods, a downgrade to "D" may occur. Morningstar DBRS may also use "SD" (Selective Default) in cases where only some securities are impacted, such as the case of a distressed exchange.

<u>Municipal Note Ratings</u>

An ***S&P Global Ratings*** U.S. municipal note rating reflects S&P Global Ratings' opinion about the liquidity factors and market access risks unique to the notes. Notes due in three years or less will likely receive a note rating. Notes with an original maturity of more than three years will most likely receive a long-term debt rating. In determining which type of rating, if any, to assign, S&P Global Ratings' analysis will review the following considerations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Amortization schedule - the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Source of payment - the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note.

Municipal Short-Term Note rating categories are as follows:

"SP-1" – Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.

"SP-2" – Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.

"SP-3" – Speculative capacity to pay principal and interest.

"D" – 'D' is assigned upon failure to pay the note when due, completion of a distressed debt restructuring, or the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions.

***Moody's*** uses the global short-term Prime rating scale (listed above under Short-Term Credit Ratings) for commercial paper issued by U.S. municipalities and nonprofits. These commercial paper programs may be backed by external letters of credit or liquidity facilities, or by an issuer's self-liquidity.

For other short-term municipal obligations, Moody's uses one of two other short-term rating scales, the Municipal Investment Grade ("MIG") and Variable Municipal Investment Grade ("VMIG") scales provided below.

Moody's uses the MIG scale for U.S. municipal cash flow notes, bond anticipation notes and certain other short-term obligations, which typically mature in three years or less.

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"MIG-1" – This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing.

"MIG-2" – This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group.

"MIG-3" – This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.

"SG" – This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection.

In the case of variable rate demand obligations ("VRDOs"), Moody's assigns both a long-term rating and a short-term payment obligation rating. The long-term rating addresses the issuer's ability to meet scheduled principal and interest payments. The short-term payment obligation rating addresses the ability of the issuer or the liquidity provider to meet any purchase price payment obligation resulting from optional tenders ("on demand") and/or mandatory tenders of the VRDO. The short-term payment obligation rating uses the VMIG scale. Transitions of VMIG ratings with conditional liquidity support differ from transitions of Prime ratings reflecting the risk that external liquidity support will terminate if the issuer's long-term rating drops below investment grade.

Moody's typically assigns the VMIG rating if the frequency of the payment obligation is less than every three years. If the frequency of the payment obligation is less than three years but the obligation is payable only with remarketing proceeds, the VMIG short-term rating is not assigned and it is denoted as "NR".

"VMIG-1" – This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections.

"VMIG-2" – This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections.

"VMIG-3" – This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections.

"SG" – This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have a sufficiently strong short-term rating or may lack the structural and/or legal protections.

<u>About Credit Ratings</u>

An ***S&P Global Ratings*** issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including ratings on medium-term note programs and commercial paper programs). It takes into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the currency in which the obligation is denominated. The opinion reflects S&P Global Ratings' view of the obligor's capacity and willingness to meet its financial commitments as they come due, and this opinion may assess terms, such as collateral security and subordination, which could affect ultimate payment in the event of default.

***Moody's*** credit ratings assigned on Moody's global long-term and short-term rating scales are forward-looking opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Moody's defines credit risk as the risk that an entity may not meet its contractual financial obligations as they come due and any estimated financial loss in the event of default or impairment. The contractual financial obligations addressed by Moody's ratings are those that call for, without regard to enforceability, the payment of an ascertainable amount, which may vary based upon standard sources of variation (*e.g.*, floating interest rates), by an ascertainable date. Moody's rating addresses the issuer's ability to obtain cash sufficient to service the obligation, and its willingness to pay. Moody's ratings do not address non-standard sources of variation in the amount of the principal obligation (*e.g.*, equity indexed), absent an express statement to the contrary in a press release accompanying an initial rating.

***Fitch's*** credit ratings are forward-looking opinions on the relative ability of an entity or obligation to meet financial commitments. Issuer Default Ratings (IDRs) are assigned to corporations, sovereign entities, and financial institutions, such as banks, leasing companies and insurers, and public finance entities (local and regional governments). Issue-level ratings are also assigned and often include an expectation of recovery, which may be notched above or below the issuer-level rating. Issue ratings are assigned to secured and unsecured debt securities, loans, preferred stock and other instruments. Credit ratings are indications of the likelihood of repayment in accordance with the terms of the issuance. In limited cases, Fitch may include additional considerations (*i.e.*, rate to a higher or lower standard than that implied in the obligation's documentation).

Credit ratings provided by ***Morningstar DBRS*** are forward-looking opinions about credit risk which reflect the creditworthiness of an issuer, rated entity, security and/or obligations. Credit ratings are not statements of fact. While historical statistics, performance, and expert opinion (on, *e.g.*, financial statements or legal matters) can be important considerations, credit ratings are not based solely on such; they include subjective considerations and involve expectations for future performance or events that cannot be guaranteed. As

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such, and to the extent that future events and economic conditions do not match expectations, credit ratings assigned to issuers, entities, securities, and/or obligations can change. Credit ratings are also based on approved and applicable methodologies, which are periodically updated and when material changes are deemed necessary, which may also lead to changes in credit ratings.

Credit ratings typically provide an opinion on the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which an obligation was issued. In some cases, credit ratings may also include consideration for the relative ranking of claims and recovery, should default occur. Credit ratings are meant to provide opinions on relative measures of risk and are not based on expectations of any specific default probability, nor are they meant to predict such.

The data and information on which Morningstar DBRS bases its opinions is not audited or verified by Morningstar DBRS, although, Morningstar DBRS conducts a reasonableness review of information received and relied upon in accordance with its Methodologies and policies.

Morningstar DBRS uses rating symbols as a concise method of expressing its opinion to the market. However, as there are credit risk differentials that exist across the credit rating spectrum and given the limited number of rating categories, Morningstar DBRS does not assert that credit ratings in the same category are exactly the same quality.

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**APPENDIX B**

**ISS Proxy Voting Guidelines**

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**U N I T E DS T A T E S**

Proxy Voting Guidelines

Benchmark Policy Recommendations

Effective for Meetings on or after February 1, 2026

Published December 9, 2025

Effective for Meetings Published on or after February 25, 2025, Consideration of Certain

Diversity Factors in Making Vote Recommendations Is Suspended (see pp. 12-13 for more

information).

<u>W</u> <u>W</u> <u>W</u> <u>.</u> <u>I S S</u> <u>G</u> <u>O</u> <u>V</u> <u>E</u> <u>R</u> <u>N</u> <u>A</u> <u>N</u> <u>C</u> <u>E</u> <u>.</u> <u>C</u> <u>O</u> <u>M</u>

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**TABLE OF CONTENTS**

**Coverage8**

**1. Board of Directors9**

Voting on Director Nominees in Uncontested Elections9

Independence9

ISS Classification of Directors – U.S.10

Composition12

Attendance12

Overboarded Directors12

Gender Diversity12

Racial and/or Ethnic Diversity13

Responsiveness13

Accountability14

Poison Pills14

Unequal Voting Rights14

Classified Board Structure15

Removal of Shareholder Discretion on Classified Boards15

Problematic Governance Structure15

Unilateral Bylaw/Charter Amendments15

Restricting Binding Shareholder Proposals16

Director Performance Evaluation16

Management Proposals to Ratify Existing Charter or Bylaw Provisions16

Problematic Audit-Related Practices17

Problematic Compensation Practices17

Problematic Pledging of Company Stock17

Climate Accountability18

Governance Failures18

Voting on Director Nominees in Contested Elections18

Vote-No Campaigns18

Proxy Contests/Proxy Access19

Other Board-Related Proposals19

Adopt Anti-Hedging/Pledging/Speculative Investments Policy19

Board Refreshment19

Term/Tenure Limits19

Age Limits20

Board Size20

Classification/Declassification of the Board20

CEO Succession Planning20

Cumulative Voting20

Director and Officer Indemnification, Liability Protection, and Exculpation21

Establish/Amend Nominee Qualifications21

Establish Other Board Committee Proposals22

Filling Vacancies/Removal of Directors22

Independent Board Chair22

Majority of Independent Directors/Establishment of Independent Committees23

Majority Vote Standard for the Election of Directors23

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Proxy Access23

Require More Nominees than Open Seats24

Shareholder Engagement Policy (Shareholder Advisory Committee)24

**2. Audit-Related25**

Auditor Indemnification and Limitation of Liability25

Auditor Ratification25

Shareholder Proposals Limiting Non-Audit Services25

Shareholder Proposals on Audit Firm Rotation26

**3. Shareholder Rights & Defenses27**

Advance Notice Requirements for Shareholder Proposals/Nominations27

Amend Bylaws without Shareholder Consent27

Control Share Acquisition Provisions27

Control Share Cash-Out Provisions28

Disgorgement Provisions28

Fair Price Provisions28

Freeze-Out Provisions28

Greenmail28

Shareholder Litigation Rights29

Federal Forum Selection Provisions29

Exclusive Forum Provisions for State Law Matters29

Fee shifting29

Net Operating Loss (NOL) Protective Amendments30

Poison Pills (Shareholder Rights Plans)30

Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy30

Management Proposals to Ratify a Poison Pill31

Management Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs)31

Proxy Voting Disclosure, Confidentiality, and Tabulation31

Ratification Proposals: Management Proposals to Ratify Existing Charter or Bylaw Provisions32

Reimbursing Proxy Solicitation Expenses32

Reincorporation Proposals33

Shareholder Ability to Act by Written Consent33

Shareholder Ability to Call Special Meetings33

Stakeholder Provisions34

State Antitakeover Statutes34

Supermajority Vote Requirements34

Virtual Shareholder Meetings34

**4. Capital/Restructuring35**

Capital35

Adjustments to Par Value of Common Stock35

Common Stock Authorization35

General Authorization Requests35

Specific Authorization Requests36

Dual Class Structure36

Issue Stock for Use with Rights Plan36

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Preemptive Rights36

Preferred Stock Authorization37

General Authorization Requests37

Recapitalization Plans38

Reverse Stock Splits38

Share Issuance Mandates at U.S. Domestic Issuers Incorporated Outside the U.S.38

Share Repurchase Programs39

Share Repurchase Programs Shareholder Proposals39

Stock Distributions: Splits and Dividends39

Tracking Stock40

Restructuring40

Appraisal Rights40

Asset Purchases40

Asset Sales40

Bundled Proposals41

Conversion of Securities41

Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged Buyouts/Wrap

Plans41

Formation of Holding Company41

Going Private and Going Dark Transactions (LBOs and Minority Squeeze-outs)42

Joint Ventures42

Liquidations43

Mergers and Acquisitions43

Private Placements/Warrants/Convertible Debentures43

Reorganization/Restructuring Plan (Bankruptcy)45

Special Purpose Acquisition Corporations (SPACs)45

Special Purpose Acquisition Corporations (SPACs) - Proposals for Extensions45

Spin-offs46

Value Maximization Shareholder Proposals46

**5. Compensation47**

Executive Pay Evaluation47

Advisory Votes on Executive Compensation—Management Proposals (Say-on-Pay)47

Pay-for-Performance Evaluation48

Problematic Pay Practices48

Compensation Committee Communications and Responsiveness49

Frequency of Advisory Vote on Executive Compensation ("Say When on Pay")50

Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale50

Equity-Based and Other Incentive Plans50

Shareholder Value Transfer (SVT)51

Three-Year Value-Adjusted Burn Rate52

Egregious Factors52

Liberal Change in Control Definition52

Repricing Provisions52

Problematic Pay Practices or Significant Pay-for-Performance Disconnect53

Amending Cash and Equity Plans (including Approval for Tax Deductibility (162(m))53

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Specific Treatment of Certain Award Types in Equity Plan Evaluations54

Dividend Equivalent Rights54

Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts (REITs)54

Other Compensation Plans54

401(k) Employee Benefit Plans54

Employee Stock Ownership Plans (ESOPs)54

Employee Stock Purchase Plans—Qualified Plans55

Employee Stock Purchase Plans—Non-Qualified Plans55

Option Exchange Programs/Repricing Options55

Stock Plans in Lieu of Cash56

Transfer Stock Option (TSO) Programs56

Director Compensation57

Shareholder Ratification of Director Pay Programs57

Equity Plans for Non-Employee Directors57

Non-Employee Director Retirement Plans58

Shareholder Proposals on Compensation58

Bonus Banking/Bonus Banking "Plus"58

Compensation Consultants—Disclosure of Board or Company's Utilization58

Disclosure/Setting Levels or Types of Compensation for Executives and Directors58

Golden Coffins/Executive Death Benefits59

Hold Equity Past Retirement or for a Significant Period of Time59

Pay Disparity59

Pay for Performance/Performance-Based Awards60

Pay for Superior Performance60

Pre-Arranged Trading Plans (10b5-1 Plans)61

Prohibit Outside CEOs from Serving on Compensation Committees61

Recoupment of Incentive or Stock Compensation in Specified Circumstances61

Severance and Golden Parachute Agreements61

Share Buyback Impact on Incentive Program Metrics62

Supplemental Executive Retirement Plans (SERPs)62

Tax Gross-Up Proposals62

Termination of Employment Prior to Severance Payment/Eliminating Accelerated Vesting of Unvested Equity

.62

**6. Routine/Miscellaneous64**

Adjourn Meeting64

Amend Quorum Requirements64

Amend Minor Bylaws64

Change Company Name64

Change Date, Time, or Location of Annual Meeting65

Other Business65

**7. Social and Environmental Issues66**

Global Approach – E&S Shareholder Proposals66

Endorsement of Principles66

Animal Welfare67

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Animal Welfare Policies67

Animal Testing67

Animal Slaughter67

Consumer Issues67

Genetically Modified Ingredients67

Reports on Potentially Controversial Business/Financial Practices68

Pharmaceutical Pricing, Access to Medicines, and Prescription Drug Reimportation68

Product Safety and Toxic/Hazardous Materials69

[Tobacco-Related Proposals](#ifca87145a27b469293e01e914221bbf8_10)[69](#ifca87145a27b469293e01e914221bbf8_10)

Climate Change70

Say on Climate (SoC) Management Proposals70

Say on Climate (SoC) Shareholder Proposals70

Climate Change/Greenhouse Gas (GHG) Emissions70

Energy Efficiency71

Renewable Energy71

Diversity72

Board Diversity72

Equality of Opportunity72

Gender Identity, Sexual Orientation, and Domestic Partner Benefits73

Gender, Race/Ethnicity Pay Gap73

Racial Equity and/or Civil Rights Audit Guidelines73

Environment and Sustainability73

Facility and Workplace Safety74

Natural Capital- Related and/or Community Impact Assessment Proposals74

Hydraulic Fracturing74

Operations in Protected Areas74

Recycling75

Sustainability Reporting75

Water Issues75

General Corporate Issues75

Charitable Contributions75

Data Security, Privacy, and Internet Issues76

ESG Compensation-Related Proposals76

Human Rights, Human Capital Management, and International Operations76

Human Rights Proposals76

Mandatory Arbitration77

Operations in High-Risk Markets77

Outsourcing/Offshoring78

Sexual Harassment78

Weapons and Military Sales78

Political Activities78

Lobbying78

Political Contributions79

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Political Expenditures and Lobbying Congruency79

Political Ties80

**8. Mutual Fund Proxies81**

Election of Directors81

Closed End Funds- Unilateral Opt-In to Control Share Acquisition Statutes81

Converting Closed-end Fund to Open-end Fund81

Proxy Contests81

Investment Advisory Agreements82

Approving New Classes or Series of Shares82

Preferred Stock Proposals82

1940 Act Policies82

Changing a Fundamental Restriction to a Nonfundamental Restriction82

Change Fundamental Investment Objective to Nonfundamental83

Name Change Proposals83

Change in Fund's Subclassification83

Business Development Companies—Authorization to Sell Shares of Common Stock at a Price below Net Asset

Value83

Disposition of Assets/Termination/Liquidation84

Changes to the Charter Document84

Changing the Domicile of a Fund84

Authorizing the Board to Hire and Terminate Subadvisers Without Shareholder Approval84

Distribution Agreements85

Master-Feeder Structure85

Mergers85

Shareholder Proposals for Mutual Funds85

Establish Director Ownership Requirement85

Reimburse Shareholder for Expenses Incurred85

Terminate the Investment Advisor86

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**Coverage**

The U.S. research team provides proxy analyses and voting recommendations for the common shareholder

meetings of U.S. - incorporated companies that are publicly-traded on U.S. exchanges, as well as certain OTC

companies, if they are held in our institutional investor clients' portfolios. Coverage generally includes corporate

actions for common equity holders, such as written consents and bankruptcies. ISS' U.S. coverage includes

investment companies (including open-end funds, closed-end funds, exchange-traded funds, and unit investment

trusts), limited partnerships ("LPs"), master limited partnerships ("MLPs"), limited liability companies ("LLCs"), and

business development companies. ISS reviews its universe of coverage on an annual basis, and the coverage is

subject to change based on client need and industry trends.

**Foreign-incorporated companies**

In addition to U.S.- incorporated, U.S.- listed companies, ISS' U.S. policies are applied to certain foreign-

incorporated company analyses. Like the SEC, ISS distinguishes two types of companies that list but are not

incorporated in the U.S.:

U.S. Domestic Issuers – which have a majority of outstanding shares held in the U.S. and meet other criteria,

as determined by the SEC, and are subject to the same disclosure and listing standards as U.S. incorporated

companies (e.g. they are required to file DEF14A proxy statements) – are generally covered under standard

U.S. policy guidelines.

<u>Foreign Private Issuers</u> (FPIs) – which are allowed to take exemptions from most disclosure requirements (e.g.,

they are allowed to file 6-K for their proxy materials) and U.S. listing standards – are generally covered under a

combination of policy guidelines:

FPI Guidelines (see the <u>Americas Regional Proxy Voting Guidelines</u>), may apply to companies incorporated

in governance havens, and apply certain minimum independence and disclosure standards in the

evaluation of key proxy ballot items, such as the election of directors; and/or

Guidelines for the market that is responsible for, or most relevant to, the item on the ballot.

U.S. incorporated companies listed only on non-U.S. exchanges are generally covered under the ISS guidelines for

the market on which they are traded.

An FPI is generally covered under ISS' approach to FPIs outlined above, even if such FPI voluntarily files a proxy

statement and/or other filing normally required of a U.S. Domestic Issuer, so long as the company retains its FPI

status.

In all cases – including with respect to other companies with cross-market features that may lead to ballot items

related to multiple markets – items that are on the ballot solely due to the requirements of another market (listing,

incorporation, or national code) may be evaluated under the policy of the relevant market, regardless of the

"assigned" primary market coverage.

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**1. Board of Directors**

Voting on Director Nominees in Uncontested Elections

Four fundamental principles apply when determining votes on director nominees:

**Independence**: Boards should be sufficiently independent from management (and significant shareholders) to

ensure that they are able and motivated to effectively supervise management's performance for the benefit of all

shareholders, including in setting and monitoring the execution of corporate strategy, with appropriate use of

shareholder capital, and in setting and monitoring executive compensation programs that support that strategy.

The chair of the board should ideally be an independent director, and all boards should have an independent

leadership position or a similar role in order to help provide appropriate counterbalance to executive

management, as well as having sufficiently independent committees that focus on key governance concerns such

as audit, compensation, and nomination of directors.

**Composition**: Companies should ensure that directors add value to the board through their specific skills and

expertise and by having sufficient time and commitment to serve effectively. Boards should be of a size

appropriate to accommodate diversity, expertise, and independence, while ensuring active and collaborative

participation by all members. Boards should be sufficiently diverse to ensure consideration of a wide range of

perspectives.

**Responsiveness**: Directors should respond to investor input, such as that expressed through significant opposition

to management proposals, significant support for shareholder proposals (whether binding or non-binding), and

tender offers where a majority of shares are tendered.

**Accountability**: Boards should be sufficiently accountable to shareholders, including through transparency of the

company's governance practices and regular board elections, by the provision of sufficient information for

shareholders to be able to assess directors and board composition, and through the ability of shareholders to

remove directors.

**General Recommendation:** Generally vote for director nominees, except under the following circumstances (with

new nominees<sup>1</sup> considered on case-by-case basis):

**Independence**

Vote against<sup>2</sup> or withhold from non-independent directors (Executive Directors and Non-Independent Non-

Executive Directors per ISS' Classification of Directors) when:

• Independent directors comprise 50 percent or less of the board;

• The non-independent director serves on the audit, compensation, or nominating committee;

• The company lacks an audit, compensation, or nominating committee so that the full board functions as that

committee; or

• The company lacks a formal nominating committee, even if the board attests that the independent directors

fulfill the functions of such a committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>1</sup> A "new nominee" is a director who is being presented for election by shareholders for the first time. Recommendations on

new nominees who have served for less than one year are made on a case-by-case basis depending on the timing of their

appointment and the problematic governance issue in question.

<sup>2</sup> In general, companies with a plurality vote standard use "Withhold" as the contrary vote option in director elections;

companies with a majority vote standard use "Against". However, it will vary by company and the proxy must be checked to

determine the valid contrary vote option for the particular company.

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**ISS Classification of Directors – U.S.**

1.**Executive Director**

1.1.Current officer<sup>1</sup> of the company or one of its affiliates<sup>2</sup>*.***

2.**Non-Independent Non-Executive Director**

<u>Board</u> <u>Identification</u>

2.1.Director identified as not independent by the board.

<u>Controlling/Significant Shareholder</u>

2.2.Beneficial owner of more than 50 percent of the company's voting power (this may be aggregated if

voting power is distributed among more than one member of a group).

<u>Current</u> <u>Employment</u> <u>at</u> <u>Company</u> <u>or</u> <u>Related</u> <u>Company</u>

2.3.Non-officer employee of the firm (including employee representatives).

2.4.Officer<sup>1</sup>[,](#ifca87145a27b469293e01e914221bbf8_10) former officer, or general or limited partner of a joint venture or partnership with the

company.

<u>Former</u> <u>Employment</u>

2.5.Former CEO of the company. <sup>3,</sup> <sup>4</sup>

2.6.Former non-CEO officer<sup>1</sup> of the company or an affiliate<sup>2</sup> within the past five years.

2.7.Former officer<sup>1</sup> of an acquired company within the past five years.<sup>4</sup>

2.8.Officer<sup>1</sup> of a former parent or predecessor firm at the time the company was sold or split off within the

past five years.

2.9.Former interim officer if the service was longer than 18 months. If the service was between 12 and 18

months an assessment of the interim officer's employment agreement will be made.<sup>5</sup>

<u>Family</u> <u>Members</u>

2.10.Immediate family member<sup>6</sup> of a current or former officer<sup>1</sup> of the company or its affiliates<sup>2</sup> within the

last five years.

2.11.Immediate family member<sup>6</sup> of a current employee of company or its affiliates<sup>2</sup> where additional factors

raise concern (which may include, but are not limited to, the following: a director related to numerous

employees; the company or its affiliates employ relatives of numerous board members; or a non-

Section 16 officer in a key strategic role).

<u>Professional,</u> <u>Transactional,</u> <u>and</u> <u>Charitable</u> <u>Relationships</u>

2.12.Director who (or whose immediate family member<sup>6</sup>) currently provides professional services<sup>7</sup> in excess

of $10,000 per year to: the company, an affiliate<sup>2</sup>, or an individual officer of the company or an affiliate;

or who is (or whose immediate family member<sup>6</sup> is) a partner, employee, or controlling shareholder of

an organization which provides the services.

2.13.Director who (or whose immediate family member<sup>6</sup>) currently has any material transactional

relationship<sup>8</sup> with the company or its affiliates<sup>2</sup>; or who is (or whose immediate family member<sup>6</sup> is) a

partner in, or a controlling shareholder or an executive officer of, an organization which has the

material transactional relationship<sup>8</sup> (excluding investments in the company through a private

placement).

2.14.Director who (or whose immediate family member<sup>6</sup>**)** is a trustee, director, or employee of a charitable

or non-profit organization that receives material grants or endowments<sup>8</sup> from the company or its

affiliates<sup>2</sup>.

<u>Other</u> <u>Relationships</u>

2.15.Party to a voting agreement<sup>9</sup> to vote in line with management on proposals being brought to

shareholder vote.

2.16.Has (or an immediate family member<sup>6</sup> has) an interlocking relationship as defined by the SEC involving

members of the board of directors or its Compensation Committee.<sup>10</sup>

2.17.Founder<sup>11</sup> of the company but not currently an employee.

2.18.Director with pay comparable to Named Executive Officers.

2.19.Any material<sup>12</sup> relationship with the company.

3.**Independent Director**

3.1.No material<sup>12</sup> connection to the company other than a board seat.

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**Footnotes:**

*1.*The definition of officer will generally follow that of a "Section 16 officer" (officers subject to Section 16 of the

Securities and Exchange Act of 1934) and includes the chief executive, operating, financial, legal, technology, and accounting

officers of a company (including the president, treasurer, secretary, controller, or any vice president in charge of a principal

business unit, division, or policy function). Current interim officers are included in this category. For private companies, the

equivalent positions are applicable. A non-employee director serving as an officer due to statutory requirements (e.g.

corporate secretary) will generally be classified as a Non-Independent Non-Executive Director under "Any material

relationship with the company." However, if the company provides explicit disclosure that the director is not receiving

additional compensation exceeding $10,000 per year for serving in that capacity, then the director will be classified as an

Independent Director.

*2.*"Affiliate" includes a subsidiary, sibling company, or parent company. ISS uses 50 percent control ownership by the

parent company as the standard for applying its affiliate designation. The manager/advisor of an externally managed issuer

(EMI) is considered an affiliate.

*3.*Includes any former CEO of the company prior to the company's initial public offering (IPO).

*4.*When there is a former CEO of a special purpose acquisition company (SPAC) serving on the board of an acquired

company, ISS will generally classify such directors as independent unless determined otherwise taking into account the

following factors: the applicable listing standards determination of such director's independence; any operating ties to the

firm; and the existence of any other conflicting relationships or related party transactions.

*5.*ISS will look at the terms of the interim officer's employment contract to determine if it contains severance pay, long-

term health and pension benefits, or other such standard provisions typically contained in contracts of permanent, non-

temporary CEOs. ISS will also consider if a formal search process was under way for a full-time officer at the time.

*6.*"Immediate family member" follows the SEC's definition of such and covers spouses, parents, children, step-parents,

step- children, siblings, in-laws, and any person (other than a tenant or employee) sharing the household of any director,

nominee for director, executive officer, or significant shareholder of the company.

*7.*Professional services can be characterized as advisory in nature, generally involve access to sensitive company

information or to strategic decision-making, and typically have a commission- or fee-based payment structure. Professional

services generally include but are not limited to the following: investment banking/financial advisory services, commercial

banking (beyond deposit services), investment services, insurance services, accounting/audit services, consulting services,

marketing services, legal services, property management services, realtor services, lobbying services, executive search

services, and IT consulting services. The following would generally be considered transactional relationships and not

professional services: deposit services, IT tech support services, educational services, and construction services. The case of

participation in a banking syndicate by a non-lead bank should be considered a transactional (and hence subject to the

associated materiality test) rather than a professional relationship. "Of Counsel" relationships are only considered

immaterial if the individual does not receive any form of compensation (in excess of $10,000 per year) from, or is a retired

partner of, the firm providing the professional service. The case of a company providing a professional service to one of its

directors or to an entity with which one of its directors is affiliated, will be considered a transactional rather than a

professional relationship. Insurance services and marketing services are assumed to be professional services unless the

company explains why such services are not advisory.

*8.*A material transactional relationship, including grants to non-profit organizations, exists if the company makes

annual payments to, or receives annual payments from, another entity, exceeding the greater of: $200,000 or 5 percent

of the recipient's gross revenues, for a company that follows NASDAQ listing standards; or the greater of $1,000,000 or

2 percent of the recipient's gross revenues, for a company that follows NYSE listing standards. For a company that

follows neither of the preceding standards, ISS will apply the NASDAQ-based materiality test. (The recipient is the party

receiving the financial proceeds from the transaction).

*9.*Dissident directors who are parties to a voting agreement pursuant to a settlement or similar arrangement may be

classified as Independent Directors if an analysis of the following factors indicates that the voting agreement does not

compromise their alignment with all shareholders' interests: the terms of the agreement; the duration of the standstill

provision in the agreement; the limitations and requirements of actions that are agreed upon; if the dissident director

nominee(s) is subject to the standstill; and if there any conflicting relationships or related party transactions.

*10.*Interlocks include: executive officers serving as directors on each other's compensation or similar committees (or, in

the absence of such a committee, on the board); or executive officers sitting on each other's boards and at least one serves on

the other's compensation or similar committees (or, in the absence of such a committee, on the board).

*11.*The operating involvement of the founder with the company will be considered; if the founder was never employed by

the company, ISS may deem him or her an Independent Director.

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*12.*For purposes of ISS's director independence classification, "material" will be defined as a standard of relationship

(financial, personal, or otherwise) that a reasonable person might conclude could potentially influence one's objectivity in the

boardroom in a manner that would have a meaningful impact on an individual's ability to satisfy requisite fiduciary standards

on behalf of shareholders.

**Composition**

**Attendance at Board and Committee Meetings:** Generally vote against or withhold from directors (except

nominees who served only part of the fiscal year<sup>3</sup>) who attend less than 75 percent of the aggregate of their board

and committee meetings for the period for which they served, unless an acceptable reason for absences is

disclosed in the proxy or another SEC filing. Acceptable reasons for director absences are generally limited to the

following:

Medical issues/illness;

Family emergencies; and

Missing only one meeting (when the total of all meetings is three or fewer).

