SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Exact name of registrant as specified in charter)
(Address of principal executive offices)
(Name and address of agent for service)
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(a)
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ETFMG Travel Tech ETF
AWAY
ETFMG 2x Daily Travel Tech ETF
AWYX
Semi-Annual Report
March 31, 2022
(Unaudited)
The funds are series of ETF Managers Trust.
| ETFMG TM ETFs |
| TABLE OF CONTENTS |
| March 31, 2022 (Unaudited) |
ETFMG TM ETFs
On behalf of the entire team, we want to express our appreciation for the confidence you have placed in these ETFs. The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
Performance Overview
During the 6-month period ended March 31, 2022, the S&P 500 Information Technology Sector Index, a broad measure of US listed technology companies, returned 6.94%. During the same period, the S&P Global 1200 Information Technology Sector Index, a broad measure of global technology companies, returned 2.81%. Below is a performance overview for each fund for the same 6-month period.
ETFMG Travel Tech ETF (AWAY)
The ETFMG Travel Tech ETF (the “Fund”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Travel Technology Index NTR (the “Index”).
Over the fiscal period, the total return for the Fund was -16.22%, while the total return the for the Index was -15.79%. The best performers in the Fund, on the basis of contribution to return, were Expedia Group Inc, Sabre Corp, Edreams Odigeo Sl, Despegar.Com Corp and Airbnb Inc-Class A, while the worst performers were Didi Global Inc, Trip.Com Group Ltd-Adr, Tongcheng Travel Holdings Lt, Lyft Inc-A, Travelsky Technology Ltd-H and Siteminder Ltd.
At the end of the reporting period, the Fund saw an average approximate allocation of 62.25% to Consumer Discretionary, 16.29% to Information Technology and 13.55% to Industrials. The portfolio securities of the Fund were exposed predominately to the United States at 34.25%, 11.98% to Canada and 11.34% to Australia.
ETFMG 2x Daily Travel Tech ETF (AWYX)
Operational Review
The discussion below relates to the performance of the ETFMG 2x Daily Travel Tech ETF (“AWYX” or the “ETF”) for the period from October 1, 2021 to March 31, 2022. The ETF is leveraged and seeks daily investment results, before fees and expenses, of 200% of the performance of the Index.
The ETF, as stated above, seeks daily investment results. It does not seek to track a multiple of the Index for periods of longer than one day and the performance of the ETF over longer periods may not correlate to the Index performance. The ETF should not be held by investors for long periods and should be used as short-term trading vehicles. These products are not suitable for all investors and should be utilized only by sophisticated investors who understand the risks associated with the use of leverage, the consequences of seeking daily leveraged investment results and intend to actively monitor and manage their investments.
AWYX attempts to provide investment results that correlate to 200% of the return of the Index, meaning AWYX attempts to move in the same direction as the Index. In seeking to achieve the ETF’s daily investment results, ETF Managers Group LLC (the “Adviser”) relies upon quantitative analysis to generate orders resulting in repositioning the ETF’s investments in accordance with its daily investment objective. Using this approach, the Adviser determines the type, quantity and mix of investment positions that it believes in combination should produce daily returns consistent with the ETF’s objective. As a consequence, if the ETF is performing as designed, the return of the Index will dictate the return for the ETF. The ETF pursues its investment objective regardless of market conditions and does not take defensive positions. The ETF has a clearly articulated goal which requires the ETF to seek economic exposure significantly in excess of its net assets. To meet its objectives, the ETF invests significantly in derivatives, including swap agreements. The Adviser uses these types of investments to produce economically “leveraged” investment results. Leveraging allows the Adviser to generate a greater positive or negative return than what would be generated on the invested capital without leverage, thus changing small market movements into larger changes in the value of the investments of the ETF.
ETFMG TM ETFs
The ETF may use certain investment techniques, including its investments in derivatives, which may be considered aggressive. Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate dramatically over time. Additionally, use of such instruments will most likely increase the volatility of the ETF. The use of derivatives may expose the ETF to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives, such as counterparty risk. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case.
Because the ETF seeks daily investment results of the Index, a comparison of the return of the ETF to the Index does not provide an indication of whether the ETF has met its investment objective. To determine if the ETF has met its daily investment goals, the Adviser performs quantitative analysis seeking to determine the expected performance of the ETF as compared to Index. The quantitative analysis includes predictive models as well as stress-testing and back-testing.
Factors Affecting Performance of the ETF:
Leverage – The ETF seeks daily investment results (before fees and expenses) of 200% of the performance of the Index. The use of leverage magnifies an ETF’s gains or losses and increases the investment’s risk and volatility.
Index Performance – The daily performance of Index, and the factors and market conditions implicitly affecting the Index, are the primary factors driving ETF performance. Given the daily goals, the daily Index returns are most important. Certain of the market conditions that affected the Index during the past year are described in the Performance Overview section.
Volatility and Compounding – The goal of the ETF is to provide the specified multiple of the daily return of the Index. Over periods longer than a single day, the ETF should not be expected to provide the multiple of the return of the underlying index. Due to the effects of compounding, a universal mathematical concept that applies to all investments, returns of the ETF over longer periods are greater or less than the ETF’s daily stated goal. Periods of high volatility that lack a clear trend hurt the ETF’s performance while trending, low volatility markets enhance the ETF’s performance.
Cost of Financing – In order to attain leveraged exposure, the ETF incurs a cost OBFR plus or minus a spread as applied to the borrowed portion of the ETF’s exposure. The spread varies by fund and counterparty and is a function of market demand, hedging costs, access to balance sheet, borrow volatility, current counterparty exposure and administrative costs associated with the swap counterparty. An increase in interest rates which effects the cost of financing will further impact the ETF’s performance and ability to track the Index.
Fees, Expenses, and Transaction Costs – Fees and expenses are listed in the ETF’s prospectus and may be higher than many traditional index funds’ fees, which cause a greater negative impact on ETF performance. Transactions costs are not included in the expense ratio of the ETF. Transaction costs can be higher due to the ETF’s use of derivatives, shorting securities, frequent creation and redemption activity, or trading securities that are comparatively less liquid.
ETFMG TM ETFs
Swap Agreements:
During the reporting period, AWYX invested in swap agreements in order to gain the desired exposure to the Index. These derivatives generally tracked the performance of AWAY and the AWYX was generally negatively impacted from financing rates associated with their use. AWYX entered into swap agreements with counterparties that the Adviser determined to be significant global financial institutions.
If a counterparty becomes insolvent or otherwise fails to perform on its obligations, the value of investments in AWYX may decline. AWYX seeks to mitigate this risk by generally requiring counterparties to post collateral for its benefit, marked to market daily, in an amount approximately equal to the amount the counterparty owed AWYX, subject to certain minimum thresholds.
Performance Review
The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022. AWYX seeks to provide daily investment results, before fees and expenses, that correspond to two times (2x) the return of the Index for a single day, not for any other period. Over the reporting period, the Index had a total return of -15.79% and a volatility of 32.7%. Given the daily investment objectives of AWYX and the path dependency of returns for longer periods, the return of the Index for the reporting period alone should not generate expectations of AWYX performance for the same period. AWYX returned -34.00% for the reporting period and had a volatility of 74.2%. For the reporting period AWYX had an average daily volume of 933 shares and an average daily statistical correlation of 95.9% to the return of the Index.
We thank you for your interest in our ETFs. You can find further details about AWAY and AWYX by visiting www.etfmg.com, or by calling 1-844-ETF-MGRS (1-844-383-6477).
Sincerely,
Samuel Masucci III
Chairman of the Board
ETFMG TM ETFs
Growth of $10,000 (Unaudited)
| Since | Value of | |||||||||||
| Average Annual Returns | 1 Year | Inception | $10,000 | |||||||||
| Period Ended March 31, 2022 | Return | (2/12/2020) | (3/31/2022) | |||||||||
| ETFMG Travel Tech ETF (NAV) | -23.22% | -2.33% | $ | 9,509 | ||||||||
| ETFMG Travel Tech ETF (Market) | -24.02% | -2.36% | $ | 9,504 | ||||||||
| S&P 500 Index | 15.65% | 16.60% | $ | 13,872 | ||||||||
| Prime Travel Technology Index GTR | -22.80% | -2.34% | $ | 9,508 | ||||||||
| Prime Travel Technology Index NTR | -22.79% | -2.35% | $ | 9,505 | ||||||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on February 12, 2020, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
| ETFMG TM ETFs |
| ETFMG Travel Tech ETF |
ETFMG TM ETFs
ETFMG 2x Daily Travel Tech ETF
| Since | Value of | |||||||
| Average Cumulative Returns | Inception | $10,000 | ||||||
| Period Ended March 31, 2022 | (6/15/2021) | (3/31/2022) | ||||||
| ETFMG 2x Daily Travel Tech ETF (NAV) | -46.50% | $ | 5,350 | |||||
| ETFMG 2x Daily Travel Tech ETF (Market) | -46.10% | $ | 5,390 | |||||
| S&P 500 Index | 7.85% | $ | 10,785 | |||||
| Prime Travel Technology Index GTR | -22.43% | $ | 7,757 | |||||
| Prime Travel Technology Index NTR | -22.43% | $ | 7,757 | |||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on June 15, 2021, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG TM ETFs
Important Disclosures and Key Risk Factors
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
AWAY
The ETFMG Travel Tech ETF (the “Fund” or the “Travel Tech ETF”) seeks investment results that correspond generally to the price and yield, before fund fees and expenses, of the Prime Travel Technology Index (the “Index”).
Companies in the technology field, including companies in the computers, telecommunications and electronics industries, face intense competition, which may have an adverse effect on profit margins. Technology companies may have limited product lines, markets, financial resources or personnel. The products of technology companies may face obsolescence due to rapid technological developments and frequent new product introduction, and such companies may face unpredictable changes in growth rates, competition for the services of qualified personnel and competition from foreign competitors with lower production costs. Companies in the technology sector are heavily dependent on patent and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
The Fund is distributed by ETFMG Financial, which is not affiliated with Prime Indexes.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
AWYX
Companies in the technology field, including companies in the computers, telecommunications and electronics industries, face intense competition, which may have an adverse effect on profit margins. Technology companies may have limited product lines, markets, financial resources or personnel. The products of technology companies may face obsolescence due to rapid technological developments and frequent new product introduction, and such companies may face unpredictable changes in growth rates, competition for the services of qualified personnel and competition from foreign competitors with lower production costs. Companies in the technology sector are heavily dependent on patent and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies.
Investing in an ETFMG 2x Daily Leveraged ETF may be more volatile than investing in broadly diversified funds. The use of leverage by an ETF increases the risk to the ETF. The ETFMG 2x Daily Leveraged ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment.
The use of derivatives such as swaps are subject to additional risks that may cause prices to fluctuate over time and include the effects of compounding, market volatility, leverage risk, aggressive investment techniques risk, counterparty risk, and intra-day investment risk. Please see the summary and full prospectuses for a more complete description of these and other risks of investing in the Fund.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
The Fund is a recently organized, diversified management investment company with limited operating history. ETF Managers Group LLC is the investment advisor to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG is not affiliated with Prime Indexes.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
ETFMG TM ETFs
As of March 31, 2022 (Unaudited)
| ETFMG 2x | ||||||||
| ETFMG | Daily | |||||||
| Travel Tech | Travel Tech | |||||||
| ETF | ETF | |||||||
| As a percent of Net Assets: | ||||||||
| Australia | 11.3 | % | — | % | ||||
| Brazil | 2.6 | — | ||||||
| Cayman Islands | 9.1 | — | ||||||
| China | 2.9 | — | ||||||
| Japan | 6.5 | — | ||||||
| Mauritius | 4.1 | — | ||||||
| Netherlands | 4.3 | — | ||||||
| Republic of Korea | 6.1 | — | ||||||
| Spain | 7.4 | — | ||||||
| United Kingdom | 8.6 | — | ||||||
| United States | 34.2 | — | ||||||
| Virgin Islands | 2.2 | — | ||||||
| Exchange Traded Funds | 0.4 | — | ||||||
| Short-Term and other Net Assets (Liabilities) | 0.3 | 100.0 | ||||||
| 100.0 | % | 100.0 | % | |||||
ETFMG TM ETFs
ETFMG Travel Tech ETF
Schedule of Investments
| Shares | Value | |||||||
| COMMON STOCKS - 99.3% | ||||||||
| Australia - 11.3% | ||||||||
| Hotels, Restaurants & Leisure - 8.2% (d) | ||||||||
| Corporate Travel Management, Ltd. (a) | 671,963 | $ | 11,942,232 | |||||
| Webjet, Ltd. (a) | 2,731,071 | 11,444,519 | ||||||
| Total Hotels, Restaurants & Leisure | 23,386,751 | |||||||
| Software - 3.1% | ||||||||
| SiteMinder, Ltd. (a) | 2,646,860 | 8,952,533 | ||||||
| Total Australia | 32,339,284 | |||||||
| Brazil - 2.6% | ||||||||
| Hotels, Restaurants & Leisure - 2.6% (d) | ||||||||
| CVC Brasil Operadora e Agencia de Viagens SA (a) | 2,154,316 | 7,542,968 | ||||||
| IT Services - 0.0% (g) | ||||||||
| Cielo SA | 57,523 | 37,333 | ||||||
| Total Brazil | 7,580,301 | |||||||
| Cayman Islands - 9.1% | ||||||||
| Hotels, Restaurants & Leisure - 6.7% (d) | ||||||||
| Tongcheng Travel Holdings, Ltd. (a) | 5,505,762 | 9,840,127 | ||||||
| Trip.com Group, Ltd. - ADR (a) | 400,157 | 9,251,630 | ||||||
| Total Hotels, Restaurants & Leisure | 19,091,757 | |||||||
| Road & Rail - 2.4% | ||||||||
| DiDi Global, Inc. - ADR (a) | 2,706,833 | 6,767,083 | ||||||
| Total Cayman Islands | 25,858,840 | |||||||
| China - 2.9% | ||||||||
| IT Services - 2.9% | ||||||||
| TravelSky Technology, Ltd. | 5,763,609 | 8,314,348 | ||||||
| Japan - 6.5% | ||||||||
| Hotels, Restaurants & Leisure - 5.6% (d) | ||||||||
| Adventure, Inc. | 80,184 | 5,815,876 | ||||||
| Airtrip Corp. | 226,991 | 5,630,958 | ||||||
| Open Door, Inc. (a) | 291,252 | 4,528,832 | ||||||
| Total Hotels, Restaurants & Leisure | 15,975,666 | |||||||
| Internet & Direct Marketing Retail - 0.9% | ||||||||
| Temairazu, Inc. | 64,591 | 2,533,449 | ||||||
| Total Japan | 18,509,115 | |||||||
| Mauritius - 4.1% | ||||||||
| Hotels, Restaurants & Leisure - 4.1% (d) | ||||||||
| MakeMyTrip, Ltd. (a) | 431,490 | 11,576,877 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
ETFMG Travel Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Netherlands - 4.3% | ||||||||
| Hotels, Restaurants & Leisure - 1.5% (d) | ||||||||
| Lastminute.com NV (a) | 103,653 | $ | 4,329,859 | |||||
| Interactive Media & Services - 2.8% | ||||||||
| Trivago NV - ADR (a) | 3,443,336 | 8,126,273 | ||||||
| Total Netherlands | 12,456,132 | |||||||
| Republic of Korea - 6.1% | ||||||||
| Hotels, Restaurants & Leisure - 6.1% (d) | ||||||||
| Hana Tour Service, Inc. (a) | 116,740 | 8,186,873 | ||||||
| Lotte Tour Development Co., Ltd. (a) | 609,825 | 9,006,120 | ||||||
| Total Hotels, Restaurants & Leisure | 17,192,993 | |||||||
| IT Services - 0.0% (g) | ||||||||
| Danal Co., Ltd. (a) | 881 | 8,977 | ||||||
| Kakaopay Corp. (a) | 433 | 53,051 | ||||||
| Total IT Services | 62,028 | |||||||
| Total Republic of Korea | 17,255,021 | |||||||
| Spain - 7.4% | ||||||||
| Hotels, Restaurants & Leisure - 3.5% (d) | ||||||||
| eDreams ODIGEO SA (a) | 1,116,916 | 9,946,539 | ||||||
| IT Services - 3.9% | ||||||||
| Amadeus IT Group SA (a) | 168,735 | 11,046,781 | ||||||
| Total Spain | 20,993,320 | |||||||
| United Kingdom - 8.6% | ||||||||
| Hotels, Restaurants & Leisure - 6.8% (d) | ||||||||
| On the Beach Group PLC (a)(f) | 1,464,413 | 4,511,125 | ||||||
| Trainline PLC (a)(f) | 4,589,482 | 15,072,388 | ||||||
| Total Hotels, Restaurants & Leisure | 19,583,513 | |||||||
| Software - 1.8% | ||||||||
| accesso Technology Group PLC (a) | 456,523 | 5,037,561 | ||||||
| Total United Kingdom | 24,621,074 | |||||||
| United States - 34.2% | ||||||||
| Airlines - 2.5% | ||||||||
| Blade Air Mobility, Inc. (a)(b) | 825,419 | 7,007,807 | ||||||
| Hotels, Restaurants & Leisure - 14.0% (d) | ||||||||
| Airbnb, Inc. - Class A (a)(b) | 80,096 | 13,757,289 | ||||||
| Booking Holdings, Inc. (a) | 5,780 | 13,574,041 | ||||||
| Expedia Group, Inc. (a) | 65,589 | 12,833,800 | ||||||
| Total Hotels, Restaurants & Leisure | 40,165,130 | |||||||
| Interactive Media & Services - 4.5% | ||||||||
| TripAdvisor, Inc. (a) | 465,326 | 12,619,641 | ||||||
| IT Services - 4.5% | ||||||||
| Sabre Corp. (a)(b) | 1,136,866 | 12,994,378 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
ETFMG Travel Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Road & Rail - 8.7% | ||||||||
| Lyft, Inc. - Class A (a)(b) | 292,053 | $ | 11,214,835 | |||||
| Uber Technologies, Inc. (a) | 383,050 | 13,667,224 | ||||||
| Total Road & Rail | 24,882,059 | |||||||
| Total United States | 97,669,015 | |||||||
| Virgin Islands (UK) - 2.2% | ||||||||
| Hotels, Restaurants & Leisure - 2.2% (d) | ||||||||
| Despegar.com Corp. (a) | 507,518 | 6,191,720 | ||||||
| TOTAL COMMON STOCKS (Cost $334,203,345) | 283,365,047 | |||||||
| INVESTMENTS PURCHASED WITH PROCEEDS FROM | ||||||||
| SECURITIES LENDING COLLATERAL - 5.4% | ||||||||
| ETFMG Sit Ultra Short ETF (e) | 25,000 | 1,226,615 | ||||||
| Mount Vernon Liquid Assets Portfolio, LLC, 0.41% (c) | 14,119,299 | 14,119,299 | ||||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $15,362,762) | 15,345,914 | |||||||
| SHORT-TERM INVESTMENTS - 0.7% | ||||||||
| Money Market Funds - 0.7% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 1,984,330 | 1,984,330 | ||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $1,984,330) | 1,984,330 | |||||||
| Total Investments (Cost $351,550,437) - 105.4% | 300,695,291 | |||||||
| Liabilities in Excess of Other Assets - (5.4)% | (15,525,289 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 285,170,002 | ||||||
| Percentages are stated as a percent of net assets. | ||||||||
| ADR | American Depositary Receipt |
| PLC | Public Limited Company |
| (a) | Non-income producing security. |
| (b) | This security or a portion of this security was out on loan at March 31, 2022. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
| (d) | As of March 31, 2022, the Fund had a significant portion of its assets in the Hotels, Restaurants & Leisure Industry. |
| (e) | Affiliated Security. Please refer to Note 9 of the Notes to Financial Statements. |
| (f) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. This security may be resold in transitions exempt from registration to qualified institutional investors. At March, 31, 2022, the market value of these securities total $19,583,513, which represents 6.8% of total net assets. |
| (g) | Less than 0.05%. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
ETFMG 2x Daily Travel Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| SHORT-TERM INVESTMENTS - 12.8% | ||||||||
| Money Market Funds - 12.8% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (a) | 68,328 | $ | 68,328 | |||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $68,328) | 68,328 | |||||||
| Total Investments (Cost $68,328) - 12.8% | 68,328 | |||||||
| Assets in Excess of Other Liabilities - 87.2% | 466,651 | |||||||
| TOTAL NET ASSETS - 100.0% | $ | 534,979 | ||||||
(a) The rate shown is the annualized seven-day yield at period end.