In cases of chronic poor attendance without reasonable justification, in addition to voting against the director(s)

with poor attendance, generally vote against or withhold from appropriate members of the nominating/

governance committees or the full board.

If the proxy disclosure is unclear and insufficient to determine whether a director attended at least 75 percent of

the aggregate of his/her board and committee meetings during his/her period of service, vote against or withhold

from the director(s) in question.

**Overboarded Directors:** Generally vote against or withhold from individual directors who:

Sit on more than five public company boards; or

Are CEOs of public companies who sit on the boards of more than two public companies besides their own—

withhold only at their outside boards<sup>4</sup>.

*NOTE: For shareholder meeting reports published on or after February 25th, 2025, Institutional Shareholder* 

*Services (ISS) has indefinitely halted the consideration of the gender diversity of a company's board when making* 

*vote recommendations with respect to the election or re-election of directors at U.S. companies covered by these* 

*guidelines under its proprietary ISS U.S. Benchmark policy.*

**Gender Diversity:** Generally vote against or withhold from the chair of the nominating committee (or other

directors on a case-by-case basis) at companies where there are no women on the company's board. An

exception will be made if there was at least one woman on the board at the preceding annual meeting and the

board makes a firm commitment to return to a gender-diverse status within a year.

*NOTE: For shareholder meeting reports published on or after February 25th, 2025, Institutional Shareholder* 

*Services (ISS) has indefinitely halted the consideration of the racial and/or ethnic diversity of a company's board* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>3</sup> Nominees who served for only part of the fiscal year are generally exempted from the attendance policy.

<sup>4</sup> Although all of a CEO's subsidiary boards with publicly-traded common stock will be counted as separate boards, ISS will not

recommend a withhold vote for the CEO of a parent company board or any of the controlled (>50 percent ownership) subsidiaries

of that parent but may do so at subsidiaries that are less than 50 percent controlled and boards outside the parent/subsidiary

relationships.

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*when making vote recommendations with respect to the election or re-election of directors at U.S. companies* 

*covered under these guidelines under its proprietary ISS U.S. Benchmark policy.*

**Racial and/or Ethnic Diversity:** For companies in the Russell 3000 or S&P 1500 indices, generally vote against or

withhold from the chair of the nominating committee (or other directors on a case-by-case basis) where the

board has no apparent racially or ethnically diverse members<sup>5</sup>. An exception will be made if there was racial and/

or ethnic diversity on the board at the preceding annual meeting and the board makes a firm commitment to

appoint at least one racial and/or ethnic diverse member within a year.

**Responsiveness**

Vote case-by-case on individual directors, committee members, or the entire board of directors as appropriate if:

The board failed to act on a shareholder proposal that received the support of a majority of the shares cast in

the previous year or failed to act on a management proposal seeking to ratify an existing charter/bylaw

provision that received opposition of a majority of the shares cast in the previous year. Factors that will be

considered are:

Disclosed outreach efforts by the board to shareholders in the wake of the vote;

Rationale provided in the proxy statement for the level of implementation;

The subject matter of the proposal;

The level of support for and opposition to the resolution in past meetings;

Actions taken by the board in response to the majority vote and its engagement with shareholders;

The continuation of the underlying issue as a voting item on the ballot (as either shareholder

or management proposals); and

Other factors as appropriate.

The board failed to act on takeover offers where the majority of shares are tendered; or

At the previous board election, any director received more than 50 percent withhold/against votes of the

shares cast and the company has failed to address the issue(s) that caused the high withhold/against vote.

Vote case-by-case on Compensation Committee members (or, in exceptional cases, the full board) and/or the

say-on-pay proposal when the company's previous say-on-pay received support of less than 70 percent of votes

cast.

Factors that will be considered in assessing board responsiveness include:

Disclosure of engagement efforts with major institutional investors, including the frequency and timing

of engagements and the company participants (including whether independent directors participated);

Disclosure of the specific concerns voiced by dissenting shareholders that led to the say-on-pay

opposition; and

Disclosure of specific and meaningful actions taken to address shareholders' concerns;

If the company discloses meaningful engagement efforts, but in addition states that it was unable to obtain

specific feedback, ISS will assess company actions taken in response to the say-on-pay vote as well as the

company's explanation as to why such actions are beneficial for shareholders.

Additional factors that may be considered include:

Whether the issues raised are recurring or isolated;

The company's ownership structure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>5</sup> Aggregate diversity statistics provided by the board will only be considered if specific to racial and/or ethnic diversity.

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Significant corporate activity, such as a recent merger or proxy contest; and

Any other compensation action or factor considered relevant to assessing board responsiveness.

If the say-on-pay support level was less than 50 percent of votes case, this would warrant the highest degree of

responsiveness, as assessed under the factors noted above.

Vote case-by-case on Compensation Committee members (or, in exceptional cases, the full board) if the board

implements an advisory vote on executive compensation on a less frequent basis than the frequency that received the

plurality of votes cast.

**Accountability**

***PROBLEMATIC TAKEOVER DEFENSES, CAPITAL STRUCTURE, AND GOVERNANCE STRUCTURE***

**Poison Pills:** Generally vote against or withhold from all nominees (except new nominees<sup>1</sup>, who should be

considered case-by-case) if:

The company has a poison pill with a deadhand or slowhand feature<sup>6</sup>;

The board makes a material adverse modification to an existing pill, including, but not limited to, extension,

renewal, or lowering the trigger, without shareholder approval; or

The company has a long-term poison pill (with a term of over one year) that was not approved by the public

shareholders<sup>7</sup>.

Vote case-by-case on nominees if the board adopts an initial short-term pill<sup>6</sup> (with a term of one year or less)

without shareholder approval, taking into consideration:

The trigger threshold and other terms of the pill;

The disclosed rationale for the adoption;

The context in which the pill was adopted, (e.g., factors such as the company's size and stage of

development, sudden changes in its market capitalization, and extraordinary industry-wide or

macroeconomic events);

A commitment to put any renewal to a shareholder vote;

The company's overall track record on corporate governance and responsiveness to shareholders; and

Other factors as relevant.

**Unequal Voting Rights**: Generally vote withhold or against directors individually, committee members, or the

entire board (except new nominees<sup>1</sup>, who should be considered case-by-case), if the company employs a common

stock structure with unequal voting rights<sup>8</sup>.

Exceptions to this policy will generally be limited to:

<sup>6</sup> If a short-term pill with a deadhand or slowhand feature is enacted but expires before the next shareholder vote, ISS will

generally still recommend withhold/against nominees at the next shareholder meeting following its adoption.

<sup>7</sup> Approval prior to, or in connection, with a company's becoming publicly-traded, or in connection with a de-SPAC transaction,

is insufficient.

<sup>8</sup> This generally includes classes of common stock that have additional votes per share than other shares; classes of shares that

are not entitled to vote on all the same ballot items or nominees; or stock with time-phased voting rights ("loyalty shares").

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Newly-public companies<sup>9</sup> with a sunset provision of no more than seven years from the date of going public;

Limited Partnerships and the Operating Partnership (OP) unit structure of REITs;

Convertible preferred shares that vote on an "as-converted" basis;

Situations where the enhanced voting rights are limited in duration and applicability, such as where

they are intended to overcome low voting turnout and ensure approval of a specific non-

controversial agenda item and "mirror voting" applies;

Situations where the super-voting shares represent less than 5% of total voting power and therefore

considered to be *de minimis*; or

The company provides sufficient protections for minority shareholders, such as allowing minority

shareholders a regular binding vote on whether the capital structure should be maintained.

**Classified Board Structure:** The board is classified, and a continuing director responsible for a problematic

governance issue at the board/committee level that would warrant a withhold/against vote recommendation is

not up for election. All appropriate nominees (except new) may be held accountable.

**Removal of Shareholder Discretion on Classified Boards**: The company has opted into, or failed to opt out of,

state laws requiring a classified board structure.

**Problematic Governance Structure**: For companies that hold or held their first annual meeting<sup>9</sup> of public

shareholders after Feb. 1, 2015, generally vote against or withhold from directors individually, committee

members, or the entire board (except new nominees<sup>1</sup>, who should be considered case-by-case) if, prior to or in

connection with the company's public offering, the company or its board adopted the following bylaw or charter

provisions that are considered to be materially adverse to shareholder rights:

Supermajority vote requirements to amend the bylaws or charter;

A classified board structure; or

Other egregious provisions.

A provision which specifies that the problematic structure(s) will be sunset within seven years of the date of going

public will be considered a mitigating factor.

Unless the adverse provision is reversed or removed, vote case-by-case on director nominees in subsequent years.

**Unilateral Bylaw/Charter Amendments:** Generally vote against or withhold from directors individually, committee

members, or the entire board (except new nominees<sup>1</sup>, who should be considered case-by-case) if the board

amends the company's bylaws or charter without shareholder approval in a manner that materially diminishes

shareholders' rights or that could adversely impact shareholders, considering the following factors:

The board's rationale for adopting the bylaw/charter amendment without shareholder ratification;

Disclosure by the company of any significant engagement with shareholders regarding the amendment;

The level of impairment of shareholders' rights caused by the board's unilateral amendment to the

bylaws/charter;

The board's track record with regard to unilateral board action on bylaw/charter amendments or other

entrenchment provisions;

The company's ownership structure;

The company's existing governance provisions;

The timing of the board's amendment to the bylaws/charter in connection with a significant business

development; and

<sup>9</sup> Includes companies that emerge from bankruptcy, SPAC transactions, spin-offs, direct listings, and those who complete a

traditional initial public offering.

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Other factors, as deemed appropriate, that may be relevant to determine the impact of the amendment on

shareholders.

Unless the adverse amendment is reversed or submitted to a binding shareholder vote, in subsequent years vote

case-by-case on director nominees. Generally vote against (except new nominees<sup>1</sup>, who should be considered

case-by-case) if the directors:

Classified the board;

Adopted supermajority vote requirements to amend the bylaws or charter;

Eliminated shareholders' ability to amend bylaws;

Adopted a <u>fee-shifting provision</u>; or

Adopted another provision deemed egregious.

**Restricting Binding Shareholder Proposals:** Generally vote against or withhold from the members of the governance

committee if:

The company's governing documents impose undue restrictions on shareholders' ability to amend the bylaws.

Such restrictions include but are not limited to: outright prohibition on the submission of binding shareholder

proposals or share ownership requirements, subject matter restrictions, or time holding requirements in

excess of SEC Rule 14a-8. Vote against or withhold on an ongoing basis.

Submission of management proposals to approve or ratify requirements in excess of SEC Rule 14a-8 for the

submission of binding bylaw amendments will generally be viewed as an insufficient restoration of shareholders'

rights. Generally continue to vote against or withhold on an ongoing basis until shareholders are provided with an

unfettered ability to amend the bylaws or a proposal providing for such unfettered right is submitted for

shareholder approval.

**Director Performance Evaluation:** The board lacks mechanisms to promote accountability and oversight,

coupled with sustained poor performance relative to peers. Sustained poor performance is measured by one-,

three-, and five-year total shareholder returns in the bottom half of a company's four-digit GICS industry group

(Russell 3000 companies only). Take into consideration the company's operational metrics and other factors as

warranted. Problematic provisions include but are not limited to:

A classified board structure;

A supermajority vote requirement;

Either a plurality vote standard in uncontested director elections, or a majority vote standard in contested

elections;

The inability of shareholders to call special meetings;

The inability of shareholders to act by written consent;

A multi-class capital structure; and/or

A non-shareholder-approved poison pill.

**Management Proposals to Ratify Existing Charter or Bylaw Provisions:** Vote against/withhold from individual

directors, members of the governance committee, or the full board, where boards ask shareholders to ratify

existing charter or bylaw provisions considering the following factors:

The presence of a shareholder proposal addressing the same issue on the same ballot;

The board's rationale for seeking ratification;

Disclosure of actions to be taken by the board should the ratification proposal fail;

Disclosure of shareholder engagement regarding the board's ratification request;

The level of impairment to shareholders' rights caused by the existing provision;

The history of management and shareholder proposals on the provision at the company's past meetings;

Whether the current provision was adopted in response to the shareholder proposal;

The company's ownership structure; and

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Previous use of ratification proposals to exclude shareholder proposals.

**Problematic Audit-Related Practices**

Generally vote against or withhold from the members of the Audit Committee if:

The non-audit fees paid to the auditor are <u>excessive</u>;

The company receives an adverse opinion on the company's financial statements from its auditor; or

There is persuasive evidence that the Audit Committee entered into an inappropriate indemnification

agreement with its auditor that limits the ability of the company, or its shareholders, to pursue legitimate legal

recourse against the audit firm.

Vote case-by-case on members of the Audit Committee and potentially the full board if:

Poor accounting practices are identified that rise to a level of serious concern, such as: fraud; misapplication of

GAAP; and material weaknesses identified in Section 404 disclosures. Examine the severity, breadth,

chronological sequence, and duration, as well as the company's efforts at remediation or corrective actions, in

determining whether withhold/against votes are warranted.

**Problematic Compensation Practices**

In the absence of an Advisory Vote on Executive Compensation (Say on Pay) ballot item or in egregious situations,

vote against or withhold from the members of the Compensation Committee and potentially the full board if:

There is an unmitigated misalignment between CEO pay and company performance (<u>pay for performance</u>);

The company maintains significant <u>problematic pay practices</u>; or

The board exhibits a significant level of <u>poor communication and responsiveness</u> to shareholders.

Generally vote against or withhold from the Compensation Committee chair, other committee members, or

potentially the full board if:

The company fails to include a Say on Pay ballot item when required under SEC provisions, or under the

company's declared frequency of say on pay; or

The company fails to include a Frequency of Say on Pay ballot item when required under SEC provisions.

Generally vote against members of the board committee responsible for approving/setting non-employee director

compensation if there is a pattern (i.e. two or more consecutive or non-consecutive years/across multiple years) of

awarding excessive or otherwise problematic<sup>10</sup> non-employee director compensation without disclosing a

compelling rationale or other mitigating factors.

Adverse recommendations may be warranted in the first year for particularly egregious director compensation

issues/instances/cases<sup>10</sup>.

**Problematic Pledging of Company Stock** : Vote against the members of the committee that oversees risks related

to pledging, or the full board, where a significant level of pledged company stock by executives or directors raises

concerns. The following factors will be considered:

The presence of an anti-pledging policy, disclosed in the proxy statement, that prohibits future pledging

activity;

The magnitude of aggregate pledged shares in terms of total common shares outstanding, market value, and

trading volume;

Disclosure of progress or lack thereof in reducing the magnitude of aggregate pledged shares over time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>10</sup> May include excessive magnitude, problematic perquisites, performance awards, stock options, or retirement benefits.

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Disclosure in the proxy statement that shares subject to stock ownership and holding requirements do not

include pledged company stock; and

Any other relevant factors.

**Climate Accountability**

For companies that are significant greenhouse gas (GHG) emitters, through their operations or value chain<sup>11</sup>,

generally vote against or withhold from the incumbent chair of the responsible committee (or other directors on

a case-by-case basis) in cases where ISS determines that the company is not taking the minimum steps needed to

understand, assess, and mitigate risks related to climate change to the company and the larger economy.

Minimum steps to understand and mitigate those risks are considered to be the following. Both minimum criteria

will be required to be in alignment with the policy :

Detailed disclosure of climate-related risks, such as according to the framework established by the Task Force

on Climate-related Financial Disclosures (TCFD), including:

Board governance measures;

Corporate strategy;

Risk management analyses; and

Metrics and targets.

Appropriate GHG emissions reduction targets.

At this time, "appropriate GHG emissions reductions targets" will be medium-term GHG reduction targets or Net

Zero-by-2050 GHG reduction targets for a company's operations (Scope 1) and electricity use (Scope 2). Targets

should cover the vast majority of the company's direct emissions.

**Governance Failures**

Under extraordinary circumstances, vote against or withhold from directors individually, committee members, or

the entire board, due to:

Material failures of governance, stewardship, risk oversight<sup>12</sup>, or fiduciary responsibilities at the company;

Failure to replace management as appropriate; or

Egregious actions related to a director's service on other boards that raise substantial doubt about his or her

ability to effectively oversee management and serve the best interests of shareholders at any company.

Voting on Director Nominees in Contested Elections

**Vote-No Campaigns**

**General Recommendation:** In cases where companies are targeted in connection with public "vote-no" campaigns,

evaluate director nominees under the existing governance policies for voting on director nominees in uncontested

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>11</sup> Companies defined as "significant GHG emitters" will be those on the current Climate Action 100+ Focus Group list.

<sup>12</sup> Examples of failure of risk oversight include but are not limited to: bribery; large or serial fines or sanctions from regulatory

bodies; demonstrably poor risk oversight of environmental and social issues, including climate change; significant adverse legal

judgments or settlement; or hedging of company stock.

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elections. Take into consideration the arguments submitted by shareholders and other publicly available

information.

**Proxy Contests/Proxy Access**

**General Recommendation:** Vote case-by-case on the election of directors in contested elections, considering the

following factors:

Long-term financial performance of the company relative to its industry;

Management's track record;

Background to the contested election;

Nominee qualifications and any compensatory arrangements;

Strategic plan of dissident slate and quality of the critique against management;

Likelihood that the proposed goals and objectives can be achieved (both slates); and

Stock ownership positions.

In the case of candidates nominated pursuant to proxy access, vote case-by-case considering any applicable factors

listed above or additional factors which may be relevant, including those that are specific to the company, to the

nominee(s) and/or to the nature of the election (such as whether there are more candidates than board seats).

Other Board-Related Proposals

**Adopt Anti-Hedging/Pledging/Speculative Investments Policy**

**General Recommendation:** Generally vote for proposals seeking a policy that prohibits named executive officers

from engaging in derivative or speculative transactions involving company stock, including hedging, holding stock

in a margin account, or pledging stock as collateral for a loan. However, the company's existing policies regarding

responsible use of company stock will be considered.

**Board Refreshment**

Board refreshment is best implemented through an ongoing program of individual director evaluations, conducted

annually, to ensure the evolving needs of the board are met and to bring in fresh perspectives, skills, and diversity

as needed.

**Term/Tenure Limits**

**General Recommendation:** Vote case-by-case on management proposals regarding director term/tenure limits,

considering:

The rationale provided for adoption of the term/tenure limit;

The robustness of the company's board evaluation process;

Whether the limit is of sufficient length to allow for a broad range of director tenures;

Whether the limit would disadvantage independent directors compared to non-independent directors; and

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Whether the board will impose the limit evenly, and not have the ability to waive it in a discriminatory

manner.

Vote case-by-case on shareholder proposals asking for the company to adopt director term/tenure limits,

considering:

The scope of the shareholder proposal; and

Evidence of problematic issues at the company combined with, or exacerbated by, a lack of board

refreshment.

**Age Limits**

**General Recommendation:** Generally vote against management and shareholder proposals to limit the tenure of

independent directors through mandatory retirement ages. Vote for proposals to remove mandatory age limits.

**Board Size**

**General Recommendation:** Vote for proposals seeking to fix the board size or designate a range for the board size.

Vote against proposals that give management the ability to alter the size of the board outside of a specified range

without shareholder approval.

**Classification/Declassification of the Board**

**General Recommendation:** Vote against proposals to classify (stagger) the board.

Vote for proposals to repeal classified boards and to elect all directors annually.

**CEO Succession Planning**

**General Recommendation:** Generally vote for proposals seeking disclosure on a CEO succession planning policy,

considering, at a minimum, the following factors:

The reasonableness/scope of the request; and

The company's existing disclosure on its current CEO succession planning process.

**Cumulative Voting**

**General Recommendation:** Generally vote against management proposals to eliminate cumulate voting, and for

shareholder proposals to restore or provide for cumulative voting, unless:

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The company has proxy access<sup>13</sup>, thereby allowing shareholders to nominate directors to the company's

ballot; and

The company has adopted a majority vote standard, with a carve-out for plurality voting in situations where

there are more nominees than seats, and a director resignation policy to address failed elections.

Vote for proposals for cumulative voting at controlled companies (insider voting power > 50%).

**Director and Officer Indemnification, Liability Protection, and Exculpation**

**General Recommendation:** Vote case-by-case on proposals on director and officer indemnification, liability

protection, and exculpation<sup>14</sup><sup>.</sup>

Consider the stated rationale for the proposed change. Also consider, among other factors, the extent to which the

proposal would:

Eliminate directors' and officers' liability for monetary damages for violating the duty of care;

Eliminate directors' and officers' liability for monetary damages for violating the duty of loyalt;

Expand coverage beyond just legal expenses to liability for acts that are more serious violations of fiduciary

obligation than mere carelessness; and

Expand the scope of indemnification to provide for mandatory indemnification of company officials in

connection with acts that previously the company was permitted to provide indemnification for, at the

discretion of the company's board (*i.e.*, "permissive indemnification"), but that previously the company was

not required to indemnify.

Vote for those proposals providing such expanded coverage in cases when a director's or officer's legal defense

was unsuccessful if both of the following apply:

If the individual was found to have acted in good faith and in a manner that the individual reasonably

believed was in the best interests of the company; and

If only the individual's legal expenses would be covered.

**Establish/Amend Nominee Qualifications**

**General Recommendation:** Vote case-by-case on proposals that establish or amend director qualifications. Votes

should be based on the reasonableness of the criteria and the degree to which they may preclude dissident

nominees from joining the board.

Vote case-by-case on shareholder resolutions seeking a director nominee who possesses a particular subject

matter expertise, considering:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>13</sup> A proxy access right that meets the <u>recommended guidelines</u>.

<sup>14</sup> **Indemnification**: the condition of being secured against loss or damage.

**Limited liability**: a person's financial liability is limited to a fixed sum, or personal financial assets are not at risk if the individual

loses a lawsuit that results in financial award/damages to the plaintiff.

**Exculpation**: to eliminate or limit the personal liability of a director or officer to the corporation or its shareholders for

monetary damages for breach of fiduciary duty as a director or officer.

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The company's board committee structure, existing subject matter expertise, and board nomination

provisions relative to that of its peers;

The company's existing board and management oversight mechanisms regarding the issue for which board

oversight is sought;

The company's disclosure and performance relating to the issue for which board oversight is sought and any

significant related controversies; and

The scope and structure of the proposal.

**Establish Other Board Committee Proposals**

**General Recommendation:** Generally vote against shareholder proposals to establish a new board committee, as

such proposals seek a specific oversight mechanism/structure that potentially limits a company's flexibility to

determine an appropriate oversight mechanism for itself. However, the following factors will be considered:

Existing oversight mechanisms (including current committee structure) regarding the issue for which board

oversight is sought;

Level of disclosure regarding the issue for which board oversight is sought;

Company performance related to the issue for which board oversight is sought;

Board committee structure compared to that of other companies in its industry sector; and

The scope and structure of the proposal.

**Filling Vacancies/Removal of Directors**

**General Recommendation:** Vote against proposals that provide that directors may be removed only for cause.

Vote for proposals to restore shareholders' ability to remove directors with or without cause.

Vote against proposals that provide that only continuing directors may elect replacements to fill board vacancies.

Vote for proposals that permit shareholders to elect directors to fill board vacancies.

**Independent Board Chair**

**General Recommendation:** Generally vote for shareholder proposals requiring that the board chair position be

filled by an independent director, taking into consideration the following:

The scope and rationale of the proposal;

The company's current board leadership structure;

The company's governance structure and practices;

Company performance; and

Any other relevant factors that may be applicable.

The following factors will increase the likelihood of a "for" recommendation:

A majority non-independent board and/or the presence of non-independent directors on key board

committees;

A weak or poorly-defined lead independent director role that fails to serve as an appropriate counterbalance

to a combined CEO/chair role;

The presence of an executive or non-independent chair in addition to the CEO, a recent recombination of the

role of CEO and chair, and/or departure from a structure with an independent chair;

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Evidence that the board has failed to oversee and address material risks facing the company;

A material governance failure, particularly if the board has failed to adequately respond to shareholder

concerns or if the board has materially diminished shareholder rights; or

Evidence that the board has failed to intervene when management's interests are contrary to shareholders'

interests.

**Majority of Independent Directors/Establishment of Independent** 

**Committees**

**General Recommendation:** Vote for shareholder proposals asking that a majority or more of directors be

independent unless the board composition already meets the proposed threshold by ISS' definition of Independent

Director (See ISS' Classification of Directors.)

Vote for shareholder proposals asking that board audit, compensation, and/or nominating committees be

composed exclusively of independent directors unless they currently meet that standard.

**Majority Vote Standard for the Election of Directors**

**General Recommendation:** Generally vote for management proposals to adopt a majority of votes cast standard

for directors in uncontested elections. Vote against if no carve-out for a plurality vote standard in contested

elections is included.

Generally vote for precatory and binding shareholder resolutions requesting that the board change the company's

bylaws to stipulate that directors need to be elected with an affirmative majority of votes cast, provided it does

not conflict with the state law where the company is incorporated. Binding resolutions need to allow for a carve-

out for a plurality vote standard when there are more nominees than board seats.

Companies are strongly encouraged to also adopt a post-election policy (also known as a director resignation

policy) that will provide guidelines so that the company will promptly address the situation of a holdover director.

**Proxy Access**

**General Recommendation:** Generally vote for management and shareholder proposals for proxy access with the

following provisions:

**Ownership threshold:** maximum requirement not more than three percent (3%) of the voting power;

**Ownership duration:** maximum requirement not longer than three (3) years of continuous ownership for each

member of the nominating group;

**Aggregation:** minimal or no limits on the number of shareholders permitted to form a nominating group; and

**Cap:** cap on nominees of generally twenty-five percent (25%) of the board.

Review for reasonableness any other restrictions on the right of proxy access. Generally vote against proposals

that are more restrictive than these guidelines.

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**Require More Nominees than Open Seats**

**General Recommendation:** Vote against shareholder proposals that would require a company to nominate more

candidates than the number of open board seats.

**Shareholder Engagement Policy (Shareholder Advisory Committee)**

**General Recommendation:** Generally vote for shareholder proposals requesting that the board establish an

internal mechanism/process, which may include a committee, in order to improve communications between

directors and shareholders, unless the company has the following features, as appropriate:

Established a communication structure that goes beyond the exchange requirements to facilitate

the exchange of information between shareholders and members of the board;

Effectively disclosed information with respect to this structure to its shareholders;

Company has not ignored majority-supported shareholder proposals, or a majority withhold vote on a director

nominee; and

The company has an independent chair or a lead director, according to <u>ISS' definition</u>. This individual must be

made available for periodic consultation and direct communication with major shareholders.

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**2. Audit-Related**

**Auditor Indemnification and Limitation of Liability**

**General Recommendation:** Vote case-by-case on the issue of auditor indemnification and limitation of liability.

Factors to be assessed include, but are not limited to:

The terms of the auditor agreement—the degree to which these agreements impact shareholders' rights;

The motivation and rationale for establishing the agreements;

The quality of the company's disclosure; and

The company's historical practices in the audit area.

Vote against or withhold from members of an audit committee in situations where there is persuasive evidence

that the audit committee entered into an inappropriate indemnification agreement with its auditor that limits the

ability of the company, or its shareholders, to pursue legitimate legal recourse against the audit firm.

**Auditor Ratification**

**General Recommendation:** Vote for proposals to ratify auditors unless any of the following apply:

An auditor has a financial interest in or association with the company, and is therefore not independent;

There is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor

indicative of the company's financial position;

Poor accounting practices are identified that rise to a serious level of concern, such as fraud or misapplication

of GAAP; or

Fees for non-audit services ("Other" fees) are excessive.

Non-audit fees are excessive if:

Non-audit ("other") fees > audit fees + audit-related fees + tax compliance/preparation fees

Tax compliance and preparation include the preparation of original and amended tax returns and refund claims,

and tax payment planning. All other services in the tax category, such as tax advice, planning, or consulting, should

be added to "Other" fees. If the breakout of tax fees cannot be determined, add all tax fees to "Other" fees.

In circumstances where "Other" fees include fees related to significant one-time capital structure events (such as

initial public offerings, bankruptcy emergence, and spin-offs) and the company makes public disclosure of the

amount and nature of those fees that are an exception to the standard "non-audit fee" category, then such fees

may be excluded from the non-audit fees considered in determining the ratio of non-audit to audit/audit-related

fees/tax compliance and preparation for purposes of determining whether non-audit fees are excessive.

**Shareholder Proposals Limiting Non-Audit Services**

**General Recommendation:** Vote case-by-case on shareholder proposals asking companies to prohibit or limit their

auditors from engaging in non-audit services.

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**Shareholder Proposals on Audit Firm Rotation**

**General Recommendation:** Vote case-by-case on shareholder proposals asking for audit firm rotation, taking into

account:

The tenure of the audit firm;

The length of rotation specified in the proposal;

Any significant audit-related issues at the company;

The number of Audit Committee meetings held each year;

The number of financial experts serving on the committee; and

Whether the company has a periodic renewal process where the auditor is evaluated for both audit quality

and competitive price.

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**3. Shareholder Rights & Defenses**

**Advance Notice Requirements for Shareholder Proposals/Nominations**

**General Recommendation:** Vote case-by-case on advance notice proposals, giving support to those proposals

which allow shareholders to submit proposals/nominations as close to the meeting date as reasonably possible

and within the broadest window possible, recognizing the need to allow sufficient notice for company, regulatory,

and shareholder review.

To be reasonable, the company's deadline for shareholder notice of a proposal/nominations must be no earlier

than 120 days prior to the anniversary of the previous year's meeting and have a submittal window of no shorter

than 30 days from the beginning of the notice period (also known as a 90-120-day window). The submittal window

is the period under which shareholders must file their proposals/nominations prior to the deadline.

In general, support additional efforts by companies to ensure full disclosure in regard to a proponent's economic

and voting position in the company so long as the informational requirements are reasonable and aimed at

providing shareholders with the necessary information to review such proposals.

**Amend Bylaws without Shareholder Consent**

**General Recommendation:** Vote against proposals giving the board exclusive authority to amend the bylaws.

Vote case-by-case on proposals giving the board the ability to amend the bylaws in addition to shareholders, taking

into account the following:

Any impediments to shareholders' ability to amend the bylaws (i.e. supermajority voting requirements);

The company's ownership structure and historical voting turnout;

Whether the board could amend bylaws adopted by shareholders; and

Whether shareholders would retain the ability to ratify any board-initiated amendments.

**Control Share Acquisition Provisions**

**General Recommendation:** Vote for proposals to opt out of control share acquisition statutes unless doing so

would enable the completion of a takeover that would be detrimental to shareholders.

Vote against proposals to amend the charter to include control share acquisition provisions.

Vote for proposals to restore voting rights to the control shares.

Control share acquisition statutes function by denying shares their voting rights when they contribute to

ownership in excess of certain thresholds. Voting rights for those shares exceeding ownership limits may only be

restored by approval of either a majority or supermajority of disinterested shares. Thus, control share acquisition

statutes effectively require a hostile bidder to put its offer to a shareholder vote or risk voting disenfranchisement

if the bidder continues buying up a large block of shares.

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**Control Share Cash-Out Provisions**

**General Recommendation:** Vote for proposals to opt out of control share cash-out statutes.

Control share cash-out statutes give dissident shareholders the right to "cash-out" of their position in a company

at the expense of the shareholder who has taken a control position. In other words, when an investor crosses a

preset threshold level, remaining shareholders are given the right to sell their shares to the acquirer, who must

buy them at the highest acquiring price.

**Disgorgement Provisions**

**General Recommendation:** Vote for proposals to opt out of state disgorgement provisions.

Disgorgement provisions require an acquirer or potential acquirer of more than a certain percentage of a

company's stock to disgorge, or pay back, to the company any profits realized from the sale of that company's

stock purchased 24 months before achieving control status. All sales of company stock by the acquirer occurring

within a certain period of time (between 18 months and 24 months) prior to the investor's gaining control status

are subject to these recapture-of-profits provisions.

**Fair Price Provisions**

**General Recommendation:** Vote case-by-case on proposals to adopt fair price provisions (provisions that stipulate

that an acquirer must pay the same price to acquire all shares as it paid to acquire the control shares), evaluating

factors such as the vote required to approve the proposed acquisition, the vote required to repeal the fair price

provision, and the mechanism for determining the fair price.

Generally vote against fair price provisions with shareholder vote requirements greater than a majority of

disinterested shares.

**Freeze-Out Provisions**

**General Recommendation:** Vote for proposals to opt out of state freeze-out provisions. Freeze-out provisions

force an investor who surpasses a certain ownership threshold in a company to wait a specified period of

time before gaining control of the company.

**Greenmail**

**General Recommendation:** Vote for proposals to adopt anti-greenmail charter or bylaw amendments or otherwise

restrict a company's ability to make greenmail payments.

Vote case-by-case on anti-greenmail proposals when they are bundled with other charter or bylaw amendments.

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Greenmail payments are targeted share repurchases by management of company stock from individuals or groups

seeking control of the company. Since only the hostile party receives payment, usually at a substantial premium

over the market value of its shares, the practice discriminates against all other shareholders.

**Shareholder Litigation Rights**

**Federal Forum Selection Provisions**

Federal forum selection provisions require that U.S. federal courts be the sole forum for shareholders to litigate

claims arising under federal securities law.

**General Recommendation:** Generally vote for federal forum selection provisions in the charter or bylaws that

specify "the district courts of the United States" as the exclusive forum for federal securities law matters, in the

absence of serious concerns about corporate governance or board responsiveness to shareholders.

Vote against provisions that restrict the forum to a particular federal district court; unilateral adoption (without a

shareholder vote) of such a provision will generally be considered a one-time failure under the <u>Unilateral Bylaw/</u>

<u>Charter Amendments</u> policy.

**Exclusive Forum Provisions for State Law Matters**

Exclusive forum provisions in the charter or bylaws restrict shareholders' ability to bring derivative lawsuits against

the company, for claims arising out of state corporate law, to the courts of a particular state (generally the state of

incorporation).

**General Recommendation:** Generally vote for charter or bylaw provisions that specify courts located within the

state of Delaware as the exclusive forum for corporate law matters for Delaware corporations, in the absence of

serious concerns about corporate governance or board responsiveness to shareholders.

For states other than Delaware, vote case-by-case on exclusive forum provisions, taking into consideration:

The company's stated rationale for adopting such a provision;

Disclosure of past harm from duplicative shareholder lawsuits in more than one forum;

The breadth of application of the charter or bylaw provision, including the types of lawsuits to which it

would apply and the definition of key terms; and

Governance features such as shareholders' ability to repeal the provision at a later date (including the vote

standard applied when shareholders attempt to amend the charter or bylaws) and their ability to hold

directors accountable through annual director elections and a majority vote standard in uncontested

elections.

Generally vote against provisions that specify a state other than the state of incorporation as the exclusive forum

for corporate law matters, or that specify a particular local court within the state; unilateral adoption of such a

provision will generally be considered a one-time failure under the <u>Unilateral Bylaw/Charter Amendments</u> policy.

**Fee shifting**

Fee-shifting provisions in the charter or bylaws require that a shareholder who sues a company unsuccessfully pay

all litigation expenses of the defendant corporation and its directors and officers.

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**General Recommendation:** Generally vote against provisions that mandate fee-shifting whenever plaintiffs are not

completely successful on the merits (i.e., including cases where the plaintiffs are partially successful).

Unilateral adoption of a fee-shifting provision will generally be considered an ongoing failure under the <u>Unilateral</u> 

Bylaw/Charter Amendments policy.

**Net Operating Loss (NOL) Protective Amendments**

**General Recommendation:** Vote against proposals to adopt a protective amendment for the stated purpose of

protecting a company's net operating losses (NOL) if the effective term of the protective amendment would

exceed the shorter of three years and the exhaustion of the NOL.

Vote case-by-case, considering the following factors, for management proposals to adopt an NOL protective

amendment that would remain in effect for the shorter of three years (or less) and the exhaustion of the NOL:

The ownership threshold (NOL protective amendments generally prohibit stock ownership transfers that

would result in a new 5-percent holder or increase the stock ownership percentage of an existing 5-percent

holder);

The value of the NOLs;

Shareholder protection mechanisms (sunset provision or commitment to cause expiration of the protective

amendment upon exhaustion or expiration of the NOL);

The company's existing governance structure including: board independence, existing takeover defenses, track

record of responsiveness to shareholders, and any other problematic governance concerns; and

Any other factors that may be applicable.

Poison Pills (Shareholder Rights Plans)

**Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy**

**General Recommendation:** Vote for shareholder proposals requesting that the company submit its poison pill to a

shareholder vote or redeem it unless the company has: (1) A shareholder-approved poison pill in place; or (2) The

company has adopted a policy concerning the adoption of a pill in the future specifying that the board will only

adopt a shareholder rights plan if either:

Shareholders have approved the adoption of the plan; or

The board, in its exercise of its fiduciary responsibilities, determines that it is in the best interest of

shareholders under the circumstances to adopt a pill without the delay in adoption that would result from

seeking stockholder approval (i.e., the "fiduciary out" provision). A poison pill adopted under this fiduciary out

will be put to a shareholder ratification vote within 12 months of adoption or expire. If the pill is not approved

by a majority of the votes cast on this issue, the plan will immediately terminate.

If the shareholder proposal calls for a time period of less than 12 months for shareholder ratification after

adoption, vote for the proposal, but add the caveat that a vote within 12 months would be considered sufficient

implementation.

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**Management Proposals to Ratify a Poison Pill**

**General Recommendation:** Vote case-by-case on management proposals on poison pill ratification, focusing on

the features of the shareholder rights plan. Rights plans should contain the following attributes:

No lower than a 20 percent trigger, flip-in or flip-over;

A term of no more than three years;

No deadhand, slowhand, no-hand, or similar feature that limits the ability of a future board to redeem the pill;

and

Shareholder redemption feature (qualifying offer clause); if the board refuses to redeem the pill 90 days after

a qualifying offer is announced, 10 percent of the shares may call a special meeting or seek a written consent

to vote on rescinding the pill.

In addition, the rationale for adopting the pill should be thoroughly explained by the company. In examining the

request for the pill, take into consideration the company's existing governance structure, including: board

independence, existing takeover defenses, and any problematic governance concerns.

**Management Proposals to Ratify a Pill to Preserve Net Operating Losses** 

**(NOLs)**

**General Recommendation:** Vote against proposals to adopt a poison pill for the stated purpose of protecting a

company's net operating losses (NOL) if the term of the pill would exceed the shorter of three years and the

exhaustion of the NOL.

Vote case-by-case on management proposals for poison pill ratification, considering the following factors, if the

term of the pill would be the shorter of three years (or less) and the exhaustion of the NOL:

The ownership threshold to transfer (NOL pills generally have a trigger slightly below 5 percent);

The value of the NOLs;

Shareholder protection mechanisms (sunset provision, or commitment to cause expiration of the pill upon

exhaustion or expiration of NOLs);

The company's existing governance structure, including: board independence, existing takeover defenses,

track record of responsiveness to shareholders, and any other problematic governance concerns; and

Any other factors that may be applicable.

**Proxy Voting Disclosure, Confidentiality, and Tabulation**

**General Recommendation:** Vote case-by-case on proposals regarding proxy voting mechanics, taking into

consideration whether implementation of the proposal is likely to enhance or protect shareholder rights. Specific

issues covered under the policy include, but are not limited to, confidential voting of individual proxies and ballots,

confidentiality of running vote tallies, and the treatment of abstentions and/or broker non-votes in the company's

vote-counting methodology.

While a variety of factors may be considered in each analysis, the guiding principles are: transparency, consistency,

and fairness in the proxy voting process. The factors considered, as applicable to the proposal, may include:

The scope and structure of the proposal;

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The company's stated confidential voting policy (or other relevant policies) and whether it ensures a "level

playing field" by providing shareholder proponents with equal access to vote information prior to the annual

meeting;

The company's vote standard for management and shareholder proposals and whether it ensures consistency

and fairness in the proxy voting process and maintains the integrity of vote results;

Whether the company's disclosure regarding its vote counting method and other relevant voting policies with

respect to management and shareholder proposals are consistent and clear;

Any recent controversies or concerns related to the company's proxy voting mechanics;

Any unintended consequences resulting from implementation of the proposal; and

Any other factors that may be relevant.

**Ratification Proposals: Management Proposals to Ratify Existing Charter or** 

**Bylaw Provisions**

**General Recommendation:** Generally vote against management proposals to ratify provisions of the company's

existing charter or bylaws, unless these governance provisions align with best practice.

In addition, voting against/withhold from individual directors, members of the governance committee, or the full

board may be warranted, considering:

The presence of a shareholder proposal addressing the same issue on the same ballot;

The board's rationale for seeking ratification;

Disclosure of actions to be taken by the board should the ratification proposal fail;

Disclosure of shareholder engagement regarding the board's ratification request;

The level of impairment to shareholders' rights caused by the existing provision;

The history of management and shareholder proposals on the provision at the company's past meetings;

Whether the current provision was adopted in response to the shareholder proposal;

The company's ownership structure; and

Previous use of ratification proposals to exclude shareholder proposals.

**Reimbursing Proxy Solicitation Expenses**

**General Recommendation:** Vote case-by-case on proposals to reimburse proxy solicitation expenses.

When voting in conjunction with support of a dissident slate, vote for the reimbursement of all appropriate proxy

solicitation expenses associated with the election.

Generally vote for shareholder proposals calling for the reimbursement of reasonable costs incurred in connection

with nominating one or more candidates in a contested election where the following apply:

The election of fewer than 50 percent of the directors to be elected is contested in the election;

One or more of the dissident's candidates is elected;

Shareholders are not permitted to cumulate their votes for directors; and

The election occurred, and the expenses were incurred, after the adoption of this bylaw.

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**Reincorporation Proposals**

**General Recommendation:** Management or shareholder proposals to change a company's state of incorporation

should be evaluated case-by-case, giving consideration to both financial and corporate governance concerns

including the following:

Reasons for reincorporation;

Comparison of company's governance practices and provisions prior to and following the reincorporation; and

Comparison of corporation laws of original state and destination state.

Vote for reincorporation when the economic factors outweigh any neutral or negative governance changes.

**Shareholder Ability to Act by Written Consent**

**General Recommendation:** Generally vote against management and shareholder proposals to restrict or prohibit

shareholders' ability to act by written consent.

Generally vote for management and shareholder proposals that provide shareholders with the ability to act by

written consent, taking into account the following factors:

Shareholders' current right to act by written consent;

The consent threshold;

The inclusion of exclusionary or prohibitive language;

Investor ownership structure; and

Shareholder support of, and management's response to, previous shareholder proposals.

Vote case-by-case on shareholder proposals if, in addition to the considerations above, the company has the

following governance and antitakeover provisions:

An unfettered<sup>15</sup> right for shareholders to call special meetings at a 10 percent threshold;

A majority vote standard in uncontested director elections;

No non-shareholder-approved pill; and

An annually elected board.

**Shareholder Ability to Call Special Meetings**

**General Recommendation:** Vote against management or shareholder proposals to restrict or prohibit

shareholders' ability to call special meetings.

Generally vote for management or shareholder proposals that provide shareholders with the ability to call special

meetings taking into account the following factors:

Shareholders' current right to call special meetings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>15</sup> "Unfettered" means no restrictions on agenda items, no restrictions on the number of shareholders who can group together

to reach the 10 percent threshold, and only reasonable limits on when a meeting can be called: no greater than 30 days after

the last annual meeting and no greater than 90 prior to the next annual meeting.

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Minimum ownership threshold necessary to call special meetings (10 percent preferred);

The inclusion of exclusionary or prohibitive language;

Investor ownership structure; and

Shareholder support of, and management's response to, previous shareholder proposals.

**Stakeholder Provisions**

**General Recommendation:** Vote against proposals that ask the board to consider non-shareholder constituencies

or other non-financial effects when evaluating a merger or business combination.

**State Antitakeover Statutes**

**General Recommendation:** Vote case-by-case on proposals to opt in or out of state takeover statutes (including

fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, and

anti-greenmail provisions).

**Supermajority Vote Requirements**

**General Recommendation:** Vote against proposals to require a supermajority shareholder vote.

Vote for management or shareholder proposals to reduce supermajority vote requirements. However, for

companies with shareholder(s) who have significant ownership levels, vote case-by-case, taking into account:

Ownership structure;

Quorum requirements; and

Vote requirements.

**Virtual Shareholder Meetings**

**General Recommendation:** Generally vote for management proposals allowing for the convening of shareholder

meetings by electronic means, so long as they do not preclude in-person meetings. Companies are encouraged to

disclose the circumstances under which virtual-only<sup>16</sup> meetings would be held, and to allow for comparable rights

and opportunities for shareholders to participate electronically as they would have during an in-person meeting.

Vote case-by-case on shareholder proposals concerning virtual-only meetings, considering:

Scope and rationale of the proposal; and

Concerns identified with the company's prior meeting practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>16</sup> Virtual-only shareholder meeting" refers to a meeting of shareholders that is held exclusively using technology without a

corresponding in-person meeting.

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**4. Capital/Restructuring**

Capital

**Adjustments to Par Value of Common Stock**

**General Recommendation:** Vote for management proposals to reduce the par value of common stock unless the

action is being taken to facilitate an anti-takeover device or some other negative corporate governance action.

Vote for management proposals to eliminate par value.

**Common Stock Authorization**

**General Authorization Requests**

**General Recommendation:** Vote case-by-case on proposals to increase the number of authorized shares of

common stock that are to be used for general corporate purposes:

If share usage (outstanding plus reserved) is less than 50% of the current authorized shares, vote for an

increase of up to **50**% of current authorized share;

If share usage is 50% to 100% of the current authorized, vote for an increase of up to **100**% of current

authorized shares;

If share usage is greater than current authorized shares, vote for an increase of up to the current share usage;

or

In the case of a stock split, the allowable increase is calculated (per above) based on the post-split adjusted

authorization.

Generally vote against proposed increases, even if within the above ratios, if the proposal or the company's prior

or ongoing use of authorized shares is problematic, including, but not limited to:

The proposal seeks to increase the number of authorized shares of the class of common stock that

has superior voting rights to other share classes;

On the same ballot is a proposal for a reverse split for which support is warranted despite the fact that it

would result in an excessive increase in the share authorization;

The company has a non-shareholder approved poison pill (including an NOL pill); or

The company has previous sizeable placements (within the past 3 years) of stock with insiders at prices

substantially below market value, or with problematic voting rights, without shareholder approval.

However, generally vote for proposed increases beyond the above ratios or problematic situations when there is

disclosure of specific and severe risks to shareholders of not approving the request, such as:

In, or subsequent to, the company's most recent 10-K filing, the company discloses that there is substantial

doubt about its ability to continue as a going concern;

The company states that there is a risk of imminent bankruptcy or imminent liquidation if shareholders do not

approve the increase in authorized capital; or

A government body has in the past year required the company to increase its capital ratios.

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For companies incorporated in states that allow increases in authorized capital without shareholder approval,

generally vote withhold or against all nominees if a unilateral capital authorization increase does not conform to

the above policies.

**Specific Authorization Requests**

**General Recommendation:** Generally vote for proposals to increase the number of authorized common shares

where the primary purpose of the increase is to issue shares in connection with transaction(s) (such as

acquisitions, SPAC transactions, private placements, or similar transactions) on the same ballot, or disclosed in the

proxy statement, that warrant support. For such transactions, the allowable increase will be the greater of:

twice the amount needed to support the transactions on the ballot, and

the allowable increase as calculated for general issuances above.

**Dual Class Structure**

**General Recommendation:** Generally vote against proposals to create a new class of common stock unless:

The company discloses a compelling rationale for the dual-class capital structure, such as:

The company's auditor has concluded that there is substantial doubt about the company's ability to continue

as a going concern; or

The new class of shares will be transitory;

The new class is intended for financing purposes with minimal or no dilution to current shareholders in both

the short term and long term; and

The new class is not designed to preserve or increase the voting power of an insider or significant shareholder.

**Issue Stock for Use with Rights Plan**

**General Recommendation:** Vote against proposals that increase authorized common stock for the explicit purpose

of implementing a non-shareholder-approved shareholder rights plan (poison pill).

**Preemptive Rights**

**General Recommendation:** Vote case-by-case on shareholder proposals that seek preemptive rights, taking into

consideration:

The size of the company;

The shareholder base; and

The liquidity of the stock.

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**Preferred Stock Authorization**

**General Authorization Requests**

**General Recommendation:** Vote case-by-case on proposals to increase the number of authorized shares of

preferred stock that are to be used for general corporate purposes:

If share usage (outstanding plus reserved) is less than 50% of the current authorized shares, vote for an

increase of up to **50**% of current authorized shares;

If share usage is 50% to 100% of the current authorized, vote for an increase of up to **100**% of current

authorized shares;

If share usage is greater than current authorized shares, vote for an increase of up to the current share usage.

In the case of a stock split, the allowable increase is calculated (per above) based on the post-split adjusted

authorization; or

If no preferred shares are currently issued and outstanding, vote against the request, unless the company

discloses a specific use for the shares.

Generally vote against proposed increases, even if within the above ratios, if the proposal or the company's prior

or ongoing use of authorized shares is problematic, including, but not limited to:

If the shares requested are blank check preferred shares that can be used for antitakeover purposes;<sup>17</sup>

The company seeks to increase a class of non-convertible preferred shares entitled to more than one vote per

share on matters that do not solely affect the rights of preferred stockholders "supervoting shares");

The company seeks to increase a class of convertible preferred shares entitled to a number of votes greater

than the number of common shares into which they are convertible ("supervoting shares") on matters that do

not solely affect the rights of preferred stockholders;

The stated intent of the increase in the general authorization is to allow the company to increase an existing

designated class of supervoting preferred shares;

On the same ballot is a proposal for a reverse split for which support is warranted despite the fact that it

would result in an excessive increase in the share authorization;

The company has a non-shareholder approved poison pill (including an NOL pill); and

The company has previous sizeable placements (within the past 3 years) of stock with insiders at prices

substantially below market value, or with problematic voting rights, without shareholder approval.

However, generally vote for proposed increases beyond the above ratios or problematic situations when there is

disclosure of specific and severe risks to shareholders of not approving the request, such as:

In, or subsequent to, the company's most recent 10-K filing, the company discloses that there is substantial

doubt about its ability to continue as a going concern;

The company states that there is a risk of imminent bankruptcy or imminent liquidation if shareholders do not

approve the increase in authorized capital; or

A government body has in the past year required the company to increase its capital ratios.

For companies incorporated in states that allow increases in authorized capital without shareholder approval,

generally vote withhold or against all nominees if a unilateral capital authorization increase does not conform to

the above policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>17</sup> To be acceptable, appropriate disclosure would be needed that the shares are "declawed": i.e., representation by the board

that it will not, without prior stockholder approval, issue or use the preferred stock for any defensive or anti-takeover purpose

or for the purpose of implementing any stockholder rights plan.

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**<u>Specific Authorization Requests</u>**

**General Recommendation:** Generally vote for proposals to increase the number of authorized preferred shares

where the primary purpose of the increase is to issue shares in connection with transaction(s) (such as

acquisitions, SPAC transactions, private placements, or similar transactions) on the same ballot, or disclosed in the

proxy statement, that warrant support. For such transactions, the allowable increase will be the greater of:

twice the amount needed to support the transactions on the ballot, and

the allowable increase as calculated for general issuances above.

**Recapitalization Plans**

**General Recommendation:** Vote case-by-case on recapitalizations (reclassifications of securities), taking into

account the following:

More simplified capital structure;

Enhanced liquidity;

Fairness of conversion terms;

Impact on voting power and dividends;

Reasons for the reclassification;

Conflicts of interest; and

Other alternatives considered.

**Reverse Stock Splits**

**General Recommendation:** Vote for management proposals to implement a reverse stock split if:

The number of authorized shares will be proportionately reduced; or

The effective increase in authorized shares is equal to or less than the allowable increase calculated

in accordance with ISS' Common Stock Authorization policy.

Vote case-by-case on proposals that do not meet either of the above conditions, taking into consideration the

following factors:

Stock exchange notification to the company of a potential delisting;

Disclosure of substantial doubt about the company's ability to continue as a going concern without additional

financing;

The company's rationale; or

Other factors as applicable.

**Share Issuance Mandates at U.S. Domestic Issuers Incorporated Outside the**

**U.S.**

**General Recommendation:** For U.S. domestic issuers incorporated outside the U.S. and listed <u>solely</u> on a U.S.

exchange, generally vote for resolutions to authorize the issuance of common shares up to 20 percent of currently

issued common share capital, where not tied to a specific transaction or financing proposal.

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For pre-revenue or other early-stage companies that are heavily reliant on periodic equity financing, generally vote

for resolutions to authorize the issuance of common shares up to 50 percent of currently issued common share

capital. The burden of proof will be on the company to establish that it has a need for the higher limit.

Renewal of such mandates should be sought at each year's annual meeting.

Vote case-by-case on share issuances for a specific transaction or financing proposal.

**Share Repurchase Programs**

**General Recommendation:** For U.S.-incorporated companies, and foreign-incorporated U.S. Domestic Issuers that

are traded solely on U.S. exchanges, vote for management proposals to institute open-market share repurchase

plans in which all shareholders may participate on equal terms, or to grant the board authority to conduct open-

market repurchases, in the absence of company-specific concerns regarding:

Greenmail;

The use of buybacks to inappropriately manipulate incentive compensation metrics;

Threats to the company's long-term viability; or

Other company-specific factors as warranted.

Vote case-by-case on proposals to repurchase shares directly from specified shareholders, balancing the stated

rationale against the possibility for the repurchase authority to be misused, such as to repurchase shares from

insiders at a premium to market price.

**Share Repurchase Programs Shareholder Proposals**

**General Recommendation:** Generally vote against shareholder proposals prohibiting executives from selling

shares of company stock during periods in which the company has announced that it may or will be repurchasing

shares of its stock. Vote for the proposal when there is a pattern of abuse by executives exercising options or

selling shares during periods of share buybacks.

**Stock Distributions: Splits and Dividends**

**General Recommendation:** Generally vote for management proposals to increase the common share

authorization for stock split or stock dividend, provided that the effective increase in authorized shares is equal to

or is less than the allowable increase calculated in accordance with ISS' Common Stock Authorization policy.

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**Tracking Stock**

**General Recommendation:** Vote case-by-case on the creation of tracking stock, weighing the strategic value of the

transaction against such factors as:

Adverse governance changes;

Excessive increases in authorized capital stock;

Unfair method of distribution;

Diminution of voting rights;

Adverse conversion features;

Negative impact on stock option plans; and

Alternatives such as spin-off.

Restructuring

**Appraisal Rights**

**General Recommendation:** Vote for proposals to restore or provide shareholders with rights of appraisal.

**Asset Purchases**

**General Recommendation:** Vote case-by-case on asset purchase proposals, considering the following factors:

Purchase price;

Fairness opinion;

Financial and strategic benefits;

How the deal was negotiated;

Conflicts of interest;

Other alternatives for the business; and

Non-completion risk.

**Asset Sales**

**General Recommendation:** Vote case-by-case on asset sales, considering the following factors:

Impact on the balance sheet/working capital;

Potential elimination of diseconomies;

Anticipated financial and operating benefits;

Anticipated use of funds;

Value received for the asset;

Fairness opinion;

How the deal was negotiated; and

Conflicts of interest.

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**Bundled Proposals**

**General Recommendation:** Vote case-by-case on bundled or "conditional" proxy proposals. In the case of items

that are conditioned upon each other, examine the benefits and costs of the packaged items. In instances when

the joint effect of the conditioned items is not in shareholders' best interests, vote against the proposals. If the

combined effect is positive, support such proposals.

**Conversion of Securities**

**General Recommendation:** Vote case-by-case on proposals regarding conversion of securities. When evaluating

these proposals, the investor should review the dilution to existing shareholders, the conversion price relative

to market value, financial issues, control issues, termination penalties, and conflicts of interest.

Vote for the conversion if it is expected that the company will be subject to onerous penalties or will be forced to

file for bankruptcy if the transaction is not approved.

**Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy** 

**Plans/Reverse Leveraged Buyouts/Wrap Plans**

**General Recommendation:** Vote case-by-case on proposals to increase common and/or preferred shares and to

issue shares as part of a debt restructuring plan, after evaluating:

Dilution to existing shareholders' positions;

Terms of the offer - discount/premium in purchase price to investor, including any fairness opinion;

termination penalties; exit strategy;

Financial issues - company's financial situation; degree of need for capital; use of proceeds; effect of the

financing on the company's cost of capital;

Management's efforts to pursue other alternatives;

Control issues - change in management; change in control, guaranteed board and committee seats; standstill

provisions; voting agreements; veto power over certain corporate actions; and

Conflict of interest - arm's length transaction, managerial incentives.

Vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not

approved.

**Formation of Holding Company**

**General Recommendation:** Vote case-by-case on proposals regarding the formation of a holding company, taking

into consideration the following:

The reasons for the change;

Any financial or tax benefits;

Regulatory benefits;

Increases in capital structure; and

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Changes to the articles of incorporation or bylaws of the company.

Absent compelling financial reasons to recommend for the transaction, vote against the formation of a holding

company if the transaction would include either of the following:

Increases in common or preferred stock in excess of the allowable maximum (see discussion under "Capital");

or

Adverse changes in shareholder rights.

**Going Private and Going Dark Transactions (LBOs and Minority Squeeze-** 

**outs)**

**General Recommendation:** Vote case-by-case on going private transactions, taking into account the following:

Offer price/premium;

Fairness opinion;

How the deal was negotiated;

Conflicts of interest;

Other alternatives/offers considered; and

Non-completion risk.

Vote case-by-case on going dark transactions, determining whether the transaction enhances shareholder value by

taking into consideration:

Whether the company has attained benefits from being publicly-traded (examination of trading volume,

liquidity, and market research of the stock); and

Balanced interests of continuing vs. cashed-out shareholders, taking into account the following:

Are all shareholders able to participate in the transaction?

Will there be a liquid market for remaining shareholders following the transaction?

Does the company have strong corporate governance?

Will insiders reap the gains of control following the proposed transaction? and

Does the state of incorporation have laws requiring continued reporting that may benefit shareholders?

**Joint Ventures**

**General Recommendation:** Vote case-by-case on proposals to form joint ventures, taking into account the

following:

Percentage of assets/business contributed;

Percentage ownership;

Financial and strategic benefits;

Governance structure;

Conflicts of interest;

Other alternatives; and

Non-completion risk.

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**Liquidations**

**General Recommendation:** Vote case-by-case on liquidations, taking into account the following:

Management's efforts to pursue other alternatives;

Appraisal value of assets; and

The compensation plan for executives managing the liquidation.

Vote for the liquidation if the company will file for bankruptcy if the proposal is not approved.

**Mergers and Acquisitions**

**General Recommendation:** Vote case-by-case on mergers and acquisitions. Review and evaluate the merits and

drawbacks of the proposed transaction, balancing various and sometimes countervailing factors including:

*Valuation* - Is the value to be received by the target shareholders (or paid by the acquirer) reasonable? While

the fairness opinion may provide an initial starting point for assessing valuation reasonableness, emphasis is

placed on the offer premium, market reaction, and strategic rationale.