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
ETFMG 2x Daily Travel Tech ETF
Schedule of Total Return Swaps
March 31, 2022 (Unaudited)
| Fund | ||||||||||||||||||||||
| Pays/Receives | Upfront | Unrealized | ||||||||||||||||||||
| Reference | Reference | Payment | Financing | Premiums | Notional | Appreciation | ||||||||||||||||
| Entity | Entity | Counterparty | Frequency | Rate | Paid/Received | Amount | (Depreciation) | |||||||||||||||
| ETFMG Travel Tech ETF Swap | Receives | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.25% | $ | — | $ | 1,047,803 | $ | — | ||||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
STATEMENTS OF ASSETS AND LIABILITIES
As of March 31, 2022 (Unaudited)
| ETFMG | ETFMG 2x | |||||||
| Travel Tech | Daily Travel | |||||||
| ETF | Tech ETF | |||||||
| ASSETS | ||||||||
| Investments in unaffiliated securities, at value* | $ | 299,468,676 | $ | 68,328 | ||||
| Investments in affiliated securities, at value* | 1,226,615 | — | ||||||
| Deposits at Broker for total return swap contracts | — | 484,614 | ||||||
| Receivables: | ||||||||
| Dividends and interest receivable | — | 6 | ||||||
| Securities lending income receivable | 7,675 | — | ||||||
| Receivable for investments sold | 60,063 | — | ||||||
| Total assets | 300,763,029 | 552,948 | ||||||
| LIABILITIES | ||||||||
| Collateral received for securities loaned (Note 7) | $ | 15,362,762 | $ | — | ||||
| Payable for open swap contracts | — | 17,572 | ||||||
| Payables: | ||||||||
| Foreign currency payable to Custodian, at value* | 60,063 | — | ||||||
| Dividends and interest payable | 762 | — | ||||||
| Management fees payable | 169,440 | 397 | ||||||
| Total liabilities | 15,593,027 | 17,969 | ||||||
| Net Assets | $ | 285,170,002 | $ | 534,979 | ||||
| NET ASSETS CONSIST OF: | ||||||||
| Paid-in Capital | $ | 387,775,450 | $ | 867,307 | ||||
| Total Distributable Earnings (Accumulated Losses) | (102,605,448 | ) | (332,328 | ) | ||||
| Net Assets | $ | 285,170,002 | $ | 534,979 | ||||
| *Identified Cost: | ||||||||
| Investments in unaffiliated securities | $ | 350,306,974 | $ | 68,328 | ||||
| Investments in affiliated securities | 1,243,463 | — | ||||||
| Foreign currency | 60,063 | — | ||||||
| Shares Outstanding^ | 12,000,000 | 100,000 | ||||||
| Net Asset Value, Offering and Redemption Price per Share | $ | 23.76 | $ | 5.35 | ||||
| ^ | No par value, unlimited number of shares authorized |
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
For the Period Ended March 31, 2022 (Unaudited)
| ETFMG 2x | ||||||||
| ETFMG | Daily ETFMG | |||||||
| Travel Tech | Travel Tech | |||||||
| ETF | ETF | |||||||
| INVESTMENT INCOME | ||||||||
| Income: | ||||||||
| Interest | $ | 276 | $ | 60 | ||||
| Securities lending income | 380,071 | — | ||||||
| Total Investment Income | 380,347 | 60 | ||||||
| Expenses: | ||||||||
| Management fees | 1,070,964 | 2,968 | ||||||
| Dividend and interest expense | 102,050 | — | ||||||
| Total Expenses | 1,173,014 | 2,968 | ||||||
| Net Investment Loss | (792,667 | ) | (2,908 | ) | ||||
| REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||
| Net Realized Gain (Loss) on: | ||||||||
| Unaffiliated Investments | (29,109,897 | ) | — | |||||
| In-Kind redemptions | (345,031 | ) | — | |||||
| Foreign currency and foreign currency translation | (129,190 | ) | — | |||||
| Total return swap contracts | — | (272,631 | ) | |||||
| Net Realized Gain (Loss) on Investments and In-Kind redemptions | (29,584,118 | ) | (272,631 | ) | ||||
| Net Change in Unrealized Appreciation (Depreciation) of: | ||||||||
|
Unaffiliated Investments |
(27,802,323 | ) | — | |||||
| Affiliated Investments | (17,260 | ) | — | |||||
| Net Change in Unrealized Appreciation (Depreciation) of Investments | (27,819,583 | ) | — | |||||
| Net Realized and Unrealized Loss on Investments | (57,403,701 | ) | (272,631 | ) | ||||
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (58,196,368 | ) | $ | (275,539 | ) | ||
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
ETFMG Travel Tech ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended | ||||||||
| March 31, | Year Ended | |||||||
| 2022 | September 30, | |||||||
| (Unaudited) | 2021 | |||||||
| OPERATIONS | ||||||||
| Net investment loss | $ | (792,667 | ) | $ | (941,304 | ) | ||
| Net realized gain (loss) on investments and in-kind redemptions | (29,584,118 | ) | 6,330,015 | |||||
| Net change in unrealized appreciation (depreciation) of investments and foreign currency and foreign currency translation | (27,819,583 | ) | (22,656,862 | ) | ||||
| Net decrease in net assets resulting from operations | (58,196,368 | ) | (17,268,151 | ) | ||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | — | (24,500 | ) | |||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase in net assets derived from net change in outstanding shares | 21,287,245 | 323,905,900 | 1 | |||||
| Transaction Fees (See Note 1) | 121,942 | 243,915 | ||||||
| Net increase in net assets from capital share transactions | 21,409,187 | 324,149,815 | ||||||
| Total increase (decrease) in net assets | (36,787,181 | ) | 306,857,164 | |||||
| NET ASSETS | ||||||||
| Beginning of Period | 321,957,183 | 15,100,019 | ||||||
| End of Period | $ | 285,170,002 | $ | 321,957,183 | ||||
| Summary of share transactions is as follows: | ||||||||||||||||
| Period Ended | ||||||||||||||||
| March 31, 2022 | Year Ended | |||||||||||||||
| (Unaudited) | September 30, 2021 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares Sold | 3,600,000 | $ | 96,246,865 | 16,450,000 | $ | 496,261,225 | ||||||||||
| Transaction Fees (See Note 1) | — | 121,942 | — | 243,915 | ||||||||||||
| Shares Redeemed | (2,950,000 | ) | (74,959,620 | ) | (5,900,000 | ) | (172,355,325 | ) | ||||||||
| Net Transactions in Fund Shares | 650,000 | $ | 21,409,187 | 10,550,000 | $ | 324,149,815 | ||||||||||
| Beginning Shares | 11,350,000 | 800,000 | ||||||||||||||
| Ending Shares | 12,000,000 | 11,350,000 | ||||||||||||||
| 1 | Includes reimbursement of $1,545 due to net asset value error. |
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
ETFMG 2x Daily Travel Tech ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended | ||||||||
| March 31, | Period Ended | |||||||
| 2022 | September 30, | |||||||
| (Unaudited) | 20211 | |||||||
| OPERATIONS | ||||||||
| Net investment loss | $ | (2,908 | ) | $ | (1,959 | ) | ||
| Net realized loss on swap contracts | (272,631 | ) | (225,319 | ) | ||||
| Net decrease in net assets resulting from operations | (275,539 | ) | (227,278 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase in net assets from capital share transactions | — | 1,037,796 | ||||||
| Total increase (decrease) in net assets | (275,539 | ) | 810,518 | |||||
| NET ASSETS | ||||||||
| Beginning of Period | 810,518 | — | ||||||
| End of Period | $ | 534,979 | $ | 810,518 | ||||
Summary of share transactions is as follows:
| Period Ended | |||||||||||||||||
| March 31, 2022 | Period Ended | ||||||||||||||||
| (Unaudited) | September 30, 20211 | ||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||
| Shares Sold | — | $ | — | 120,000 | $ | 1,181,474 | |||||||||||
| Shares Redeemed | — | — | (20,000 | ) | (143,678 | ) | |||||||||||
| Net Transactions in Fund Shares | — | $ | — | 100,000 | $ | 1,037,796 | |||||||||||
| Beginning Shares | 100,000 | — | |||||||||||||||
| Ending Shares | 100,000 | 100,000 | |||||||||||||||
| 1 | The Fund commenced operations on June 15, 2021. |
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
ETFMG Travel Tech ETF
For a capital share outstanding throughout each period/year
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
Period Ended September 30, 20201 |
||||||||||
| Net Asset Value, Beginning Period/Year | $ | 28.37 | $ | 18.88 | $ | 25.00 | ||||||
| Income (Loss) from Investment Operations: | ||||||||||||
| Net investment income (loss)2 | (0.07 | ) | (0.13 | ) | (0.02 | ) | ||||||
| Net realized and unrealized gain (loss) on investments | (4.55 | ) | 9.60 | (6.12 | ) | |||||||
| Total from investment operations | (4.62 | ) | 9.47 | (6.14 | ) | |||||||
| Less Distributions: | ||||||||||||
| Distributions from net investment income | — | (0.01 | ) | — | ||||||||
| Net realized gains | — | — | — | |||||||||
| Total distributions | — | (0.01 | ) | — | ||||||||
| Capital Shares Transactions: | ||||||||||||
| Transaction fees added to paid-in capital | 0.01 | 0.03 | 0.02 | |||||||||
| Net asset value, end period/year | $ | 23.76 | $ | 28.37 | $ | 18.88 | ||||||
| Total Return | -16.22 | %3 | 50.35 | % | -24.50 | %3 | ||||||
| Ratios/Supplemental Data: | ||||||||||||
| Net assets at end period/year (000’s) | $ | 285,170 | $ | 321,957 | $ | 15,100 | ||||||
| Expenses to Average Net Assets | 0.82 | %4,5 | 0.75 | % | 0.75 | %4 | ||||||
| Net Investment Income (Loss) to Average Net Assets | -0.56 | %4 | -0.43 | % | 0.30 | %4 | ||||||
| Portfolio Turnover Rate | 17 | %3 | 57 | % | 49 | %3 | ||||||
| 1 | Commencement of operations on February 12, 2020. |
| 2 | Calculated based on average shares outstanding during the period/year. |
| 3 | Not annualized. |
| 4 | Annualized. |
| 5 | Includes 0.07% of dividend and interest expense. |
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
ETFMG 2x Daily Travel Tech ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
| Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 20211 |
|||||||
| Net Asset Value, Beginning Period | $ | 8.11 | $ | 10.00 | ||||
| Income (Loss) from Investment Operations: | ||||||||
| Net investment income (loss) 2 | (0.03 | ) | (0.02 | ) | ||||
| Net realized and unrealized gain (loss) on investments | (2.73 | ) | (1.87 | ) | ||||
| Total from investment operations | (2.76 | ) | (1.89 | ) | ||||
| Net asset value, end period | $ | 5.35 | $ | 8.11 | ||||
| Total Return | -34.00 | %3 | -18.95 | %3 | ||||
| Ratios/Supplemental Data: | ||||||||
| Net assets at end of period (000’s) | $ | 535 | $ | 811 | ||||
| Gross Expenses to Average Net Assets | 0.95 | %4 | 0.95 | %4 | ||||
| Net Investment Income (Loss) to Average Net Assets | -0.93 | %4 | -0.80 | %4 | ||||
| Portfolio Turnover Rate | 0 | %3 | 0 | %3 | ||||
| 1 | The Fund commenced operations on June 15, 2021. |
| 2 | Calculated based on average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
March 31, 2022 (Unaudited)
NOTE 1 – ORGANIZATION
ETFMG Travel Tech ETF (“AWAY”) and ETFMG 2x Daily Travel Tech ETF (“AWYX”) (each a “Fund”, or collectively the “Funds”) are series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Funds’ shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”).
The following table is a summary of the Strategy Commencement Date and Strategy of the Funds:
| Fund Ticker | Strategy Commencement Date |
Strategy |
| ETFMG Travel Tech ETF | 2/12/2020 | Seeks to provide investment results that, before fees and expenses,correspond generally to the total return performance of the Prime Travel Technology Index NTR (the “Index”). |
| ETFMG 2x Daily Travel Tech ETF | 6/15/2021 | Seeks to provide daily investment results that, before fees and expenses, correspond to two times (2x) the daily total return of the Index. The Fund does not seek to achieve its stated investment objective over a period of time greater than a single day. |
The Funds may use a combination of swaps on the Index and swaps on an ETF whose investment objective is to track the performance of the same, or a substantially similar index to achieve its investment objective.
The Funds each currently offer one class of shares, which have no front end sales load, no deferred sales charges, and no redemption fees. The Funds may issue an unlimited number of shares of beneficial interest, with no par value. All shares of each Fund have equal rights and privileges.
Shares of the Funds are listed and traded on the NYSE Arca, Inc. Market prices for the shares may be different from their net asset value (“NAV”). Each Fund issues and redeems shares on a continuous basis at NAV only in blocks of 50,000 shares for AWAY and 10,000 shares for AWYX, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in a specified Index. Once created, shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, shares are not redeemable securities of a Fund. Shares of a Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the shares directly from a Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and may be subject to customary brokerage commissions or fees.
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in Transaction Fees” in the Statements of Changes in Net Assets.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Fund may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (SEC). For more information about the underlying Fund’s operations and policies, please refer to those Fund’s semiannual and annual reports, which are filed with the SEC.
| A. | Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Funds’ Board. The use of fair value pricing by a Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. As of March 31, 2022, the Funds did not hold any securities that were fair valued by the Board.
As described above, the Funds utilize various methods to measure the fair value of their investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| Level 3 | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following is a summary of the inputs used to value the Funds’ net assets as of March 31, 2022:
| ETFMG Travel Tech ETF | ||||||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 283,365,047 | $ | — | $ | — | $ | 283,365,047 | ||||||||
| Short-Term Investments | 1,984,330 | — | — | 1,984,330 | ||||||||||||
| ETFMG Sit Ultra Short ETF** | 1,226,615 | — | — | 1,226,615 | ||||||||||||
| Investments Purchased with Securities Lending | ||||||||||||||||
| Collateral* | — | — | — | 14,119,299 | ||||||||||||
| Total Investments in Securities | $ | 286,575,992 | $ | — | $ | — | $ | 300,695,291 | ||||||||
| ETFMG 2x Daily Travel Tech ETF | ||||||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Short-Term Investments | $ | 68,328 | $ | — | $ | — | $ | 68,328 | ||||||||
| Total Investments in Securities | $ | 68,328 | $ | — | $ | — | $ | 68,328 | ||||||||
| Swap Contracts*** | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Long Total Return Equity Swap Contracts | $ | — | $ | — | $ | — | $ | — | ||||||||
| Total Swap Contracts | $ | — | $ | — | $ | — | $ | — |
| ^ | See Schedule of Investments for classifications by country and industry. |
| * | Certain investments that are measured at fair value used the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Schedules of Investments. |
| ** | Investment was purchased with collateral. |
| *** | Swap contracts are derivative instruments, which are presented at the unrealized appreciation/depreciation on the instrument. |
| B. | Federal Income Taxes. The Funds have each elected to be taxed as a “regulated investment company” and intend to distribute substantially all taxable income to their shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
To avoid imposition of the excise tax applicable to regulated investment companies, each Fund intends to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of each Fund’s next taxable year.
Each Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Each Fund has analyzed its tax position and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Funds’ 2021 tax returns. The Funds identify their major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
As of March 31, 2022, management has reviewed the tax positions for open periods (for Federal purposes, four years from the date of filing and for state purposes, four years from the date of filing), as applicable to the Funds, and has determined that no provision for income tax is required in the Funds’ financial statements.
| C. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Funds may be subject to income, withholding or other taxes imposed by foreign countries. |
| D. | Foreign Currency Translations and Transactions. The Funds may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Funds do not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Funds do isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
| E. | Distributions to Shareholders. Distributions to shareholders from net investment income are generally declared and paid by each of the Funds on a quarterly basis. Distributions to shareholders from realized gains on securities for each Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
| G. | Share Valuation. The net asset value (“NAV”) per share of each Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Funds’ shares will not be priced on the days on which the NYSE is closed for trading. For Authorized Participants, the offering and redemption price per share for the Funds are equal to the Funds’ respective net asset value per share. |
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| H. | Guarantees and Indemnifications. In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. |
Derivatives
The Funds may enter into swap agreements; including interest rate, index, and total return swap agreements. Swap agreements are contracts between parties in which one party agrees to make periodic payments to the other party based on the change in market value or level of a specified rate, index or asset. In return, the other party agrees to make payments to the first party based on the return of a different specified rate, index or asset. Swap agreements will usually be done on a net basis, i.e., where the two parties make net payments with a Fund receiving or paying, as the case may be, only the net amount of the two payments. The net amount of the excess, if any, of a Fund’s obligations over its entitlements with respect to each swap is accrued on a daily basis and an amount of cash or equivalents having an aggregate value at least equal to the accrued excess is maintained by the Fund.
The total return swap contracts are subject to master netting agreements, which are agreements between a Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund through a single payment, in the event of default or termination. Amounts presented on the schedule of total return swaps are gross settlement amounts.
The following table presents the Funds’ gross derivative assets and liabilities by counterparty and contract type, net of amounts available for offset under a master netting agreement and the related collateral received or pledged by the Funds as of March 31, 2022.
ETFMG 2x Daily Travel Tech ETF
| Gross | |||||||||||||||||||||
| Amounts of | Gross Amounts not offset in | ||||||||||||||||||||
| Recognized | the Statements of Assets & | ||||||||||||||||||||
| Assets | Liabilities | ||||||||||||||||||||
| Presented in | Gross | ||||||||||||||||||||
| the Statements | Amounts | ||||||||||||||||||||
| Investment | of Assets & | Available | Financial | Collateral | |||||||||||||||||
| Counterparty | Type | Liabilities | Offset | Net Amounts | Instruments | Received | Net Amount | ||||||||||||||
| Cowen and | Total Return | ||||||||||||||||||||
| Company, LLC | Swap Contract | $ | (17,572) | $ | — | $ | (17,572) | $- | $ | — | $ | (17,572) | |||||||||
The average monthly notional amount of the swap contracts during the period ended March 31, 2022 for AWYX was $1,120,452.
The following is a summary of the effect of swap contracts on the Funds’ Statements of Assets and Liabilities as of March 31, 2022:
| Net | ||||||||||||||
| Unrealized | ||||||||||||||
| Assets | Liabilities | Gain (Loss) | ||||||||||||
| ETFMG 2x Daily Travel Tech ETF | Swap Contract | $ | — | $ | 17,572 | $ | — | |||||||
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The following is a summary of the effect of swap contracts on the Funds’ Statements of Operations for the period ended March 31, 2022:
| Realized Gain (Loss) |
Change in Unrealized Appreciation/Depreciation |
|||||||||
| ETFMG 2x Daily Travel Tech ETF | Swap Contract | $ | (272,631 | ) | $ | — | ||||
NOTE 3 – RISK FACTORS
Investing in the Funds may involve certain risks, as discussed in the Funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a Fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The Funds, other than VALT, are not actively managed (“Index Funds”). Therefore, those Funds follow the securities included in its respective index during upturns as well as downturns. Because of their indexing strategies, the Index Funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Index Funds’ expenses, the Index Funds’ performance may be below that of their respective index.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Concentration Risk. To the extent that a Fund’s or an index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19),have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Funds and their investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect lobal, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under the circumstances, the Funds may have difficulty achieving their investment objectives which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Funds’ Sponsor and third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Funds’ investments. These factors can cause substantial market volatility. exchange trading suspensions and closures and can impact the ability of the Funds to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A widespread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on a Fund’s performance, resulting in losses to the Funds.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs), interest rates or indexes. A Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other ordinary investments, including risk related to the market, leverage, imperfect daily correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions. The use of derivatives is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The use of derivatives may result in larger losses or smaller gains than directly investing in securities. When a Fund uses derivatives, there may be imperfect correlation between the value of the reference assets and the derivative, which may prevent the Fund from achieving its investment objective. Because derivatives often require only a limited initial investment, the use of derivatives may expose a Fund to losses in excess of those amounts initially invested.
Daily Index Correlation/Tracking Risk. There is no guarantee that a Fund will achieve a high degree of correlation to the Index and therefore achieve its daily leveraged investment objective. To achieve a high degree of correlation with the Index, a Fund seeks to rebalance its portfolio daily to keep leverage consistent with its daily leveraged investment objective. In addition, a Fund’s exposure to the Index is impacted by the Index’s movement. Because of this, it is unlikely that a Fund will be perfectly exposed to the Index at the end of each day. The possibility of the Fund being materially over-or under-exposed to the Index increases on days when the Index is volatile near the close of the trading day. Market disruptions, regulatory restrictions and extreme volatility will also adversely affect a Fund’s ability to adjust exposure to the required levels.
NOTE 4 – MANAGEMENT AND OTHER CONTRACTS
ETF Managers Group, LLC (the “Advisor”), serves as the investment advisor to the Funds. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Funds, and the Advisor, the Advisor provides investment advice to the Funds and oversees the day-to-day operations of the Funds, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Advisor is also responsible for arranging transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Funds to operate.
Under the Investment Advisory Agreement, the Advisor has overall responsibility for the general management and administration of the Funds and arranges for sub-advisory, transfer agency, custody, fund administration, securities lending, and all other non-distribution related services necessary for the Funds to operate. The Funds unitary fees are accrued daily and paid monthly. The Advisor bears the costs of all advisory and non- advisory services required to operate the Funds, in exchange for a single unitary fee at the following annual rates:
| ETFMG Travel Tech ETF | 0.75% |
| ETFMG 2x Daily Travel Tech ETF | 0.95% |
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Under the Investment Advisory Agreement, the Advisor has agreed to pay all expenses of the Funds, except for: the fee paid to the Advisor pursuant to the Investment Advisory Agreement, interest charges on any borrowings, 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”). The Advisor has entered into an agreement with its affiliate ETFMG Financial, LLC to serve as distributor to the Funds (the “Distributor”). The Distributor provides marketing support for the Funds, including distributing marketing materials related to the Funds. Level ETF Ventures, LLC (“Level”) serves as the index provider for AWAY and AWYX. Level is not affiliated with the Trust or the Advisor.