*Market reaction* - How has the market responded to the proposed deal? A negative market reaction should

cause closer scrutiny of a deal.

*Strategic rationale* - Does the deal make sense strategically? From where is the value derived? Cost and

revenue synergies should not be overly aggressive or optimistic, but reasonably achievable. Management

should also have a favorable track record of successful integration of historical acquisitions.

*Negotiations and process* - Were the terms of the transaction negotiated at arm's-length? Was the process fair

and equitable? A fair process helps to ensure the best price for shareholders. Significant negotiation "wins"

can also signify the deal makers' competency. The comprehensiveness of the sales process (e.g., full auction,

partial auction, no auction) can also affect shareholder value.

*Conflicts of interest* - Are insiders benefiting from the transaction disproportionately and inappropriately as

compared to non-insider shareholders? As the result of potential conflicts, the directors and officers of the

company may be more likely to vote to approve a merger than if they did not hold these interests. Consider

whether these interests may have influenced these directors and officers to support or recommend the

merger. The CIC figure presented in the "ISS Transaction Summary" section of this report is an aggregate figure

that can in certain cases be a misleading indicator of the true value transfer from shareholders to insiders.

Where such figure appears to be excessive, analyze the underlying assumptions to determine whether a

potential conflict exists.

*Governance* - Will the combined company have a better or worse governance profile than the current

governance profiles of the respective parties to the transaction? If the governance profile is to change for the

worse, the burden is on the company to prove that other issues (such as valuation) outweigh any deterioration

in governance.

**Private Placements/Warrants/Convertible Debentures**

**General Recommendation:** Vote case-by-case on proposals regarding private placements, warrants, and

convertible debentures taking into consideration:

Dilution to existing shareholders' position: The amount and timing of shareholder ownership dilution should

be weighed against the needs and proposed shareholder benefits of the capital infusion. Although newly

issued common stock, absent preemptive rights, is typically dilutive to existing shareholders, share price

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appreciation is often the necessary event to trigger the exercise of "out of the money" warrants and

convertible debt. In these instances from a value standpoint, the negative impact of dilution is mitigated by

the increase in the company's stock price that must occur to trigger the dilutive event.

Terms of the offer (discount/premium in purchase price to investor, including any fairness opinion, conversion

features, termination penalties, exit strategy):

The terms of the offer should be weighed against the alternatives of the company and in light of

company's financial condition. Ideally, the conversion price for convertible debt and the exercise price for

warrants should be at a premium to the then prevailing stock price at the time of private placement.

When evaluating the magnitude of a private placement discount or premium, consider factors that

influence the discount or premium, such as, liquidity, due diligence costs, control and monitoring costs,

capital scarcity, information asymmetry, and anticipation of future performance.

Financial issues:

The company's financial condition;

Degree of need for capital;

Use of proceeds;

Effect of the financing on the company's cost of capital;

Current and proposed cash burn rate; and

Going concern viability and the state of the capital and credit markets.

Management's efforts to pursue alternatives and whether the company engaged in a process to evaluate

alternatives: A fair, unconstrained process helps to ensure the best price for shareholders. Financing

alternatives can include joint ventures, partnership, merger, or sale of part or all of the company.

Control issues:

Change in management;

Change in control;

Guaranteed board and committee seats;

Standstill provisions;

Voting agreements;

Veto power over certain corporate actions; and

Minority versus majority ownership and corresponding minority discount or majority control premium.

Conflicts of interest:

Conflicts of interest should be viewed from the perspective of the company and the investor; and

Were the terms of the transaction negotiated at arm's length? Are managerial incentives aligned with

shareholder interests?

Market reaction:

The market's response to the proposed deal. A negative market reaction is a cause for concern. Market

reaction may be addressed by analyzing the one-day impact on the unaffected stock price.

Vote for the private placement, or for the issuance of warrants and/or convertible debentures in a private

placement, if it is expected that the company will file for bankruptcy if the transaction is not approved.

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**Reorganization/Restructuring Plan (Bankruptcy)**

**General Recommendation:** Vote case-by-case on proposals to common shareholders on bankruptcy plans of

reorganization, considering the following factors including, but not limited to:

Estimated value and financial prospects of the reorganized company;

Percentage ownership of current shareholders in the reorganized company;

Whether shareholders are adequately represented in the reorganization process (particularly through the

existence of an Official Equity Committee);

The cause(s) of the bankruptcy filing, and the extent to which the plan of reorganization addresses the

cause(s);

Existence of a superior alternative to the plan of reorganization; and

Governance of the reorganized company.

**Special Purpose Acquisition Corporations (SPACs)**

**General Recommendation:** Vote case-by-case on SPAC mergers and acquisitions taking into account the following:

*Valuation* - Is the value being paid by the SPAC reasonable? SPACs generally lack an independent fairness

opinion and the financials on the target may be limited. Compare the conversion price with the intrinsic value

of the target company provided in the fairness opinion. Also, evaluate the proportionate value of the

combined entity attributable to the SPAC IPO shareholders versus the pre-merger value of SPAC. Additionally,

a private company discount may be applied to the target if it is a private entity.

*Market reaction* - How has the market responded to the proposed deal? A negative market reaction may be a

cause for concern. Market reaction may be addressed by analyzing the one-day impact on the unaffected

stock price.

*Deal timing* - A main driver for most transactions is that the SPAC charter typically requires the deal to be

complete within 18 to 24 months, or the SPAC is to be liquidated. Evaluate the valuation, market reaction,

and potential conflicts of interest for deals that are announced close to the liquidation date.

*Negotiations and process* - What was the process undertaken to identify potential target companies within

specified industry or location specified in charter? Consider the background of the sponsors.

*Conflicts of interest* - How are sponsors benefiting from the transaction compared to IPO shareholders?

Potential conflicts could arise if a fairness opinion is issued by the insiders to qualify the deal rather than a

third party or if management is encouraged to pay a higher price for the target because of an 80 percent rule

(the charter requires that the fair market value of the target is at least equal to 80 percent of net assets of the

SPAC). Also, there may be sense of urgency by the management team of the SPAC to close the deal since its

charter typically requires a transaction to be completed within the 18-24-month timeframe.

*Voting agreements* - Are the sponsors entering into enter into any voting agreements/tender offers with

shareholders who are likely to vote against the proposed merger or exercise conversion rights?

*Governance* - What is the impact of having the SPAC CEO or founder on key committees following the

proposed merger?

**Special Purpose Acquisition Corporations (SPACs) - Proposals for Extensions**

The main purpose of SPACs is to identify and acquire a viable target within a specified timeframe, and failure to

achieve this objective within the allotted time calls into question management's ability to execute its primary

objective. The end of that timeframe is generally referred to as the termination date.

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**General Recommendation:** Generally support requests to extend the termination date by up to one year from the

SPAC's original termination date (inclusive of any built-in extension options, and accounting for prior extension

requests).

Other factors that may be considered include: any added incentives, business combination status, other

amendment terms, and, if applicable, use of money in the trust fund to pay excise taxes on redeemed shares.

**Spin-offs**

**General Recommendation:** Vote case-by-case on spin-offs, considering:

Tax and regulatory advantages;

Planned use of the sale proceeds;

Valuation of spinoff;

Fairness opinion;

Benefits to the parent company;

Conflicts of interest;

Managerial incentives;

Corporate governance changes; and

Changes in the capital structure.

**Value Maximization Shareholder Proposals**

**General Recommendation:** Vote case-by-case on shareholder proposals seeking to maximize shareholder value by:

Hiring a financial advisor to explore strategic alternatives;

Selling the company; or

Liquidating the company and distributing the proceeds to shareholders.

These proposals should be evaluated based on the following factors:

Prolonged poor performance with no turnaround in sight;

Signs of entrenched board and management (such as the adoption of takeover defenses);

Strategic plan in place for improving value;

Likelihood of receiving reasonable value in a sale or dissolution; and

The company actively exploring its strategic options, including retaining a financial advisor.

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**5. Compensation**

Executive Pay Evaluation

Underlying all evaluations are five global principles that most investors expect corporations to adhere to in

designing and administering executive and director compensation programs:

1. Maintain appropriate pay-for-performance alignment, with emphasis on long-term shareholder value: This

principle encompasses overall executive pay practices, which must be designed to attract, retain, and

appropriately motivate the key employees who drive shareholder value creation over the long term. It will

take into consideration, among other factors, the link between pay and performance; the mix between fixed

and variable pay; performance goals; and equity-based plan costs;

2. Avoid arrangements that risk "pay for failure": This principle addresses the appropriateness of long or

indefinite contracts, excessive severance packages, and guaranteed compensation;

3. Maintain an independent and effective compensation committee: This principle promotes oversight of

executive pay programs by directors with appropriate skills, knowledge, experience, and a sound process for

compensation decision-making (*e.g.*, including access to independent expertise and advice when needed);

4. Provide shareholders with clear, comprehensive compensation disclosures: This principle underscores the

importance of informative and timely disclosures that enable shareholders to evaluate executive pay practices

fully and fairly; and

5. Avoid inappropriate pay to non-executive directors: This principle recognizes the interests of shareholders in

ensuring that compensation to outside directors is reasonable and does not compromise their independence

and ability to make appropriate judgments in overseeing managers' pay and performance. At the market level,

it may incorporate a variety of generally accepted best practices.

**Advisory Votes on Executive Compensation—Management Proposals (Say-** 

**on-Pay)**

**General Recommendation:** Vote case-by-case on ballot items related to executive pay and practices, as well as

certain aspects of outside director compensation.

Vote against Advisory Votes on Executive Compensation (Say-on-Pay or "SOP") if:

There is an unmitigated misalignment between CEO pay and company performance (pay for performance);

The company maintains significant problematic pay practices; or

The board exhibits a significant level of poor communication and responsiveness to shareholders.

Vote against or withhold from the members of the Compensation Committee and potentially the full board if:

There is no SOP on the ballot, and an against vote on an SOP would otherwise be warranted due to pay-for-

performance misalignment, problematic pay practices, or the lack of adequate responsiveness on

compensation issues raised previously, or a combination thereof;

The board fails to respond adequately to a previous SOP proposal that received less than 70 percent support

of votes cast;

The company has recently practiced or approved problematic pay practices, such as option repricing or option

backdating; or

The situation is egregious.

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**Primary Evaluation Factors for Executive Pay**

**Pay-for-Performance Evaluation**

ISS annually conducts a pay-for-performance analysis to identify strong or satisfactory alignment between pay

and performance over a sustained period. With respect to companies in the S&P1500, Russell 3000, or Russell

3000E Indices, this analysis considers the following:

1. Peer Group<sup>18</sup> Alignment:

The degree of alignment between the company's annualized TSR rank and the CEO's annualized total pay

rank within a peer group, each measured over a five-year period.

The rankings of CEO total pay and company financial performance within a peer group, each measured over a

five-year period.

The multiple of the CEO's total pay relative to the peer group median over one- and three-year periods.

2. Absolute Alignment<sup>19</sup> – the absolute alignment between the trend in CEO pay and company TSR over the

prior five fiscal years – i.e., the difference between the trend in annual pay changes and the trend in

annualized TSR during the period.

If the above analysis demonstrates significant unsatisfactory long-term pay-for-performance alignment or, in the

case of companies outside the Russell indices, a misalignment between pay and performance is otherwise

suggested, our analysis may include any of the following qualitative factors, as relevant to an evaluation of how

various pay elements may work to encourage or to undermine long-term value creation and alignment with

shareholder interests:

The overall ratio of performance-based compensation to fixed or discretionary pay;

The ratio of performance- to time-based long-term incentive awards;

Vesting and/or retention requirements for equity awards that demonstrate a long-term focus;

The rigor of performance goals;

The complexity and risks around pay program design;

The transparency and clarity of disclosure;

The company's peer group benchmarking practices;

Financial/operational results, both absolute and relative to peers;

Special circumstances related to, for example, a new CEO in the prior FY or anomalous equity grant practices

(e.g., bi-annual awards);

Realizable and/or realized pay compared to grant pay; and

Any other factors deemed relevant.

**Problematic Pay Practices**

Problematic pay elements are generally evaluated case-by-case considering the context of a company's overall pay

program and demonstrated pay-for-performance philosophy. The focus is on executive compensation practices

that contravene the global pay principles, including:

Problematic practices related to non-performance-based compensation elements;

Incentives that may motivate excessive risk-taking or present a windfall risk; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>18</sup> The ISS peer group is generally comprised of 14-24 companies that are selected using market cap, revenue, assets, GICS

industry group, and company's selected peers' GICS industry group. ISS' peer selection methodology is detailed in the U.S. Peer

Group FAQ..

<sup>19</sup> Russell 3000E Index companies (excluding S&P1500 and Russell 3000 companies) are not subject to the Absolute Alignment

analysis.

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Pay decisions that circumvent pay-for-performance, such as options backdating or waiving performance

requirements.

The list of examples below highlights certain problematic practices that carry significant weight in this overall

consideration and may result in adverse vote recommendations:

Repricing or replacing of underwater stock options/SARs without prior shareholder approval (including cash

buyouts and voluntary surrender of underwater options);

Extraordinary perquisites or tax gross-ups;

New or materially amended agreements that provide for:

Excessive termination or CIC severance payments (generally exceeding 3 times base salary and

average/target/most recent bonus);

CIC severance payments without involuntary job loss or substantial diminution of duties ("single" or

"modified single" triggers) or in connection with a problematic Good Reason definition;

CIC excise tax gross-up entitlements (including "modified" gross-ups); and/or

Multi-year guaranteed awards that are not at risk due to rigorous performance conditions;

Liberal CIC definition combined with any single-trigger CIC benefits;

Insufficient executive compensation disclosure by externally-managed issuers (EMIs) such that a reasonable

assessment of pay programs and practices applicable to the EMI's executives is not possible;

Severance payments made when the termination is not clearly disclosed as involuntary (for example, a

termination without cause or resignation for good reason); and/or

Any other provision or practice deemed to be egregious and present a significant risk to investors.

The above examples are not an exhaustive list. Please refer to ISS' <u>U.S. Compensation</u> <u>Policies FAQ</u> document for

additional detail on specific pay practices that have been identified as problematic and may lead to negative vote

recommendations.

**Options Backdating**

The following factors should be examined case-by-case to allow for distinctions to be made between "sloppy" plan

administration versus deliberate action or fraud:

Reason and motive for the options backdating issue, such as inadvertent vs. deliberate grant date changes;

Duration of options backdating;

Size of restatement due to options backdating;

Corrective actions taken by the board or compensation committee, such as canceling or re-pricing backdated

options, the recouping of option gains on backdated grants; and

Adoption of a grant policy that prohibits backdating and creates a fixed grant schedule or window period for

equity grants in the future.

**Compensation Committee Communications and Responsiveness**

Consider the following factors case-by-case when evaluating ballot items related to executive pay on the board's

responsiveness to investor input and engagement on compensation issues:

Failure to respond to majority-supported shareholder proposals on executive pay topics; or

Failure to adequately respond to the company's previous say-on-pay proposal that received low support taking

into account the factors identified under the Responsiveness section in the Board of Directors policy with

respect to say-on-pay.

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**Frequency of Advisory Vote on Executive Compensation ("Say When on Pay")**

**General Recommendation:** Vote for annual advisory votes on compensation, which provide the most consistent

and clear communication channel for shareholder concerns about companies' executive pay programs.

**Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or** 

**Proposed Sale**

**General Recommendation:** Vote case-by-case on say on Golden Parachute proposals, including consideration of

existing change-in-control arrangements maintained with named executive officers but also considering new or

extended arrangements.

Features that may result in an "against" recommendation include one or more of the following, depending on the

number, magnitude, and/or timing of issue(s):

Single- or modified-single-trigger cash severance;

Single-trigger acceleration of unvested equity awards;

Full acceleration of equity awards granted shortly before the change in control;

Acceleration of performance awards above the target level of performance without compelling rationale;

Excessive cash severance (generally >3x base salary and bonus);

Excise tax gross-ups triggered and payable;

Excessive golden parachute payments (on an absolute basis or as a percentage of transaction equity value); or

Recent amendments that incorporate any problematic features (such as those above) or recent actions (such

as extraordinary equity grants) that may make packages so attractive as to influence merger agreements that

may not be in the best interests of shareholders; or

The company's assertion that a proposed transaction is conditioned on shareholder approval of the

golden parachute advisory vote.

Recent amendment(s) that incorporate problematic features will tend to carry more weight on the overall analysis.

However, the presence of multiple legacy problematic features will also be closely scrutinized.

In cases where the golden parachute vote is incorporated into a company's advisory vote on compensation

(management say-on-pay), ISS will evaluate the say-on-pay proposal in accordance with these guidelines, which

may give higher weight to that component of the overall evaluation.

Equity-Based and Other Incentive Plans

Please refer to ISS' <u>U.S. Equity Compensation Plans FAQ</u> document for additional details on the Equity Plan

Scorecard policy.

**General Recommendation:** Vote case-by-case on equity plan proposals subject to the Equity Plan Scorecard

framework, where positive factors may counterbalance negative factors under three pillars:

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**Plan Cost:** The total estimated cost of the company's equity plans relative to industry/market cap peers,

measured by the company's estimated Shareholder Value Transfer (SVT) in relation to peers and considering

both:

SVT based on new shares requested plus shares remaining for future grants, plus outstanding

unvested/unexercised grants; and

SVT based only on new shares requested plus shares remaining for future grants.

**Plan Features:**

Quality of disclosure around vesting upon a change in control (CIC);

Discretionary vesting authority;

Liberal share recycling on various award types;

Lack of minimum vesting period for grants made under the plan;

Dividends payable prior to award vesting; and

Cash-denominated awards limits for non-employee directors.

**Grant Practices:**

The company's three-year burn rate relative to its industry/market cap peers;

Vesting requirements in CEO's recent equity grants;

The estimated duration of the plan;

The proportion of the CEO's most recent equity grants/awards classified by ISS as performance-based;

Whether the company maintains a sufficient claw-back policy; and

Whether the company maintains sufficient post-exercise/vesting share-holding requirements.

Generally vote against the plan proposal if the combination of above factors indicates that the plan is not, overall,

in shareholders' interests, or if any of the following egregious factors ("overriding factors") apply:

Awards may vest in connection with a liberal change-of-control definition;

The plan would permit repricing or cash buyout of underwater options without shareholder approval (either

by expressly permitting it – for NYSE and Nasdaq listed companies – or by not prohibiting it when the company

has a history of repricing – for non-listed companies);

The plan is a vehicle for problematic pay practices or a significant pay-for-performance disconnect under

certain circumstances;

The plan is excessively dilutive to shareholders' holdings;

The plan contains an evergreen (automatic share replenishment) feature;

The plan lacks sufficient positive features under the Plan Features pillar;or

Any other factors that are determined to have a significant negative impact on shareholder interests.

**Further Information on certain EPSC Factors:**

**Shareholder Value Transfer (SVT)**

The cost of the equity plans is expressed as Shareholder Value Transfer (SVT), which is measured using a binomial

option pricing model that assesses the amount of shareholders' equity flowing out of the company to employees

and directors. SVT is expressed as both a dollar amount and as a percentage of market value, and includes the new

shares proposed, shares available under existing plans, and shares granted but unexercised (using two measures,

in the case of plans subject to the Equity Plan Scorecard evaluation, as noted above). All award types are valued.

For omnibus plans, unless limitations are placed on the most expensive types of awards (for example, full-value

awards), the assumption is made that all awards to be granted will be the most expensive types.

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For proposals that are not subject to the Equity Plan Scorecard evaluation, Shareholder Value Transfer is

reasonable if it falls below a company-specific benchmark. The benchmark is determined as follows: The top

quartile performers in each industry group (using the Global Industry Classification Standard: GICS) are identified.

Benchmark SVT levels for each industry are established based on these top performers' historic SVT. Regression

analyses are run on each industry group to identify the variables most strongly correlated to SVT. The benchmark

industry SVT level is then adjusted upwards or downwards for the specific company by plugging the company-

specific performance measures, size, and cash compensation into the industry cap equations to arrive at the

company's benchmark.<sup>22</sup>

**Three-Year Value-Adjusted Burn Rate**

A "Value-Adjusted Burn Rate" is used for stock plan evaluations. Value-Adjusted Burn Rate benchmarks are

calculated as the greater of: (1) an industry-specific threshold based on three-year burn rates within the company's

GICS group segmented by S&P 500, Russell 3000 index (less the S&P 500) and non-Russell 3000 index; and (2) a *de* 

*minimis* threshold established separately for each of the S&P 500, the Russell 3000 index less the S&P 500, and the

non-Russell 3000 index. Year-over-year burn-rate benchmark changes will be limited to a predetermined range

above or below the prior year's burn-rate benchmark.

The Value-Adjusted Burn Rate is calculated as follows:

Value-Adjusted Burn Rate = ((# of options \* option's dollar value using a Black-Scholes model) + (# of full-value

awards \* stock price)) / (Weighted average common shares \* stock price).

**Egregious Factors**

**Liberal Change in Control Definition**

Generally vote against equity plans if the plan has a liberal definition of change in control and the equity awards

could vest upon such liberal definition of change in control, even though an actual change in control may not

occur. Examples of such a definition include, but are not limited to, announcement or commencement of a tender

offer, provisions for acceleration upon a "potential" takeover, shareholder approval of a merger or other

transactions, or similar language.

**Repricing Provisions**

Vote against plans that expressly permit the repricing or exchange of underwater stock options/stock appreciate

rights (SARs) without prior shareholder approval. "Repricing" typically includes the ability to do any of the

following:

Amend the terms of outstanding options or SARs to reduce the exercise price of such outstanding options or

SARs;

Cancel outstanding options or SARs in exchange for options or SARs with an exercise price that is less than the

exercise price of the original options or SARs;

Cancel underwater options in exchange for stock awards; or

Provide cash buyouts of underwater options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>20</sup>For plans evaluated under the Equity Plan Scorecard policy, the company's SVT benchmark is considered along with other

factors.

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While the above cover most types of repricing, ISS may view other provisions as akin to repricing depending on the

facts and circumstances.

Also, vote against or withhold from members of the Compensation Committee who approved repricing (as defined

above or otherwise determined by ISS), without prior shareholder approval, even if such repricings are allowed in

their equity plan.

Vote against plans that do not expressly prohibit repricing or cash buyout of underwater options without

shareholder approval if the company has a history of repricing/buyouts without shareholder approval, and the

applicable listing standards would not preclude them from doing so.

**Problematic Pay Practices or Significant Pay-for-Performance Disconnect**

If the equity plan on the ballot is a vehicle for <u>problematic pay practices</u>, vote against the plan.

ISS may recommend a vote against the equity plan if the plan is determined to be a vehicle for pay-for-

performance misalignment. Considerations in voting against the equity plan may include, but are not limited to:

Severity of the pay-for-performance misalignment;

Whether problematic equity grant practices are driving the misalignment; and/or

Whether equity plan awards have been heavily concentrated to the CEO and/or the other NEOs.

**Amending Cash and Equity Plans (including Approval for Tax Deductibility** 

**(162(m))**

**General Recommendation:** Vote case-by-case on amendments to cash and equity incentive plans.

Generally vote for proposals to amend executive cash, stock, or cash and stock incentive plans if the proposal:

Addresses administrative features only; or

Seeks approval for Section 162(m) purposes <u>only</u>, and the plan administering committee consists entirely of

independent directors, per ISS' Classification of Directors. Note that if the company is presenting the plan to

shareholders for the first time for any reason (including after the company's initial public offering), or if the

proposal is bundled with other material plan amendments, then the recommendation will be case-by-case

(see below).

Vote against proposals to amend executive cash, stock, or cash and stock incentive plans if the proposal:

Seeks approval for Section 162(m) purposes only, and the plan administering committee does not consist

entirely of independent directors, per <u>ISS' Classification of Directors</u>.

Vote case-by-case on all other proposals to amend <u>cash</u> incentive plans. This includes plans presented to

shareholders for the first time after the company's IPO and/or proposals that bundle material amendment(s) other

than those for Section 162(m) purposes.

Vote case-by-case on all other proposals to amend <u>equity</u> incentive plans, considering the following:

If the proposal requests additional shares and/or the amendments include a term extension or addition of full

value awards as an award type, the recommendation will be based on the Equity Plan Scorecard evaluation as

well as an analysis of the overall impact of the amendments;

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If the plan is being presented to shareholders for the first time (including after the company's IPO), whether or

not additional shares are being requested, the recommendation will be based on the Equity Plan Scorecard

evaluation as well as an analysis of the overall impact of any amendments; and

If there is no request for additional shares and the amendments do not include a term extension or addition of

full value awards as an award type, then the recommendation will be based entirely on an analysis of the

overall impact of the amendments, and the EPSC evaluation will be shown only for informational purposes.

In the first two case-by-case evaluation scenarios, the EPSC evaluation/score is the more heavily weighted

consideration.

**Specific Treatment of Certain Award Types in Equity Plan Evaluations**

**Dividend Equivalent Rights**

Options that have Dividend Equivalent Rights (DERs) associated with them will have a higher calculated award

value than those without DERs under the binomial model, based on the value of these dividend streams. The

higher value will be applied to new shares, shares available under existing plans, and shares awarded but not

exercised per the plan specifications. DERS transfer more shareholder equity to employees and non-employee

directors and this cost should be captured.

**Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts** 

**(REITs)**

For Real Estate Investment Trusts (REITS), include the common shares issuable upon conversion of outstanding

Operating Partnership (OP) units in the share count for the purposes of determining: (1) market capitalization in

the Shareholder Value Transfer (SVT) analysis and (2) shares outstanding in the burn rate analysis.

Other Compensation Plans

**401(k) Employee Benefit Plans**

**General Recommendation:** Vote for proposals to implement a 401(k) savings plan for employees.

**Employee Stock Ownership Plans (ESOPs)**

**General Recommendation:** Vote for proposals to implement an ESOP or increase authorized shares for existing

ESOPs, unless the number of shares allocated to the ESOP is excessive (more than five percent of outstanding

shares).

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**Employee Stock Purchase Plans—Qualified Plans**

**General Recommendation:** Vote case-by-case on qualified employee stock purchase plans. Vote for employee

stock purchase plans where all of the following apply:

Purchase price is at least 85 percent of fair market value;

Offering period is 27 months or less; and

The number of shares allocated to the plan is 10 percent or less of the outstanding shares.

Vote against qualified employee stock purchase plans where when the plan features do not meet all of the above

criteria.

**Employee Stock Purchase Plans—Non-Qualified Plans**

**General Recommendation:** Vote case-by-case on nonqualified employee stock purchase plans. Vote for

nonqualified employee stock purchase plans with all the following features:

Broad-based participation;

Limits on employee contribution, which may be a fixed dollar amount or expressed as a percent of base salary;

Company matching contribution up to 25 percent of employee's contribution, which is effectively a discount

of 20 percent from market value; and

No discount on the stock price on the date of purchase when there is a company matching contribution.

Vote against nonqualified employee stock purchase plans when the plan features do not meet all of the above criteria.

If the matching contribution or effective discount exceeds the above, ISS may evaluate the SVT cost of the plan as part

of the assessment.

**Option Exchange Programs/Repricing Options**

**General Recommendation:** Vote case-by-case on management proposals seeking approval to exchange/reprice

options taking into consideration:

Historic trading patterns--the stock price should not be so volatile that the options are likely to be back "in-

the-money" over the near term;

Rationale for the re-pricing--was the stock price decline beyond management's control?;

Is this a value-for-value exchange?;

Are surrendered stock options added back to the plan reserve?;

Timing--repricing should occur at least one year out from any precipitous drop in company's stock price;

Option vesting--does the new option vest immediately or is there a black-out period?;

Term of the option--the term should remain the same as that of the replaced option;

Exercise price--should be set at fair market or a premium to market; and

Participants--executive officers and directors must be excluded.

If the surrendered options are added back to the equity plans for re-issuance, then also take into consideration the

company's total cost of equity plans and its three-year average burn rate.

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In addition to the above considerations, evaluate the intent, rationale, and timing of the repricing proposal. The

proposal should clearly articulate why the board is choosing to conduct an exchange program at this point in time.

Repricing underwater options after a recent precipitous drop in the company's stock price demonstrates poor

timing and warrants additional scrutiny. Also, consider the terms of the surrendered options, such as the grant

date, exercise price and vesting schedule. Grant dates of surrendered options should be far enough back (two to

three years) so as not to suggest that repricings are being done to take advantage of short-term downward price

movements. Similarly, the exercise price of surrendered options should be above the 52-week high for the stock

price.

Vote for shareholder proposals to put option repricings to a shareholder vote.

**Stock Plans in Lieu of Cash**

**General Recommendation:** Vote case-by-case on plans that provide participants with the option of taking all or a

portion of their cash compensation in the form of stock.

Vote for non-employee director-only equity plans that provide a dollar-for-dollar cash-for-stock exchange.

Vote case-by-case on plans which do not provide a dollar-for-dollar cash for stock exchange. In cases where the

exchange is not dollar-for-dollar, the request for new or additional shares for such equity program will be

considered using the binomial option pricing model. In an effort to capture the total cost of total compensation,

ISS will not make any adjustments to carve out the in-lieu-of cash compensation.

**Transfer Stock Option (TSO) Programs**

**General Recommendation:** One-time Transfers: Vote against or withhold from compensation committee members

if they fail to submit one-time transfers to shareholders for approval.

Vote case-by-case on one-time transfers. Vote for if:

Executive officers and non-employee directors are excluded from participating;

Stock options are purchased by third-party financial institutions at a discount to their fair value using option

pricing models such as Black-Scholes or a Binomial Option Valuation or other appropriate financial models;

and

There is a two-year minimum holding period for sale proceeds (cash or stock) for all participants.

Additionally, management should provide a clear explanation of why options are being transferred to a third-party

institution and whether the events leading up to a decline in stock price were beyond management's control. A

review of the company's historic stock price volatility should indicate if the options are likely to be back "in-the-

money" over the near term.

Ongoing TSO program: Vote against equity plan proposals if the details of ongoing TSO programs are not provided

to shareholders. Since TSOs will be one of the award types under a stock plan, the ongoing TSO program, structure,

and mechanics must be disclosed to shareholders. The specific criteria to be considered in evaluating these

proposals include, but not limited, to the following:

Eligibility;

Vesting;

Bid-price;

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Term of options;

Cost of the program and impact of the TSOs on company's total option expense; and

Option repricing policy.

Amendments to existing plans that allow for introduction of transferability of stock options should make clear that

only options granted post-amendment shall be transferable.

Director Compensation

**Shareholder Ratification of Director Pay Programs**

**General Recommendation:** Vote case-by-case on management proposals seeking ratification of non-employee

director compensation, based on the following factors:

If the equity plan under which non-employee director grants are made is on the ballot, whether or not it

warrants support; and

An assessment of the following qualitative factors:

The relative magnitude of director compensation as compared to companies of a similar profile;

The presence of problematic pay practices relating to director compensation;

Director stock ownership guidelines and holding requirements;

Equity award vesting schedules;

The mix of cash and equity-based compensation;

Meaningful limits on director compensation;

The availability of retirement benefits or perquisites; and

The quality of disclosure surrounding director compensation.

**Equity Plans for Non-Employee Directors**

**General Recommendation:** Vote case-by-case on compensation plans for non-employee directors, based on:

The total estimated cost of the company's equity plans relative to industry/market cap peers, measured by the

company's estimated Shareholder Value Transfer (SVT) based on new shares requested plus shares remaining

for future grants, plus outstanding unvested/unexercised grants;

The company's three-year burn rate relative to its industry/market cap peers (in certain circumstances); and

The presence of any egregious plan features (such as an option repricing provision or liberal CIC vesting risk).

On occasion, non-employee director stock plans will exceed the plan cost or burn-rate benchmarks when

combined with employee or executive stock plans. In such cases, vote case-by-case on the plan taking into

consideration the following qualitative factors:

The relative magnitude of director compensation as compared to companies of a similar profile;

The presence of problematic pay practices relating to director compensation;

Director stock ownership guidelines and holding requirements;

Equity award vesting schedules;

The mix of cash and equity-based compensation;

Meaningful limits on director compensation;

The availability of retirement benefits or perquisites; and

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The quality of disclosure surrounding director compensation.

**Non-Employee Director Retirement Plans**

**General Recommendation:** Vote against retirement plans for non-employee directors. Vote for shareholder

proposals to eliminate retirement plans for non-employee directors.

Shareholder Proposals on Compensation

**Bonus Banking/Bonus Banking "Plus"**

**General Recommendation:** Vote case-by-case on proposals seeking deferral of a portion of annual bonus pay, with

ultimate payout linked to sustained results for the performance metrics on which the bonus was earned (whether

for the named executive officers or a wider group of employees), taking into account the following factors:

The company's past practices regarding equity and cash compensation;

Whether the company has a holding period or stock ownership requirements in place, such as a meaningful

retention ratio (at least 50 percent for full tenure); and

Whether the company has a rigorous claw-back policy in place.

**Compensation Consultants—Disclosure of Board or Company's Utilization**

**General Recommendation:** Generally vote for shareholder proposals seeking disclosure regarding the company,

board, or compensation committee's use of compensation consultants, such as company name, business

relationship(s), and fees paid.

**Disclosure/Setting Levels or Types of Compensation for Executives and Directors**

**General Recommendation:** Generally vote for shareholder proposals seeking additional disclosure of executive

and director pay information, provided the information requested is relevant to shareholders' needs, would not

put the company at a competitive disadvantage relative to its industry, and is not unduly burdensome to the

company.

Generally vote against shareholder proposals seeking to set absolute levels on compensation or otherwise

dictate the amount or form of compensation (such as types of compensation elements or specific metrics) to be

used for executive or directors.

Generally vote against shareholder proposals that mandate a minimum amount of stock that directors must own in

order to qualify as a director or to remain on the board.

Vote case-by-case on all other shareholder proposals regarding executive and director pay, taking into account

relevant factors, including but not limited to: company performance, pay level and design versus peers, history of

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compensation concerns or pay-for-performance disconnect, and/or the scope and prescriptive nature of the

proposal.

**Golden Coffins/Executive Death Benefits**

**General Recommendation:** Generally vote for proposals calling for companies to adopt a policy of obtaining

shareholder approval for any future agreements and corporate policies that could oblige the company to make

payments or awards following the death of a senior executive in the form of unearned salary or bonuses,

accelerated vesting or the continuation in force of unvested equity grants, perquisites and other payments or

awards made in lieu of compensation. This would not apply to any benefit programs or equity plan proposals for

which the broad-based employee population is eligible.

**Hold Equity Past Retirement or for a Significant Period of Time**

**General Recommendation:** Vote case-by-case on shareholder proposals asking companies to adopt policies

requiring senior executive officers to retain a portion of net shares acquired through compensation plans. The

following factors will be taken into account:

The percentage/ratio of net shares required to be retained;

The time period required to retain the shares;

Whether the company has equity retention, holding period, and/or stock ownership requirements in place

and the robustness of such requirements;

Whether the company has any other policies aimed at mitigating risk taking by executives;

Executives' actual stock ownership and the degree to which it meets or exceeds the proponent's suggested

holding period/retention ratio or the company's existing requirements; and

Problematic pay practices, current and past, which may demonstrate a short-term versus long-term focus.

**Pay Disparity**

**General Recommendation:** Vote case-by-case on proposals calling for an analysis of the pay disparity between

corporate executives and other non-executive employees. The following factors will be considered:

The company's current level of disclosure of its executive compensation setting process, including how the

company considers pay disparity;

If any problematic pay practices or pay-for-performance concerns have been identified at the company; and

The level of shareholder support for the company's pay programs.

Generally vote against proposals calling for the company to use the pay disparity analysis or pay ratio in a specific

way to set or limit executive pay.

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**Pay for Performance/Performance-Based Awards**

**General Recommendation:** Vote case-by-case on shareholder proposals requesting that a significant amount of

future long-term incentive compensation awarded to senior executives shall be performance-based and requesting

that the board adopt and disclose challenging performance metrics to shareholders, based on the following

analytical steps:

First, vote for shareholder proposals advocating the use of performance-based equity awards, such as

performance contingent options or restricted stock, indexed options, or premium-priced options, unless the

proposal is overly restrictive or if the company has demonstrated that it is using a "substantial" portion of

performance-based awards for its top executives. Standard stock options and performance-accelerated

awards do not meet the criteria to be considered as performance-based awards. Further, premium-priced

options should have a meaningful premium to be considered performance-based awards; and

Second, assess the rigor of the company's performance-based equity program. If the bar set for the

performance-based program is too low based on the company's historical or peer group comparison, generally

vote for the proposal. Furthermore, if target performance results in an above target payout, vote for the

shareholder proposal due to program's poor design. If the company does not disclose the performance metric

of the performance-based equity program, vote for the shareholder proposal regardless of the outcome of the

first step to the test.

In general, vote for the shareholder proposal if the company does not meet both of the above two steps.

**Pay for Superior Performance**

**General Recommendation:** Vote case-by-case on shareholder proposals that request the board establish a pay-for-

superior performance standard in the company's executive compensation plan for senior executives. These

proposals generally include the following principles:

Set compensation targets for the plan's annual and long-term incentive pay components at or below the peer

group median;

Deliver a majority of the plan's target long-term compensation through performance-vested, not simply time-

vested, equity awards;

Provide the strategic rationale and relative weightings of the financial and non-financial performance metrics

or criteria used in the annual and performance-vested long-term incentive components of the plan;

Establish performance targets for each plan financial metric relative to the performance of the company's

peer companies; and

Limit payment under the annual and performance-vested long-term incentive components of the plan to

when the company's performance on its selected financial performance metrics exceeds peer group

median performance.

Consider the following factors in evaluating this proposal:

What aspects of the company's annual and long-term equity incentive programs are performance driven?

If the annual and long-term equity incentive programs are performance driven, are the performance criteria

and hurdle rates disclosed to shareholders or are they benchmarked against a disclosed peer group?

Can shareholders assess the correlation between pay and performance based on the current disclosure? and

What type of industry and stage of business cycle does the company belong to?

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**Pre-Arranged Trading Plans (10b5-1 Plans)**

**General Recommendation:** Generally vote for shareholder proposals calling for the addition of certain safeguards

in prearranged trading plans (10b5-1 plans) for executives. Safeguards may include:

Adoption, amendment, or termination of a 10b5-1 Plan must be disclosed in a Form 8-K;

Amendment or early termination of a 10b5-1 Plan allowed only under extraordinary circumstances, as

determined by the board;

Request that a certain number of days that must elapse between adoption or amendment of a 10b5-1 Plan

and initial trading under the plan;

Reports on Form 4 must identify transactions made pursuant to a 10b5-1 Plan;

An executive may not trade in company stock outside the 10b5-1 Plan; and

Trades under a 10b5-1 Plan must be handled by a broker who does not handle other securities transactions

for the executive.

**Prohibit Outside CEOs from Serving on Compensation Committees**

**General Recommendation:** Generally vote against proposals seeking a policy to prohibit any outside CEO from

serving on a company's compensation committee, unless the company has demonstrated problematic pay

practices that raise concerns about the performance and composition of the committee.

**Recoupment of Incentive or Stock Compensation in Specified Circumstances**

**General Recommendation:** Vote case-by-case on proposals to recoup incentive cash or stock compensation made

to senior executives if it is later determined that the figures upon which incentive compensation is earned turn out

to have been in error, or if the senior executive has breached company policy or has engaged in misconduct that

may be significantly detrimental to the company's financial position or reputation, or if the senior executive failed

to manage or monitor risks that subsequently led to significant financial or reputational harm to the company.

Many companies have adopted policies that permit recoupment in cases where an executive's fraud, misconduct,

or negligence significantly contributed to a restatement of financial results that led to the awarding of unearned

incentive compensation. However, such policies may be narrow given that not all misconduct or negligence may

result in significant financial restatements. Misconduct, negligence, or lack of sufficient oversight by senior

executives may lead to significant financial loss or reputational damage that may have long-lasting impact.

In considering whether to support such shareholder proposals, ISS will take into consideration the following

factors:

If the company has adopted a formal recoupment policy;

The rigor of the recoupment policy focusing on how and under what circumstances the company may recoup

incentive or stock compensation;

Whether the company has chronic restatement history or material financial problems;

Whether the company's policy substantially addresses the concerns raised by the proponent;

Disclosure of recoupment of incentive or stock compensation from senior executives or lack thereof; and

Any other relevant factors.

**Severance and Golden Parachute Agreements**

**General Recommendation:** Vote case-by-case on shareholder proposals requiring that executive severance

(including change-in-control related) arrangements or payments be submitted for shareholder ratification.

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Factors that will be considered include, but are not limited to:

The company's severance or change-in-control agreements in place, and the presence of problematic features

(such as excessive severance entitlements, single triggers, excise tax gross-ups, etc.);

Any existing limits on cash severance payouts or policies which require shareholder ratification of severance

payments exceeding a certain level;

Any recent severance-related controversies; and

Whether the proposal is overly prescriptive, such as requiring shareholder approval of severance that does

not exceed market norms.

**Share Buyback Impact on Incentive Program Metrics**

**General Recommendation:** Vote case-by-case on proposals requesting the company exclude the impact of share

buybacks from the calculation of incentive program metrics, considering the following factors:

The frequency and timing of the company's share buybacks;

The use of per-share metrics in incentive plans;

The effect of recent buybacks on incentive metric results and payouts; and

Whether there is any indication of metric result manipulation.

**Supplemental Executive Retirement Plans (SERPs)**

**General Recommendation:** Generally vote for shareholder proposals requesting to put extraordinary benefits

contained in SERP agreements to a shareholder vote unless the company's executive pension plans do not contain

excessive benefits beyond what is offered under employee-wide plans.

Generally vote for shareholder proposals requesting to limit the executive benefits provided under the company's

supplemental executive retirement plan (SERP) by limiting covered compensation to a senior executive's annual

salary or those pay elements covered for the general employee population.

**Tax Gross-Up Proposals**

**General Recommendation:** Generally vote for proposals calling for companies to adopt a policy of not providing

tax gross-up payments to executives, except in situations where gross-ups are provided pursuant to a plan, policy,

or arrangement applicable to management employees of the company, such as a relocation or expatriate tax

equalization policy.

**Termination of Employment Prior to Severance Payment/Eliminating** 

**Accelerated Vesting of Unvested Equity**

**General Recommendation:** Vote case-by-case on shareholder proposals seeking a policy requiring termination of

employment prior to severance payment and/or eliminating accelerated vesting of unvested equity.

The following factors will be considered:

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The company's current treatment of equity upon employment termination and/or in change-in-control

situations (i.e., vesting is double triggered and/or pro rata, does it allow for the assumption of equity by

acquiring company, the treatment of performance shares, etc.); and

Current employment agreements, including potential poor pay practices such as gross-ups embedded in those

agreements.

Generally vote for proposals seeking a policy that prohibits automatic acceleration of the vesting of equity awards

to senior executives upon a voluntary termination of employment or in the event of a change in control (except for

pro rata vesting considering the time elapsed and attainment of any related performance goals between the award

date and the change in control).

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**6. Routine/Miscellaneous**

**Adjourn Meeting**

**General Recommendation:** Generally vote against proposals to provide management with the authority to adjourn

an annual or special meeting absent compelling reasons to support the proposal.

Vote for proposals that relate specifically to soliciting votes for a merger or transaction if supporting that merger

or transaction. Vote against proposals if the wording is too vague or if the proposal includes "other business."

**Amend Quorum Requirements**

**General Recommendation:** Vote case-by-case on proposals to reduce quorum requirements for shareholder

meetings below a majority of the shares outstanding, taking into consideration:

The new quorum threshold requested;

The rationale presented for the reduction;

The market capitalization of the company (size, inclusion in indices);

The company's ownership structure;

Previous voter turnout or attempts to achieve quorum;

Any provisions or commitments to restore quorum to a majority of shares outstanding, should voter turnout

improve sufficiently; and

Other factors as appropriate.

In general, a quorum threshold kept as close to a majority of shares outstanding as is achievable is preferred.

Vote case-by-case on directors who unilaterally lower the quorum requirements below a majority of the shares

outstanding, taking into consideration the factors listed above.

**Amend Minor Bylaws**

**General Recommendation:** Vote for bylaw or charter changes that are of a housekeeping nature (updates or

corrections).

**Change Company Name**

**General Recommendation:** Vote for proposals to change the corporate name unless there is compelling evidence

that the change would adversely impact shareholder value.

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**Change Date, Time, or Location of Annual Meeting**

**General Recommendation:** Vote for management proposals to change the date, time, or location of the annual

meeting unless the proposed change is unreasonable.

Vote against shareholder proposals to change the date, time, or location of the annual meeting unless the current

scheduling or location is unreasonable.

**Other Business**

**General Recommendation:** Vote against proposals to approve other business when it appears as a voting item.

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**7. Social and Environmental Issues**

Global Approach – E&S Shareholder Proposals

ISS applies a common approach globally to evaluating social and environmental shareholder proposals which

cover a wide range of topics, including consumer and product safety, environment and energy, labor standards

and human rights, workplace and board diversity, and corporate political issues. While a variety of factors goes

into each analysis, the overall principle guiding all vote recommendations focuses on how the proposal may

enhance or protect shareholder value in either the short or long term.

**General Recommendation:** Generally vote case-by-case, examining primarily whether implementation of the

proposal is likely to enhance or protect shareholder value. The following factors will be considered:

If the issues presented in the proposal are being appropriately or effectively dealt with through legislation or

regulation;

If the company has already responded in an appropriate and sufficient manner to the issue(s) raised in the

proposal;

Whether the proposal's request is unduly burdensome (scope or timeframe) or overly prescriptive;

The company's relevant practices compared with any industry standard practices for addressing the issue(s)

raised by the proposal;

Whether there are significant controversies, fines, penalties, or litigation associated with the

company's practices related to the issue(s) raised in the proposal;

If the proposal requests increased disclosure or greater transparency, whether reasonable and sufficient

information is currently available to shareholders from the company or from other publicly available sources;

If the proposal requests increased disclosure or greater transparency, whether implementation would reveal

proprietary or confidential information that could place the company at a competitive disadvantage; and

Whether the proposal addresses substantive matters that may impact shareholders' interests, including how

the proposal may impact shareholders' rights.

Endorsement of Principles

**General Recommendation:** Generally vote against proposals seeking a company's endorsement of principles that

support a particular public policy position. Endorsing a set of principles may require a company to take a stand on

an issue that is beyond its own control and may limit its flexibility with respect to future developments.

Management and the board should be afforded the flexibility to make decisions on specific public policy positions

based on their own assessment of the most beneficial strategies for the company.

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Animal Welfare

**Animal Welfare Policies**

**General Recommendation:** Generally vote for proposals seeking a report on a company's animal welfare

standards, or animal welfare-related risks, unless:

The company has already published a set of animal welfare standards and monitors compliance;

The company's standards are comparable to industry peers; and

There are no recent significant fines, litigation, or controversies related to the company's and/or its suppliers'

treatment of animals.

**Animal Testing**

**General Recommendation:** Generally vote against proposals to phase out the use of animals in product testing,

unless:

The company is conducting animal testing programs that are unnecessary or not required by regulation;

The company is conducting animal testing when suitable alternatives are commonly accepted and used by

industry peers; or

There are recent, significant fines or litigation related to the company's treatment of animals.

**Animal Slaughter**

**General Recommendation:** Generally vote against proposals requesting the implementation of Controlled

Atmosphere Killing (CAK) methods at company and/or supplier operations unless such methods are required by

legislation or generally accepted as the industry standard.

Vote case-by-case on proposals requesting a report on the feasibility of implementing CAK methods at company

and/or supplier operations considering the availability of existing research conducted by the company or industry

groups on this topic and any fines or litigation related to current animal processing procedures at the company.

Consumer Issues

**Genetically Modified Ingredients**

**General Recommendation:** Generally vote against proposals requesting that a company voluntarily label

genetically engineered (GE) ingredients in its products. The labeling of products with GE ingredients is best left to

the appropriate regulatory authorities.

Vote case-by-case on proposals asking for a report on the feasibility of labeling products containing GE ingredients,

taking into account:

The potential impact of such labeling on the company's business;

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The quality of the company's disclosure on GE product labeling, related voluntary initiatives, and how this

disclosure compares with industry peer disclosure; and

Company's current disclosure on the feasibility of GE product labeling.

Generally vote against proposals seeking a report on the social, health, and environmental effects of genetically

modified organisms (GMOs). Studies of this sort are better undertaken by regulators and the scientific community.

Generally vote against proposals to eliminate GE ingredients from the company's products, or proposals asking for

reports outlining the steps necessary to eliminate GE ingredients from the company's products. Such decisions are

more appropriately made by management with consideration of current regulations.

**Reports on Potentially Controversial Business/Financial Practices**

**General Recommendation:** Vote case-by-case on requests for reports on a company's potentially controversial

business or financial practices or products, taking into account:

Whether the company has adequately disclosed mechanisms in place to prevent abuses;

Whether the company has adequately disclosed the financial risks of the products/practices in question;

Whether the company has been subject to violations of related laws or serious controversies; and

Peer companies' policies/practices in this area.

**Pharmaceutical Pricing, Access to Medicines, and Prescription Drug** 

**Reimportation**

**General Recommendation:** Generally vote against proposals requesting that companies implement specific price

restraints on pharmaceutical products unless the company fails to adhere to legislative guidelines or industry

norms in its product pricing practices.

Vote case-by-case on proposals requesting that a company report on its product pricing or access to medicine

policies, considering:

The potential for reputational, market, and regulatory risk exposure;

Existing disclosure of relevant policies;

Deviation from established industry norms;

Relevant company initiatives to provide research and/or products to disadvantaged consumers;

Whether the proposal focuses on specific products or geographic regions;

The potential burden and scope of the requested report; and

Recent significant controversies, litigation, or fines at the company.

Generally vote for proposals requesting that a company report on the financial and legal impact of its prescription

drug reimportation policies unless such information is already publicly disclosed.

Generally vote against proposals requesting that companies adopt specific policies to encourage or constrain

prescription drug reimportation. Such matters are more appropriately the province of legislative activity and may

place the company at a competitive disadvantage relative to its peers.

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**Product Safety and Toxic/Hazardous Materials**

**General Recommendation:** Generally vote for proposals requesting that a company report on its policies,

initiatives/procedures, and oversight mechanisms related to toxic/hazardous materials or product safety in its

supply chain, unless:

The company already discloses similar information through existing reports such as a supplier code of conduct

and/or a sustainability report;

The company has formally committed to the implementation of a toxic/hazardous materials and/or product

safety and supply chain reporting and monitoring program based on industry norms or similar standards

within a specified time frame; or

The company has not been recently involved in relevant significant controversies, fines, or litigation.

Vote case-by-case on resolutions requesting that companies develop a feasibility assessment to phase-out of certain

toxic/hazardous materials, or evaluate and disclose the potential financial and legal risks associated with utilizing

certain materials, considering:

The company's current level of disclosure regarding its product safety policies, initiatives, and oversight

mechanisms;

Current regulations in the markets in which the company operates; and

Recent significant controversies, litigation, or fines stemming from toxic/hazardous materials at the company.

Generally vote against resolutions requiring that a company reformulate its products.

**Tobacco-Related Proposals**

**General Recommendation:** Vote case-by-case on resolutions regarding the advertisement of tobacco products,

considering:

Recent related fines, controversies, or significant litigation;

Whether the company complies with relevant laws and regulations on the marketing of tobacco;

Whether the company's advertising restrictions deviate from those of industry peers;

Whether the company entered into the Master Settlement Agreement, which restricts marketing of tobacco

to youth; and

Whether restrictions on marketing to youth extend to foreign countries.

Vote case-by-case on proposals regarding second-hand smoke, considering;

Whether the company complies with all laws and regulations;

The degree that voluntary restrictions beyond those mandated by law might hurt the company's

competitiveness; and

The risk of any health-related liabilities.

Generally vote against resolutions to cease production of tobacco-related products, to avoid selling products to

tobacco companies, to spin-off tobacco-related businesses, or prohibit investment in tobacco equities. Such

business decisions are better left to company management or portfolio managers.

Generally vote against proposals regarding tobacco product warnings. Such decisions are better left to public

health authorities.

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Climate Change

**Say on Climate (SoC) Management Proposals**

**General Recommendation:** Vote case-by-case on management proposals that request shareholders to approve

the company's climate transition action plan<sup>21</sup><sup>,</sup> taking into account the completeness and rigor of the plan.

Information that will be considered where available includes the following:

The extent to which the company's climate related disclosures are in line with TCFD recommendations and

meet other market standards;

Disclosure of its operational and supply chain GHG emissions (Scopes 1, 2, and 3);

The completeness and rigor of company's short-, medium-, and long-term targets for reducing operational and

supply chain GHG emissions (Scopes 1, 2, and 3 if relevant);

Whether the company has sought and received third-party approval that its targets are science-based;

Whether the company has made a commitment to be "net zero" for operational and supply chain emissions

(Scopes 1, 2, and 3) by 2050;

Whether the company discloses a commitment to report on the implementation of its plan in subsequent

years;

Whether the company's climate data has received third-party assurance;

Disclosure of how the company's lobbying activities and its capital expenditures align with company strategy;

Whether there are specific industry decarbonization challenges; and

The company's related commitment, disclosure, and performance compared to its industry peers.

**Say on Climate (SoC) Shareholder Proposals**

**General Recommendation:** Vote case-by-case on shareholder proposals that request the company to disclose a

report providing its GHG emissions levels and reduction targets and/or its upcoming/approved climate transition

action plan and provide shareholders the opportunity to express approval or disapproval of its GHG emissions

reduction plan, taking into account information such as the following:

The completeness and rigor of the company's climate-related disclosure;

The company's actual GHG emissions performance;

Whether the company has been the subject of recent, significant violations, fines, litigation, or controversy

related to its GHG emissions; and

Whether the proposal's request is unduly burdensome (scope or timeframe) or overly prescriptive.

**Climate Change/Greenhouse Gas (GHG) Emissions**

**General Recommendation:** Vote case-by-case on resolutions requesting that a company disclose information on

the climate change related financial, physical, or regulatory risks it faces to its operations and investments or on

how the company identifies, measures, and manages such risks, considering:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________

<sup>21</sup> Variations of this request also include climate transition related ambitions, or commitment to reporting on the

implementation of a climate plan.

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Whether the company already provides current, publicly-available information on the climate change-

related financial, physical, or regulatory risks its faces to its operations and investments or on the impact

that climate change may have on the company;

Associated company policies and practices addressing climate change related risks and/or opportunities;

The company's level of disclosure compared to industry peers; and

Whether there are significant controversies, fines, penalties, or litigation associated with the

company's climate change-related performance.

Vote case-by-case on proposals requesting that a company report on its greenhouse gas (GHG) emissions from

company operations and/or products and operations, considering:

Whether the company discloses current, publicly-available information on the impacts that GHG emissions

may have on the company as well as associated company policies and procedures to address related risks

and/or opportunities;

Whether the company's level of disclosure is comparable to that of industry peers; or

Whether there are significant, controversies, fines, penalties, or litigation associated with the

company's GHG emissions.

Vote case-by-case on proposals that call for the adoption of GHG reduction goals from products and operations,

considering:

The company's actual GHG emissions performance;

The company's current GHG emission policies, oversight mechanisms, and related initiatives;

Whether the company provides disclosure of year-over-year GHG emissions performance data;

Whether company disclosure lags behind industry peers; and

Whether the company has been the subject of recent, significant violations, fines, litigation, or controversy

related to GHG emissions.

**Energy Efficiency**

**General Recommendation:** Generally vote for proposals requesting that a company report on its energy efficiency

policies, unless:

The company complies with applicable energy efficiency regulations and laws, and discloses its participation in

energy efficiency policies and programs, including disclosure of benchmark data, targets, and performance

measures; or

The proponent requests adoption of specific energy efficiency goals within specific timelines.

**Renewable Energy**

**General Recommendation:** Generally vote for requests for reports on the feasibility of developing renewable

energy resources unless the report would be duplicative of existing disclosure or irrelevant to the company's line

of business.

Generally vote against proposals requesting that the company invest in renewable energy resources. Such

decisions are best left to management's evaluation of the feasibility and financial impact that such programs may

have on the company.

Generally vote against proposals that call for the adoption of renewable energy goals, taking into account:

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The scope and structure of the proposal;

The company's current level of disclosure on renewable energy use and GHG emissions; and

The company's disclosure of policies, practices, and oversight implemented to manage GHG emissions and

mitigate climate change risks.

Diversity

**Board Diversity**

**General Recommendation:** Generally vote for requests for reports on a company's efforts to diversify the board,

unless:

The gender and racial minority representation of the company's board is reasonably inclusive in relation to

companies of similar size and business; or

The board already reports on its nominating procedures and gender and racial minority initiatives on the

board and within the company.

Vote case-by-case on proposals asking a company to increase the gender and racial minority representation on its

board, taking into account:

The degree of existing gender and racial minority diversity on the company's board and among its executive

officers;

The level of gender and racial minority representation that exists at the company's industry peers;

The company's established process for addressing gender and racial minority board representation;

Whether the proposal includes an overly prescriptive request to amend nominating committee

charter language;

The independence of the company's nominating committee;

Whether the company uses an outside search firm to identify potential director nominees; and

Whether the company has had recent controversies, fines, or litigation regarding equal employment practices.

**Equality of Opportunity**

**General Recommendation:** Generally vote case-by-case on proposals requesting a company disclose its diversity

policies or initiatives, or proposals requesting disclosure of a company's comprehensive workforce diversity data,

including requests for EEO-1 data. Factors that will be considered are:

Whether the company publicly discloses equal opportunity policies and initiatives;

Whether the company publicly discloses comprehensive workforce diversity data/EEO-1 report; or

Whether the company has recent significant workplace discrimination/fair employment violations or litigation.

Generally vote against proposals seeking information on the diversity efforts of suppliers and service providers.

Such requests may pose a significant burden on the company.

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**Gender Identity, Sexual Orientation, and Domestic Partner Benefits**

**General Recommendation:** Generally vote for proposals seeking to amend a company's EEO statement or diversity

policies to prohibit discrimination based on sexual orientation and/or gender identity, unless the change would be

unduly burdensome.

Generally vote against proposals to extend company benefits to, or eliminate benefits from, domestic partners.

Decisions regarding benefits should be left to the discretion of the company.

**Gender, Race/Ethnicity Pay Gap**

**General Recommendation:** Vote case-by-case on requests for reports on a company's pay data by gender or race/

ethnicity, or a report on a company's policies and goals to reduce any gender or race/ethnicity pay gaps, taking

into account:

The company's current policies and disclosure related to both its diversity and inclusion policies and

practices and its compensation philosophy on fair and equitable compensation practices;

Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

gender, race, or ethnicity pay gap issues;

The company's disclosure regarding gender, race, or ethnicity pay gap policies or initiatives compared to its

industry peers; and

Local laws regarding categorization of race and/or ethnicity and definitions of ethnic and/or racial minorities.