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services (the “Administrator”) provides fund accounting, fund administration, and transfer agency services to the Funds. The Advisor compensates the Administrator for these services under an administration agreement between the two parties.
The Advisor pays each independent Trustee a quarterly fee for service to the Funds. Each Trustee is also reimbursed by the Advisor for all reasonable out-of-pocket expenses incurred in connection with his duties as Trustee, including travel and related expenses incurred in attending Board meetings.
NOTE 5 – DISTRIBUTION PLAN
The Funds have each adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, each Fund may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to each Fund, with the amount of such compensation not to exceed an annual rate of 0.25% of each Fund’s average daily net assets. During the period ended March 31, 2022, the Funds did not incur any 12b-1 expenses.
NOTE 6 - PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, during the period ended March 31, 2022:
| Purchases | Sales | |||
| ETFMG Travel Tech ETF | $61,897,968 | $49,238,550 |
The costs of purchases and sales of in-kind transactions associated with creations and redemptions during the period ended March 31, 2022:
| Purchases In- | Sales In- | |||
| Kind | Kind | |||
| ETFMG Travel Tech ETF | $ 66,210,066 | $59,859,950 |
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all in-kind sales. Net capital gains or losses resulting from in-kind redemptions are excluded from the Funds’ determination of taxable gains and are not distributed to shareholders.
There were no purchases or sales of U.S. Government obligations during the period ended March 31, 2022.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 7 — SECURITIES LENDING
The Funds, may lend up to 33 1⁄3% of the value of the securities in their portfolios to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending program administered by U.S. Bank N.A. (the “Custodian”) . The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the value of any loaned securities at the time of the loan, plus accrued interest. The Funds receive compensation in the form of fees and earn interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Funds continue to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss on the fair value of securities loaned that may occur during the term of the loan will be for the account of the Funds. The Funds have the right under the terms of the securities lending agreement to recall the securities from the borrower on demand. The cash collateral is invested by the Custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations, either directly on behalf of each Fund or through one or more joint accounts, money market funds, or short-term bond funds, including those advised by or affiliated with the Advisor; however, all such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. Other investment companies in which a Fund may invest cash collateral can be expected to incur fees and expenses for operations, such as investment advisory and administration fees, which would be in addition to those incurred by the Fund, and which may be received in full or in part by the Advisor. Pursuant to guidance issued by the SEC staff, fees and expenses of money market funds used for cash collateral received in connection with loans of securities are not treated as Acquired Fund Fees and Expenses, which reflect a Fund’s pro rata share of the fees and expenses incurred by other investment companies in which the Fund invests (as disclosed in the Prospectus, as applicable). The Funds could also experience delays in recovering their securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Fund is indemnified from this risk by contract with the securities lending agent.
As of the period ended March 31, 2022 the value of the securities on loan and payable for collateral due to broker were as follows:
| Value of Securities on Loan Collateral Received | ||||||||
| Values of | Fund | |||||||
| Securities | Collateral | |||||||
| Fund | on Loan | Received* | ||||||
| ETFMG Travel Tech ETF | $ | 14,916,010 | $ | 15,362,762 | ||||
* The cash collateral received was invested in the Mount Vernon Liquid Assets Portfolio, a money market fund with an overnight and continuous maturity, and ETFMG Sit Ultra Short ETF as shown on the Schedule of Investments.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 8 – FEDERAL INCOME TAXES
The components of distributable earnings (losses) and cost basis of investments for federal income tax purposes at September 30, 2021 were as follows:
| Net | ||||||||||||||||
| Gross | Gross | Unrealized | ||||||||||||||
| Unrealized | Unrealized | Appreciation | ||||||||||||||
| Cost | Appreciation | Depreciation | (Depreciation) | |||||||||||||
| ETFMG Travel Tech ETF | $ | 376,640,122 | $ | 24,396,622 | $ | (65,655,349 | ) | $ | (41,258,727 | ) | ||||||
| ETFMG 2x Daily Travel Tech ETF | — | — | — | — | ||||||||||||
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
As of September 30, 2021, the components of distributable earnings (loss) on a tax basis were as follows:
| Undistributed | Total | Other | Total | |||||||||||||||||
| Ordinary | Undistributed | Distributable | Accumulated | Accumulated | ||||||||||||||||
| Income | Long-Term Gain | Earnings | Loss | Gain (Loss) | ||||||||||||||||
| ETFMG Travel Tech ETF | $ | — | $ | — | $ | — | $ | (3,150,353 | ) | $ | (44,409,080 | ) | ||||||||
| ETFMG 2x Daily Travel Tech ETF | — | — | — | (56,789 | ) | (56,789 | ) | |||||||||||||
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
As of September 30, 2021, the Funds had accumulated capital loss carryovers of:
| Capital Loss | Capital Loss | ||||||||||
| Carryforward | Carryforward | ||||||||||
| ST | LT | Expires | |||||||||
| ETFMG Travel Tech ETF | $ | (2,021,666 | ) | $ | — | Indefinite | |||||
| ETFMG 2x Daily Travel Tech ETF | (56,789 | ) | — | Indefinite | |||||||
Under current tax law, capital and currency losses realized after October 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The following Funds had deferred post-October capital and currency losses, which will be treated as arising on the first business day of the year ending September 30, 2021.
| Post- | ||||||||
| Late Year | October | |||||||
| Ordinary | Capital | |||||||
| Loss | Loss | |||||||
| ETFMG Travel Tech ETF | $ | 1,134,749 | $ | — | ||||
| ETFMG 2x Daily Travel Tech ETF | — | — | ||||||
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The tax character of distributions paid during the period ended March 31, 2022, and the year ended September 30, 2021 were as follows:
| Period Ended | Year Ended | |||||||||||||||
| March 31, 2022 | September 30, 2021 | |||||||||||||||
| From | From | From | From | |||||||||||||
| Ordinary | Capital | Ordinary | Capital | |||||||||||||
| Income | Gains | Income | Gains | |||||||||||||
| ETFMG Travel Tech ETF | $ | — | — | $ | 24,500 | — | ||||||||||
| ETFMG 2x Daily Travel Tech ETF | — | — | — | — | ||||||||||||
NOTE 9 – INVESTMENTS IN AFFILIATES
ETFMG Travel Tech ETF
ETFMG Travel Tech ETF owned the following company during the period ended March 31, 2022. ETFMG Sit Ultra Short ETF is deemed to be an affiliate of the Fund as defined by the 1940 Act as of the period ended March 31, 2022. Transactions during the period in this security were as follows:
| Change in | |||||||||||||||||||||||||||||
| Value at | Realized | Unrealized | Value at | ||||||||||||||||||||||||||
| September 30, | Gain | Appreciation | Dividend | March 31, | Ending | ||||||||||||||||||||||||
| Security Name | 2021 | Purchases | Sales | (Loss)(1) | (Depreciation) | Income | 2022 | Shares | |||||||||||||||||||||
| ETFMG Sit Ultra Short ETF * | $ | 1,243,875 | $ | — | $ | — | $ | — | $ | (17,260 | ) | $ | — | $ | 1,226,615 | 25,000 | |||||||||||||
*Affiliate as of March 31, 2022.
1 Realized Losses include transactions in affiliated investments and affiliated in-kind redemptions.
NOTE 10 – LEGAL MATTERS
The Adviser and its parent, ETFMG, were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled[.]”
ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (together with the Adviser, the “Adviser Defendants”) have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C -152-21 (the “NJ Action”). The NJ Action asserts breach of contract, defamation and other tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The NJ Action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022, the Adviser, together with the other named affiliates, filed a motion for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied.
NOTE 11 – SUBSEQUENT EVENTS
In preparing these financial statements, the Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed below, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the financial statements.
With respect to Note 10 – Legal Matters, on May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust as well as, all claims asserted against the Adviser Defendants, aside from the defamation claim. The Adviser Defendants intend to vigorously defend themselves against this sole remaining claim.
ETFMG Travel Tech ETF
ETFMG 2x Daily Travel Tech ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on March 28-29, 2022, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the renewal of the Amended and Restated Investment Advisory Agreement (the “Advisory Agreement”) between ETF Managers Group LLC (the “Adviser”) and the Trust, on behalf of each of ETFMG Travel Tech ETF (“AWAY”) and ETFMG 2x Daily Travel Tech ETF (AWYX) (each a “Fund” and collectively, the “Funds”).
Pursuant to Section 15(c) of the 1940 Act, the Board must annually review and approve the Advisory Agreement after their initial two-year term: (i) by the vote of the Trustees or by a vote of the shareholders of the Funds; and (ii) by the vote of a majority of the Trustees who are not parties to the Advisory Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. Each year, the Board calls and holds a meeting to decide whether to renew the Advisory Agreement for an additional one-year term. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services provided to the Funds by the Adviser; (ii) the investment performance of the Funds; (iii) the Adviser’s costs and profits realized in providing services to the Funds, including any fall-out benefits enjoyed by the Adviser; (iv) comparative fee and expense data for the Funds in relation to other similar investment companies; (v) the extent to which economies of scale would be realized as the Funds grow and whether the advisory fees for the Funds reflect these economies of scale for the benefit of the Funds; and (vi) other financial benefits to the Adviser and its affiliates resulting from services rendered to the Funds. The Board’s review included written and oral information furnished to the Board prior to and at the meeting held on March 28-29, 2022, and throughout the year. Among other things, the Adviser provided responses to a detailed series of questions, which included information about the Adviser’s operations, service offerings, personnel, risk assessment process, compliance program and financial condition. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentations and any other information that the Board received at the meeting, and deliberated on the renewal of the Advisory Agreement in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the renewal of the Advisory Agreement, and the weight to be given to each such factor. The conclusions reached with respect to the Advisory Agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to each Fund. The Independent Trustees conferred amongst themselves and independent legal counsel during an executive session held prior to the meeting and also conferred in executive sessions both with and without representatives of management before and during the meeting. The Independent Trustees requested, received and considered additional information arising out of these executive sessions.
Nature, Extent and Quality of Services Provided by the Adviser
The Trustees considered the scope of services provided under the Advisory Agreement, noting that the Adviser provides investment management services to the Funds. The Board discussed the responsibilities of the Adviser, including: responsibility for the general management of the day-to-day investment and reinvestment of the assets of the Funds; determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis; responsibility for daily monitoring of tracking error and quarterly reporting to the Board; and implementation of Board directives as they relate to the Funds. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel in managing funds with significant derivatives exposure; and the quality of the Adviser’s compliance and risk assessment infrastructure. The Board also considered the Adviser’s experience managing exchange-traded funds (“ETFs”), as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
ETFMG Travel Tech ETF
ETFMG 2x Daily Travel Tech ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board also considered other services provided to the Funds, such as overseeing the Funds’ service providers, monitoring adherence to the Fund’s investment restrictions, and monitoring compliance with various policies and procedures and with applicable securities laws.
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Funds by the Adviser.
Historical Performance
The Board then considered the past performance of the Funds over various time periods ending December 31, 2021. The Board also considered each Fund’s performance as compared to that of comparable ETFs, as determined by the Adviser (“peer group”) using data received from an independent third party. In this regard, the Board noted the short time that AWYX has been in operation.
The Board additionally reviewed the performance of AWAY and AWYX as compared to its underlying index and the correlation of returns to benchmark information, respectively, for various time periods. The Board noted management’s explanation that analysis of investment performance, in absolute terms, is less relevant than it is for actively managed funds, given the Funds’ investment objectives. The Board also noted management’s further explanation that it is more relevant to review the performance of the Funds by focusing on the correlation of performance verses the benchmark (or relevant multiple thereof). The Board reviewed information regarding each Fund’s correlation of returns to the benchmark, discussing, as applicable, factors which contributed to each Fund’s correlation of returns. The Board noted underperformance by each Fund relative to its benchmark (or relevant multiple thereof) over certain periods, but that such underperformance was, at least in part, a result of costs incurred by the Funds not incurred by their underlying indexes, cash drag, the process of rebalancing the Funds’ portfolios and regulatory requirements. The Board noted management’s representations that the Funds’ performance correlation of returns versus target performance was within range of what was expected. The Board concluded that, after taking these factors into account, each Fund’s correlation of returns versus target performance was satisfactory.
The Board further noted that it had received and would continue to receive regular reports regarding each Fund’s performance, including with respect to its tracking error, at its quarterly meetings.
Cost of Services Provided, Profits and Economies of Scale
The Board reviewed the advisory fees for the Funds and compared them to the total operating expenses of comparable ETFs, as determined by the Adviser using data received from an independent third party. Among other information, the Board noted that the advisory fee for AWAY was higher than the average and median expense ratios for its peer group and that with respect to AWYX, the advisory fee was lower than the average and median expense ratios for its peer group. The Board took into consideration management’s discussion of the fees, including that the Funds have niche investment strategies that are substantially different than the strategies of many of the peer ETFs and, therefore, the information provided about the comparable ETFs may not provide meaningful direct comparisons to the Funds.
ETFMG Travel Tech ETF
ETFMG 2x Daily Travel Tech ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board noted the importance of the fact that the advisory fee for each Fund is a “unified fee,” meaning that the shareholders of the Funds pay no expenses other than the advisory fee and certain other costs such as interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, non-standard Board-related expenses and litigation against the Board, Trustees, Funds, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses. The Board also noted that the Adviser was responsible for compensating the Trust’s other service providers and paying the Funds’ other expenses (except as noted above) out of its own fees and resources. The Board concluded that the advisory fee for each of the Funds is reasonable in light of the factors considered.
The Board also evaluated the compensation and other benefits received by the Adviser from its relationship with the Funds, taking into account profitability information provided by the Adviser. The Board received and reviewed profitability information on a fund by fund basis and considered how profit margins could affect the Adviser’s long-term viability and ability to attract and retain high-quality personnel. The Board also considered the impact on the Adviser’s profitability of payments made to, or received from, partners involved with certain of the Funds. Based on the information provided to the Trustees, the Trustees concluded that the net revenue retained by the Adviser from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund. The Board further considered other benefits derived by the Adviser and its affiliates from the Adviser’s relationship with the Funds.
In addition, the Board considered whether economies of scale may be realized for the Funds. The Board noted that the Adviser regularly considers whether fee reductions are appropriate as the Funds grow in size. The Board noted that a unitary fee provides a level of certainty in expenses for the Funds and effectively acts as a cap on the fees and expenses (except as noted above) that are borne by the Funds. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the continued provision of high-quality services to the Funds, such as the hiring of new trading, legal and compliance personnel, and enhancements to technology and related systems. The Board concluded that no changes to the advisory fee structure of the Funds were necessary.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision.
Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Advisory Agreement are fair and reasonable; (b) concluded that the Adviser’s fee is reasonable in light of the services that the Adviser provides to the Funds; and (c) approved the renewal of the Advisory Agreement for another year.
ETFMG TM ETFs
Period Ended March 31, 2022 (Unaudited)
As a shareholder of the Funds you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The examples are based on an investment of $1,000 invested for the period of time as indicated in the table below.
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then, multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
| Annualized | ||||||||
| Expense | ||||||||
| Ratio | ||||||||
| During the | ||||||||
| Beginning | Ending | Period | ||||||
| Account | Account | Expenses | October 1, | |||||
| Value | Value | Paid | 2021 to | |||||
| October 1, | March 31, | During the | March 31, | |||||
| Fund Name | 2021 | 2022 | Period^ | 2022 | ||||
| ETFMG Travel Tech ETF | ||||||||
| Actual | 1,000.00 | 837.80 | 3.76 | 0.82% | ||||
| Hypothetical (5% annual) | 1,000.00 | 1,020.84 | 4.13 | 0.82% | ||||
| ETFMG 2x Daily Travel Tech ETF | ||||||||
| Actual | 1,000.00 | 660.00 | 3.93 | 0.95% | ||||
| Hypothetical (5% annual) | 1,000.00 | 1,020.19 | 4.78 | 0.95% |
^ The dollar amounts shown as expenses paid during the period are equal to the annualized six-month expense ratio multiplied by the average account value during the period, multiplied by 182/365 (to reflect the one-half year period).
ETFMG TM ETFs
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
March 31, 2022 (Unaudited)
ETF Managers Trust (the “Trust”) has adopted a liquidity risk management program (the “Program”). The Trust’s Board of Trustees (the “Board”) has designated ETF Managers Group LLC (the “Program Administrator”) as the administrator of the Program. The Program Administrator has designated a committee (the “Committee”), composed of personnel from multiple departments, including investment operations and compliance, that is responsible for the implementation and ongoing administration of the Program, which includes assessing the liquidity risk of ETFMG Travel Tech ETF and ETFMG 2x Daily Travel Tech ETF (each a “Fund” and, collectively, the “Funds”) under both normal and reasonably foreseeable stressed conditions.
Under the Program, the Program Administrator assesses, manages and periodically reviews each Fund’s liquidity risk, based on factors specific to the circumstances of the Fund. Liquidity risk is the risk that a Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in that Fund. This risk is managed by monitoring the degree of liquidity of each Fund’s investments and limiting the amount of the Fund’s illiquid investments, among other means. The Program Administrator’s process of determining the degree of liquidity of each Fund’s investments is supported by one or more third-party liquidity assessment vendors.
At a meeting of the Board on March 28-29, 2022, the Adviser provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, the operation of any Highly Liquid Investment Minimum, where applicable, and any material changes to the Program, for the period from March 1, 2021 through March 1, 2022 (the “Reporting Period”). No significant liquidity events impacting any Fund were noted in the report and it was represented that, as of December 31, 2021, each Fund was primarily highly liquid and, during the Reporting Period, each Fund held less than 15% in illiquid securities. In addition, the Program Administrator provided its assessment that Program implementation was effective and that the Program operated adequately and effectively to enable the Program Administrator to oversee and manage liquidity risk and ensure each Fund is able to meet requests to redeem shares without significant dilution to the remaining investors’ interest in the Fund.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to your Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
ETFMG TM ETFs
March 31, 2022 (Unaudited)
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of each Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.etfmgfunds.com.
NOTE 2 – FEDERAL TAX INFORMATION
Qualified Dividend Income/Dividends Received Deduction
For the fiscal year ended September 30, 2021, certain dividends paid by the Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
| Fund Name | Qualified Dividend Income |
| ETFMG Travel Tech ETF | 49.14% |
| ETFMG 2x Daily Travel Tech ETF | 0.00% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September 30, 2021 was as follows:
| Fund Name | Dividends Received Deduction |
| ETFMG Travel Tech ETF | 3.92% |
| ETFMG 2x Daily Travel Tech ETF | 0.00% |
Short Term Capital Gain
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871 (k)(2)(C) for each Fund were as follows:
| Fund Name | Short-Term Capital Gain |
| ETFMG Travel Tech ETF | 0.00% |
| ETFMG 2x Daily Travel Tech ETF | 0.00% |
During the year ended September 30, 2021, the Funds did not declare any long-term realized gains distributions.
NOTE 3 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the Securities and Exchange Commission (“SEC”) on Part F of Form N-PORT. The Funds’ Part F of Form N-PORT is available on the website of the SEC at www.sec.gov and the Funds’ website at www.etfmgfunds.com. Each Fund’s portfolio holdings are posted on their website at www.etfmgfunds.com daily.
ETFMG TM ETFs
SUPPLEMENTARY INFORMATION
March 31, 2022 (Unaudited) (Continued)
NOTE 4 – INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at (877) 756-7873, by accessing the SEC’s website at www.sec.gov, or by accessing the Funds’ website at www.etfmgfunds.com.
Information regarding how the Funds voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at (877) 756-7873 or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477) or by visiting www.etfmgfunds.com. Read the prospectus carefully before investing.
ETFMG TM ETFs
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
| Position(s) | Number of | Other | ||
| Held with the | Portfolios | Directorships | ||
| Trust, Term | in Fund | Held by | ||
| of Office and | Complex | Trustee | ||
| Name and Year | Length of | Principal Occupation(s) During | Overseen | During Past 5 |
| of Birth | Time Served | Past 5 Years | By Trustee | Years |
| Interested Trustee and Officers | ||||
| Samuel
Masucci, III (1962) |
Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) | Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). |
20 | None |
| John
A. Flanagan, (1946) |
Treasurer (since 2015) |
President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). | n/a | n/a |
| Reshma
A. Tanczos (1978) |
Chief Compliance Officer (since 2016) | Chief Compliance Officer of ETFMG Financial LLC (Since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). | n/a | n/a |
| Matthew
J. Bromberg (1973) |
Assistant Secretary (since 2020) |
General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015- 2016). | n/a | n/a |
| * Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. | ||||
ETFMG TM ETFs
Board of Trustees (Continued)
| Position(s) | Number of | Other | ||
| Held with the | Portfolios | Directorships | ||
| Trust, Term | in Fund | Held by | ||
| of Office and | Complex | Trustee | ||
| Name and Year | Length of | Principal Occupation(s) During | Overseen | During Past 5 |
| of Birth | Time Served | Past 5 Years | By Trustee | Years |
| Independent Trustees | ||||
| Terry Loebs (1963) |
Trustee (since 2014); Lead Independent Trustee (since 2020) |
Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). | 20 | None |
| Eric Wiegel (1960) |
Trustee (since 2020) |
Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018).
|
20 | None |
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services
615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006
ETFMG Prime Junior Silver Miners ETF
SILJ
ETFMG Prime 2x Daily Junior Silver
Miners ETF
SILX
ETFMG Prime 2x Daily Inverse Junior
Silver Miners ETF
SINV
Semi-Annual Report
March 31, 2022
(Unaudited)
The funds are series of ETF Managers Trust.