**Racial Equity and/or Civil Rights Audit Guidelines**

**General Recommendation:** Vote case-by-case on proposals asking a company to conduct an independent racial

equity and/or civil rights audit, taking into account:

The company's established process or framework for addressing racial inequity and discrimination internally;

Whether the company adequately discloses workforce diversity and inclusion metrics and goals;

Whether the company has issued a public statement related to its racial justice efforts in recent years, or has

committed to internal policy review;

Whether the company has engaged with impacted communities, stakeholders, and civil rights experts;

The company's track record in recent years of racial justice measures and outreach externally; and

Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

racial inequity or discrimination.

Environment and Sustainability

**Facility and Workplace Safety**

**General Recommendation:** Vote case-by-case on requests for workplace safety reports, including reports on

accident risk reduction efforts, taking into account:

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The company's current level of disclosure of its workplace health and safety performance data, health and

safety management policies, initiatives, and oversight mechanisms;

The nature of the company's business, specifically regarding company and employee exposure to health and

safety risks;

Recent significant controversies, fines, or violations related to workplace health and safety; and

The company's workplace health and safety performance relative to industry peers.

Vote case-by-case on resolutions requesting that a company report on safety and/or security risks associated with

its operations and/or facilities, considering:

The company's compliance with applicable regulations and guidelines;

The company's current level of disclosure regarding its security and safety policies, procedures, and

compliance monitoring; and

The existence of recent, significant violations, fines, or controversy regarding the safety and security of the

company's operations and/or facilities.

**Natural Capital- Related and/or Community Impact Assessment Proposals**

**General Recommendation:** Vote case-by-case on requests for reports on policies and/or the potential

(community) social and/or environmental impact of company operations, considering:

Alignment of current disclosure of applicable company policies, metrics, risk assessment report(s) and risk

management procedures with any relevant, broadly accepted reporting frameworks;

The impact of regulatory non-compliance, litigation, remediation, or reputational loss that may be associated

with failure to manage the company's operations in question, including the management of relevant

community and stakeholder relations;

The nature, purpose, and scope of the company's operations in the specific region(s);

The degree to which company policies and procedures are consistent with industry norms; and

The scope of the resolution.

**Hydraulic Fracturing**

**General Recommendation:** Generally vote for proposals requesting greater disclosure of a company's (natural gas)

hydraulic fracturing operations, including measures the company has taken to manage and mitigate the potential

community and environmental impacts of those operations, considering:

The company's current level of disclosure of relevant policies and oversight mechanisms;

The company's current level of such disclosure relative to its industry peers;

Potential relevant local, state, or national regulatory developments; and

Controversies, fines, or litigation related to the company's hydraulic fracturing operations.

**Operations in Protected Areas**

**General Recommendation:** Generally vote for requests for reports on potential environmental damage as a result

of company operations in protected regions, unless:

Operations in the specified regions are not permitted by current laws or regulations;

The company does not currently have operations or plans to develop operations in these protected regions; or

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The company's disclosure of its operations and environmental policies in these regions is comparable to

industry peers.

**Recycling**

**General Recommendation:** Vote case-by-case on proposals to report on an existing recycling program, or adopt a

new recycling program, taking into account:

The nature of the company's business;

The current level of disclosure of the company's existing related programs;

The timetable and methods of program implementation prescribed by the proposal;

The company's ability to address the issues raised in the proposal; and

How the company's recycling programs compare to similar programs of its industry peers.

**Sustainability Reporting**

**General Recommendation:** Generally vote for proposals requesting that a company report on its policies,

initiatives, and oversight mechanisms related to social, economic, and environmental sustainability, unless:

The company already discloses similar information through existing reports or policies such as an

environment, health, and safety (EHS) report; a comprehensive code of corporate conduct; and/or a diversity

report; or

The company has formally committed to the implementation of a reporting program based on Global

Reporting Initiative (GRI) guidelines or a similar standard within a specified time frame.

**Water Issues**

**General Recommendation:** Vote case-by-case on proposals requesting a company report on, or adopt a new policy

on, water-related risks and concerns, taking into account:

The company's current disclosure of relevant policies, initiatives, oversight mechanisms, and water usage

metrics;

Whether or not the company's existing water-related policies and practices are consistent with relevant

internationally recognized standards and national/local regulations;

The potential financial impact or risk to the company associated with water-related concerns or issues; and

Recent, significant company controversies, fines, or litigation regarding water use by the company and its

suppliers.

General Corporate Issues

**Charitable Contributions**

**General Recommendation:** Vote against proposals restricting a company from making charitable contributions.

Charitable contributions are generally useful for assisting worthwhile causes and for creating goodwill in the

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community. In the absence of bad faith, self-dealing, or gross negligence, management should determine which,

and if, contributions are in the best interests of the company.

**Data Security, Privacy, and Internet Issues**

**General Recommendation:** Vote case-by-case on proposals requesting the disclosure or implementation of data

security, privacy, or information access and management policies and procedures, considering:

The level of disclosure of company policies and procedures relating to data security, privacy, freedom of

speech, information access and management, and Internet censorship;

Engagement in dialogue with governments or relevant groups with respect to data security, privacy, or the

free flow of information on the Internet;

The scope of business involvement and of investment in countries whose governments censor or monitor the

Internet and other telecommunications;

Applicable market-specific laws or regulations that may be imposed on the company; and

Controversies, fines, or litigation related to data security, privacy, freedom of speech, or Internet censorship.

**ESG Compensation-Related Proposals**

**General Recommendation:** Vote case-by-case on proposals seeking a report or additional disclosure on the

company's approach, policies, and practices on incorporating environmental and social criteria into its executive

compensation strategy, considering:

The scope and prescriptive nature of the proposal;

The company's current level of disclosure regarding its environmental and social performance and

governance;

The degree to which the board or compensation committee already discloses information on whether it has

considered related E&S criteria; and

Whether the company has significant controversies or regulatory violations regarding social or

environmental issues.

Human Rights, Human Capital Management, and International

Operations

**Human Rights Proposals**

**General Recommendation:** Vote case-by-case on proposals requesting a report on company or company supplier

labor and/or human rights standards and policies, taking into consideration:

Whether such information is publicly disclosed;

Whether the company is lagging industry peers; and

Whether there are recent, significant company controversies, fines, or litigation regarding human rights at the

company or its suppliers.

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Vote case-by-case on proposals to implement company or company supplier labor and/or human rights standards

and policies, considering:

The scope of the request;

The degree to which existing relevant policies and practices are disclosed;

Whether or not existing relevant policies are consistent with internationally recognized standards;

Deviation from industry sector peer company standards and practices.

Whether company facilities and those of its suppliers are monitored and how;

Company participation in fair labor organizations or other internationally recognized human rights initiatives;

Scope and nature of business conducted in markets known to have higher risk of workplace labor/

human rights abuse; and

Recent, significant company controversies, fines, or litigation regarding human rights at the company or its

suppliers.

Vote case-by-case on proposals requesting that a company conduct an assessment of the human rights risks in its

operations or in its supply chain, or report on its human rights risk assessment process, considering:

The degree to which existing relevant policies and practices are disclosed, including information on the

implementation of these policies and any related oversight mechanisms;

The company's industry and whether the company or its suppliers operate in countries or areas where there is

a history of human rights concerns;

Recent significant controversies, fines, or litigation regarding human rights involving the company or its

suppliers, and whether the company has taken remedial steps; and

Whether the proposal is unduly burdensome or overly prescriptive.

**Mandatory Arbitration**

**General Recommendation:** Vote case-by-case on requests for a report on a company's use of mandatory

arbitration on employment-related claims, taking into account:

The company's current policies and practices related to the use of mandatory arbitration agreements

on workplace claims;

Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

the use of mandatory arbitration agreements on workplace claims; and

The company's disclosure of its policies and practices related to the use of mandatory arbitration

agreements compared to its peers.

**Operations in High-Risk Markets**

**General Recommendation:** Vote case-by-case on requests for a report on a company's potential financial and

reputational risks associated with operations in "high-risk" markets, such as a terrorism-sponsoring state or

politically/socially unstable region, taking into account:

The nature, purpose, and scope of the operations and business involved that could be affected by social

or political disruption;

Current disclosure of applicable risk assessment(s) and risk management procedures;

Compliance with U.S. sanctions and laws;

Consideration of other international policies, standards, and laws; and

Whether the company has been recently involved in recent, significant controversies, fines, or litigation

related to its operations in "high-risk" markets.

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**Outsourcing/Offshoring**

**General Recommendation:** Vote case-by-case on proposals calling for companies to report on the risks associated

with outsourcing/plant closures, considering:

Controversies surrounding operations in the relevant market(s);

The value of the requested report to shareholders;

The company's current level of disclosure of relevant information on outsourcing and plant closure

procedures; and

The company's existing human rights standards relative to industry peers.

**Sexual Harassment**

**General Recommendation:** Vote case-by-case on requests for a report on company actions taken to strengthen

policies and oversight to prevent workplace sexual harassment, or a report on risks posed by a company's failure

to prevent workplace sexual harassment, taking into account:

The company's current policies, practices, oversight mechanisms related to preventing workplace sexual

harassment;

Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

workplace sexual harassment issues; and

The company's disclosure regarding workplace sexual harassment policies or initiatives compared to its

industry peers.

**Weapons and Military Sales**

**General Recommendation:** Vote against reports on foreign military sales or offsets. Such disclosures may involve

sensitive and confidential information. Moreover, companies must comply with government controls and

reporting on foreign military sales.

Generally vote against proposals asking a company to cease production or report on the risks associated with the

use of depleted uranium munitions or nuclear weapons components and delivery systems, including disengaging

from current and proposed contracts. Such contracts are monitored by government agencies, serve multiple

military and non-military uses, and withdrawal from these contracts could have a negative impact on the

company's business.

Political Activities

**Lobbying**

**General Recommendation:** Vote case-by-case on proposals requesting information on a company's lobbying

(including direct, indirect, and grassroots lobbying) activities, policies, or procedures, considering:

The company's current disclosure of relevant lobbying policies, and management and board oversight;

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The company's disclosure regarding trade associations or other groups that it supports, or is a member of, that

engage in lobbying activities; and

Recent significant controversies, fines, or litigation regarding the company's lobbying-related activities.

**Political Contributions**

**General Recommendation:** Vote case-by-case on proposals requesting greater disclosure of a company's political

contributions and trade association spending policies and activities, considering:

The company's policies, and management and board oversight related to its direct political contributions and

payments to trade associations or other groups that may be used for political purposes;

The company's disclosure regarding its support of, and participation in, trade associations or other groups

that may make political contributions;

The company's disclosure of its direct corporate political contributions; and

Recent significant controversies, fines, or litigation related to the company's political contributions or political

activities.

Vote against proposals barring a company from making political contributions. Businesses are affected by

legislation at the federal, state, and local level; barring political contributions can put the company at a competitive

disadvantage.

Vote against proposals to publish in newspapers and other media a company's political contributions. Such

publications could present significant cost to the company without providing commensurate value to shareholders.

**Political Expenditures and Lobbying Congruency**

**General Recommendation:** Generally vote case-by-case on proposals requesting greater disclosure of a company's

alignment of political contributions, lobbying, and electioneering spending with a company's publicly stated values

and policies, considering:

The company's policies, management, board oversight, governance processes, and level of disclosure related

to direct political contributions, lobbying activities, and payments to trade associations, political action

committees, or other groups that may be used for political purposes;

The company's disclosure regarding: the reasons for its support of candidates for public offices; the

reasons for support of and participation in trade associations or other groups that may make political

contributions; and other political activities;

Any incongruencies identified between a company's direct and indirect political expenditures and its publicly

stated values and priorities; and

Recent significant controversies related to the company's direct and indirect lobbying, political contributions,

or political activities.

Generally vote case-by-case on proposals requesting comparison of a company's political spending to objectives

that can mitigate material risks for the company, such as limiting global warming.

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**Political Ties**

**General Recommendation:** Generally vote against proposals asking a company to affirm political nonpartisanship

in the workplace, so long as:

There are no recent, significant controversies, fines, or litigation regarding the company's political

contributions or trade association spending; and

The company has procedures in place to ensure that employee contributions to company-sponsored political

action committees (PACs) are strictly voluntary and prohibit coercion.

Vote against proposals asking for a list of company executives, directors, consultants, legal counsels, lobbyists, or

investment bankers that have prior government service and whether such service had a bearing on the business of

the company. Such a list would be burdensome to prepare without providing any meaningful information to

shareholders.

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**8. Mutual Fund Proxies**

**Election of Directors**

**General Recommendation:** Vote case-by-case on the election of directors and trustees, following the same

guidelines for uncontested directors for public company shareholder meetings. However, mutual fund boards do

not usually have compensation committees, so do not withhold for the lack of this committee.

**Closed End Funds- Unilateral Opt-In to Control Share Acquisition Statutes**

**General Recommendation:** For closed-end management investment companies (CEFs), vote against or withhold

from nominating/governance committee members (or other directors on a case-by-case basis) at CEFs that have

not provided a compelling rationale for opting-in to a Control Share Acquisition statute, nor submitted a by-law

amendment to a shareholder vote.

**Converting Closed-end Fund to Open-end Fund**

**General Recommendation:** Vote case-by-case on conversion proposals, considering the following factors:

Past performance as a closed-end fund;

Market in which the fund invests;

Measures taken by the board to address the discount; and

Past shareholder activism, board activity, and votes on related proposals.

**Proxy Contests**

**General Recommendation:** Vote case-by-case on proxy contests, considering the following factors:

Past performance relative to its peers;

Market in which the fund invests;

Measures taken by the board to address the issues;

Past shareholder activism, board activity, and votes on related proposals;

Strategy of the incumbents versus the dissidents;

Independence of directors;

Experience and skills of director candidates;

Governance profile of the company; and

Evidence of management entrenchment.

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**Investment Advisory Agreements**

**General Recommendation:** Vote case-by-case on investment advisory agreements, considering the following

factors:

Proposed and current fee schedules;

Fund category/investment objective;

Performance benchmarks;

Share price performance as compared with peers;

Resulting fees relative to peers; and

Assignments (where the advisor undergoes a change of control).

**Approving New Classes or Series of Shares**

**General Recommendation:** Vote for the establishment of new classes or series of shares.

**Preferred Stock Proposals**

**General Recommendation:** Vote case-by-case on the authorization for or increase in preferred shares, considering

the following factors:

Stated specific financing purpose;

Possible dilution for common shares; and

Whether the shares can be used for antitakeover purposes.

**1940 Act Policies**

**General Recommendation:** Vote case-by-case on policies under the Investment Advisor Act of 1940, considering

the following factors:

Potential competitiveness;

Regulatory developments;

Current and potential returns; and

Current and potential risk.

Generally vote for these amendments as long as the proposed changes do not fundamentally alter the investment

focus of the fund and do comply with the current SEC interpretation.

**Changing a Fundamental Restriction to a Nonfundamental Restriction**

**General Recommendation:** Vote case-by-case on proposals to change a fundamental restriction to a non-

fundamental restriction, considering the following factors:

The fund's target investments;

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The reasons given by the fund for the change; and

The projected impact of the change on the portfolio.

**Change Fundamental Investment Objective to Nonfundamental**

**General Recommendation:** Vote against proposals to change a fund's fundamental investment objective to non-

fundamental.

**Name Change Proposals**

**General Recommendation:** Vote case-by-case on name change proposals, considering the following factors:

Political/economic changes in the target market;

Consolidation in the target market; and

Current asset composition.

**Change in Fund's Subclassification**

**General Recommendation:** Vote case-by-case on changes in a fund's sub-classification, considering the following

factors:

Potential competitiveness;

Current and potential returns;

Risk of concentration; and

Consolidation in target industry.

**Business Development Companies—Authorization to Sell Shares of Common** 

**Stock at a Price below Net Asset Value**

**General Recommendation:** Vote for proposals authorizing the board to issue shares below Net Asset Value (NAV)

if:

The proposal to allow share issuances below NAV has an expiration date no more than one year from the

date shareholders approve the underlying proposal, as required under the Investment Company Act of 1940;

The sale is deemed to be in the best interests of shareholders by (1) a majority of the company's independent

directors and (2) a majority of the company's directors who have no financial interest in the issuance; and

The company has demonstrated responsible past use of share issuances by either:

Outperforming peers in its 8-digit GICS group as measured by one- and three-year median TSRs; or

Providing disclosure that its past share issuances were priced at levels that resulted in only small or

moderate discounts to NAV and economic dilution to existing non-participating shareholders.

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**Disposition of Assets/Termination/Liquidation**

**General Recommendation:** Vote case-by-case on proposals to dispose of assets, to terminate or liquidate,

considering the following factors:

Strategies employed to salvage the company;

The fund's past performance; and

The terms of the liquidation.

**Changes to the Charter Document**

**General Recommendation:** Vote case-by-case on changes to the charter document, considering the following

factors:

The degree of change implied by the proposal;

The efficiencies that could result;

The state of incorporation; and

Regulatory standards and implications.

Vote against any of the following changes:

Removal of shareholder approval requirement to reorganize or terminate the trust or any of its series;

Removal of shareholder approval requirement for amendments to the new declaration of trust;

Removal of shareholder approval requirement to amend the fund's management contract, allowing the

contract to be modified by the investment manager and the trust management, as permitted by the 1940 Act;

Allow the trustees to impose other fees in addition to sales charges on investment in a fund, such as deferred

sales charges and redemption fees that may be imposed upon redemption of a fund's shares;

Removal of shareholder approval requirement to engage in and terminate subadvisory arrangements; or

Removal of shareholder approval requirement to change the domicile of the fund.

**Changing the Domicile of a Fund**

**General Recommendation:** Vote case-by-case on re-incorporations, considering the following factors:

Regulations of both states;

Required fundamental policies of both states; and

The increased flexibility available.

**Authorizing the Board to Hire and Terminate Subadvisers Without** 

**Shareholder Approval**

**General Recommendation:** Vote against proposals authorizing the board to hire or terminate subadvisers without

shareholder approval if the investment adviser currently employs only one subadviser.

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**Distribution Agreements**

**General Recommendation:** Vote case-by-case on distribution agreement proposals, considering the following

factors:

Fees charged to comparably sized funds with similar objectives;

The proposed distributor's reputation and past performance;

The competitiveness of the fund in the industry; and

The terms of the agreement.

**Master-Feeder Structure**

**General Recommendation:** Vote for the establishment of a master-feeder structure.

**Mergers**

**General Recommendation:** Vote case-by-case on merger proposals, considering the following factors:

Resulting fee structure;

Performance of both funds;

Continuity of management personnel; and

Changes in corporate governance and their impact on shareholder rights.

Shareholder Proposals for Mutual Funds

**Establish Director Ownership Requirement**

**General Recommendation:** Generally vote against shareholder proposals that mandate a specific minimum

amount of stock that directors must own in order to qualify as a director or to remain on the board.

**Reimburse Shareholder for Expenses Incurred**

**General Recommendation:** Vote case-by-case on shareholder proposals to reimburse proxy solicitation expenses.

When supporting the dissidents, vote for the reimbursement of the proxy solicitation expenses.

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**Terminate the Investment Advisor**

**General Recommendation:** Vote case-by-case on proposals to terminate the investment advisor, considering the

following factors:

Performance of the fund's Net Asset Value (NAV);

The fund's history of shareholder relations; and

The performance of other funds under the advisor's management.

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We empower investors and companies to build

for long-term and sustainable growth by providing

high-quality data, analytics, and insight.

**GET STARTED WITH ISS SOLUTIONS**

Email <u>sales@issgovernance.com</u> or visit <u>www.issgovernance.com</u> for more information.

Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies

to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is

majority owned by Deutsche Bourse Group, along with Genstar Capital and ISS management, is a leading provider

of corporate governance and responsible investment solutions, market intelligence, fund services, and events and

editorial content for institutional investors and corporations, globally. ISS' 2,600 employees operate worldwide

across 29 global locations in 15 countries. Its approximately 3,400 clients include many of the world's leading

institutional investors who rely on ISS' objective and impartial offerings, as well as public companies focused on

ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS' expertise to

help them make informed investment decisions. This document and all of the information contained in it,

including without limitation all text, data, graphs, and charts (collectively, the "Information") is the property of

Institutional Shareholder Services Inc. (ISS), its subsidiaries, or, in some cases third party suppliers.

The Information has not been submitted to, nor received approval from, the United States Securities and Exchange

Commission or any other regulatory body. None of the Information constitutes an offer to sell (or a solicitation of

an offer to buy), or a promotion or recommendation of, any security, financial product or other investment vehicle

or any trading strategy, and ISS does not endorse, approve, or otherwise express any opinion regarding any issuer,

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The user of the Information assumes the entire risk of any use it may make or permit to be made of the

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Without limiting any of the foregoing and to the maximum extent permitted by law, in no event shall ISS have any

liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost

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or limit any liability that may not by applicable law be excluded or limited.© 2025 \| Institutional Shareholder Services and/or its affiliates

------

**PART C: OTHER INFORMATION**

**Item 28. Exhibits**

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| **<u>Exhibit No.</u>** | **<u>Exhibit No.</u>** | **<u>Exhibit No.</u>** | **<u>Description of Exhibit</u>** |
| (a) | (i) |  | <u>[Certificate of Trust of Active Weighting Funds ETF Trust (now Listed Funds Trust) (the "Trust" or the "Registrant") dated August 26, 2016 is incorporated by reference to Exhibit (a)(1) to the Registrant's Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the Securities and Exchange Commission (the "SEC") on April 26, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919002369/cert-of_trust.htm)</u> |
|  | (ii) |  | <u>[Certificate of Amendment to the Certificate of Trust of Active Weighting Funds ETF Trust effective December 31, 2018 is incorporated herein by reference to Exhibit (a)(ii) to the Registrant's Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919002369/amend_cert_trust.htm)</u> |
|  | (iii) |  | <u>[Amended and Restated Declaration of Trust dated March 19, 2019 is incorporated herein by reference to Exhibit (a)(iii) to the Registrant's Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919002369/declaroftrust.htm)</u> |
| (b) |  |  | <u>[Amended and Restated By-Laws dated March 19, 2019 are incorporated by reference to Exhibit (b) to the Registrant's Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919002369/by-laws.htm)</u> |
| (c) |  |  | For information regarding the rights of the holders of securities, please see Articles IV, VII and VIII of the Declaration of Trust, filed as Exhibit (a)(i) above. |
| (d) | (i) | (A) | <u>[Investment Advisory Agreement dated May 24, 2019 between the Trust and Roundhill Financial Inc. ("Roundhill") is incorporated herein by reference to Exhibit (d)(i) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on May 24, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919003200/roundhill485b-advisoryagre.htm)</u> |
|  |  | (B) | <u>[A](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdib-amendmenttoschedule.htm)[mended](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdib-amendmenttoschedule.htm)[Schedule A](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdib-amendmenttoschedule.htm)[,](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdib-amendmenttoschedule.htm)[dated June 7, 2023](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdib-amendmenttoschedule.htm)[,](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdib-amendmenttoschedule.htm)[to the Investment Advisory Agreement](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdib-amendmenttoschedule.htm)[is incorporated herein by reference to Exhibit (d)(i)(B) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on June 12, 2023.](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdib-amendmenttoschedule.htm)</u> |
|  |  | (C) | Fee Waiver Agreement between Listed Funds Trust, on behalf of the Roundhill Magnificent Seven ETF, and Roundhill Financial, Inc. - ***<u>[Filed Herewith.](feewaiverandexpenselimitat.htm)</u>*** |
|  | (ii) | (A) | <u>[Investment Sub-Advisory Agreement dated May 24, 2019 between the Trust, Roundhill and Exchange Traded Concepts, LLC is incorporated herein by reference to Exhibit (d)(ii) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on May 24, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919003200/roundhill485b-subxadvisory.htm)</u> |
|  |  | (B) | <u>[A](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdiib-amendmenttoschedul.htm)[mended](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdiib-amendmenttoschedul.htm)[Schedule A](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdiib-amendmenttoschedul.htm)[,](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdiib-amendmenttoschedul.htm)[dated June 7, 2023](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdiib-amendmenttoschedul.htm)[,](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdiib-amendmenttoschedul.htm)[to the Investment Sub-Advisory Agreement](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdiib-amendmenttoschedul.htm)[is incorporated herein by reference to Exhibit (d)(ii)(B) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on June 12, 2023.](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhdiib-amendmenttoschedul.htm)</u> |
| (e) | (i) | (A) | <u>[ETF Distribution Agreement, dated September 30, 2021, between the Registrant and Foreside Fund Services, LLC (the "Distributor") (the "Distribution Agreement") is incorporated herein by reference to Exhibit (e)(i) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on October 19, 2021.](https://www.sec.gov/Archives/edgar/data/1683471/000089418921007379/exhei-liftxforesidedistrib.htm)</u> |
|  |  | (B) | <u>[Sixteenth Amendment to the ETF Distribution Agreement effective December 6, 2024 is incorporated herein by reference to Exhibit (e)(iii) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on January 21, 2026.](https://www.sec.gov/Archives/edgar/data/1683471/000089418926000955/a16thamendment-etfdistribu.htm)</u> |
|  | (ii) |  | <u>[Form of Authorized Participant Agreement is incorporated herein by reference to Exhibit (e)(2) to the Registrant's Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on October 2, 2017.](https://www.sec.gov/Archives/edgar/data/1683471/000089109217007054/e75901ex_e2.htm)</u> |
| (f) |  |  | Not applicable. |
| (g) | (i) | (A) | <u>[Custody Agreement between Registrant and U.S. Bank National Association dated April 9, 2019 is incorporated herein by reference to Exhibit (G) to the Registrant's Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919002369/custo_agree.htm)</u> |
|  |  | (B) | <u>[Amendment and Amended Exhibit 1 to the Custody Agreement dated June 12, 2023 is incorporated herein by reference to Exhibit (g)(i)(B) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on June 12, 2023.](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhgib-roundhillxamendment.htm)</u> |
| (h) | (i) | (A) | <u>[Fund Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, LLC dated April 9, 2019 is incorporated herein by reference to Exhibit (h)(1) to the Registrant's Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919002369/fundserv-agree.htm)</u> |
|  |  | (B) | <u>[Amendment and Amended Exhibit 1 to the Fund Servicing Agreement dated June 12, 2023 is incorporated herein by reference to Exhibit (h)(i)(B) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on June 12, 2023.](https://www.sec.gov/Archives/edgar/data/1683471/000089418923004204/exhhib-roundhillxamendment.htm)</u> |
|  | (ii) |  | <u>[Power of Attorney is incorporated herein by reference to Exhibit (h)(ii) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on March 27, 2025.](https://www.sec.gov/Archives/edgar/data/1683471/000089418925002115/lifpowerofattorney3525.htm)</u> |
|  | (iii) |  | <u>[Certificate of Secretary dated February 6, 2019 is incorporated herein by reference to Exhibit (h)(vi) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on February 6, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919000783/cert-of_sec.htm)</u> |

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| (i) | (i) | <u>[Opinion and Consent of Counsel for Roundhill BITKRAFT Esports & Digital Entertainment ETF is incorporated herein by reference to Exhibit (i) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on May 24, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919003200/roundhilllegalopinionandco.htm)</u> |
|  | (ii) | <u>[Opinion and Consent of Counsel for Roundhill Sports Betting & Gaming ETF is incorporated herein by reference to Exhibit (i) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on May 29, 2020.](https://www.sec.gov/Archives/edgar/data/1683471/000089418920004184/legalopinionforroundhillig.htm)</u> |
|  | (iii) | <u>[Opinion and Consent of Counsel for Roundhill Ball Metaverse ETF is incorporated herein by reference to Exhibit (i)(v) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on June 28, 2021.](https://www.sec.gov/Archives/edgar/data/1683471/000089418921004119/exhiv-legalopinionforround.htm)</u> |
|  | (iv) | <u>[Opinion and Consent of Counsel for Roundhill Cannabis ETF in incorporated herein by reference to Exhibit (viii) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on April 14, 2022.](https://www.sec.gov/Archives/edgar/data/1683471/000089418922002659/exiviii-legalopinionforrou.htm)</u> |
|  | (v) | <u>[Opinion and Consent of Counsel for Roundhill BIG Tech ETF, Roundhill BIG Airlines ETF, Roundhill BIG Defense ETF, Roundhill BIG Bank ETF, Roundhill BIG Oil ETF, and Roundhill BIG Railroad ETF is incorporated herein by reference to Exhibit (i)(viii) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on March 1, 2023.](https://www.sec.gov/Archives/edgar/data/1683471/000089418923001755/exhiviii-legalopinionforro.htm)</u> |
| (j) |  | Consent of Independent Registered Public Accounting Firm - ***<u>[Filed Herewith.](exjconsentofcohen-rh.htm)</u>*** |
| (k) |  | Not applicable. |
| (l) |  | Not applicable. |
| (m) | (i) | <u>[Rule 12b-1 Plan dated September 13, 2017 (the "12b-1 Plan") is incorporated herein by reference to Exhibit (m) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on October 2, 2017.](https://www.sec.gov/Archives/edgar/data/1683471/000089109217007054/e75901ex_m.htm)</u> |
|  | (ii) | <u>[Amended Appendix A to the Rule 12b-1 Plan is incorporated herein by reference to Exhibit (m)(ii) to Registrant's Registration Statement on From N-1A, as filed with the SEC on April 15, 2026.](https://www.sec.gov/Archives/edgar/data/1683471/000089418926012119/liftamendappendixatotherul.htm)</u> |
| (n) |  | Not applicable. |
| (o) |  | Reserved. |
| (p) | (i) | <u>[Registrant's Code of Ethics dated March 19, 2019 is incorporated herein by reference to Exhibit (p)(1) to the Registrant's Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919002369/coe-lift.htm)</u> |
|  | (ii) | <u>[Code of Ethics for Roundhill Financial, LLC is incorporated herein by reference to Exhibit (p)(ii) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on May 24, 2019.](https://www.sec.gov/Archives/edgar/data/1683471/000089418919003200/codeofethicsroundhill.htm)</u> |
|  | (iii) | Code of Ethics for Exchange Traded Concepts, LLC - ***<u>[Filed Herewith.](etc-codeofethicsxnovember2.htm)</u>*** |
| (q) |  | <u>[Opinions with Respect to the Execution of Derivatives and Purchase of Cannabis Company Securities is incorporated herein by reference to Exhibit (q) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on April 14, 2022.](https://www.sec.gov/Archives/edgar/data/1683471/000089418922002659/exq-roundhillcannabisopini.htm)</u> |

---

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

No person is directly or indirectly controlled by or under common control with the Registrant.