ETFMG™ ETFs
TABLE OF CONTENTS
March 31, 2022 (Unaudited)
ETFMG™ ETFs
On behalf of the entire team, we want to express our appreciation for the confidence you have placed in our suite of silver ETFs. The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
Performance Overview
During the 6-month period ended March 31, 2022, the S&P 500 Index, a broad measure of US companies, returned 5.91%. Below is a performance overview for each Fund for the same 6-month period.
ETFMG Prime Junior Silver ETF (SILJ)
The ETFMG Prime Junior Silver ETF (“SILJ”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Junior Silver Miners & Explorers Index (the “Index”).
Over the period, the total return for SILJ was 19.46%, while the total return for the Index, which does not incur Fund expenses, was 19.58%. The best performers in SILJ, on the basis of contribution to return, were Turquoise Hill Resources Ltd, Yamana Gold Inc, Ssr Mining Inc and First Majestic Silver Corp and Pan American Silver Corp, while the worst performers in SILJ, on the basis of contribution to return, were Gatos Silver Inc, Coeur Mining Inc, Mcewen Mining Inc, Andean Precious Metals Corp and Great Panther Mining Ltd.
At the end of the reporting period, SILJ saw an average approximate allocation of 99.0% to Materials. The portfolio securities of SILJ were exposed predominately to Canada at 74.21%, 6.87% to Mongolia and 6.69% to United States.
ETFMG Prime 2x Daily Junior Silver Miners ETF (SILX); and
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF (SINV)
Operational Review
The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
SILX and SINV (collectively, the “Funds”) are leveraged and seek daily investment results, before fees and expenses, of 200% or -200%, respectively, of the performance of the Index. The Funds, as stated above, seek daily investment results. They do not seek to track a multiple of the Index for periods of longer than one day and the performance of the Funds over longer periods may not correlate to the Index performance. The Funds should not be held by investors for long periods and should be used as short -term trading vehicles. These products are not suitable for all investors and should be utilized only by sophisticated investors who understand the risks associated with the use of leverage, the consequences of seeking daily leveraged investment results and intend to actively monitor and manage their investments.
SILX attempts to provide investment results that correlate to 200% of the return of the Index, meaning SILX attempts to move in the same direction as the Index. SINV attempts to provide investment results that correlate to -200% of the return of a benchmark, meaning that SINV attempts to move in the opposite, or inverse, direction of the Index.
In seeking to achieve each of the Funds’ daily investment results, ETF Managers Group LLC (the “Adviser”) relies upon quantitative analysis to generate orders resulting in repositioning each of the Funds’ investments in accordance with its daily investment objective. Using this approach, the Adviser determines the type, quantity and mix of investment positions that it believes in combination should produce daily returns consistent with each of the Funds’ objective. As a consequence, if the Funds are performing as designed, the return of the Index will dictate the return for the Funds. Each of the Funds pursues its investment objective regardless of market conditions and does not take defensive positions. Each of the Funds has a clearly articulated goal which requires the both Funds to seek economic exposure significantly in excess of its net assets. To meet its objectives, each of the Funds invests in some combination of financial instruments, including significant investments in derivatives, primarily comprised of swap agreements. The Adviser uses these types of investments to produce economically “leveraged” investment results. Leveraging allows the Adviser to generate a greater positive or negative return than what would be generated on the invested capital without leverage, thus changing small market movements into larger changes in the value of the investments of the Funds.
ETFMG™ ETFs
The Funds use of certain investment techniques, including investments in derivatives, may be considered aggressive. Investments in derivatives in general are subject to market risks that may cause their prices to fluctuate dramatically over time. Additionally, use of such instruments may increase the volatility of the Funds. The use of derivatives may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives, such as counterparty risk. The use of derivatives may result in larger losses or smaller gains than otherwise would be the case.
Because each the Funds seeks daily investment results of the Index, a comparison of the return of the Funds to the Index does not provide an indication of whether either of the Funds met its respective investment objective. To determine if each of the Funds met its respective daily investment goals, the Adviser performs quantitative analysis seeking to determine the expected performance of each of the Funds as compared to Index. The quantitative analysis includes predictive models as well as stress-testing and back-testing. Factors Affecting Performance of the Funds:
Leverage – Each of the Funds seeks daily investment results (before fees and expenses) of 200% or - 200% of the performance of the Index. The use of leverage magnifies the Funds’ gains or losses and increases the investment’s risk and volatility.
Index Performance – The daily performance of Index, and the factors and market conditions implicitly affecting the Index, are the primary factors driving each of the Funds performance. Given the daily goals, the daily
Index returns are most important. The market conditions that affected the Index during the past year are described in the Performance Overview section.
Volatility and Compounding – The goal of the Funds is to provide the specified multiple of the daily return of the Index. Over periods longer than a single day, neither of the Funds should be expected to provide the multiple of the return of the underlying index. Due to the effects of compounding, a universal mathematical concept that applies to all investments, returns of the Funds over longer periods are greater or less than its daily stated goal. Periods of high volatility that lack a clear trend hurt the Funds’ performance while trending, low volatility markets enhance the Funds’ performance.
Cost of Financing – In order to attain leveraged or inverse leveraged exposure, each of the Funds receives OBFR plus or minus a spread as applied to the borrowed portion of each of the Funds’ exposure. The spread varies between each of the Funds and counterparty and is a function of market demand, hedging costs, access to balance sheet, borrow volatility, current counterparty exposure and administrative costs associated with the swap counterparty. An increase in interest rates which effects the cost of financing will further impact each of the Funds’ performance and ability to track the Index.
ETFMG™ ETFs
Fees, Expenses, and Transaction Costs – Fees and expenses are listed in each of the Funds’ prospectus and may be higher than many traditional index funds’ fees, which cause a greater negative impact on performance. Transactions costs are not included in the expense ratio of the Funds. Transaction costs can be higher due to the each of the Funds’ use of derivatives, shorting securities, frequent creation and redemption activity, or trading securities that are comparatively less liquid.
Performance Review
The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
ETFMG Prime 2x Daily Junior Silver Miners ETF (SILX)
SILX seeks to provide daily investment results, before fees and expenses, that correspond to two times (2x) the return of the Index for a single day, not for any other period. Over the reporting period, the Index had a total return of 19.58% and a volatility of 38.7%. Given the daily investment objectives of SILX and the path dependency of returns for longer periods, the return of the Index for the reporting period alone should not generate expectations of SILX performance for the same period. SILX returned 28.00% for the reporting period and had a volatility of 76.3%. For the reporting period SILX had an average daily volume of 14,850 shares and an average daily statistical correlation of 99.4% to the return of the Index.
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF (SINV)
SINV seeks to provide investment results that, before fees and expenses, correspond to two times the inverse (-2x) (or opposite) of the return of the Index for a single day, not for any other period. Over the reporting period the Index had a total return of 19.58% and a volatility of 38.7%. Given the daily investment objectives of SINV and the path dependency of returns for longer periods, the return of the Index for the reporting period alone should not generate expectations of SINV performance for the same period. SINV returned -46.72% and had a volatility of 76.5%. For the reporting period SINV had an average daily volume of 797 shares and an average daily statistical correlation of over -99.3% to the return of the Index.
Swap Agreements:
During the reporting period, the Funds invested in swap agreements in order to gain the desired exposure to the Index. These derivatives generally tracked the performance of SILJ and the Funds were generally negatively impacted from financing rates associated with their use. The Funds entered into swap agreements with counterparties that the Adviser determined to be significant global financial institutions.
If a counterparty becomes insolvent or otherwise fails to perform on its obligations, the value of investments in the Funds may decline. The Funds have sought to mitigate this risk by generally requiring counterparties to post collateral for the benefit of the Funds, marked to market daily, in an amount approximately equal to the amount the counterparty owed each of the Funds, subject to certain minimum thresholds.
We thank you for your interest in our ETFs. You can find further details about SILJ, SINV and SILX by visiting www.etfmg.com, or by calling 1- 844-ETF-MGRS (1-844-383-6477).
Sincerely,
Samuel Masucci III
Chairman of the Board
ETFMG Prime Junior Silver Miners ETF
|
Average Annual Returns Period Ended March 31, 2022 |
1 Year Return |
5 Year Return |
Since Inception (11/28/12) |
Value of $10,000 (3/31/2022) |
||||||||||||
| ETFMG Prime Junior Silver Miners ETF (NAV) | -1.49 | % | 2.68 | % | -2.87 | % | $ | 7,617 | ||||||||
| ETFMG Prime Junior Silver Miners ETF (Market) | -2.07 | % | 2.68 | % | -2.88 | % | $ | 7,609 | ||||||||
| S&P 500 Index | 15.65 | % | 15.99 | % | 15.55 | % | $ | 38,565 | ||||||||
| Prime Junior Silver Miners & Explorers Index* | -1.71 | % | 3.38 | % | -2.01 | % | $ | 8,274 | ||||||||
* The Fund’s benchmark before 8/1/17 was the ISE Junior Silver (Small Cap Miners/Explorers) Index. On 8/1/17, the Fund’s benchmark became the Prime Junior Silver Miners & Explorers Index.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on November 28, 2012, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sale of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The index returns do not reflect fees or expenses and are not available for direct investment.
ETFMG Prime Junior Silver Miners ETF
| Top Ten Holdings as of March 31, 2022 (Unaudited)* | |||
| Security | % of Total Investments | ||
| 1 | First Majestic Silver Corp. | 14.18% | |
| 2 | Pan American Silver Corp. | 11.92% | |
| 3 | Yamana Gold, Inc. | 7.96% | |
| 4 | Turquoise Hill Resources, Ltd. | 6.87% | |
| 5 | SSR Mining, Inc. | 5.66% | |
| 6 | MAG Silver Corp. | 4.42% | |
| 7 | SilverCrest Metals, Inc. | 4.05% | |
| 8 | Hecla Mining Co. | 4.02% | |
| 9 | Harmony Gold Mining Co., Ltd. - ADR | 3.48% | |
| 10 | Cia de Minas Buenaventura SAA - ADR | 2.91% | |
Top Ten Holdings = 65.47% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
ETFMG Prime 2x Daily Junior Silver Miners ETF
Growth of $10,000 (Unaudited)
|
Average Cumulative Returns Period Ended March 31, 2022 |
Since Inception (6/15/2021) |
Value of $10,000 (3/31/2022) |
||||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF (NAV) | -41.10 | % | $ | 5,890 | ||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF (Market) | -40.43 | % | $ | 5,957 | ||||
| S&P 500 Index | 7.85 | % | $ | 10,785 | ||||
| Prime Junior Silver Miners & Explorers Index | -16.90 | % | $ | 8,310 | ||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on June 15, 2021, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF
Growth of $10,000 (Unaudited)
|
Average Cumulative Returns Period Ended March 31, 2022 |
Since Inception (6/15/2021) |
Value of $10,000 (3/31/2022) |
||||||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF (NAV) | -8.77 | % | $ | 9,123 | ||||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF (Market) | -8.71 | % | $ | 9,129 | ||||
| S&P 500 Index | 7.85 | % | $ | 10,785 | ||||
| Prime Junior Silver Miners & Explorers Index | -16.90 | % | $ | 8,310 | ||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on June 15, 2021, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG™ ETFs
Important Disclosures and Key Risk Factors
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
SILJ
The ETFMG Prime Junior Silver Miners ETF (the “Fund” or the “Junior Silver ETF”) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Prime Junior Silver Miners & Explorers Index (the “Index”).
Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater for investments in emerging markets. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual issuer volatility than a diversified fund. Funds that are less diversified across countries or geographic regions are generally riskier than more geographically diversified funds and risks associated with such countries or geographic regions may negatively affect a Fund. Investments in small capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. The ETFMG Prime Junior Silver Miners ETF is subject to risks associated with the worldwide price of silver and the costs of extraction and production. Worldwide silver prices may fluctuate substantially over short periods of time, so the Fund’s share price may be more volatile than other types of economic conditions, tax treatment, government regulation and intervention, and world events in the regions in which the company’s operation. Several foreign countries have begun a process of privatizing certain entities and industries. Privatized entities may lose money or be renationalized. The Fund invests in some economies that are heavily dependent upon trading with key partners. Any reduction in this trading may cause an adverse impact on the economy in which the Fund invests. The Fund’s return may not match or achieve a high degree of correlation with the return of the Prime Junior Silver Miners & Explorers Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Prime Junior Silver Miners & Explorers Index. IOPV or indicative optimized portfolio value is an estimated intraday fair value of one share of an ETF determined by the last trade price of the fund’s underlying securities.
The Prime Junior Silver Miners & Explorers Index is designed to provide a benchmark for investors interested in tracking public, small-cap companies that are active in silver mining exploration and production industry. The stocks are screened for liquidity and weighted according to modified free-float market capitalization. The Index generally is comprised of 25-35 securities. An investment cannot be made directly in an index.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
ETFMG™ ETFs
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
ETF Managers Group LLC is the investment adviser to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG Financial LLC is not affiliated with Prime Indexes.
SILX
Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater for investments in emerging markets. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual issuer volatility than a diversified fund. Funds that are less diversified across countries or geographic regions are generally riskier than more geographically diversified funds and risks associated with such countries or geographic regions may negatively affect a Fund. Investments in small capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. The ETFMG Prime Junior Silver Miners ETF is subject to risks associated with the worldwide price of silver and the costs of extraction and production. Worldwide silver prices may fluctuate substantially over short periods of time, so the Fund’s share price may be more volatile. Several foreign countries have begun a process of privatizing certain entities and industries. Privatized entities may lose money or be renationalized. The Fund invests in some economies that are heavily dependent upon trading with key partners. Any reduction in this trading may cause an adverse impact on the economy in which the Fund invests. The Fund’s return may not match or achieve a high degree of correlation with the return of the Prime Junior Silver Miners & Explorers Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Prime Junior Silver Miners & Explorers Index. IOPV or indicative optimized portfolio value is an estimated intraday fair value of one share of an ETF determined by the last trade price of the fund’s underlying securities.
Investing in an ETFMG 2x Daily Inverse Leveraged ETF may be more volatile than investing in broadly diversified funds. The use of leverage by an ETF increases the risk to the ETF. The ETFMG 2x Daily Leveraged ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment.
The use of derivatives such as swaps are subject to additional risks that may cause prices to fluctuate over time and include the effects of compounding, market volatility, leverage risk, aggressive investment techniques risk, counterparty risk, and intra-day investment risk. Please see the summary and full prospectuses for a more complete description of these and other risks of investing in the Fund.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
ETFMG™ ETFs
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
The Fund is a recently organized, diversified management investment company with limited operating history. ETF Managers Group LLC is the investment advisor to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG is not affiliated with Prime Indexes.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
SINV
Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater for investments in emerging markets. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual issuer volatility than a diversified fund. Funds that are less diversified across countries or geographic regions are generally riskier than more geographically diversified funds and risks associated with such countries or geographic regions may negatively affect a Fund. Investments in small capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. The ETFMG Prime Junior Silver Miners ETF is subject to risks associated with the worldwide price of silver and the costs of extraction and production. Worldwide silver prices may fluctuate substantially over short periods of time, so the Fund’s share price may be more volatile. Several foreign countries have begun a process of privatizing certain entities and industries. Privatized entities may lose money or be renationalized. The Fund invests in some economies that are heavily dependent upon trading with key partners. Any reduction in this trading may cause an adverse impact on the economy in which the Fund invests. The Fund’s return may not match or achieve a high degree of correlation with the return of the Prime Junior Silver Miners & Explorers Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Prime Junior Silver Miners & Explorers Index. IOPV or indicative optimized portfolio value is an estimated intraday fair value of one share of an ETF determined by the last trade price of the fund’s underlying securities.
Investing in an ETFMG 2x Daily Inverse Leveraged ETF may be more volatile than investing in broadly diversified funds. The use of leverage by an ETF increases the risk to the ETF. The ETFMG 2x Daily Leveraged ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment.
The use of derivatives such as swaps are subject to additional risks that may cause prices to fluctuate over time and include the effects of compounding, market volatility, leverage risk, aggressive investment techniques risk, counterparty risk, and intra-day investment risk. Please see the summary and full prospectuses for a more complete description of these and other risks of investing in the Fund.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
ETFMG™ ETFs
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
The Fund is a recently organized, diversified management investment company with limited operating history. ETF Managers Group LLC is the investment advisor to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG is not affiliated with Prime Indexes.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
ETFMG™ ETFs
PORTFOLIO ALLOCATIONS
As of March 31, 2022 (Unaudited)
| ETFMG Prime Junior Silver Miners ETF |
ETFMG Prime 2x Daily Junior Silver Miners ETF |
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF |
|||||||
| As a percent of Net Assets: | |||||||||
| Australia | 0.3 | % | — | % | — | % | |||
| Canada | 83.5 | — | — | ||||||
| Luxembourg | 0.7 | — | — | ||||||
| Peru | 2.9 | — | — | ||||||
| South Africa | 3.5 | — | — | ||||||
| United Kingdom | 1.0 | — | — | ||||||
| United States | 7.1 | — | — | ||||||
| Virgin Islands | 0.1 | — | — | ||||||
| Short-Term and Other Net Assets (Liabilities) | 0.9 | 100.0 | 100.0 | ||||||
| 100.0 | % | 100.0 | % | 100.0 | % |
ETFMG™ ETFs
ETFMG Prime Junior Silver Miners ETF
Schedule of Investments
| Shares | Value | |||||||
| COMMON STOCKS - 99.1% | ||||||||
| Australia - 0.3% | ||||||||
| Metals & Mining - 0.3% (d) | ||||||||
| Kingsgate Consolidated, Ltd. (a) | 2,370,211 | $ | 2,766,866 | |||||
| Canada - 83.5% | ||||||||
| Metals & Mining - 83.5% (d) | ||||||||
| AbraSilver Resource Corp. (a) | 14,003,988 | 3,920,646 | ||||||
| Alexco Resource Corp. (a) | 4,446,436 | 6,891,976 | ||||||
| Americas Gold & Silver Corp. (a) | 2,571,334 | 2,817,844 | ||||||
| Andean Precious Metals Corp. (a) | 2,463,177 | 3,270,707 | ||||||
| Ascot Resources, Ltd. (a) | 4,036,405 | 3,422,461 | ||||||
| Aya Gold & Silver, Inc. (a) | 1,637,358 | 11,682,785 | ||||||
| Bear Creek Mining Corp. (a) | 1,943,896 | 1,663,775 | ||||||
| Benchmark Metals, Inc. (a) | 1,821,809 | 1,588,427 | ||||||
| Canada Silver Cobalt Works, Inc. (a) | 1,748,628 | 398,639 | ||||||
| Capstone Copper Corp. (a) | 4,439,222 | 25,105,227 | ||||||
| Discovery Silver Corp. NPV (a) | 5,191,054 | 7,598,791 | ||||||
| Dolly Varden Silver Corp. (a) | 2,049,256 | 1,344,151 | ||||||
| Dundee Precious Metals, Inc. | 2,047,173 | 12,216,063 | ||||||
| Eldorado Gold Corp. (a) | 1,959,776 | 21,946,858 | ||||||
| Endeavour Silver Corp. (a) | 5,030,226 | 23,390,551 | ||||||
| Excellon Resources, Inc. (a) | 946,850 | 840,702 | ||||||
| First Majestic Silver Corp. | 10,129,038 | 133,298,140 | ||||||
| Fortuna Silver Mines, Inc. (a) | 3,128,795 | 11,887,994 | ||||||
| GCM Mining Corp. | 1,051,598 | 4,912,476 | ||||||
| GoGold Resources, Inc. (a) | 8,205,076 | 19,230,390 | ||||||
| Great Panther Mining, Ltd. (a) | 4,769,373 | 1,197,113 | ||||||
| Hudbay Minerals, Inc. | 2,806,517 | 22,045,352 | ||||||
| Kootenay Resources, Inc. (a)(b) | 224,973 | 1,799 | ||||||
| Kootenay Silver, Inc. (a) | 5,016,122 | 702,173 | ||||||
| Liberty Gold Corp. (a) | 3,093,310 | 2,301,146 | ||||||
| MAG Silver Corp. (a) | 2,567,772 | 41,572,376 | ||||||
| Mandalay Resources Corp. (a) | 477,585 | 1,218,651 | ||||||
| Metalla Royalty & Streaming, Ltd. (a) | 475,421 | 3,392,197 | ||||||
| Minaurum Gold, Inc. (a) | 1,908,088 | 549,463 | ||||||
| Minco Silver Corp. (a)(e) | 1,712,729 | 397,305 | ||||||
| Mirasol Resources, Ltd. (a) | 579,491 | 319,841 | ||||||
| New Gold, Inc. (a) | 7,309,213 | 13,271,938 | ||||||
| New Pacific Metals Corp. (a) | 812,188 | 2,585,696 | ||||||
| Orla Mining, Ltd. (a) | 2,657,391 | 12,711,433 | ||||||
| Pan American Silver Corp. | 4,108,013 | 112,118,869 | ||||||
| Sabina Gold & Silver Corp. (a) | 4,447,361 | 5,371,767 | ||||||
| Seabridge Gold, Inc. (a) | 839,526 | 15,559,587 | ||||||
| Sierra Metals, Inc. | 851,773 | 1,015,192 | ||||||
| Silvercorp Metals, Inc. | 5,220,425 | 19,041,825 | ||||||
| SilverCrest Metals, Inc. (a) | 4,278,165 | 38,122,432 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Junior Silver Miners ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Sombrero Resources, Inc. (a)(b) | 585,867 | $ | 131,316 | |||||
| SSR Mining, Inc. | 2,449,816 | 53,262,408 | ||||||
| Trevali Mining Corp. (a) | 1,061,238 | 1,230,888 | ||||||
| Turquoise Hill Resources, Ltd. (a) | 2,150,092 | 64,563,815 | ||||||
| Yamana Gold, Inc. | 13,414,553 | 74,853,206 | ||||||
| Total Metals & Mining | 784,966,391 | |||||||
| Luxembourg - 0.7% | ||||||||
| Metals & Mining - 0.7% (d) | ||||||||
| Nexa Resources SA | 687,738 | 6,423,473 | ||||||
| Peru - 2.9% | ||||||||
| Metals & Mining - 2.9% (d) | ||||||||
| Cia de Minas Buenaventura SAA - ADR (a) | 2,713,734 | 27,327,301 | ||||||
| South Africa - 3.5% | ||||||||
| Metals & Mining - 3.5% (d) | ||||||||
| Harmony Gold Mining Co., Ltd. - ADR | 6,496,411 | 32,676,947 | ||||||
| United Kingdom - 1.0% | ||||||||
| Metals & Mining - 1.0% (d) | ||||||||
| Hochschild Mining PLC | 5,476,822 | 9,259,458 | ||||||
| United States - 7.1% | ||||||||
| Metals & Mining - 7.1% (d) | ||||||||
| Coeur Mining, Inc. (a) | 2,744,189 | 12,211,641 | ||||||
| Gatos Silver, Inc. (a) | 2,029,509 | 8,767,479 | ||||||
| Gold Resource Corp. | 797,107 | 1,785,520 | ||||||
| Golden Minerals Co. (a) | 4,779,823 | 2,393,735 | ||||||
| Hecla Mining Co. | 5,752,447 | 37,793,577 | ||||||
| McEwen Mining, Inc. (a) | 4,907,374 | 4,130,537 | ||||||
| Total Metals & Mining | 67,082,489 | |||||||
| Virgin Islands (UK) - 0.1% | ||||||||
| Metals & Mining - 0.1% (d) | ||||||||
| Sailfish Royalty Corp. (e) | 690,330 | 817,253 | ||||||
| TOTAL COMMON STOCKS (Cost $917,321,418) | 931,320,178 | |||||||
| SHORT-TERM INVESTMENTS - 0.9% | ||||||||
| Money Market Funds - 0.9% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 8,910,634 | 8,910,634 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Junior Silver Miners ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $8,910,634) | ||||||||
| Total Investments (Cost $926,232,052) - 100.0% | $ | 940,230,812 | ||||||
| Other Assets in Excess of Liabilities - 0.0% (f) | 176,621 | |||||||
| TOTAL NET ASSETS - 100.0% | $ | 940,407,433 | ||||||
Percentages are stated as a percent of net assets.
| ADR | American Depositary Receipt |
| PLC | Public Limited Company |
| (a) | Non-income producing security. |
| (b) | Value determined based on estimated fair value. The value of this security totals $133,115, which represents 0.01% of total net assets. Classified as Level 3 in the fair value hierarchy. Please refer to Note 2 of the Notes to Financial Statements. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
| (d) | As of March 31, 2022, the Fund had a significant portion of its assets invested in the Metals & Mining Industry. |
| (e) | These securities have been deemed illiquid according to the Fund’s liquidity guidelines. The value of these securities total $1,214,558, which represents 0.1% of total net assets. |
| (f) | Value less than 0.05% |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime 2x Daily Junior Silver Miners ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| SHORT-TERM INVESTMENTS - 42.2% | ||||||||
| Money Market Funds - 42.2% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (a) | 1,292,656 | $ | 1,292,656 | |||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $1,292,656) | 1,292,656 | |||||||
| Total Investments (Cost $1,292,656) - 42.2% | 1,292,656 | |||||||
| Assets in Excess of Other Liabilities - 57.8% | 1,770,376 | |||||||
| TOTAL NET ASSETS - 100.0% | $ | 3,063,032 | ||||||
| (a) | The rate shown is the annualized seven-day yield at period end. |
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime 2x Daily Junior Silver Miners ETF
Schedule of Total Return Swaps
March 31, 2022 (Unaudited)
| Reference Entity |
Fund Pays/Receives Reference Entity |
Counterparty | Payment Frequency |
Financing Rate |
Upfront Premiums Paid/Received |
Notional Amount |
Unrealized Appreciation (Depreciation) |
|||||||||||||
| ETFMG Prime Junior Silver Miners ETF Swap | Receives | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.10% | $ | — | $ | 6,000,319 | $ | — | ||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| SHORT-TERM INVESTMENTS - 52.0% | ||||||||
| Money Market Funds - 52.0% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (a) | 94,920 | $ | 94,920 | |||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $94,920) | 94,920 | |||||||
| Total Investments (Cost $94,920) - 52.0% | 94,920 | |||||||
| Assets in Excess of Other Liabilities - 48.0% | 87,548 | |||||||
| TOTAL NET ASSETS - 100.0% | $ | 182,468 | ||||||
| (a) | The rate shown is the annualized seven-day yield at period end. |
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF
Schedule of Total Return Swaps
March 31, 2022 (Unaudited)
| Reference Entity |
Fund Pays/Receives Reference Entity |
Counterparty | Payment Frequency |
Financing Rate |
Upfront Premiums Paid/Received |
Notional Amount |
Unrealized Appreciation (Depreciation) |
|||||||||||||
| ETFMG Prime Junior Silver Miners ETF Swap | Pays | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index -0.25% | $ | — | $ | (351,141 | ) | $ | — | |||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
STATEMENTS OF ASSETS AND LIABILITIES
As of March 31, 2022 (Unaudited)
|
ETFMG Prime Junior Silver Miners ETF |
ETFMG Prime 2x Daily Junior Silver Miners ETF |
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF |
||||||||||
| ASSETS | ||||||||||||
| Investments in unaffiliated securities, at value* | $ | 940,230,812 | $ | 1,292,656 | $ | 94,920 | ||||||
| Foreign currency* | 2,394 | — | — | |||||||||
| Deposits at Broker for total return swap contracts | — | 1,558,450 | 131,221 | |||||||||
| Receivable for open swap contracts | — | 213,849 | — | |||||||||
| Receivables: | ||||||||||||
| Dividends and interest receivable | 718,378 | 109 | 9 | |||||||||
| Total assets | 940,951,584 | 3,065,064 | 226,150 | |||||||||
| LIABILITIES | ||||||||||||
| Payable for open swap contracts | — | — | 43,535 | |||||||||
| Payables: | ||||||||||||
| Management fees payable | 544,151 | 2,032 | 147 | |||||||||
| Total liabilities | 544,151 | 2,032 | 43,682 | |||||||||
| Net Assets | $ | 940,407,433 | $ | 3,063,032 | $ | 182,468 | ||||||
| NET ASSETS CONSIST OF: | ||||||||||||
| Paid-in Capital | $ | 1,072,208,387 | $ | 3,033,209 | $ | (211,968 | ) | |||||
| Total Distributable Earnings (Accumulated Losses) | (131,800,954 | ) | 29,823 | 394,436 | ||||||||
| Net Assets | $ | 940,407,433 | $ | 3,063,032 | $ | 182,468 | ||||||
| *Identified Cost: | ||||||||||||
| Investments in unaffiliated securities | $ | 926,232,052 | $ | 1,292,656 | $ | 94,920 | ||||||
| Foreign currency | 2,389 | — | — | |||||||||
| Shares Outstanding^ | 66,850,000 | 520,000 | 20,000 | |||||||||
| Net Asset Value, Offering and Redemption Price per Share | $ | 14.07 | $ | 5.89 | $ | 9.12 | ||||||
| ^ | No par value, unlimited number of shares authorized |
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
For the Period Ended March 31, 2022 (Unaudited)
|
ETFMG Prime Junior Silver Miners ETF |
ETFMG Prime 2x Daily Junior Silver Miners ETF |
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF |
||||||||||
| INVESTMENT INCOME | ||||||||||||
| Income: | ||||||||||||
| Dividends from unaffiliated securities (net of foreign withholdings tax of $360,317, $-, $-) | $ | 3,631,479 | $ | — | $ | — | ||||||
| Interest | 1,244 | 113 | 9 | |||||||||
| Total Investment Income | 3,632,723 | 113 | 9 | |||||||||
| Expenses: | ||||||||||||
| Management fees | 2,790,180 | 5,939 | 1,197 | |||||||||
| Total Expenses | 2,790,180 | 5,939 | 1,197 | |||||||||
| Net Investment Income (Loss) | 842,543 | (5,826 | ) | (1,188 | ) | |||||||
| REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS AND SWAP CONTRACTS | ||||||||||||
| Net Realized Gain (Loss) on: | ||||||||||||
| Unaffiliated Investments | (43,620,378 | ) | — | — | ||||||||
| In-Kind redemptions | 15,891,356 | — | — | |||||||||
| Foreign currency and foreign currency translation | (120,453 | ) | — | — | ||||||||
| Swap contracts | — | 193,489 | (226,369 | ) | ||||||||
| Net Realized Gain (Loss) on Investments, Swap Contracts and In-Kind redemptions | (27,849,475 | ) | 193,489 | (226,369 | ) | |||||||
| Net Change in Unrealized Appreciation (Depreciation) of: | ||||||||||||
| Unaffiliated Investments | 157,217,679 | — | — | |||||||||
| Affiliated Investments | 5,690,285 | — | — | |||||||||
| Foreign currency and foreign currency translation | (124 | ) | — | — | ||||||||
| Net change in Unrealized Appreciation (Depreciation) on Investments and Swap Contracts | 162,907,840 | — | — | |||||||||
| Net Realized and Unrealized Gain (Loss) on Investments and Swap Contracts | 135,058,365 | 193,489 | (226,369 | ) | ||||||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 135,900,908 | $ | 187,663 | $ | (227,557 | ) | |||||
The accompanying notes are an integral part of these financial statements.
ETFMG Prime Junior Silver Miners ETF
STATEMENTS OF CHANGES IN NET ASSETS
|
Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||
| OPERATIONS | ||||||||
| Net investment (loss) | $ | 842,543 | $ | (713,805 | ) | |||
| Net realized gain (loss) on investments, in-kind redemptions | ||||||||
| and foreign currency and foreign currency translation | (27,849,475 | ) | 4,697,566 | |||||
| Net change in unrealized appreciation (depreciation) of investments and foreign currency and foreign currency translation | 162,907,840 | (204,205,217 | ) | |||||
| Net increase (decrease) in net assets resulting from operations | 135,900,908 | (200,221,456 | ) | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | (2,774,481 | ) | (7,160,000 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase in net assets derived | ||||||||
| from net change in outstanding shares | 79,293,190 | 527,049,120 | ||||||
| Transaction Fees (See Note 1) | 747 | 822 | ||||||
| Net increase in net assets from capital share transactions | 79,293,937 | 527,049,942 | ||||||
| Total increase in net assets | 212,420,364 | 319,668,486 | ||||||
| NET ASSETS | ||||||||
| Beginning of Period | 727,987,069 | 408,318,583 | ||||||
| End of Period | $ | 940,407,433 | $ | 727,987,069 | ||||
Summary of share transactions is as follows:
|
Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||
| Shares Sold | 12,400,000 | $ | 172,468,090 | 43,950,000 | $ | 706,233,470 | ||||||||
| Transaction Fees (See Note 1) | — | 747 | — | 822 | ||||||||||
| Shares Redeemed | (7,150,000 | ) | (93,174,900 | ) | (11,950,000 | ) | (179,184,350 | ) | ||||||
| Net Transactions in Fund Shares | 5,250,000 | $ | 79,293,937 | 32,000,000 | $ | 527,049,942 | ||||||||
| Beginning Shares | 61,600,000 | 29,600,000 | ||||||||||||
| Ending Shares | 66,850,000 | 61,600,000 | ||||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG Prime 2x Daily Junior Silver Miners ETF
STATEMENTS OF CHANGES IN NET ASSETS
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 20211 |
|||||||
| OPERATIONS | ||||||||
| Net investment loss | $ | (5,826 | ) | $ | (1,658 | ) | ||
| Net realized gain (loss) on swap contracts | 193,489 | (546,722 | ) | |||||
| Net increase (decrease) in net assets resulting from operations | 187,663 | (548,380 | ) | |||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase in net assets from capital share transactions | 2,369,225 | 1,054,524 | ||||||
| Total increase in net assets | 2,556,888 | 506,144 | ||||||
| NET ASSETS | ||||||||
| Beginning of Period | 506,144 | — | ||||||
| End of Period | $ | 3,063,032 | $ | 506,144 | ||||
Summary of share transactions is as follows:
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 20211 |
||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||
| Shares Sold | 440,000 | $ | 2,535,332 | 160,000 | $ | 1,345,424 | |||||||||
| Shares Redeemed | (30,000 | ) | (166,107 | ) | (50,000 | ) | (290,900 | ) | |||||||
| Net Transactions in Fund Shares | 410,000 | $ | 2,369,225 | 110,000 | $ | 1,054,524 | |||||||||
| Beginning Shares | 110,000 | — | |||||||||||||
| Ending Shares | 520,000 | 110,000 | |||||||||||||
| 1 | The Fund commenced operations on June 15, 2021. |
The accompanying notes are an integral part of these financial statements.
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF
STATEMENTS OF CHANGES IN NET ASSETS
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 20211 |
|||||||
| OPERATIONS | ||||||||
| Net investment loss | $ | (1,188 | ) | $ | (1,515 | ) | ||
| Net realized gain (loss) on swap contracts | (226,369 | ) | 623,508 | |||||
| Net increase (decrease) in net assets resulting from operations | (227,557 | ) | 621,993 | |||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase (decrease) in net assets from capital share transactions | (445,763 | ) | 233,795 | |||||
| Total increase (decrease) in net assets | (673,320 | ) | 855,788 | |||||
| NET ASSETS | ||||||||
| Beginning of Period | 855,788 | — | ||||||
| End of Period | $ | 182,468 | $ | 855,788 | ||||
Summary of share transactions is as follows:
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 20211 |
|||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||
| Shares Sold | 20,000 | $ | 225,442 | 100,000 | $ | 1,000,000 | ||||||||
| Shares Redeemed | (50,000 | ) | (671,205 | ) | (50,000 | ) | (766,205 | ) | ||||||
| Net Transactions in Fund Shares | (30,000 | ) | $ | (445,763 | ) | 50,000 | $ | 233,795 | ||||||
| Beginning Shares | 50,000 | — | ||||||||||||
| Ending Shares | 20,000 | 50,000 | ||||||||||||
| 1 | The Fund commenced operations on June 15, 2021. |
The accompanying notes are an integral part of these financial statements.
ETFMG Prime Junior Silver Miners ETF
For a capital share outstanding throughout each period/year
|
Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
Year Ended September 30, 2020 |
Year Ended September 30, 2019 |
Year Ended September 30, 2018 |
Year Ended September 30, 2017 |
|||||||||||||||||||
| Net Asset Value, | ||||||||||||||||||||||||
| Beginning Period/Year | $ | 11.82 | $ | 13.79 | $ | 9.45 | $ | 8.70 | $ | 11.84 | $ | 15.57 | ||||||||||||
| Income (Loss) from | ||||||||||||||||||||||||
| Investment Operations: | ||||||||||||||||||||||||
| Net investment income (loss)1 | 0.01 | (0.01 | ) | (0.05 | ) | (0.02 | ) | (0.03 | ) | (0.06 | ) | |||||||||||||
| Net realized and unrealized gain (loss) on investments | 2.28 | (1.76 | ) | 4.56 | 0.91 | (3.11 | ) | (3.61 | ) | |||||||||||||||
| Total from investment operations | 2.29 | (1.77 | ) | 4.51 | 0.89 | (3.14 | ) | (3.67 | ) | |||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||
| Distributions from net investment income | (0.04 | ) | (0.20 | ) | (0.17 | ) | (0.14 | ) | — | (0.06 | ) | |||||||||||||
| Total distributions | (0.04 | ) | (0.20 | ) | (0.17 | ) | (0.14 | ) | — | (0.06 | ) | |||||||||||||
| Capital Share Transactions: | ||||||||||||||||||||||||
| Transaction fees | — | 0.00 | 3 | — | — | — | — | |||||||||||||||||
| Net asset value, end period/year | $ | 14.07 | $ | 11.82 | $ | 13.79 | $ | 9.45 | $ | 8.70 | $ | 11.84 | ||||||||||||
| Total Return | 19.46 | %4 | -13.06 | % | 48.06 | % | 10.45 | % | -26.50 | % | -23.53 | % | ||||||||||||
| Ratios/Supplemental Data: | ||||||||||||||||||||||||
| Net assets at end period/year (000’s) | $ | 940,407 | $ | 727,987 | $ | 408,319 | $ | 100,119 | $ | 45,265 | $ | 58,033 | ||||||||||||
| Expenses to Average Net Assets before legal expense | 0.69 | %5 | 0.69 | % | 0.69 | % | 0.69 | % | 0.69 | % | 0.69 | % | ||||||||||||
| Gross Expenses to Average Net Assets | 0.69 | %5 | 0.69 | % | 0.69 | % | 0.69 | % | 0.69 | % | 0.72 | %2 | ||||||||||||
| Net Investment Income (Loss) to Average Net Assets | 0.21 | %5 | -0.10 | % | -0.46 | % | -0.21 | % | -0.32 | % | -0.48 | % | ||||||||||||
| Portfolio Turnover Rate | 12 | %4 | 26 | % | 71 | % | 34 | % | 36 | % | 69 | % | ||||||||||||
| 1 | Calculated based on average shares outstanding during the period/year. |
| 2 | The ratio of expenses to average net assets includes legal expense. |
| 3 | Amount is less than $0.05. |
| 4 | Not annualized. |
| 5 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG Prime 2x Daily Junior Silver Miners ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 20211 |
|||||||
| Net Asset Value, Beginning Period | $ | 4.60 | $ | 10.00 | ||||
| Income (Loss) from Investment Operations: | ||||||||
| Net investment loss 2 | (0.02 | ) | (0.02 | ) | ||||
| Net realized and unrealized gain (loss) on investments | 1.31 | (5.38 | ) | |||||
| Total from investment operations | 1.29 | (5.40 | ) | |||||
| Net asset value, end period | $ | 5.89 | $ | 4.60 | ||||
| Total Return | 28.00 | %3 | -53.98 | %3 | ||||
| Ratios/Supplemental Data: | ||||||||
| Net assets at end of period (000’s) | $ | 3,063 | $ | 506 | ||||
| Gross Expenses to Average Net Assets | 0.95 | %4 | 0.95 | %4 | ||||
| Net Investment (Loss) to Average Net Assets | -0.93 | %4 | -0.88 | %4 | ||||
| Portfolio Turnover Rate | 0 | %3 | 0 | %3 | ||||
| 1 | The Fund commenced operations on June 15, 2021. |
| 2 | Calculated based on average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 20211 |
|||||||
| Net Asset Value, Beginning Period | $ | 17.12 | $ | 10.00 | ||||
| Income (Loss) from Investment Operations: | ||||||||
| Net investment loss 2 | (0.06 | ) | (0.02 | ) | ||||
| Net realized and unrealized gain (loss) on investments | (7.94 | ) | 7.14 | |||||
| Total from investment operations | (8.00 | ) | 7.12 | |||||
| Net asset value, end period | $ | 9.12 | $ | 17.12 | ||||
| Total Return | -46.72 | %3 | 71.23 | %3 | ||||
| Ratios/Supplemental Data: | ||||||||
| Net assets at end of period (000’s) | $ | 182 | $ | 856 | ||||
| Gross Expenses to Average Net Assets | 0.95 | %4 | 0.95 | %4 | ||||
| Net Investment Income (Loss) to Average Net Assets | -0.94 | %4 | -0.50 | %4 | ||||
| Portfolio Turnover Rate | 0 | %3 | 0 | %3 | ||||
| 1 | The Fund commenced operations on June 15, 2021. |
| 2 | Calculated based on average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
March 31, 2022 (Unaudited)
NOTE 1 – ORGANIZATION
ETFMG Prime Junior Silver Miners ETF (“SILJ”), ETFMG Prime 2x Daily Junior Silver Miners ETF (“SILX”), and ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF (“SINV”) (each a “Fund”, or collectively the “Funds”) are series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open -end management investment company and the offering of the Funds’ shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”).