**Item 30. Indemnification**

Every person who is, has been, or becomes a Trustee or officer of the Registrant (hereinafter referred to as a "Covered Person") shall be indemnified by the Registrant to the fullest extent permitted by law against any and all liabilities and expenses reasonably incurred or paid by them in connection with the defense of any proceeding in which they become involved as a party or otherwise by virtue of their being or having been such a Trustee or officer, and against amounts paid or incurred by them in the settlement thereof. Every person who is, has been, or becomes an agent of the Registrant may, upon due approval of the Trustees (including a majority of the Trustees who are not interested persons of the Registrant), be indemnified by the Registrant, to the fullest extent permitted by law, against any and all liabilities and expenses reasonably incurred or paid by them in connection with the defense of any proceeding in which they become involved as a party or otherwise by virtue of their being or having been an agent, and against amounts paid or incurred by him in the settlement thereof. Every Person who is serving or has served at the request of the Registrant as a director, officer, partner, trustee, employee, agent or fiduciary of another domestic or foreign corporation, partnership, joint venture, trust, other enterprise or employee benefit plan ("Other Position") and who was or is a party or is threatened to be made a party to any proceeding by reason of alleged acts or omissions while acting within the scope of his or her service in such Other Position, may, upon due approval of the Trustees (including a majority of the Trustees who are not interested persons of the Registrant), be indemnified by the Registrant, to the fullest extent permitted by law, against any and all liabilities and expenses reasonably incurred or paid by them in connection with the defense of any proceeding in which they become involved as a party or otherwise by virtue of their being or having held such Other Position, and against amounts paid or incurred by them in the settlement thereof.

------

The Registrant shall indemnify each Covered Person who was or is a party or is threatened to be made a party to any proceeding, by reason of alleged acts or omissions within the scope of their service as a Covered Person, against judgments, fines, penalties, settlements and reasonable expenses (including attorneys' fees) actually incurred by them in connection with such proceeding to the maximum extent consistent with state law and the Investment Company Act of 1940, as amended.

No indemnification shall be provided to any person who shall have been adjudicated by a court or body before which the proceeding was brought: (i) to be liable to the Registrant or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of their office, or (ii) not to have acted in good faith in the reasonable belief that his action was in the best interest of the Registrant.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "1933 Act") may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the 1933 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 director, officer or controlling person of the Registrant in connection with the successful defense of any action, suit or proceeding or payment pursuant to any insurance policy) is asserted against the Registrant by such director, 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 1933 Act and will be governed by the final adjudication of such issue.

**Item 31. Business and Other Connections of Investment Adviser**

This Item incorporates by reference each investment adviser's Uniform Application for Investment Adviser Registration ("Form ADV") on file with the SEC, as listed below. Each Form ADV may be obtained, free of charge, at the SEC's website at www.adviserinfo.sec.gov. Additional information as to any other business, profession, vocation or employment of a substantial nature engaged in by each officer and director of the below-listed investment advisers is included in the Trust's Statement of Additional Information.

---

| | |
|:---|:---|
| <u>Investment Adviser and Sub-Adviser</u> | <u>SEC File No.</u> |
| Roundhill Financial LLC | 801-114971 |
| Exchange Traded Concepts, LLC | 801-70485 |

---

**Item 32.&nbsp;&nbsp;&nbsp;&nbsp;Principal Underwriter.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Foreside Fund Services, LLC (the "Distributor") serves as principal underwriter for the following investment companies registered under the Investment Company Act of 1940, as amended:

1. AB Active ETFs, Inc.

2. ABS Long/Short Strategies Fund

3. ActivePassive Core Bond ETF, Series of Trust for Professional Managers

4. ActivePassive Intermediate Municipal Bond ETF, Series of Trust for Professional Managers

5. ActivePassive International Equity ETF, Series of Trust for Professional Managers

6. ActivePassive U.S. Equity ETF, Series of Trust for Professional Managers

7. AdvisorShares Trust

8. AFA Private Credit Fund

9. AGF Investments Trust

10. AIM ETF Products Trust

11. Alexis Practical Tactical ETF, Series of Listed Funds Trust

12. AlphaCentric Prime Meridian Income Fund

13. Alternative Strategies Income Fund

14. American Century ETF Trust

15. AMG ETF Trust

16. Amplify ETF Trust

17. Applied Finance Dividend Fund, Series of World Funds Trust

18. Applied Finance Explorer Fund, Series of World Funds Trust

19. Applied Finance Select Fund, Series of World Funds Trust

20. Ardian Access LLC

21. ARK ETF Trust

22. ARK Venture Fund

23. Bitwise Funds Trust

------

24. BondBloxx ETF Trust

25. Bramshill Multi-Strategy Income Fund, Series of Investment Managers Series Trust

26. Bridgeway Funds, Inc.

27. Brinker Capital Destinations Trust

28. Brookfield Real Assets Income Fund Inc.

29. Build Funds Trust

30. Calamos Convertible and High Income Fund

31. Calamos Convertible Opportunities and Income Fund

32. Calamos Dynamic Convertible and Income Fund

33. Calamos Global Dynamic Income Fund

34. Calamos Global Total Return Fund

35. Calamos Strategic Total Return Fund

36. Carlyle Tactical Private Credit Fund

37. Cascade Private Capital Fund

38. Catalyst/Perini Strategic Income Fund

39. CBRE Global Real Estate Income Fund

40. Center Coast Brookfield MLP & Energy Infrastructure Fund

41. Cliffwater Corporate Lending Fund

42. Cliffwater Enhanced Lending Fund

43. Coatue Innovative Strategies Fund

44. Cohen & Steers ETF Trust

45. Convergence Long/Short Equity ETF, Series of Trust for Professional Managers

46. CrossingBridge Ultra-Short Duration ETF, Series of Trust for Professional Managers

47. Curasset Capital Management Core Bond Fund, Series of World Funds Trust

48. Curasset Capital Management Limited Term Income Fund, Series of World Funds Trust

49. CYBER HORNET S&P 500® and Bitcoin 75/25 Strategy ETF, Series of CYBER HORNET Trust

50. Davis Fundamental ETF Trust

51. Defiance BMNR Option Income ETF, Series of ETF Series Solutions

52. Defiance Connective Technologies ETF, Series of ETF Series Solutions

53. Defiance Drone and Modern Warfare ETF, Series of ETF Series Solutions

54. Defiance Quantum ETF, Series of ETF Series Solutions

55. Defiance Retail Kings ETF, Series of ETF Series Solutions

56. Denali Structured Return Strategy Fund

57. Dodge & Cox Funds

58. DoubleLine ETF Trust

59. DoubleLine Income Solutions Fund

60. DoubleLine Opportunistic Credit Fund

61. DoubleLine Yield Opportunities Fund

62. DriveWealth ETF Trust

63. EIP Investment Trust

64. Ellington Income Opportunities Fund

65. ETF Opportunities Trust

66. Exchange Listed Funds Trust

67. Exchange Place Advisors Trust

68. FIS Trust

69. FlexShares Trust

70. Fortuna Hedged Bitcoin ETF, Series of Listed Funds Trust

71. Forum Funds

72. Forum Funds II

73. Forum Real Estate Income Fund

74. GMO ETF Trust

75. GoldenTree Opportunistic Credit Fund

76. Gramercy Emerging Markets Debt Fund, Series of Investment Managers Series Trust

77. Grayscale Funds Trust

78. Guinness Atkinson Funds

79. Harbor ETF Trust

80. Harris Oakmark ETF Trust

81. Hawaiian Tax-Free Trust

82. Horizon Kinetics Blockchain Development ETF, Series of Listed Funds Trust

------

83. Horizon Kinetics Energy and Remediation ETF, Series of Listed Funds Trust

84. Horizon Kinetics Inflation Beneficiaries ETF, Series of Listed Funds Trust

85. Horizon Kinetics Japan Owner Operator ETF, Series of Listed Funds Trust

86. Horizon Kinetics Medical ETF, Series of Listed Funds Trust

87. Horizon Kinetics SPAC Active ETF, Series of Listed Funds Trust

88. Horizon Kinetics Texas ETF, Series of Listed Funds Trust

89. Innovator ETFs Trust

90. Ironwood Institutional Multi-Strategy Fund LLC

91. Ironwood Multi-Strategy Fund LLC

92. Jensen Quality Growth ETF, Series of Trust for Professional Managers

93. John Hancock Exchange-Traded Fund Trust

94. Kurv ETF Trust

95. Lazard Active ETF Trust

96. LDR Real Estate Value-Opportunity Fund, Series of World Funds Trust

97. Lone Peak Value Fund, Series of World Funds Trust

98. Mairs & Power Balanced Fund, Series of Trust for Professional Managers

99. Mairs & Power Fund, Series of Trust for Professional Managers

100. Mairs & Power Minnesota Municipal Bond ETF, Series of Trust for Professional Managers

101. Mairs & Power Small Cap Fund, Series of Trust for Professional Managers

102. Manor Investment Funds

103. MoA Funds Corporation

104. Moerus Worldwide Fund, Series of Northern Lights Fund Trust IV

105. Morgan Stanley ETF Trust

106. Morgan Stanley Pathway Large Cap Equity ETF, Series of Morgan Stanley Pathway Funds

107. Morgan Stanley Pathway Small-Mid Cap Equity ETF, Series of Morgan Stanley Pathway Funds

108. Morningstar Funds Trust

109. NEOS ETF Trust

110. Niagara Income Opportunities Fund

111. NXG Cushing® Midstream Energy Fund

112. NXG NextGen Infrastructure Income Fund

113. OTG Latin American Fund, Series of World Funds Trust

114. Overlay Shares Core Bond ETF, Series of Listed Funds Trust

115. Overlay Shares Foreign Equity ETF, Series of Listed Funds Trust

116. Overlay Shares Hedged Large Cap Equity ETF, Series of Listed Funds Trust

117. Overlay Shares Large Cap Equity ETF, Series of Listed Funds Trust

118. Overlay Shares Municipal Bond ETF, Series of Listed Funds Trust

119. Overlay Shares Short Term Bond ETF, Series of Listed Funds Trust

120. Overlay Shares Small Cap Equity ETF, Series of Listed Funds Trust

121. Palmer Square Funds Trust

122. Palmer Square Opportunistic Income Fund

123. Partners Group Private Income Opportunities, LLC

124. Perkins Discovery Fund, Series of World Funds Trust

125. Philotimo Focused Growth and Income Fund, Series of World Funds Trust

126. Plan Investment Fund, Inc.

127. Point Bridge America First ETF, Series of ETF Series Solutions

128. Precidian ETFs Trust

129. Rareview 2x Bull Cryptocurrency & Precious Metals ETF, Series of Collaborative Investment Series Trust

130. Rareview Dynamic Fixed Income ETF, Series of Collaborative Investment Series Trust

131. Rareview Systematic Equity ETF, Series of Collaborative Investment Series Trust

132. Rareview Tax Advantaged Income ETF, Series of Collaborative Investment Series Trust

133. Rareview Total Return Bond ETF, Series of Collaborative Investment Series Trust

134. Renaissance Capital Greenwich Funds

135. REX ETF Trust

136. Reynolds Funds, Inc.

137. RMB Investors Trust

138. Robinson Opportunistic Income Fund, Series of Investment Managers Series Trust

139. Robinson Tax Advantaged Income Fund, Series of Investment Managers Series Trust

140. Roundhill Ball Metaverse ETF, Series of Listed Funds Trust

141. Roundhill Cannabis ETF, Series of Listed Funds Trust

------

142. Roundhill ETF Trust

143. Roundhill Magnificent Seven ETF, Series of Listed Funds Trust

144. Roundhill Sports Betting & iGaming ETF, Series of Listed Funds Trust

145. Roundhill Video Games ETF, Series of Listed Funds Trust

146. Rule One Fund, Series of World Funds Trust

147. Russell Investments Exchange Traded Funds

148. Securian AM Real Asset Income Fund, Series of Investment Managers Series Trust

149. Six Circles Trust

150. Sound Shore Fund, Inc.

151. SP Funds Trust

152. Sparrow Funds

153. Spear Alpha ETF, Series of Listed Funds Trust

154. STF Tactical Growth & Income ETF, Series of Listed Funds Trust

155. STF Tactical Growth ETF, Series of Listed Funds Trust

156. Strategic Trust

157. Strategy Shares

158. Swan Hedged Equity US Large Cap ETF, Series of Listed Funds Trust

159. Tekla World Healthcare Fund

160. Tema ETF Trust

161. The 2023 ETF Series Trust

162. The Community Development Fund

163. The Cook & Bynum Fund, Series of World Funds Trust

164. The Private Shares Fund

165. The SPAC and New Issue ETF, Series of Collaborative Investment Series Trust

166. Third Avenue Trust

167. Third Avenue Variable Series Trust

168. Tidal Trust I

169. Tidal Trust II

170. Tidal Trust III

171. Tidal Trust IV

172. TIFF Investment Program

173. Timothy Plan High Dividend Stock ETF, Series of The Timothy Plan

174. Timothy Plan International ETF, Series of The Timothy Plan

175. Timothy Plan Market Neutral ETF, Series of The Timothy Plan

176. Timothy Plan US Small Cap Core ETF, Series of The Timothy Plan

177. Timothy Plan US Large/Mid Cap Core ETF, Series of The Timothy Plan

178. Total Fund Solution

179. Touchstone ETF Trust

180. Trailmark Series Trust

181. T-Rex 2X Inverse Bitcoin Daily Target ETF, Series of World Funds Trust

182. T-Rex 2x Inverse Ether Daily Target ETF, Series of World Funds Trust

183. T-Rex 2X Long Bitcoin Daily Target ETF, Series of World Funds Trust

184. T-Rex 2x Long Ether Daily Target ETF

185. U.S. Global Investors Funds

186. Union Street Partners Value Fund, Series of World Funds Trust

187. Vest Bitcoin Strategy Managed Volatility Fund, Series of World Funds Trust

188. Vest S&P 500® Dividend Aristocrats Target Income Fund, Series of World Funds Trust

189. Vest US Large Cap 10% Buffer Strategies Fund, Series of World Funds Trust

190. Vest US Large Cap 20% Buffer Strategies Fund, Series of World Funds Trust

191. Virtus Stone Harbor Emerging Markets Income Fund

192. Volatility Shares Trust

193. WEBs ETF Trust

194. Wedbush Series Trust

195. Wellington Global Multi-Strategy Fund

196. Wilshire Mutual Funds, Inc.

197. Wilshire Variable Insurance Trust

198. WisdomTree Trust

199. XAI Octagon Floating Rate & Alternative Income Term Trust

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The following are the Officers and Manager of the Distributor, the Registrant's underwriter. The Distributor's main business address is 190 Middle Street, Suite 301, Portland, Maine 04101.

---

| | | | |
|:---|:---|:---|:---|
| <u>Name</u> | <u>Address</u> | <u>Position with Underwriter</u> | <u>Position with Registrant</u> |
| Teresa Cowan | 190 Middle Street, Suite 301, Portland, Maine 04101 | President/Manager |  |
| Chris Lanza | 190 Middle Street, Suite 301, Portland, Maine 04101 | Vice President |  |
| Kate Macchia | 190 Middle Street, Suite 301, Portland, Maine 04101 | Vice President |  |
| Alicia Strout | 190 Middle Street, Suite 301, Portland, Maine 04101 | Vice President and Chief Compliance Officer |  |
| Gabriel E. Edelman | 190 Middle Street, Suite 301, Portland, Maine 04101 | Secretary |  |
| Susan L. LaFond | 190 Middle Street, Suite 301, Portland, Maine 04101 | Treasurer |  |
| Weston Sommers | 190 Middle Street, Suite 301, Portland, Maine 04101 | Financial and Operations Principal and Chief Financial Officer |  |

---

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

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

The books and records required to be maintained by Section 31(a) of the Investment Company Act of 1940 are maintained at the following locations:

---

| | |
|:---|:---|
| **Records Relating to:** | **Are located at:** |
| Registrant's Fund Administrator, Fund Accountant and Transfer Agent | U.S. Bancorp Fund Services, LLC<br>615 East Michigan Street<br>Milwaukee, Wisconsin 53202 |
| Registrant's Custodian | U.S. Bank, National Association<br>1555 North Rivercenter Drive, Suite 302 <br>Milwaukee, Wisconsin 53212 |
| Registrant's Principal Underwriter | Foreside Fund Services, LLC<br>190 Middle Street, Suite 301<br>Portland, Maine 04101 |
| Registrant's Investment Adviser | Roundhill Financial LLC <br>154 West 14th Street, 2nd Floor<br>New York, New York 10011 |
| Registrant's Sub-Adviser | Exchange Traded Concepts, LLC<br>10900 Hefner Pointe Drive, Suite 400<br>Oklahoma City, Oklahoma 73120 |

---

**Item 34. Management Services**

Not applicable.

**Item 35. Undertakings**

Not applicable.

------

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it meets all of the requirements for effectiveness of this Post-Effective Amendment to the Registrant's Registration Statement on Form N-1A (the "Amendment") under rule 485(b) under the Securities Act and has duly caused this Amendment to be signed on its behalf by the undersigned, duly authorized, in the City of Milwaukee, State of Wisconsin, on April 30, 2026.

---

| | |
|:---|:---|
| | **Listed Funds Trust** |
| By: | *<u>/s/ Chad Fickett</u>* |
|  | Chad Fickett |
|  | Secretary |

---

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities indicated on April 30, 2026.

---

| | |
|:---|:---|
| <u>Signature</u> | <u>Title</u> |
| \*/s/ John L. Jacobs | Trustee |
| John L. Jacobs |  |
| \*/s/ Koji Felton | Trustee |
| Koji Felton |  |
| \*/s/ Pamela H. Conroy | Trustee and Chairman |
| Pamela H. Conroy |  |
| \*/s/ Kacie G. Briody | President and Principal Executive Officer |
| Kacie G. Briody |  |
| \*/s/ Travis G. Babich | Treasurer and Principal Financial Officer |
| Travis G. Babich |  |
| \*By: *<u>/s/ Chad Fickett</u>*<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chad Fickett, Attorney-in-Fact<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to <u>[Power of Attorney](https://www.sec.gov/Archives/edgar/data/1683471/000089418925002115/lifpowerofattorney3525.htm)</u> | \*By: *<u>/s/ Chad Fickett</u>*<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chad Fickett, Attorney-in-Fact<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to <u>[Power of Attorney](https://www.sec.gov/Archives/edgar/data/1683471/000089418925002115/lifpowerofattorney3525.htm)</u> |

---

------

**INDEX TO EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| (d)(i)(C) | <u>[Fee Waiver Agreement between Listed Funds Trust, on behalf of the](feewaiverandexpenselimitat.htm)[Roundhill Magnificent Seven ETF](feewaiverandexpenselimitat.htm)[, and Roundhill Financial, Inc](feewaiverandexpenselimitat.htm)[.](feewaiverandexpenselimitat.htm)</u> |
| (j) | <u>[Consent of Independent Registered Public Accounting Firm](exjconsentofcohen-rh.htm)</u> |
| (p)(iii) | <u>[Code of Ethics for Exchange Traded Concepts, LLC](etc-codeofethicsxnovember2.htm)</u> |

---

## Ex-99.(D)(I)(C)

**LISTED FUNDS TRUST**

**Fee Waiver and Expense Limitation Agreement**

**April 23, 2026**

THIS FEE WAIVER AND EXPENSE LIMITATION AGREEMENT (the "Agreement") is entered into by and between Listed Funds Trust, a Delaware statutory trust (the "Trust"), on behalf of the series of the Trust set forth in Schedule A attached hereto (each, a "Fund" and collectively, the "Funds"), and Roundhill Financial Inc. (the "Adviser"), the Fund's investment adviser.

WITNESSETH:

WHEREAS, the Adviser has entered into an Investment Advisory Agreement with the Trust, pursuant to which the Adviser provides, or arranges for the provision of, investment advisory and management services to each Fund, and for which it is compensated based on the average daily net assets of the Fund; and

WHEREAS, the Trust and the Adviser have determined that it is appropriate and in the best interests of each Fund and its shareholders to maintain the expenses of the Fund at or below the level to which the Fund would normally be subject such that its Total Annual Fund Operating Expenses (as defined in the prospectus) do not exceed 0.30%.

&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the covenants and the mutual promises set forth herein, the parties mutually agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.EXPENSE LIMITATION. The Adviser hereby agrees to waive all or a portion of a Fund's unitary management fee and/or limit the Fund's Total Annual Fund Operating Expenses such that the Fund's Total Annual Fund Operating Expenses, at an annual rate, and expressed as a percentage of average daily net assets, shall not exceed the Maximum Annual Operating Expense Limit set forth on Schedule A attached hereto. For the avoidance of doubt, Total Annual Fund Operating Expenses are inclusive of Acquired Fund Fees and Expenses (AFFE). In the event the Fund's Total Annual Fund Operating Expenses, after any fee waiver or expense limitation, as accrued each month, exceed the Maximum Annual Operating Expense Limit set forth on Schedule A, the Adviser will pay to the Fund, on a monthly basis, the excess expense within thirty (30) calendar days of being notified that an excess expense payment is due. In the event the Board of Trustees of the Trust determines that an excess expense payment due date to be other than thirty (30) calendar days, the Trust will provide the Adviser with ten (10) calendar days written notice prior to the implementation of such other excess expense payment due date. In no case will an excess expense payment due date be less than fifteen (15) calendar days from the date the Adviser is notified of such excess expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.TERM. This Agreement shall continue in effect with respect to a Fund listed on Schedule A until the date indicated thereon ("Initial Term End Date") and shall thereafter

------

continue in effect from year to year for successive one-year periods, unless and until terminated by the Trust as provided in paragraph 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.TERMINATION. This Agreement may be terminated at any time, and without payment of any penalty, with respect to a Fund: (i) by the Board of Trustees of the Trust (the "Board"), for any reason and at any time; (ii) by the Adviser, for any reason, upon sixty (60) days' (or such shorter period as agreed to by the Trust) prior written notice to the Trust, such termination to be effective as of the close of business on the Initial Term End Date, on the last day of the then-current one-year period, or on such earlier date as approved by the Board; or (iii) automatically upon the termination of the Investment Advisory Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.ASSIGNMENT. This Adviser may not assign its rights and obligations hereunder without the prior approval of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute or rule, or shall be otherwise rendered invalid, the remainder of this Agreement shall not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to the conflict of laws principles thereof; provided that nothing herein shall be construed to preempt, or to be inconsistent with, any federal law, regulation or rule, including the Investment Company Act of 1940, and the Investment Advisers Act of 1940, and any rules and regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.AMENDMENT. This Agreement may not be amended except pursuant to a writing signed by the parties hereto and in accordance with the Investment Company Act of 1940, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.ENTIRE AGREEMENT. This Agreement, including any schedules hereto (each of which is incorporated herein and made a part hereof), represents the entire agreement and understanding of the parties hereto, and shall supersede any prior agreements.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested by their duly authorized officers, all on the date first written above.

\*&nbsp;&nbsp;&nbsp;&nbsp;\*&nbsp;&nbsp;&nbsp;&nbsp;\*

------

**LISTED FUNDS TRUST**

on behalf of the Roundhill Magnificent Seven ETF

By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/</u> <u>Chad E. Fickett</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chad E. Fickett

Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Secretary

**ROUNDHILL FINANCIAL INC.**

By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Sean Poyntz</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sean Poyntz

Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director of Operations

------

**<u>Schedule A</u>**

**<u>Expense Limits</u>**

---

| | | |
|:---|:---|:---|
| <br>**Fund** | **Maximum Annual Operating Expense Limit** | <br>**Initial Term End Date** |
| <br>Roundhill Magnificent Seven ETF | <br>0.30% | <br>May 1, 2027 |

---

## Ex-99.(J)

![image.jpg](image.jpg)

**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 February 27, 2026, relating to the financial statements and financial highlights of Roundhill Ball Metaverse ETF, Roundhill Cannabis ETF, Roundhill Magnificent Seven ETF, Roundhill Sports Betting & iGaming ETF, and Roundhill Video Games ETF, each a series of Listed Funds Trust, which are included in Form N-CSR for the year ended December 31, 2025, and to the references to our firm under the headings "Other 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.

Philadelphia, Pennsylvania

April 27, 2026

![image1.jpg](image1.jpg)

## Ex-99.(P)(Iii)

![etclogoa.jpg](etclogoa.jpg)

**<u>EXCHANGE TRADED CONCEPTS, LLC</u>**

**<u>CODE OF ETHICS/PERSONAL TRADING POLICY</u>**

**Adopted: November 2025**

This Code of Ethics (the "Code") is the sole property of Exchange Traded Concepts, LLC and ETC Platform Services, LLC ("Exchange Traded Concepts" or "ETC" or the "Firm") (defined below in the Code) and must be returned to the Firm upon termination for any reason of an Employee's association with the Firm. The contents of this Code are strictly confidential. Employees (defined below) may not duplicate, copy or reproduce this Code in whole or in part or make it available in any form to non-Employees without prior approval in writing from the Firm's Chief Compliance Officer ("CCO") (defined below).

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**<u>Introduction</u>**

Rule 204A-1 under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), requires an investment adviser registered with the U.S. Securities and Exchange Commission ("SEC") to establish, maintain and enforce a written code of ethics which meets the minimum requirements stated in the Rule. This Code of Ethics/Personal Trading Policy ("the Code") is intended to meet the requirements of the Advisers Act.

Rule 17j-1 under the Investment Company Act of 1940 also requires certain persons to be subject to a code of ethics. Rule 17j-1 makes it unlawful for any affiliated person of a regulated investment company or any affiliated person of its adviser or principal underwriter to engage in certain enumerated types of misconduct in connection with the purchase or sale by such person of a security held or to be acquired by the regulated investment company. This Code of Ethics is intended to ensure that all acts, practices and courses of business engaged in by Employees (as defined below) of the Adviser reflect high standards and comply with the requirements of Section 17(j) of the Act and Rule 17j-1 thereunder.

This Code of Ethics (the "Code") is applicable to all Access Persons (as defined below) of the Firm with respect to such activities and conduct on behalf of Exchange Traded Concepts, LLC or ETC Platform Services, LLC.

Exchange Traded Concepts, LLC (the "Adviser") is registered with the U.S. Securities and Exchange Commission (the "SEC") under the Investment Advisers Act of 1940, as amended (the "Advisers Act"). It serves as investment adviser to multiple series trusts ("the Trusts") as well as a subadviser to additional series.

ETC Platform Services, LLC ("ETCPS") is a service provider to the funds that provides non-advisory services.

Collectively, Exchange Traded Concepts, LLC and ETCPS shall be referred to as ("Exchange Traded Concepts", the "Firm" or "ETC")

Certain personnel are dual-hatted and work for both entities. All employees of ETC are considered Access Persons and must comply with all requirements in ETC's Code of Ethics.

The Code does not attempt to serve as a comprehensive outline regarding employee conduct, but rather to establish general rules of conduct and procedures applicable to all Access Persons.

The Code should be kept at hand for easy reference. Any questions regarding this Code, or other compliance issues, must be directed to the Chief Compliance Officer of ETC (the "CCO" defined below). The CCO is responsible for administering and implementing this Code. ETC expects Access Persons to be thoroughly familiar with the Firm's standards and procedures as set forth herein. In order to make it easier to review and understand the standards and procedures, a few commonly used terms are defined below.

**DEFINITIONS**

"**Access Person**," as defined in the Advisers Act, means any Employee, or supervised person, of the Firm who has access to non-public information regarding Clients' investments, including the purchase or sale of securities, or non-public information regarding the portfolio holdings of any Client; is involved in making investment and Securities recommendations to Clients or who has access to such recommendations that are non-public; is a director, officer or partner of the Firm.

"**Advisers Act**" means the Investment Advisers Act of 1940, as amended.

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"**Automatic Investment Plan**" means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan or "DRIP".

"**Beneficial Ownership**" is interpreted in the same manner as it would be under Rule 16a-1(a) under the Securities Exchange Act of 1934 (the "Exchange Act") in determining whether a person has beneficial ownership of a security for purposes of Section 16 of the Exchange Act and the rules and regulations thereunder. Generally, you will be treated as the "beneficial owner" of a security under this policy only if you have a direct or indirect pecuniary interest in the security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;A direct pecuniary interest is the opportunity, directly or indirectly, to profit, or to share the profit, from the transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;An indirect pecuniary interest is any non-direct financial interest, but is specifically defined in the rules to include securities held by members of your immediate family sharing the same household. An Access Person's "immediate family" includes a spouse, minor children and adults living in the same household as the Access Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Securities held by a partnership of which you are a general partner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Securities held by a trust of which you are the settlor if you can revoke the trust without the consent of another person, or a beneficiary if you have or share investment control with the trustee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Equity securities which may be acquired upon exercise of an option or other right, or through conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;For interpretive guidance on this test, you should consult counsel.