The following table is a summary of the Strategy Commencement Date and Strategy of the Funds:
| Fund Ticker |
Strategy Commencement Date |
Strategy |
| ETFMG Prime Junior Silver Miners ETF | 8/1/2017 | Seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Prime Junior Silver Miners & Explorers Index (the “Index”). |
| ETFMG Prime 2x Daily Junior Silver Miners ETF | 6/15/2021 | Seeks daily investment results, before fees and expenses, that correspond to two times (2x) the return of the Index for a single day, not for any other period. |
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | 6/15/2021 | Seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) (or opposite) of the return of the Index for a single day, not for any other period. |
The Funds may use a combination of swaps on the Index and swaps on an ETF whose investment objective is to track the performance of the same, or a substantially similar index to achieve its investment objective.
The Funds each currently offer one class of shares, which have no front-end sales load, no deferred sales charges, and no redemption fees. The Funds may issue an unlimited number of shares of beneficial interest, with no par value. All shares of each Fund have equal rights and privileges.
Shares of the Funds are listed and traded on the NYSE Arca, Inc. Market prices for the shares may be different from their net asset value (“NAV”). Each Fund issues and redeems shares on a continuous basis at NAV only in blocks of 50,000 shares for SILJ and 10,000 shares for SILX and SINV, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in a specified Index. Once created, shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, shares are not redeemable securities of a Fund. Shares of a Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the shares directly from a Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and may be subject to customary brokerage commissions or fees.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in Transaction Fees” in the Statements of Changes in Net Assets.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Fund may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (SEC). For more information about the underlying Fund’s operations and policies, please refer to those Fund’s semiannual and annual reports, which are filed with the SEC.
| A. | Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Funds’ Board. The use of fair value pricing by a Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. As of March 31, 2022, the ETFMG Prime Junior Silver Miners ETF held two securities that were fair valued by the Board.
As described above, the Funds utilize various methods to measure the fair value of their investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. | |
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. | |
| Level 3 | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following is a summary of the inputs used to value the Funds’ net assets as of March 31, 2022:
ETFMG Prime Junior Silver Miners ETF
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 931,187,063 | $ | — | $ | 113,115 | $ | 931,320,178 | ||||||||
| Short Term Investments | 8,910,634 | — | — | 8,910,634 | ||||||||||||
| Total Investments in Securities | $ | 940,097,697 | $ | — | $ | 113,115 | $ | 940,230,812 | ||||||||
ETFMG Prime 2x Daily Junior Silver Miners ETF
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Short-Term Investments | $ | 1,292,656 | $ | — | $ | — | $ | 1,292,656 | ||||||||
| Total Investments in Securities | $ | 1,292,656 | $ | — | $ | — | $ | 1,292,656 | ||||||||
| Swap Contracts* | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Short Term Investments | $ | — | $ | — | $ | — | $ | — | ||||||||
| Total Swap Contracts | $ | — | $ | — | $ | — | $ | — | ||||||||
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Short-Term Investments | $ | 94,920 | $ | — | $ | — | $ | 94,920 | ||||||||
| Total Investments in Securities | $ | 94,920 | $ | — | $ | — | $ | 94,920 | ||||||||
| Swap Contracts* | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Short Term Investments | $ | — | $ | — | $ | — | $ | — | ||||||||
| Total Swap Contracts | $ | — | $ | — | $ | — | $ | — | ||||||||
| ^ | See Schedule of Investments for classifications by country and industry. |
| * | Swap contracts are derivative instruments, which are presented at the unrealized appreciation/depreciation on the instrument. |
| B. | Federal Income Taxes. The Funds have each elected to be taxed as a “regulated investment company” and intend to distribute substantially all taxable income to their shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
To avoid imposition of the excise tax applicable to regulated investment companies, each Fund intends to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of each Fund’s next taxable year.
Each Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Each Fund has analyzed its tax position and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Funds’ 2021 tax returns. The Funds identify their major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
As of March 31, 2022, management has reviewed the tax positions for open periods (for Federal purposes, four years from the date of filing and for state purposes, four years from the date of filing), as applicable to the Funds, and has determined that no provision for income tax is required in the Funds’ financial statements.
| C. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Funds may be subject to income, withholding or other taxes imposed by foreign countries. |
| D. | Foreign Currency Translations and Transactions. The Funds may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Funds do not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Funds do isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
| E. | Distributions to Shareholders. Distributions to shareholders from net investment income are generally declared and paid by each of the Funds on a quarterly basis. Distributions to shareholders from realized gains on securities for each Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| G. | Share Valuation. The net asset value (“NAV”) per share of each Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Funds’ shares will not be priced on the days on which the NYSE is closed for trading. For Authorized Participants, the offering and redemption price per share for the Funds are equal to the Funds’ respective net asset value per share. |
| H. | Guarantees and Indemnifications. In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. |
Derivatives
The Funds may enter into swap agreements; including interest rate, index, and total return swap agreements. Swap agreements are contracts between parties in which one party agrees to make periodic payments to the other party based on the change in market value or level of a specified rate, index or asset. In return, the other party agrees to make payments to the first party based on the return of a different specified rate, index or asset. Swap agreements will usually be done on a net basis, i.e., where the two parties make net payments with a Fund receiving or paying, as the case may be, only the net amount of the two payments. The net amount of the excess, if any, of a Fund’s obligations over its entitlements with respect to each swap is accrued on a daily basis and an amount of cash or equivalents having an aggregate value at least equal to the accrued excess is maintained by the Fund.
The total return swap contracts are subject to master netting agreements, which are agreements between a Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund through a single payment, in the event of default or termination. Amounts presented on the schedule of total return swaps are gross settlement amounts.
The following table presents the Funds’ gross derivative assets and liabilities by counterparty and contract type, net of amounts available for offset under a master netting agreement and the related collateral received or pledged by the Funds as of March 31, 2022.
ETFMG Prime 2x Daily Junior Silver Miners ETF
| Gross | Gross Amounts not | |||||||||||||||||||||||
| Amounts of | offset in the Statements | |||||||||||||||||||||||
| Recognized | of Assets & Liabilities | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Presented in | ||||||||||||||||||||||||
| the | Gross | |||||||||||||||||||||||
| Statements | Amounts | |||||||||||||||||||||||
| of Assets & | Available | Net | Financial | Collateral | Net | |||||||||||||||||||
| Counterparty | Investment Type | Liabilities | Offset | Amounts | Instruments | Received | Amount | |||||||||||||||||
| Cowen and Company, LLC | Total Return Swap Contract | $ | 213,849 | $ | — | $ | 213,849 | $ | — | $ | — | $ | 213,849 | |||||||||||
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF
| Gross | Gross Amounts not | ||||||||||||||||||||||||
| Amounts of | offset in the Statements | ||||||||||||||||||||||||
| Recognized | of Assets & Liabilities | ||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Presented in | |||||||||||||||||||||||||
| the | Gross | ||||||||||||||||||||||||
| Statements | Amounts | ||||||||||||||||||||||||
| of Assets & | Available | Net | Financial | Collateral | Net | ||||||||||||||||||||
| Counterparty | Investment Type | Liabilities | Offset | Amounts | Instruments | Received | Amount | ||||||||||||||||||
| Cowen and Company, LLC | Total Return Swap Contract | $ | (43,535 | ) | $ | — | $ | (43,435 | ) | $ | — | $ | — | $ | (43,535 | ) | |||||||||
The average monthly notional amount of the swap contracts during the period ended March 31, 2022 for the Funds were:
| ETFMG Prime 2x Daily Junior Silver Miners ETF | Swap Contract | $ | 2,802,732 | |||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | Swap Contract | $ | (403,754 | ) |
The following is a summary of the effect of swap contracts on the Funds’ Statements of Assets and Liabilities as of March 31, 2022:
| Assets | Liabilities |
Net Unrealized Gain (Loss) |
||||||||||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF | Swap Contract | $ | 213,849 | $ | — | $ | — | |||||||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | Swap Contract | $ | — | $ | 43,535 | $ | — | |||||||
The following is a summary of the effect of swap contracts on the Funds’ Statements of Operations for the period ended March 31, 2022:
|
Realized Gain (Loss) |
Change in Unrealized Appreciation/Depreciation |
||||||||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF | Swap Contract | $ | 193,489 | $ | — | ||||||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | Swap Contract | $ | (226,369 | ) | $ | — | |||||
NOTE 3 – RISK FACTORS
Investing in the Funds may involve certain risks, as discussed in the Funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a Fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The Funds, other than VALT, are not actively managed (“Index Funds”). Therefore, those Funds follow the securities included in its respective index during upturns as well as downturns. Because of their indexing strategies, the Index Funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Index Funds’ expenses, the Index Funds’ performance may be below that of their respective index.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Concentration Risk. To the extent that a Fund’s or an index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19),have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Funds and their investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect lobal, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under the circumstances, the Funds may have difficulty achieving their investment objectives which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Funds’ Sponsor and third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Funds’ investments. These factors can cause substantial market volatility. exchange trading suspensions and closures and can impact the ability of the Funds to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A widespread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on a Fund’s performance, resulting in losses to the Funds.
Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs), interest rates or indexes. A Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other ordinary investments, including risk related to the market, leverage, imperfect daily correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions. The use of derivatives is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The use of derivatives may result in larger losses or smaller gains than directly investing in securities. When a Fund uses derivatives, there may be imperfect correlation between the value of the reference assets and the derivative, which may prevent the Fund from achieving its investment objective. Because derivatives often require only a limited initial investment, the use of derivatives may expose a Fund to losses in excess of those amounts initially invested.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Daily Index Correlation/Tracking Risk. There is no guarantee that a Fund will achieve a high degree of correlation to the Index and therefore achieve its daily leveraged investment objective. To achieve a high degree of correlation with the Index, a Fund seeks to rebalance its portfolio daily to keep leverage consistent with its daily leveraged investment objective. In addition, a Fund’s exposure to the Index is impacted by the Index’s movement. Because of this, it is unlikely that a Fund will be perfectly exposed to the Index at the end of each day. The possibility of the Fund being materially over-or under-exposed to the Index increases on days when the Index is volatile near the close of the trading day. Market disruptions, regulatory restrictions and extreme volatility will also adversely affect a Fund’s ability to adjust exposure to the required levels.
NOTE 4 – MANAGEMENT AND OTHER CONTRACTS
ETF Managers Group, LLC (the “Advisor”), serves as the investment advisor to the Funds. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Funds, and the Advisor, the Advisor provides investment advice to the Funds and oversees the day-to-day operations of the Funds, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Advisor is also responsible for arranging transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Funds to operate.
Under the Investment Advisory Agreement, the Advisor has overall responsibility for the general management and administration of the Funds and arranges for sub-advisory, transfer agency, custody, fund administration, securities lending, and all other non-distribution related services necessary for the Funds to operate. The Funds unitary fees are accrued daily and paid monthly. The Advisor bears the costs of all advisory and non-advisory services required to operate the Funds, in exchange for a single unitary fee at the following annual rates:
| ETFMG Prime Junior Silver Miners ETF | 0.69 | % | ||
| ETFMG Prime 2x Daily Junior Silver Miners ETF | 0.95 | % | ||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | 0.95 | % |
Under the Investment Advisory Agreement, the Advisor has agreed to pay all expenses of the Funds, except for: the fee paid to the Advisor pursuant to the Investment Advisory Agreement, interest charges on any borrowings, 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”). The Advisor has entered into an agreement with its affiliate ETFMG Financial, LLC to serve as distributor to the Funds (the “Distributor”). The Distributor provides marketing support for the Funds, including distributing marketing materials related to the Funds. Level ETF Ventures, LLC (“Level”) serves as the index provider for SILJ, SILX, and SINV. Level is not affiliated with the Trust or the Advisor.
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services (the “Administrator”) provides fund accounting, fund administration, and transfer agency services to the Funds. The Advisor compensates the Administrator for these services under an administration agreement between the two parties.
The Advisor pays each independent Trustee a quarterly fee for service to the Funds. Each Trustee is also reimbursed by the Advisor for all reasonable out-of-pocket expenses incurred in connection with his duties as Trustee, including travel and related expenses incurred in attending Board meetings.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 5 – DISTRIBUTION PLAN
The Funds have each adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, each Fund may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to each Fund, with the amount of such compensation not to exceed an annual rate of 0.25% of each Fund’s average daily net assets. During the period ended March 31, 2022, the Funds did not incur any 12b-1 expenses.
NOTE 6 – PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, during the period ended March 31, 2022:
| Purchases | Sales | |||||||
| ETFMG Prime Junior Silver Miners ETF | $ | 92,120,693 | $ | 101,761,248 | ||||
The costs of purchases and sales of in-kind transactions associated with creations and redemptions during the period ended March 31, 2022:
| Purchases In- | Sales In- | |||||||
| Kind | Kind | |||||||
| ETFMG Prime Junior Silver Miners ETF | $ | 170,536,528 | $ | 87,007,414 | ||||
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all in-kind sales. Net capital gains or losses resulting from in-kind redemptions are excluded from the Funds’ determination of taxable gains and are not distributed to shareholders.
There were no purchases or sales of U.S. Government obligations during the period ended March 31, 2022.
NOTE 7 – FEDERAL INCOME TAXES
The components of distributable earnings (losses) and cost basis of investments for federal income tax purposes at September 30, 2021 were as follows:
| Net | ||||||||||||||||
| Gross | Gross | Unrealized | ||||||||||||||
| Unrealized | Unrealized | Appreciation | ||||||||||||||
| Cost | Appreciation | Depreciation | (Depreciation) | |||||||||||||
| ETFMG Prime Junior Silver Miners ETF | $ | 916,697,076 | $ | 39,467,924 | $(228,497,140 | ) | $(189,029,216 | ) | ||||||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF | — | — | — | — | ||||||||||||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | — | — | — | — | ||||||||||||
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
As of September 30, 2021, the components of distributable earnings (loss) on a tax basis were as follows:
| Undistributed | Undistributed | Total | Other | Total | ||||||||||||||||
| Ordinary | Long-Term | Distributable | Accumulated | Accumulated | ||||||||||||||||
| Income | Gain | Earnings | Loss | Gain (Loss) | ||||||||||||||||
| ETFMG Prime Junior Silver Miners ETF | $ | — | $ | — | $ | — | $ | (75,898,165 | ) | $ | (264,927,381 | ) | ||||||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF | — | — | — | (157,840 | ) | (157,840 | ) | |||||||||||||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | 621,993 | — | 621,993 | — | 621,993 | |||||||||||||||
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
As of September 30, 2021, the Funds had accumulated capital loss carryovers of:
| Capital Loss | Capital Loss | |||||||||||
| Carryforward | Carryforward | |||||||||||
| ST | LT | Expires | ||||||||||
| ETFMG Prime Junior Silver Miners ETF | $ | (50,115,596 | ) | $ | (23,278,875 | ) | Indefinite | |||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF | (157,840 | ) | — | Indefinite | ||||||||
| ETFMG Prime 2x Daily Inverse Junior Silver | ||||||||||||
| Miners ETF | — | — | Indefinite | |||||||||
Under current tax law, capital and currency losses realized after October 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The following Funds had deferred post-October capital and currency losses, which will be treated as arising on the first business day of the year ending September 30, 2021.
| Post- | ||||||||
| Late Year | October | |||||||
| Ordinary | Capital | |||||||
| Loss | Loss | |||||||
| ETFMG Prime Junior Silver Miners ETF | $ | 2,503,820 | $ | — | ||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF | — | — | ||||||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | — | — | ||||||
The tax charter of distributions paid during the period ended March 31, 2022, and the year ended September 30, 2021 were as follows:
| Period Ended | Year Ended | |||||||||||||||
| March 31, 2022 | September 30, 2021 | |||||||||||||||
| From | From | From | From | |||||||||||||
| Ordinary | Capital | Ordinary | Capital | |||||||||||||
| Income | Gains | Income | Gains | |||||||||||||
| ETFMG Prime Junior Silver Miners ETF | $ | 2,774,481 | — | $ | 7,160,000 | — | ||||||||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF | — | — | — | — | ||||||||||||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | — | — | — | — | ||||||||||||
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 8 – LEGAL MATTERS
The Adviser and its parent, ETFMG, were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled[.]”
ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (together with the Adviser, the “Adviser Defendants”) have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C -152-21 (the “NJ Action”). The NJ Action asserts breach of contract, defamation and other tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action. The NJ Action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022, the Adviser, together with the other named affiliates, filed a motion for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied.
NOTE 9 – SUBSEQUENT EVENTS
In preparing these financial statements, the Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed below, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the financial statements.
With respect to Note 8 – Legal Matters, on May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust as well as, all claims asserted against the Adviser Defendants, aside from the defamation claim. The Adviser Defendants intend to vigorously defend themselves against this sole remaining claim.
ETFMG Prime Junior Silver Miners ETF
ETFMG Prime 2X Daily Junior Silver Miners ETF
ETFMG Prime 2X Daily Inverse Junior Silver Miners ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on March 28-29, 2022, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the approval of the Amended and Restated Investment Advisory Agreement (the “Advisory Agreement”) between ETF Managers Group LLC (the “Adviser”) and the Trust, on behalf of ETFMG Prime Junior Silver Miners ETF (“SILJ”), ETFMG Prime 2X Daily Junior Silver Miners ETF (“SILX”) and ETFMG Prime 2X Daily Inverse Junior Silver Miners ETF (“SINV”) (each a “Fund” and collectively, the “Funds”).
Pursuant to Section 15 of the 1940 Act, the Advisory Agreement must be approved by the vote of a majority of the Trustees who are not parties to the Advisory Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services to be provided to the Funds by the Adviser; (ii) comparative fee and expense data for each Fund in relation to other similar investment companies; (iii) the extent to which economies of scale may be realized as the Funds grow and whether the proposed advisory fee for each Fund reflects these expected economies of scale for the benefit of the Fund; and (iv) other financial benefits to the Adviser and its affiliates resulting from services to be rendered to the Funds. The Board’s review included written and oral information furnished to the Board prior to and at the meeting held on March 28-29, 2022, and throughout the year. Among other things, the Adviser provided responses to detailed series of questions, which included information about the Adviser’s operations, service offerings, personnel, risk assessment and compliance programs and financial condition. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentation and any other information that the Board received at the meeting, and deliberated on the approval of the Advisory Agreement in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the approval of the Advisory Agreement, and the weight to be given to each such factor. The conclusions reached with respect to the Advisory Agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to the Funds. The Independent Trustees conferred amongst themselves and independent legal counsel during an executive session held prior to the meeting and also conferred in executive session both with and without representatives of management before and during the meeting. The Independent Trustees requested, received and considered additional information arising out of these executive sessions.
Nature, Extent and Quality of Services Provided.
The Trustees considered the scope of services to be provided under the Advisory Agreement, noting that the Adviser provides investment advisory services to the Funds. The Board discussed the responsibilities of the Adviser, including: responsibility for the general management of the day-to-day investment and reinvestment of the assets of each Fund determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemption of Fund shares conducted on a cash-in-lieu basis; responsibility for daily monitoring of tracking error and quarterly reporting to the Board; and implementation of Board directives as they relate to each Fund. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel in managing funds with significant derivatives exposure; and the quality of the Adviser’s compliance and risk assessment infrastructure. The Board also considered the Adviser’s experience managing ETFs, as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
ETFMG Prime Junior Silver Miners ETF
ETFMG Prime 2X Daily Junior Silver Miners ETF
ETFMG Prime 2X Daily Inverse Junior Silver Miners ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board also considered other services provided to the Funds, such as overseeing the Funds’ service providers, monitoring adherence to each Fund’s investment restrictions, and monitoring compliance with various policies and procedures and with applicable securities laws.
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to each Fund by the Adviser.
Historical Performance.
The Board then considered the past performance of the Funds over various time periods ending December 31, 2021. The Board also considered each Fund’s performance as compared to that of comparable ETFs, as determined by the Adviser (“peer group”) using data received from an independent third party. In this regard, the Board noted the short time that each of SILX and SINV have been in operation.
The Board additionally reviewed each Fund’s performance as compared to its underlying index or the correlation of returns to benchmark information, as applicable, for various time periods. The Board noted management’s explanation that analysis of investment performance, in absolute terms, is less relevant than it is for actively managed funds, given the Funds’ investment objectives. The Board also noted management’s further explanation that it is more relevant to review the performance of the Funds by focusing on the correlation of performance verses the benchmark (or relevant inverse of multiple thereof). The Board reviewed information regarding each Fund’s correlation of return to the benchmark, discussing, as applicable, factors which contributed to each Fund’s correlation of returns. The Board noted underperformance by each Fund relative to its benchmark (or relevant inverse or multiple thereof) over certain periods, but that such underperformance was, at least in part, a result of costs incurred by the Funds not incurred by their underlying indexes, cash drag, the process of rebalancing the Funds’ portfolios and regulatory requirements. The Board noted management’s representations that the Funds’ performance correlation of returns versus target performance was within the range of expectations. The Board concluded that, after taking these factors into account, each Fund’s correlation of returns versus target performance was satisfactory.
The Board further noted that it had received and would continue to receive regular reports regarding each Fund’s performance, including with respect to its tracking error, at its quarterly meetings.
Cost of Services Provided, Fall-Out Benefits and Economies of Scale.
The Board reviewed the advisory fees for the Funds and compared them to the total operating expenses of comparable ETFs, as determined by the Adviser using data received from an independent third party. Among other information, the Board noted that the advisory fee for SILJ was higher than the average and median expense ratios for its peer group; that with respect to SILX, the advisory fee was lower than the average and median expense ratios for its peer group; and that with respect to SINV, the advisory fee was lower than the average and equal to the median expense ratios for its peer group. The Board took into consideration management’s discussion of the fees, including that the Funds have niche investment strategies that are substantially different than the strategies of many of the peer ETFs and, therefore, the information provided about the comparable ETFs may not provide meaningful direct comparisons to the Funds.
ETFMG Prime Junior Silver Miners ETF
ETFMG Prime 2X Daily Junior Silver Miners ETF
ETFMG Prime 2X Daily Inverse Junior Silver Miners ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board noted the importance of the fact that the advisory fee for each Fund is a “unified fee,” meaning that the shareholders of the Funds pay no expenses other than the advisory fee and certain other costs such as interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, non-standard Board-related expenses and litigation against the Board, Trustees, Funds, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses. The Board also noted that the Adviser was responsible for compensating the Trust’s other service providers and paying the Funds’ other expenses (except as noted above) out of its own fees and resources. The Board concluded that the advisory fee for each of the Funds is reasonable in light of the factors considered.
The Board also evaluated the compensation and other benefits received by the Adviser from its relationship with the Funds, taking into account profitability information provided by the Adviser. The Board received and reviewed profitability information on a fund by fund basis and considered how profit margins could affect the Adviser’s long-term viability and ability to attract and retain high-quality personnel. The Board also considered the impact on the Adviser’s profitability of payments made to, or received from, partners involved with certain of the Funds. Based on the information provided to the Trustees, the Trustees concluded that the net revenue retained by the Adviser from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund. The Board further considered other benefits derived by the Adviser and its affiliates from the Adviser’s relationship with the Funds.
In addition, the Board considered whether economies of scale may be realized for the Funds. The Board noted that the Adviser regularly considers whether fee reductions are appropriate as the Funds grow in size. The Board noted that a unitary fee provides a level of certainty in expenses for the Funds and effectively acts as a cap on the fees and expenses (except as noted above) that are borne by the Funds. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the continued provision of high-quality services to the Funds, such as the hiring of new trading, legal and compliance personnel, and enhancements to technology and related systems. The Board concluded that no changes to the advisory fee structure of the Funds were necessary.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision.
Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Advisory Agreement are fair and reasonable; (b) concluded that the Adviser’s fee is reasonable in light of the services that the Adviser provides to the Funds; and (c) approved the renewal of the Advisory Agreement for another year.
ETFMG™ ETFs
Period Ended March 31, 2022 (Unaudited)
As a shareholder of the Funds you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The examples are based on an investment of $1,000 invested for the period of time as indicated in the table below.
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then, multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
| Fund Name |
Beginning Account Value October 1, 2021 |
Ending Account Value March 31, 2022 |
Expenses Paid During the Period^ |
Annualized Expense Ratio During the Period October 1, 2021 to March 31, 2022 |
||||||||||||
| ETFMG Prime Junior Silver Miners ETF | ||||||||||||||||
| Actual | $ | 1,000.00 | $ | 1,194.60 | $ | 3.78 | 0.69 | % | ||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,021.49 | 3.48 | 0.69 | % | |||||||||||
| ETFMG Prime 2x Daily Junior Silver Miners ETF | ||||||||||||||||
| Actual | 1,000.00 | 1,280.00 | 5.40 | 0.95 | % | |||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,020.19 | 4.78 | 0.95 | % | |||||||||||
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | ||||||||||||||||
| Actual | 1,000.00 | 532.80 | 3.63 | 0.95 | % | |||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,020.19 | 4.78 | 0.95 | % | |||||||||||
^ The dollar amounts shown as expenses paid during the period are equal to the annualized six-month expense ratio multiplied by the average account value during the period, multiplied by 182/365 (to reflect the one-half year period).
ETFMG™ ETFs
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
March 31, 2022 (Unaudited)
ETF Managers Trust (the “Trust”) has adopted a liquidity risk management program (the “Program”). The Trust’s Board of Trustees (the “Board”) has designated ETF Managers Group LLC (the “Program Administrator”) as the administrator of the Program. The Program Administrator has designated a committee (the “Committee”), composed of personnel from multiple departments, including investment operations and compliance, that is responsible for the implementation and ongoing administration of the Program, which includes assessing the liquidity risk of ETFMG Prime Junior Silver Miners ETF, ETFMG Prime 2X Daily Junior Silver Miners ETF and ETFMG Prime 2X Daily Inverse Junior Silver Miners ETF (each a “Fund” and, collectively, the “Funds”) under both normal and reasonably foreseeable stressed conditions.
Under the Program, the Program Administrator assesses, manages and periodically reviews each Fund’s liquidity risk, based on factors specific to the circumstances of the Fund. Liquidity risk is the risk that a Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in that Fund. This risk is managed by monitoring the degree of liquidity of each Fund’s investments and limiting the amount of the Fund’s illiquid investments, among other means. The Program Administrator’s process of determining the degree of liquidity of each Fund’s investments is supported by one or more third-party liquidity assessment vendors.
At a meeting of the Board on March 28-29, 2022, the Adviser provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, the operation of any Highly Liquid Investment Minimum, where applicable, and any material changes to the Program, for the period from March 1, 2021 through March 1, 2022 (the “Reporting Period”). No significant liquidity events impacting any Fund were noted in the report and it was represented that, as of December 31, 2021, each Fund was primarily highly liquid and, during the Reporting Period, each Fund held less than 15% in illiquid securities. In addition, the Program Administrator provided its assessment that Program implementation was effective and that the Program operated adequately and effectively to enable the Program Administrator to oversee and manage liquidity risk and ensure each Fund is able to meet requests to redeem shares without significant dilution to the remaining investors’ interest in the Fund.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to your Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
ETFMG™ ETFs
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
| 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 |
Number
of Portfolios in Fund Complex Overseen By Trustee |
Other Directorships Held by Trustee During Past 5 Years |
| Interested Trustee and Officers | ||||
|
Samuel Masucci, III (1962)
|
Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) | Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). | 20 | None |
|
John A. Flanagan, (1946)
|
Treasurer (since 2015) | President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). | n/a | n/a |
|
Reshma A. Tanczos (1978)
|
Chief Compliance Officer (since 2016) | Chief Compliance Officer of ETFMG Financial LLC (Since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). | n/a | n/a |
|
Matthew J. Bromberg (1973)
|
Assistant Secretary (since 2020) | General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015-2016). | n/a | n/a |
| * Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. | ||||
ETFMG™ ETFs
Board of Trustees (Continued)
| 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 |
Number
of Portfolios in Fund Complex Overseen By Trustee |
Other Directorships Held by Trustee During Past 5 Years |
|
Terry Loebs (1963)
|
Trustee (since 2014); Lead Independent Trustee (since 2020) | Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). | 20 | None |
|
Eric Wiegel (1960)
|
Trustee (since 2020) | Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018). | 20 | None |
ETFMG™ ETFs
March 31, 2022 (Unaudited)
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of each Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.etfmgfunds.com.
NOTE 2 – FEDERAL TAX INFORMATION
Qualified Dividend Income/Dividends Received Deduction
For the fiscal year ended September 30, 2021, certain dividends paid by the Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
| Fund Name | Qualified Dividend Income |
| ETFMG Prime Junior Silver Miners ETF | 7.70% |
| ETFMG Prime 2x Daily Junior Silver Miners ETF | 0.00% |
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | 0.00% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September 30, 2021 was as follows:
| Fund Name | Dividends Received Deduction |
| ETFMG Prime Junior Silver Miners ETF | 4.05% |
| ETFMG Prime 2x Daily Junior Silver Miners ETF | 0.00% |
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | 0.00% |
Short Term Capital Gain
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871 (k)(2)(C) for each Fund were as follows:
| Fund Name | Short-Term Capital Gain |
| ETFMG Prime Junior Silver Miners ETF | 0.00% |
| ETFMG Prime 2x Daily Junior Silver Miners ETF | 0.00% |
| ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF | 0.00% |
During the year ended September 30, 2021, the Funds did not declare any long-term realized gains distributions.
ETFMG™ ETFs
SUPPLEMENTARY INFORMATION
March 31, 2022 (Unaudited) (Continued)
Pursuant to Section 853 of the Internal Revenue Code, the Fund designated the following amounts as foreign taxes paid for the year ended September 30, 2021. Foreign taxes paid for purposes of Section 853 may be less than actual foreign taxes paid for financial statement purposes.
| Per Share | ||||||||||||||||||||
| Fund |
Gross Foreign Source Income |
Foreign Taxes Passthrough |
Gross Foreign Source Income |
Foreign Taxes Passthrough |
Shares Outstanding at 9/30/21 |
|||||||||||||||
| ETFMG Prime Junior Silver Miners ETF | 4,543,400 | 552,243 | 0.07375649 | 0.00896498 | 61,600,000 | |||||||||||||||
Foreign taxes paid or withheld should be included to taxable income with an offsetting deduction from gross income or as a credit for taxes paid to foreign governments.
Above figures may differ from those cited elsewhere in this report due to difference in the calculation of income and gains under GAAP purposes and Internal Revenue Service purposes.
NOTE 3 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the Securities and Exchange Commission (“SEC”) on Part F of Form N-PORT. The Funds’ Part F of Form N-PORT is available on the website of the SEC at www.sec.gov and the Funds’ website at www.etfmgfunds.com. Each Fund’s portfolio holdings are posted on their website at www.etfmgfunds.com daily.
NOTE 4 – INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at (877) 756-7873, by accessing the SEC’s website at www.sec.gov, or by accessing the Funds’ website at www.etfmgfunds.com.
Information regarding how the Funds voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at (877) 756-7873 or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477) or by visiting www.etfmgfunds.com. Read the prospectus carefully before investing.
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services
615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006
ETFMG Prime Cyber Security ETF
HACK
ETFMG Prime Mobile Payments ETF
IPAY
ETFMG Sit Ultra Short ETF
VALT
ETFMG Treatments, Testing and
Advancements ETF
GERM
Semi-Annual Report
March 31, 2022
(Unaudited)
The funds are series of ETF Managers Trust.
ETFMG™ ETFs
TABLE OF CONTENTS
March 31, 2022 (Unaudited)
ETFMG™ ETFs
On behalf of the entire team, we want to express our appreciation for the confidence you have placed in these ETFs. The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
Performance Overview
During the 6-month period ended March 31, 2022, the S&P 500 Information Technology Sector Index, a broad measure of US listed technology companies, returned 6.94%. During the same period, the S&P Global 1200 Information Technology Sector Index, a broad measure of global technology companies, returned 2.81%. Below is a performance overview for each fund for the same 6-month period.
ETFMG Prime Cyber Security ETF (HACK)
The ETFMG Prime Cyber Security ETF (“HACK”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Cyber Defense Index (the “PCD Index”).
Over the period, the total return for HACK was -3.71%, while the total return for the PCD Index was -3.30%. The best performers in HACK, on the basis of contribution to return, were Palo Alto Networks Inc, Juniper Networks Inc, Mandiant Inc, Cloudflare Inc - Class A and Fortinet Inc, while the worst performers were Darktrace Plc, Okta Inc, Everbridge Inc, Cognyte Software Ltd and Ipsidy Inc.
At the end of the period, HACK saw an average approximate allocation of 82.58% to Information Technology and 16.67% to Industrials. The portfolio securities of HACK were exposed predominately to the United States at 85.11%, 6.21% to the United Kingdom and 4.06% to Israel.
ETFMG Prime Mobile Payments ETF (IPAY)
The ETFMG Prime Mobile Payments ETF (“IPAY”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Mobile Payments Index (the “PMP Index”).
Over the period, the total return for IPAY was -22.95%, while the total return for the PMP Index was -22.98%. The best performers in IPAY, on the basis of contribution to return, were American Express Co, Cielo Sa, Jack Henry & Associates Inc, Kakaopay Corp and Wex Inc, while the worst performers were Paypal Holdings Inc, Block Inc, Affirm Holdings Inc, Adyen Nv and Wise Plc - A.
At the end of the period, IPAY saw an average approximate allocation of 89.22% to Information Technology and 10.21% to Financials. The portfolio securities of IPAY were exposed predominately to the United States at 70.7%, 4.86% to Netherlands and 4.73% to Brazil.
ETFMG Sit Ultra Short ETF (VALT)
The ETFMG Sit Ultra Short ETF (“VALT”) is an actively managed exchange-traded fund that seeks maximum current income, consistent with preservation of capital and daily liquidity.
Over the period, the total return for VALT was -1.18%, while the total return for its benchmark, the Bloomberg Barclays U.S. Treasury Bills Index: 1–3-month Index, was 0.04%.
ETFMG™ ETFs
VALT seeks to achieve its investment objective by investing in a diversified portfolio of high-quality, short-term U.S. dollar-denominated domestic and foreign debt securities and other instruments. VALT uses the Bloomberg Barclays U.S. Treasury Bills Index: 1-3-month Index as its benchmark index. During normal market conditions, the average portfolio effective duration for VALT is expected be more than 2 months, but less than 1 year. However, VALT is not a money market fund, does not seek to maintain a fixed or stable net asset value of $1, is not subject to the rules that govern the quality, maturity, liquidity, and other features of securities that money market funds may purchase, and does not have the tax advantages of a money market fund.
ETFMG Treatments, Testing and Advancements ETF (GERM)
The ETFMG Treatments, Testing and Advancements ETF ( “GERM”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Treatments, Testing and Advancements Index (the “ PTT Index”).
Over the fiscal period, the total return for GERM was -33.24%, while the total return the for the PTT Index was -33.36%. The best performers in GERM, on the basis of contribution to return, were Dicerna Pharmaceuticals Inc, Abbvie Inc, Biocryst Pharmaceuticals Inc, Bristol-Myers Squibb Co and Eli Lilly & Co, while the worst performers were Moderna Inc, Novavax Inc, Adagio Therapeutics Inc, Curevac Nv and I-Mab-Sponsored Adr.
At the end of the period, GERM saw an average approximate allocation of 99.61% to Health Care. The portfolio securities of GERM were exposed predominately to the United States at 78.2%, 10.26% to Germany and 5.2% to Canada.
You can find further details about each of HACK, IPAY, VALT and GERM by visiting www.etfmg.com, or by calling 1-844-383-6477.
Sincerely,
Samuel Masucci III
Chairman of the Board
ETFMG Prime Cyber Security ETF
| Average Annual Returns Period Ended March 31, 2022 |
1 Year Return |
5 Year Return |
Since Inception (11/11/14) |
Value of $10,000 (3/31/2022) |
||||||||||||
| ETFMG Prime Cyber Security ETF (NAV) | 7.54 | % | 15.31 | % | 12.81 | % | $ | 24,355 | ||||||||
| ETFMG Prime Cyber Security ETF (Market) | 7.27 | % | 15.32 | % | 12.83 | % | $ | 24,384 | ||||||||
| S&P 500 Index | 15.65 | % | 15.99 | % | 13.57 | % | $ | 25,592 | ||||||||
| Prime Cyber Defense Index* | 8.34 | % | 15.76 | % | 13.32 | % | $ | 25,172 | ||||||||
* The Fund’s benchmark before 8/1/17 was the ISE Cyber Security Index. On 8/1/17, the Fund’s benchmark became the Prime Cyber Defense Index.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on November 11, 2014, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG Prime Cyber Security ETF
| Top Ten Holdings as of March 31, 2022 (Unaudited)* | ||
| Security | % of Total Investments | |
| 1 | Splunk, Inc. | 4.34% |
| 2 | Crowdstrike Holdings, Inc. - Class A | 4.23% |
| 3 | Cloudflare, Inc. - Class A | 4.10% |
| 4 | Palo Alto Networks, Inc. | 3.87% |
| 5 | Akamai Technologies, Inc. | 3.73% |
| 6 | BAE Systems PLC | 3.62% |
| 7 | VeriSign, Inc. | 3.62% |
| 8 | Fortinet, Inc. | 3.62% |
| 9 | Zscaler, Inc. | 3.55% |
| 10 | Cisco Systems, Inc. | 3.54% |
Top Ten Holdings = 38.22% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
ETFMG Prime Mobile Payments ETF
Growth of $10,000 (Unaudited)
| Average Annual Returns Period Ended March 31, 2022 |
1 Year Return |
5 Year Return |
Since Inception (7/15/15) |
Value of $10,000 (3/31/2022) |
||||||||||||
| ETFMG Prime Mobile Payments ETF (NAV) | -21.47 | % | 13.49 | % | 11.82 | % | $ | 21,168 | ||||||||
| ETFMG Prime Mobile Payments ETF (Market) | -21.96 | % | 13.36 | % | 11.77 | % | $ | 21,106 | ||||||||
| S&P 500 Index | 15.65 | % | 15.99 | % | 14.23 | % | $ | 24,426 | ||||||||
| Prime Mobile Payments Index* | -21.16 | % | 14.13 | % | 12.46 | % | $ | 21,997 | ||||||||
* The Fund’s benchmark before 8/1/17 was the ISE Mobile Payments Index. On 8/1/17, the Fund’s benchmark became the Prime Mobile Payments Index.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on July 15, 2015, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG Prime Mobile Payments ETF
| Top Ten Holdings as of March 31, 2022 (Unaudited)* | ||
| Security | % of Total Investments | |
| 1 | PayPal Holdings, Inc. | 5.29% |
| 2 | Block, Inc. | 5.04% |
| 3 | Visa, Inc. - Class A | 4.96% |
| 4 | MasterCard, Inc. - Class A | 4.86% |
| 5 | American Express Co. | 4.82% |
| 6 | Fiserv, Inc. | 4.27% |
| 7 | ETFMG Sit Ultra Short ETF** | 4.23% |
| 8 | Adyen NV | 4.10% |
| 9 | Fidelity National Information Services, Inc. | 4.07% |
| 10 | Global Payments, Inc. | 2.89% |
Top Ten Holdings= 44.53% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
** Affiliated security. Please refer to Note 9 of the Notes to Financial Statements.
ETFMG Sit Ultra Short ETF
Growth of $10,000 (Unaudited)
| Average Annual Returns Period Ended March 31, 2022 |
1 Year Return |
Since Inception (10/8/2019) |
Value of $10,000 (3/31/2022) |
|||||||||
| ETFMG Sit Ultra Short ETF (NAV) | -0.78 | % | 0.30 | % | $ | 10,074 | ||||||
| ETFMG Sit Ultra Short ETF (Market) | -0.78 | % | 0.30 | % | $ | 10,075 | ||||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on October 8, 2019, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG Sit Ultra Short ETF
| Top Ten Holdings as of March 31, 2022 (Unaudited)* | ||
| Security | % of Total Investments | |
| 1 | Dominion Energy, Inc. | 2.43% |
| 2 | Entergy Louisiana LLC | 2.24% |
| 3 | United States Trasury Inflation Index Bonds | 2.22% |
| 4 | Nationwide Mutual Insurance Co. | 2.20% |
| 5 | General Mills, Inc. | 2.20% |
| 6 | Toronto-Dominion Bank | 2.18% |
| 7 | Goldman Sachs Group, Inc. | 2.15% |
| 8 | Charles Schwab Corp. | 2.02% |
| 9 | L3Harris Technologies, Inc. | 1.94% |
| 10 | PPL Electric Utilities Corp. | 1.74% |
Top Ten Holdings =21.32% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
ETFMG Treatments, Testing and Advancements ETF
Growth of $10,000 (Unaudited)
| Average Annual Returns Period Ended March 31, 2022 |
1 Year Return |
Since Inception (6/17/2020) |
Value of $10,000 (3/31/2022) |
|||||||||
| ETFMG Treatments, Testing and Advancements ETF (NAV) | -22.61 | % | 5.77 | % | $ | 11,054 | ||||||
| ETFMG Treatments, Testing and Advancements ETF (Market) | -22.67 | % | 5.85 | % | $ | 11,069 | ||||||
| S&P 500 Index | 15.65 | % | 25.22 | % | $ | 14,944 | ||||||
| Prime Treatments, Testing and Advancements Index NTR | -22.82 | % | 5.37 | % | $ | 10,997 | ||||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on June 17, 2020, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG Treatments, Testing and Advancements ETF
| Top Ten Holdings as of March 31, 2022 (Unaudited)* | ||
| Security | % of Total Investments | |
| 1 | Moderna, Inc. | 5.28% |
| 2 | BioNTech SE - ADR | 5.20% |
| 3 | Alnylam Pharmaceuticals, Inc. | 4.29% |
| 4 | Laboratory Corp. of America Holdings | 4.23% |
| 5 | Bio-Rad Laboratories, Inc. - Class A | 4.01% |
| 6 | Quidel Corp. | 3.13% |
| 7 | Zai Lab, Ltd. - ADR | 3.04% |
| 8 | Ortho Clinical Diagnostics Holdings PLC | 2.95% |
| 9 | Quest Diagnostics, Inc. | 2.92% |
| 10 | ETFMG Sit Ultra Short ETF** | 2.69% |
Top Ten Holdings = 37.74% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
** Affiliated security. Please refer to Note 9 of the Notes to Financial Statements.
ETFMG™ ETFs
Important Disclosures and Key Risk Factors
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
HACK
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Prime Cyber Defense Index (the “Index”).