"**Chief Compliance Officer**" or "**CCO**" means Dennis Lowenfels or such other person as may be designated from time to time.

"**Client**" means any fund to which the Firm provides investment advisory or management services.

"**Covered Account**" means a personal investment or trading account of an Employee or Access Person or related account (this may include, but is not limited to, an account for which an Employee or Access Person is a trustee or custodian, a spousal account, any account of an Employee or Access Person's children or any account for an individual who relies on the Employee or Access Person for material support) in which an Employee or Access Person has any direct or indirect beneficial ownership interest, an investment or trading account over which an Employee or Access Person exercises control or provides investment advice, or a proprietary investment or trading account maintained for the Firm or its employees. Specifically, Covered Account includes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Trusts for which an Employee or Access Person acts as trustee, executor, custodian or discretionary manager;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Accounts for the benefit of the Employee's or Access Person's spouse or minor child;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Accounts for the benefit of a relative living with the Employee or Access Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Accounts for the benefit of any person who receives material financial support from the Employee or Access Person.

Covered Account does NOT include any account that does not hold Reportable Securities, such as cash accounts or 401k accounts that only hold open-end mutual funds, single stock funds that trade once daily at NAV, money market funds, direct obligations of the U.S. federal government, bank certificates of deposit, commercial paper and repurchase agreements.

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"**Covered Securities**" means a security defined in section 202(a)(18) of the Advisers Act held in a Covered Account. Covered Securities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Stocks

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Bonds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Futures

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Exchange Traded Funds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Investment contracts

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Options on securities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Options on indexes and options on currencies,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Limited partnerships (of any kind)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Foreign unit trusts

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Private Equity

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Private investment funds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Hedge funds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Investment clubs

Covered Securities <u>do not</u> include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Direct obligations of the U.S. government (e.g. treasury securities)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Bankers acceptances

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Bank certificates of deposit

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Commercial paper

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;High quality short-term debt obligations - including repurchase agreements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Open-End Mutual Funds or single stock funds that trade once daily at NAV

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Money Market Funds

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Crypto Currencies

"**Discretionary Managed Account**" means an account for which the Employee has designated investment discretion entirely to a third party. In such account, the Employee cannot exercise any investment discretion in the purchase or sale of securities.

"**Employee**" means any "supervised person" of ETC, as defined under the Advisers Act to be any partner, officer, director (or other person occupying a similar status or performing similar functions), employee, or other person who provides investment advice on behalf of ETC and is subject to the supervision and control of ETC.

"**Exchange Act**" means the Securities Exchange Act of 1934, as amended.

"**Federal Securities Laws**" means the Securities Act of 1933 (the "1933 Act"), the Exchange Act, the Sarbanes-Oxley Act of 2002, the 1940 Act, the Advisers Act, Title V of the Gramm-Leach-Bliley Act, any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act as it applies to investment advisers, and any rules adopted thereunder by the SEC or the Department of Treasury.

"**Firm**" means Exchange Traded Concepts, LLC or Exchange Traded Concepts or ETC.

"**Initial Public Offering**" means an offering of securities registered under the 1933 Act, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act.

"**Legal**" means the legal department of Exchange Traded Concepts

"**Limited Offering**" means an offering that is exempt from registration under the 1933 Act pursuant to Section 4(2) or Section 4(6) or pursuant to Rule 504, Rule 505, or Rule 506 under the 1933 Act.

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"**Private Placement**" shall mean an offering of Securities that is exempt from registration under the Section 4(2) or Section 4(6) of the Securities Act of 1933, as amended ("Securities Act"); or pursuant to Rule 504, Rule 505, or Rule 506 under the Securities Act.

"**Purchase or Sale of a Security**" includes, among other things, the writing of an option to purchase or sell a security.

"**Reportable Fund**" means: (i) any fund for which Exchange Traded Concepts serves as an investment adviser as defined in section 2(a)(20) of the 1940 Act (including Funds of the Trust); or (ii) any fund whose investment adviser or principal underwriter controls Exchange Traded Concepts, is controlled by Exchange Traded Concepts, or is under common control with Exchange Traded Concepts.

"**Reportable Security**" means any security except open-end mutual funds, money market funds, direct obligations of the U.S. federal government, municipal securities, bank CDs, bankers acceptances, commercial paper and repurchase agreements.

"**Security**" means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing.

**"Senior Management"** means J. Garrett Stevens, Rich Hogan and Jay Baker

**<u>STANDARDS OF CONDUCT</u>**

The reputation of Exchange Traded Concepts, LLC ("Exchange Traded Concepts") is based on our employees acting in an ethical manner with honesty, integrity and professionalism. That reputation is a vital business asset. Exchange Traded Concepts expects that its employees will perform their duties and conduct their personal investment activities with (1) the duty to, at all times, place our client's interests first, and (2) the fundamental principle that they should not take inappropriate advantage of their positions.

Exchange Traded Concepts deems all Employees to be Access Persons. Should ETC utilize interns or consultants, whether or not they are considered Access Persons, subject to the Firm's Code of Ethics, shall be determined by the CCO depending upon their role and access to information.

All Access Persons are governed by the requirements of this Code and must comply with federal securities laws (as defined below). Access Persons are not permitted:

1) &nbsp;&nbsp;&nbsp;&nbsp;to defraud a client in any manner;

2)&nbsp;&nbsp;&nbsp;&nbsp;to mislead a client, including by either making an untrue statement of material fact or by making a statement that omits material facts;

3) &nbsp;&nbsp;&nbsp;&nbsp;to engage in any act, practice or course of conduct which operates or would operate as a fraud or deceit upon a client;

4) &nbsp;&nbsp;&nbsp;&nbsp;to engage in any manipulative practice with respect to a client; or

5) &nbsp;&nbsp;&nbsp;&nbsp;to engage in any manipulative practice with respect to securities.

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As a fiduciary, Exchange Traded Concepts has an affirmative duty of care, loyalty, honesty and good faith to act in the best interests of its clients. This duty includes fully disclosing all material facts to clients concerning any conflict that does arise with respect to that client. This duty also applies to all Access Persons of Exchange Traded Concepts.

Disciplinary actions for failure to comply with this Code may include suspension of personal trading privileges, or suspension or termination of employment. The CCO will determine disciplinary actions by taking into account such facts as deemed appropriate and relevant, including the severity of the violation, and whether the Access Person has previously violated this Code.

**<u>Annual Acknowledgement</u>**

This Code is an integral part of the Firm's compliance program. This Code may be revised and supplemented from time to time; it is the responsibility of the CCO to distribute the most current version to all Access Persons.

It is the responsibility of each Access Person to understand the contents of this Code and the policies set forth herein, and to adhere to all applicable policies and procedures. Compliance by Access Persons with the Federal Securities Laws; the terms and provisions of the Compliance Manual, including, without limitation, the Code of Ethics; and any other applicable laws, rules, and regulations is a condition of employment and continued employment with the Firm. Access Persons who have supervisory responsibility should ensure that the Employees they supervise are familiar with applicable Federal Securities Laws, the Compliance Manual, and all applicable laws, rules, and regulations.

Each Access Person upon hire and annually thereafter is required to acknowledge his or her receipt and understanding of the Code and agreement to abide by its policies (the "Annual Acknowledgement"). Annual Acknowledgements will generally be distributed via and archived in the Firm's third-party compliance software.

**<u>PERSONAL SECURITIES TRANSACTIONS GENERALLY</u>**

All personal securities transactions are to be conducted in such a manner as to be consistent with the Code and to avoid any actual or potential conflict of interest or any abuse of an employee's position of trust and responsibility. Under the Advisers Act, the SEC has determined that an investment adviser's code of ethics must require Access Persons (as described above) to report their personal securities transactions and holdings and be subject to certain trading restrictions. Strict compliance with the provisions of the Code shall be considered a basic condition of employment with Exchange Traded Concepts.

For purposes of Exchange Traded Concepts' policy, employees of sub-advisers and service providers that have access to nonpublic information are not covered by this policy but are covered by their respective employer's policy.

**<u>CONFIDENTIALITY OF CLIENT AND FIRM INFORMATION AND THE USE OF ARTIFICIAL INTELLIGENCE (AI) /LARGE LANGUAGE MODEL (LLM) SERVICES</u>**

Confidentiality of information pertaining to Exchange Traded Concepts and its clients is a fundamental principle of the investment management business of Exchange Traded Concepts. Access Persons must maintain the confidential relationship between Exchange Traded Concepts and each of its clients. The confidentiality of information such as the extent of the account relationship must be held inviolate by those to whom it is entrusted and must never be discussed outside the normal and necessary course of Exchange Traded Concepts' business. To the extent possible, all information concerning clients and their accounts (including funds advised or sub-advised by Exchange Traded Concepts and the investors therein) shall be shared among employees on a strictly need-to-know basis. Each Access Person shall be subject to the privacy policies and procedures of Exchange Traded Concepts included in the Firm's compliance manual.

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Supervised Persons should not share any confidential or proprietary information relating to the firm, its business, investment strategies, computer models, code, clients, strategies, or information relating any person or persons employed by the firm with or via online platforms, such as pasting information into Google or AI/LLM services such as Google's Bard or OpenAI's Chat GPT. By positing information into search engines, AI, LLM services and the like, Supervised Persons risk breaching client and commercial confidentiality and in so doing breaching the relevant policies maintained and adopted by the firm. Should any supervised person wish to post any information relating to the business or clients or employees of the firm into any such service, supervised persons must obtain the written permission from legal or compliance before positing any information.

**<u>GIFTS AND ENTERTAINMENT</u>** 

Access Persons may not be compensated, directly or indirectly, except by the Firm. In light of the nature of the Firm's business, its fiduciary obligations to its investors and Clients as well as the regulatory environment in which the Firm conducts its business, the Firm is compelled to monitor the nature and quantity of the gifts, gratuities and other entertainment activities that its Access Persons give to or receive from a person or firm that conducts business with or provides services to the Firm, that may do business or is being solicited to do business with the Firm or that is associated with an organization that conducts or seeks to conduct business with the Firm. Such monitoring is not intended to prevent Access Persons from giving or receiving gifts, gratuities, and other entertainment activities but rather serves to ensure that the practice of giving or receiving gifts, gratuities and other entertainment activities is not abused or undertaken for improper purposes, and does not compromise the integrity, objectivity, or fiduciary responsibilities of the Firm or its Access Persons.

No gift, gratuity, or other entertainment activities should ever be accepted or given with any understanding that the donor will receive special or favorable treatment by the Firm or any Access Person.

Each Access Person may give or accept gifts from a business associate of up to $100 in value in aggregate per year without obtaining prior approval of the CCO. For gifts above $100 in aggregate per year, prior approval from the CCO must be received before accepting or giving the gift. The CCO may require the Access Person to return a gift if it is determined that the gift could improperly influence the use of a third-party business or create the appearance of a conflict of interest.

In situations where prior approval by CCO is not required, Access Persons must report to the CCO or a delegate thereof, in a timely manner after they have given or received a gift or entertainment (excluding basic, non-lavish, lunches during the business week multi-client events at conferences or gifts of promotional items). Access Persons must not give or receive any gift or entertainment, unless it is ordinary and reasonable in scope or cost. Gifts and Entertainment shall be tracked via the Firm's third-party compliance software system. To clarify, this policy does not prohibit an Access Person from giving or accepting an occasional meal, reception invitation, ticket to a sporting or theater event, or comparable entertainment, that is not so frequent, costly, or lavish as to raise any question of impropriety.

Furthermore, to ensure compliance with the Foreign Corrupt Practices Act, Access Persons are prohibited from directly or indirectly paying or giving, offering or promising to pay, give or authorize or approving such offer or payment, of any funds, gifts, services or anything else of any value, no matter how small, or seemingly insignificant, to any Covered Person(s) for any business or Firm-related reasons. A "Covered Person" for this purpose is any foreign official including, without limitation, any officer or employee of any foreign government or any governmental department, agency or instrumentality (e.g., a central bank) or any government-owned or controlled enterprise (e.g., sovereign wealth fund) or any person acting in an official capacity for or on behalf of any such government, department, agency, instrumentality or enterprise. It also includes any foreign political party, party official or candidate for political office.

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Access Persons are prohibited from soliciting the brokerage community for these items or other favors in any manner that could be construed as using their employment/association with the Firm to obtain a personal benefit. In no event should any Access Person allocate brokerage commissions or trades to a broker on the basis of personal gifts, entertainment or rewards provided to the Access Person, or a relative or friend of the Access Person.

Access Persons are prohibited from giving or receiving any gift of cash, gift certificate, or cash equivalents.

Gifts and entertainment among Employees are not subject to the guidelines set forth above. Access Persons may attend seminars sponsored or paid for by a business associate provided that attendance at the seminar is not so costly or so lavish as to raise conflict of interest issues and they have received prior written approval from the CCO.

Each Access Person is expected to use professional judgment in entertaining and being entertained by a business associate. Provided the Access Person and the business associate both attend, an Access Person may accept from or provide to, a business associate breakfast, lunch, dinner or reception, ticket to a sporting event or the theater, or comparable entertainment, provided that such entertainment is not so frequent, costly, lavish, or excessive as to raise any question of impropriety. If there is any question as to whether a specific entertainment event can be accepted or given, the CCO should be consulted.

See Exhibit B of the Compliance Manual for Exchange Traded Concepts' policy on gifts and entertainment.

**<u>OUTSIDE EMPLOYMENT AND OTHER ACTIVITIES</u>**

Access Persons are not permitted to engage in any business activity or employment which interferes with their duties to Exchange Traded Concepts, divides their loyalty, creates an actual or apparent conflict of interest, or exposes the Access Person or Exchange Traded Concepts to possible criticism or adverse publicity. Access Persons must disclose all outside employment to Exchange Traded Concepts' senior management ("Senior Management") and the CCO. Access Persons must obtain prior approval from the CCO for all outside employment, business activities, managing directorships, or fiduciary appointments.

Exchange Traded Concepts encourages employees to participate in worthwhile civic, social, educational, professional and charitable organizations and activities. No activity, however, should interfere with their regular employment duties, unreasonably encroach upon working time, or necessitate such long hours as to impair working effectiveness of the employee.

Exchange Traded Concepts defines a publicly traded company as any organization or entity which makes available to the public for purchase either through an exchange or other instrumentality a stake or share in the organization or entity. Access Persons who wish to serve on the board of directors of a publicly traded company must supply a description, in writing, of the publicly traded company and the reasons why they are attempting to act in this role. Written pre-approval must be obtained from the Chief Compliance Officer ("CCO") and Exchange Traded Concepts' Senior Management in order for an Access Person to serve on the board of directors of a publicly traded company. Senior Management, in consultation with the CCO, will review/consider many factors in making the decision to grant approval or disapproval, including, but not limited to, whether the company is one which Exchange Traded Concepts Trusts (the "Trusts") would own in one of their Funds. Senior Management's decision, either for or against, will be provided to the Access Person in writing and a copy will be retained according to the Firm's Recordkeeping Policies and Procedures.

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If approval is granted by Senior Management, the Access Person has an ongoing obligation to notify Senior Management and the CCO of any potential conflicts of interest which may arise during the course of participating as a member of the board of directors of a public company. If there is any question whether a conflict of interest exists or may exist, Senior Management and CCO shall be notified.

Under no circumstance may an ETC Access Person be a member of a Board that is held as an investment in any of ETC's Trusts.

Violation of this policy may result in disciplinary action, up to and including termination of employment.

**<u>Conflicts of Interest</u>**

It is the policy of the Firm that all Access Persons conduct the business affairs of the Firm in accordance with the highest principles of business ethics and in such manner that no conflict of interest, actual or potential, can be construed. All Access Persons should promptly report to the CCO any situation or circumstance which may give rise to a conflict of interest.

It is a violation of this Code for any Access Person, without the prior written consent of the CCO, to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Rebate or pay any part of the compensation received from the Firm as an Employee to, directly or indirectly, any person, firm, or corporation that does business with or on behalf of the Firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Accept, directly or indirectly from any person, corporation, or association, other than the Firm, compensation of any nature as a bonus, commission, fee, gratuity, or other consideration in connection with any transaction on behalf of the Firm, or a Client Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Accept, directly or indirectly, from any person, firm, corporation, association or other entity that does business with or on behalf of the Firm, any gift or other item of more than *de minimis* value provided, however, that Access Persons may accept gifts in accordance with the Firm's policies related to gifts and entertainment as set forth in this Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Participate in entertainment with Clients, brokers and other counterparties unless reasonably related to legitimate business purposes of the Firm as described in more detail under the gifts and entertainment policy in this Code; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Own any Security or have, directly or indirectly, any financial interest in any other organization engaged in any securities, financial or financial related business, except for (i) ownership, or other interests in the Firm, and (ii) stock ownership, or other financial interest of a class of stock, or other classification of interests in accordance with the Firm's policies related to personal trading as set forth in this Code.

In addition, Access Persons may not influence, directly or indirectly, investment decisions on behalf of the Firm's Clients, or the allocation of Client brokerage for the benefit (in any form) of any immediate family member of the Access Person.

**<u>POLITICAL ACTIVITIES AND CONTRIBUTIONS</u>**

Exchange Traded Concepts encourages Access Persons to be informed about and participate in the political process and political activities, provided such participation does not unduly interfere with their duties or embarrass or discredit Exchange Traded Concepts. Exchange Traded Concepts further encourages all Access Persons to vote in elections and, if they so choose, to make voluntary contributions of time and/or money to political and governmental activities. Access Persons are required to comply with all provisions of Exchange Traded Concepts' Political Contributions (Pay-to-Play) Policy, which has been designed to ensure compliance with Rule 206(4)-5 of the Advisers Act. Access Persons must,

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however, engage in such activities as individuals rather than as representatives of Exchange Traded Concepts. Access Persons must further avoid any appearance of corporate sponsorship or endorsement in connection with any election. Access Persons must not use the corporate name in connection with any political fund-raising activity or in any printed material for use in political fund-raising activity, except where permitted by law. Access Persons must obtain approval from the CCO before becoming a candidate for public office, accepting any nomination or appointment to a public office or agreeing to serve as an official (such as a campaign manager, chairman or treasurer) in a political campaign.

Corporate disbursements of money, property or services to any government official, political party or candidate, either domestic or foreign, are strictly prohibited, even in those jurisdictions where such contributions are legally permissible. No offer, promise of payment or payment shall be made to any person, corporate entity, official of any government or government agency, in the United States or abroad, either directly or indirectly, to win preferential treatment in securing business or obtaining special concessions in Exchange Traded Concepts' interest. It should be emphasized that a corporate payment need not be illegal to be prohibited. Payments are broadly defined to include property or services.

Access Persons are required to provide the CCO with advance notice of planned solicitation activities for any political candidate or official by a spouse or other household member. The Firm reserves the right to object to these activities if the planned solicitation would be inconsistent with this policy.

Access Persons who wish to serve in public office must supply a description, in writing, of the particular public office and the reasons why they are attempting to serve in this role. This material should be submitted to Senior Management and the CCO for review and consideration. Written pre-approval must be obtained from Senior Management in order for an employee to seek or serve in public office. Senior Management, in consultation with the CCO, will review/consider many factors in making the decision to grant approval or disapproval, including, but not limited to, whether serving in such capacity will give the Access Person access to non-public information concerning stocks that are currently or could potentially be considered for inclusion in Exchange Traded Concepts client portfolios. Senior Management's decision will be provided to the Access Person in writing and a copy will be retained according to the Firm's Books and Records Policies and Procedures. If approval is granted by Senior Management, the Access Person has an ongoing obligation to notify Senior Management and the CCO of any potential conflicts of interest which may arise during the course of his or her service in public office. If there is any question whether a conflict of interest exists or may exist, Senior Management and the CCO shall be notified.

Contributions to a charity are not considered "political contributions" unless made to, through, in the name of, or to a fund controlled by a U.S. political candidate or official. This policy is not intended to impede legitimate, charitable fund-raising activities. Any questions regarding whether an organization is a charity, should be directed to the CCO.

Violation of this policy may result in disciplinary action, up to and including termination of employment.

**<u>RECORDS</u>**

The following records will be kept pertaining to this Code:

A copy of each Code that has been in effect at any time during the past five years will be kept in a readily accessible place by the CCO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;A record of any violations of the Code and any action taken as a result of such violation for five years from the end of the fiscal year in which the violation occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A record of all written acknowledgements of receipt of the Code and any amendments thereto for each person who is currently, or was within the past five years, a supervised person (five years from the date employment is terminated).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Holdings and statements/transaction reports made pursuant to the Code must be maintained for at least five years after the end of the fiscal year in which the report was made (the first two years in an easily accessible place).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;A list of names of persons who are currently, or within the past five years were access persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;A record of any decision and supporting reasons for approving the acquisition of securities by access persons in limited offerings for at least five years after the end of the fiscal year in which the approval was granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A record of the individual(s) responsible for reviewing Access Persons' reports currently and during the past five years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;A copy of reports provided to the board of trustees regarding the Code for at least five years after the end of the fiscal year in which it was made, the first two years in an easily accessible place.

All Access Persons are required to report any violations of the Code and potential conflicts of interest promptly to the CCO (if the CCO is unavailable or a party to the violation the violation should be reported to Senior Management). Such reports will be treated confidentially to the extent permitted by law and investigated promptly and appropriately. If an Access Person is unsure if a violation occurred but in good faith believes one might have occurred, they are to present all information to the CCO or Senior Management in the manner stated above. Retaliation by an Access Person against an individual who reports a violation is prohibited and constitutes a further violation of the Code. This duty encompasses a requirement that all employees promptly self-report violations of the Code.

**<u>PERSONAL TRADING</u>**

All Covered Accounts must be disclosed via the Firm's compliance software. Generally, security transactions in Covered Securities require written pre-clearance. With the exception of certain circumstances enumerated below, if an Access Person wishes to purchase or sell a position in any Covered Security, he/she must obtain written pre-clearance from the CCO or his/her delegate. Submission of a pre-clearance request as well as approval or denial shall be handled via the Firm's third-party compliance software. Prior to approving a request, the CCO shall review the requested security against the securities in any pro forma rebalance the Firm is currently in possession of, at the time of the request, as well as any trade files for actively managed funds and daily trade sheets for any private funds managed by ETC's Portfolio Management Desk in the Firm's possession. Absent extenuating circumstances, trade pre-clearance will not be approved if the security in question is included in a pro forma rebalance, trade file for an active fund or a private fund daily trade sheet which the Firm is currently in possession of at the time the request is made. Exceptions may be made with regards to personal transactions in SPDR S&P 500 ETF ("SPY") and Invesco QQQ Trust ("QQQ") as well as derivatives on these two broad-based ETFs, certain mega-cap stocks, generally understood to be over $200B in market cap (including derivatives on these issuers) and ETFs, that are traded daily in certain ETC advised or subadvised funds, subject to the discretion of the Firm's CCO or General Counsel. In the instance of extenuating circumstances, any deviation from the Personal Trading Policy must be approved by the CCO or General Counsel. The trade request must include an explanation of the extenuating circumstances to be considered by the CCO or General Counsel and Senior Management. For the personal trading of the CCO, the CCO must obtain written pre-clearance from Exchange Traded Concepts' Chief Executive Officer or member of Legal.

Transactions in Discretionary Managed Accounts, transactions effected pursuant to an Automatic Investment Plan (i.e. dividend reinvestment plan and micro investing through apps), transactions in open-ended mutual funds, futures, and Forex trading, as well as acquisitions of securities through stock dividends, stock splits and other similar corporate reorganizations are all excluded from the Firm's pre-clearance requirements.

Advance written approval is valid only for the day on which approval was granted. If a trade has not been executed on the day the approval was granted, subsequent approvals are necessary prior to trading.

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Preclearance requests will be retained in the Firm's third-party compliance software. The CCO or his/her delegate will periodically reconcile pre-clearance reports with the duplicate trading confirmations received electronically in the Firm's third-party compliance software, to ensure compliance with the policy.

Access Persons may not purchase or hold Initial Public Offerings (IPO's).

Limited Offerings require written pre-clearance. Transactions in Covered Securities in retirement accounts including, but not limited to IRA's, that are self-directed (i.e. stocks or bonds, not mutual funds), ESOP's (Employee Stock Option Plans) and ESPP (Employee Stock Purchase Plans) require pre-clearance.

All ETC Access Persons are prohibited from trading, encouraging others to trade, either personally or on behalf of others, while in possession of material, non-public information. All ETC Access Persons are also prohibited from communicating material non-public information to others in violation of the law. For additional information see Exchange Traded Concepts' Policy on the Prevention of Insider Trading included in Exhibit A of the Compliance Manual.

<u>Short Term Trading:</u> 

ETC discourages short term trading by Access Persons. Excessive short-term trading can lead to the suspension of personal trading privileges as determined by the CCO and Senior Management.

**<u>Reporting</u>**

Consistent with the requirements of Rule 204A-1 under the Advisers Act, Access Persons must submit the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Initial Holdings Report</u> - within ten (10) days of hire, all new Access Persons are required to file a signed and dated Initial Holdings Report, setting forth the title, ticker symbol or CUSIP number, type of security, number of shares, and the principal amount of each Covered Security (including mutual funds advised or sub-advised by the firm) in which they have any direct or indirect beneficial ownership; and the name of any broker, dealer, or bank with whom an account is maintained in which any Covered Securities are held for their direct or indirect benefit and the date the report is submitted. The information must be current as of a date no more than 45 days prior to the date the person became an Access Person. Initial Holdings Reports shall be filed through the Firm's third-party compliance software.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Annual Holdings Report</u> - on an annual basis, all Access Persons are required to file within thirty (30) days of year-end a signed and dated Annual Holdings Report listing all Covered securities owned as of December 31<sup>st</sup>. Within this report, all Access Persons must list the title, the number of shares, and the principal amount of each Covered Security (including mutual funds advised or sub-advised by the firm) in which they had any direct or indirect beneficial ownership; and the name of any broker, dealer, or bank with whom an account was maintained in which any Covered Securities were held for their direct or indirect benefit and the date the report is submitted. The information must be current as of a date no more than 45 days before the report is submitted. Annual Holdings Reports shall be filed through the Firm's third-party compliance software.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Quarterly Transaction Reports</u> - Within thirty (30) days following the end of each calendar quarter all Access Persons must submit a signed and dated report listing all transactions in Covered Securities executed during that preceding calendar quarter. For each transaction, Access Persons are required to list the date, the title, ticker symbol or CUSIP number, the number of shares, interest rate and maturity date, and the principal amount of each covered security involved; the nature of the transaction (i.e., purchase, sale, or other type of acquisition/disposition); the price at which the transaction was effected; and the name of any broker, dealer, or bank through which the transaction was effected and the date the report is submitted. Also in

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this report Access Persons are to disclose any brokerage account opened during the calendar quarter. Access Persons are required to list the name of the broker, dealer or bank with whom the access person established the account, the date the account was established and the date the report is submitted. Quarterly Transactions Reports will be filed through the Firm's third-party compliance software.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Duplicate brokerage/mutual fund statements/confirms</u> – Access Persons must have duplicate statements and confirms sent to the attention of Exchange Traded Concepts' CCO. When possible, and in most cases, this shall be accomplished via a direct electronic link or direct feed to the Firm's third-party compliance software. The CCO or his/her delegate will review them on a quarterly basis, to ensure all policies are being followed. Senior Management or Legal will review the statements and confirms of the CCO. Brokerage, mutual funds advised or sub-advised by Exchange Traded Concepts, IRA's, Rollover IRA's (which are self-directed), ESOP's, private placements, and limited partnerships must all be reported and duplicate statements must be forwarded. Violations detected during the review will be documented and reviewed by the CCO. The CCO will determine appropriate steps depending on the violation, up to and including termination of employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Annual Certification</u> - All Access Persons are required to certify annually to the CCO that: (i) they have read and understand the Code; (ii) they have complied with all requirements of the Code; and (iii) they have reported all transactions required to be reported under the Code. Annual Certification shall be accomplished through the Firm's third-party compliance software.

Access Persons of Exchange Traded Concepts must abide by the established internal policies and procedures. Compliance with the quarterly/annual Trading Disclosures and Holdings Reporting is a requirement of your employment at Exchange Traded Concepts. It is each Access Person's responsibility to provide the required information within 30 days of the end of each quarter.

All transaction and holdings reports submitted to the CCO will be maintained in the strictest confidence, except to the extent necessary to implement and enforce provisions of the Code or to comply with requests for information from government agencies of proper authority or pursuant to litigation.

The Chief Compliance Officer or compliance designee will review required reports to determine whether a violation of this Code may have occurred. If a violation is found to have occurred, the Chief Compliance Officer and Senior Management will impose, after consultation with outside counsel (as appropriate), corrective action as they deem appropriate under the circumstances.

<u>Miscellaneous:</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Confidentiality.</u> All reports of securities transactions and any other information filed with ETC pursuant to this Code will be treated as confidential. However, we may disclose copies of reports and information to the Securities and Exchange Commission or as otherwise required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Interpretation of Provisions.</u> ETC may from time to time adopt interpretations of this Code as it deems appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Distribution of Code, Acknowledgement of Receipt and Annual Certification of Compliance.</u> All ETC Access Persons will receive a copy of this Code and any material amendments. Within 10 days of receiving any initial or amended copy of this Code, and each year thereafter, each ETC Access Person will sign and return the compliance certification via the Firm's third-party compliance software. ETC Access Persons who need any additional copies of the Code should contact the CCO.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Reporting Violations</u>. Any violation of this Code must be promptly reported to ETC's Chief Compliance Officer, an Alternate Review Officer, or other member of ETC's Compliance Department.

10900 Hefner Pointe Drive, Suite 400 Oklahoma City, OK 73120 (405) 778-8377