The fund is concentrated in technology-related companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. Such companies may have limited product lines, markets, financial resources or personnel. The products of such companies may face obsolescence due to rapid technological developments, frequent new product introduction, unpredictable changes in growth rates, competition for the services of qualified personnel, and competition from foreign competitors with lower production costs. Technology companies are heavily dependent on patent and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. The Funds are non-diversified, meaning they may concentrate its assets in fewer individual holdings than a diversified fund. Investments in smaller companies tend to have limited liquidity and greater price volatility than large-capitalization companies. Diversification does not assure a profit or protect against a loss in a declining market. The Fund’s return may not match or achieve a high degree of correlation with the return of the Prime Cyber Defense Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Prime Cyber Defense Index. The Prime Cyber Defense Index provides a benchmark for investors interested in tracking companies actively involved in providing cyber security technology and services. The Index uses a market capitalization weighted allocation across the infrastructure provider and service provider categorizations as well as an equal weighted allocation methodology for all components within each sector allocation. Index components are reviewed semi-annually for eligibility, and the weights are re-set accordingly. An investment cannot be made directly in an index.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
ETFMG™ ETFs
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
ETF Managers Group LLC is the investment adviser to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG Financial LLC is not affiliated with Prime Indexes.
IPAY
The ETFMG Prime Mobile Payments ETF (the “Fund” or the “Mobile Payments ETF”) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Prime Mobile Payments Index (the “Index”).
Mobile Payment Companies face intense competition, both domestically and internationally, and are subject to increasing regulatory constraints, particularly with respect to fees, competition and anti-trust matters, cybersecurity and privacy. Mobile Payment Companies may be highly dependent on their ability to enter into agreements with merchants and other third parties to utilize a particular payment method, system, software or service, and such agreements may be subject to increased regulatory scrutiny. Additionally, certain Mobile Payment Companies have recently faced increased costs related to class-action litigation challenging such agreements. Such factors may adversely affect the profitability and value of such companies. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Investments in smaller companies tend to have limited liquidity and greater price volatility than large-capitalization companies. The Fund’s return may not match or achieve a high degree of correlation with the return of the Prime Mobile Payments Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Index. Diversification does not guarantee a profit, nor does it protect against a loss in a declining market.
The Prime Mobile Payments Index is designed to provide a benchmark for investors interested in tracking the mobile and electronic payments industry. The stocks are screened for liquidity and weighted according to a modified linear-based capitalization-weighted methodology. The Index generally is comprised of 25-40 securities. An investment cannot be made directly in an index.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
ETF Managers Group LLC is the investment adviser to the Fund.
ETFMG™ ETFs
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG Financial LLC is not affiliated with Prime Indexes.
VALT
The ETFMG Sit Ultra Short ETF (the “Fund” or the “Ultra Short ETF”) seeks maximum current income, consistent with preservation of capital and daily liquidity.
The market price of the Fund’s fixed-income instruments may change, sometimes rapidly or unpredictably, in response to changes in interest rates, factors affecting securities markets generally, and other factors. Generally, when interest rates rise, the values of fixed-income instruments fall, and vice versa. The Fund may invest in floating rate securities, which are generally less sensitive to interest rate changes than securities with fixed interest rates but may decline in value if their interest rates do not rise as much, or as quickly, as comparable market interest rates. The Fund may invest in U.S. dollar-denominated debt obligations of foreign issuers. Mortgage-and asset-backed securities are subject to interest rate risk. Modest movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain types of these securities. From time to time the Fund may invest a substantial amount of its assets in taxable or tax-exempt municipal securities whose interest is paid solely from revenues of similar projects.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
The Fund’s investment strategy may require it to redeem shares for cash or to otherwise include cash as part of its redemption proceeds. In the event of large shareholder redemptions, the Fund may have to sell portfolio securities at times when it would not otherwise do so, which may negatively impact the Fund’s performance.
Distributed by ETFMG Financial LLC, which is not affiliated with Sit Investment Associates.
GERM
The ETFMG Treatments, Testing and Advancements ETF (the “Fund”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Treatments, Testing and Advancements Index (the “Index”).
Vaccine development companies are involved in discovering, developing and commercializing novel drugs with significant market potential. These companies face challenges including pre-clinical testing and clinical trial stages of development. Clinical trials may be delayed, and certain programs may never advance in the clinic or may be more costly to conduct than anticipated. Vaccine development requires companies to seek and secure significant funding. If there are delays in obtaining required regulatory and marketing approvals the ability of vaccine development companies to generate revenue will be materially impaired. If regulatory approval is obtained, products will still remain subject to regulatory scrutiny with regulatory authorities having the ability impose significant restrictions on the indicated uses or marketing. Lastly, even if a licensed product is achieved, vaccine development companies may encounter difficulties in manufacturing, product release, shelf life, testing, storage, supply chain management, or shipping.
ETFMG™ ETFs
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
The Fund is distributed by ETFMG Financial LLC, which is not affiliated with Prime Indexes.
ETFMG™ ETFs
As of March 31, 2022 (Unaudited)
| ETFMG Prime Cyber Security ETF |
ETFMG Prime Mobile Payments ETF |
ETFMG Sit Ultra |
ETFMG Treatments, Testing and Advancements ETF |
|||||||||||||
| As a percent of Net Assets: | ||||||||||||||||
| Australia | — | % | 0.4 | % | — | % | — | % | ||||||||
| Bermuda | — | 0.4 | — | — | ||||||||||||
| Brazil | — | 1.4 | — | — | ||||||||||||
| Canada | 1.1 | 2.2 | — | 3.5 | ||||||||||||
| Cayman Islands | 0.1 | 6.3 | — | 5.2 | ||||||||||||
| Denmark | — | — | — | 0.1 | ||||||||||||
| Finland | 0.1 | — | — | — | ||||||||||||
| France | — | 1.7 | — | 0.7 | ||||||||||||
| Germany | 0.1 | — | — | 6.9 | ||||||||||||
| Isle of Man | 0.2 | — | — | — | ||||||||||||
| Israel | 5.6 | — | — | — | ||||||||||||
| Italy | — | 1.9 | — | — | ||||||||||||
| Japan | 2.1 | 2.3 | — | 0.7 | ||||||||||||
| Jersey | 1.2 | — | — | — | ||||||||||||
| Netherlands | — | 4.9 | — | 3.3 | ||||||||||||
| Puerto Rico | — | 1.3 | — | — | ||||||||||||
| Republic of Korea | 0.2 | 2.4 | — | — | ||||||||||||
| Sweden | 0.1 | — | — | — | ||||||||||||
| United Kingdom | 7.2 | 3.3 | — | 6.6 | ||||||||||||
| United States | 81.2 | 70.9 | — | 72.6 | ||||||||||||
| Coporate Bonds | — | — | 93.1 | — | ||||||||||||
| Municipal Debt Obligations | — | — | 1.9 | — | ||||||||||||
| U.S. Government Notes/Bonds | — | — | 4.1 | |||||||||||||
| Short-Term and other Net Assets | ||||||||||||||||
| (Liabilities) | 0.8 | 0.6 | 0.9 | 0.4 | ||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Cyber Security ETF
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| COMMON STOCKS - 99.2% | ||||||||
| Canada - 1.1% | ||||||||
| Software - 1.1% (d) | ||||||||
| Absolute Software Corp. | 255,503 | $ | 2,156,187 | |||||
| BlackBerry, Ltd. (a) | 2,879,487 | 21,351,713 | ||||||
| Total Software | 23,507,900 | |||||||
| Cayman Islands - 0.1% | ||||||||
| Software - 0.1% (d) | ||||||||
| Arqit Quantum, Inc. (a) | 116,415 | 1,813,746 | ||||||
| Finland - 0.1% | ||||||||
| Software - 0.1% (d) | ||||||||
| F-Secure Oyj (a) | 486,358 | 2,456,136 | ||||||
| Germany - 0.1% | ||||||||
| IT Services - 0.1% | ||||||||
| Secunet Security Networks AG | 6,841 | 3,212,572 | ||||||
| Isle Of Man - 0.2% | ||||||||
| Software - 0.2% (d) | ||||||||
| Kape Technologies PLC (a) | 744,503 | 3,809,363 | ||||||
| Israel - 5.6% | ||||||||
| Communications Equipment - 0.3% | ||||||||
| Radware, Ltd. (a)(b) | 192,536 | 6,155,376 | ||||||
| Software - 5.3% (d) | ||||||||
| Allot Communications, Ltd. (a) | 180,380 | 1,461,078 | ||||||
| Check Point Software Technologies, Ltd. (a) | 531,103 | 73,430,301 | ||||||
| Cognyte Software, Ltd. (a) | 339,745 | 3,842,516 | ||||||
| CyberArk Software, Ltd. (a) | 199,452 | 33,657,525 | ||||||
| Tufin Software Technologies, Ltd. (a) | 169,123 | 1,510,268 | ||||||
| Total Software | 113,901,688 | |||||||
| Total Israel | 120,057,064 | |||||||
| Japan - 2.1% | ||||||||
| Software - 2.1% (d) | ||||||||
| Cyber Security Cloud, Inc. (a) | 25,575 | 459,232 | ||||||
| Digital Arts, Inc. | 52,589 | 3,205,277 | ||||||
| Trend Micro, Inc. | 688,653 | 40,502,345 | ||||||
| Total Software | 44,166,854 | |||||||
| Jersey - 1.2% | ||||||||
| Software - 1.2% (d) | ||||||||
| Mimecast, Ltd. (a) | 318,900 | 25,371,684 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Cyber Security ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Republic of Korea - 0.2% | ||||||||
| Software - 0.2% (d) | ||||||||
| Ahnlab, Inc. | 34,319 | $ | 3,505,377 | |||||
| Sweden - 0.1% | ||||||||
| Electronic Equipment, Instruments & Components - 0.1% | ||||||||
| Fingerprint Cards AB - Class B (a) | 1,239,213 | 1,959,829 | ||||||
| United Kingdom - 7.2% | ||||||||
| Aerospace & Defense - 5.6% | ||||||||
| BAE Systems PLC | 9,885,942 | 93,166,081 | ||||||
| QinetiQ Group PLC | 2,930,059 | 11,716,541 | ||||||
| Ultra Electronics Holdings PLC | 347,995 | 15,195,410 | ||||||
| Total Aerospace & Defense | 120,078,032 | |||||||
| IT Services - 0.2% | ||||||||
| NCC Group PLC | 1,561,019 | 3,744,444 | ||||||
| Software - 1.4% (d) | ||||||||
| Avast PLC (f) | 3,226,442 | 23,989,362 | ||||||
| Darktrace PLC (a) | 1,088,804 | 6,436,364 | ||||||
| Total Software | 30,425,726 | |||||||
| Total United Kingdom | 154,248,202 | |||||||
| United States - 81.2% | ||||||||
| Aerospace & Defense - 1.0% | ||||||||
| Parsons Corp. (a)(b) | 525,106 | 20,321,602 | ||||||
| Communications Equipment - 10.7% | ||||||||
| Cisco Systems, Inc. | 1,633,185 | 91,066,396 | ||||||
| F5 Networks, Inc. (a)(b) | 307,568 | 64,266,334 | ||||||
| Juniper Networks, Inc. | 1,620,588 | 60,221,050 | ||||||
| NetScout Systems, Inc. (a) | 361,284 | 11,589,991 | ||||||
| Total Communications Equipment | 227,143,771 | |||||||
| IT Services - 18.5% | ||||||||
| Akamai Technologies, Inc. (a)(b) | 802,304 | 95,787,075 | ||||||
| Cerberus Cyber Sentinel Corp. (a) | 558,058 | 2,968,869 | ||||||
| Cloudflare, Inc. - Class A (a)(b) | 880,470 | 105,392,259 | ||||||
| LiveRamp Holdings, Inc. (a) | 336,981 | 12,599,720 | ||||||
| Okta, Inc. (a)(b) | 545,136 | 82,293,731 | ||||||
| SolarWinds Corp. (b) | 198,536 | 2,642,514 | ||||||
| VeriSign, Inc. (a) | 418,651 | 93,133,101 | ||||||
| Total IT Services | 394,817,269 | |||||||
| Professional Services - 10.1% | ||||||||
| Booz Allen Hamilton Holding Corp. | 665,470 | 58,454,885 | ||||||
| CACI International, Inc. - Class A (a) | 117,119 | 35,283,270 | ||||||
| Leidos Holdings, Inc. | 708,690 | 76,552,694 | ||||||
| ManTech International Corp. - Class A | 205,675 | 17,727,128 | ||||||
| Science Applications International Corp. (b) | 287,761 | 26,522,931 | ||||||
| Total Professional Services | 214,540,908 | |||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Cyber Security ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Software - 40.9% (d) | ||||||||
| A10 Networks, Inc. | 328,698 | $ | 4,585,337 | |||||
| CommVault Systems, Inc. (a) | 224,571 | 14,900,286 | ||||||
| Crowdstrike Holdings, Inc. - Class A (a) | 479,233 | 108,824,230 | ||||||
| Everbridge, Inc. (a)(b) | 199,300 | 8,697,452 | ||||||
| ForgeRock, Inc. - Class A (a) | 140,035 | 3,069,567 | ||||||
| Fortinet, Inc. (a)(b) | 272,188 | 93,017,527 | ||||||
| Ipsidy, Inc. (a) | 83,822 | 328,582 | ||||||
| KnowBe4, Inc. - Class A (a)(b) | 794,786 | 18,295,974 | ||||||
| Mandiant, Inc. (a)(b) | 1,195,001 | 26,660,472 | ||||||
| N-able, Inc. (a) | 297,665 | 2,708,751 | ||||||
| NortonLifeLock, Inc. (b) | 2,951,467 | 78,272,905 | ||||||
| OneSpan, Inc. (a) | 178,526 | 2,577,915 | ||||||
| Palo Alto Networks, Inc. (a)(b) | 159,672 | 99,397,417 | ||||||
| Ping Identity Holding Corp. (a) | 354,105 | 9,713,100 | ||||||
| Qualys, Inc. (a)(b) | 152,602 | 21,732,051 | ||||||
| Rapid7, Inc. (a)(b) | 291,588 | 32,436,249 | ||||||
| Sailpoint Technologies Holdings, Inc. (a)(b) | 468,717 | 23,988,936 | ||||||
| SecureWorks Corp. - Class A (a)(b) | 263,529 | 3,491,759 | ||||||
| SentinelOne, Inc. - Class A (a)(b) | 1,324,246 | 51,301,290 | ||||||
| Splunk, Inc. (a) | 751,627 | 111,699,288 | ||||||
| Sumo Logic, Inc. (a) | 543,779 | 6,345,901 | ||||||
| Telos Corp. (a) | 202,860 | 2,022,514 | ||||||
| Tenable Holdings, Inc. (a) | 530,397 | 30,651,643 | ||||||
| Varonis Systems, Inc. (a) | 539,800 | 25,662,092 | ||||||
| VirnetX Holding Corp. (a)(b) | 320,429 | 522,299 | ||||||
| Zscaler, Inc. (a)(b) | 378,203 | 91,252,820 | ||||||
| Total Software | 872,156,357 | |||||||
| Total United States | 1,728,979,907 | |||||||
| TOTAL COMMON STOCKS (Cost $1,813,858,973) | 2,113,088,634 | |||||||
| INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL - 20.7% | ||||||||
| ETFMG Sit Ultra Short ETF (e) | 1,750,000 | 85,863,050 | ||||||
| Mount Vernon Liquid Assets Portfolio, LLC, 0.41% (c) | 355,673,245 | 355,673,245 | ||||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $443,090,562) | 441,536,295 | |||||||
| SHORT-TERM INVESTMENTS - 0.8% | ||||||||
| Money Market Funds - 0.8% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 16,241,332 | 16,241,332 | ||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $16,241,332) | 16,241,332 | |||||||
| Total Investments (Cost $2,273,190,867) - 120.7% | 2,570,866,261 | |||||||
| Liabilities in Excess of Other Assets - (20.7)% | (441,443,129 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 2,129,423,132 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Cyber Security ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
Percentages are stated as a percent of net assets.
PLC Public Limited Company
| (a) | Non-income producing security. |
| (b) | All or a portion of this security was out on loan at March 31, 2022. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
| (d) | As of March 31, 2022 the Fund had a significant portion of its assets in the Software Industry. |
| (e) | Affiliated security. Please refer to Note 9 of the Notes to Financial Statements. |
| (f) | Restricted security as defined in Rule 144(a) under the Securities Act of 1933. Resale to the public may require registration or may extend only to qualified institutional buyers. At March 31, 2022, the market value of these securities total $23,989,362, which represents 1.1% of total net assets. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Mobile Payments ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| COMMON STOCKS - 99.4% | ||||||||
| Australia - 0.4% | ||||||||
| IT Services - 0.4% (d) | ||||||||
| EML Payments, Ltd. (a) | 1,446,761 | $ | 3,258,666 | |||||
| Bermuda - 0.4% | ||||||||
| Electronic Equipment, Instruments & Components - 0.4% | ||||||||
| PAX Global Technology, Ltd. | 4,789,450 | 3,943,670 | ||||||
| Brazil - 1.4% | ||||||||
| IT Services - 1.4% (d) | ||||||||
| Cielo SA | 19,474,241 | 12,639,104 | ||||||
| Canada - 2.2% | ||||||||
| IT Services - 2.2% (d) | ||||||||
| Nuvei Corp. (a)(f) | 261,849 | 19,688,682 | ||||||
| Cayman Islands - 6.3% | ||||||||
| IT Services - 6.3% (d) | ||||||||
| Dlocal, Ltd. (a) | 470,755 | 14,715,801 | ||||||
| Pagseguro Digital, Ltd. - Class A (a)(b) | 828,396 | 16,609,340 | ||||||
| StoneCo., Ltd. - Class A (a)(b) | 1,053,405 | 12,324,839 | ||||||
| Yeahka, Ltd. (a) | 3,710,893 | 11,416,966 | ||||||
| Total IT Services | 55,066,946 | |||||||
| Cyprus - 0.0% | ||||||||
| IT Services - 0.0% | ||||||||
| QIWI PLC - ADR (b)(g) | 235,051 | — | ||||||
| France - 1.7% | ||||||||
| IT Services - 1.7% (d) | ||||||||
| Worldline SA (a)(f) | 343,195 | 14,990,934 | ||||||
| Italy - 1.9% | ||||||||
| IT Services - 1.9% (d) | ||||||||
| Nexi SpA (a)(f) | 1,448,947 | 16,830,514 | ||||||
| Japan - 2.3% | ||||||||
| Consumer Finance - 0.4% | ||||||||
| Jaccs Co., Ltd. | 127,526 | 3,226,385 | ||||||
| IT Services - 1.8% (d) | ||||||||
| GMO Financial Gate, Inc. | 15,172 | 1,935,446 | ||||||
| GMO Payment Gateway, Inc. | 133,693 | 13,815,163 | ||||||
| Total IT Services | 15,750,609 | |||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Mobile Payments ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Software - 0.1% | ||||||||
| Intelligent Wave, Inc. | 225,157 | $ | 1,072,705 | |||||
| Total Japan | 20,049,699 | |||||||
| Netherlands - 4.9% | ||||||||
| IT Services - 4.9% (d) | ||||||||
| Adyen NV (a)(f) | 21,372 | 42,770,007 | ||||||
| Puerto Rico - 1.3% | ||||||||
| IT Services - 1.3% (d) | ||||||||
| EVERTEC, Inc. | 277,351 | 11,351,976 | ||||||
| Republic of Korea - 2.4% | ||||||||
| IT Services - 2.4% (d) | ||||||||
| Danal Co., Ltd. (a) | 298,355 | 3,040,043 | ||||||
| Kakaopay Corp. (a) | 146,694 | 17,972,905 | ||||||
| Total IT Services | 21,012,948 | |||||||
| United Kingdom - 3.3% | ||||||||
| IT Services - 3.3% (d) | ||||||||
| Network International Holdings PLC (a)(f) | 3,964,591 | 14,582,595 | ||||||
| PayPoint PLC | 249,965 | 1,911,088 | ||||||
| Wise PLC - Class A (a) | 1,935,074 | 12,582,912 | ||||||
| Total IT Services | 29,076,595 | |||||||
| United States - 70.9% | ||||||||
| Consumer Finance - 9.8% | ||||||||
| American Express Co. | 269,271 | 50,353,677 | ||||||
| Discover Financial Services | 232,058 | 25,570,471 | ||||||
| Green Dot Corp. - Class A (a) | 390,177 | 10,722,064 | ||||||
| Total Consumer Finance | 86,646,212 | |||||||
| IT Services - 58.4% (d) | ||||||||
| Affirm Holdings, Inc. (a)(b) | 388,970 | 18,001,532 | ||||||
| Block, Inc. (a)(b) | 388,368 | 52,662,700 | ||||||
| Boku, Inc. (a)(f) | 1,072,706 | 1,557,118 | ||||||
| Cantaloupe, Inc. (a) | 250,934 | 1,698,823 | ||||||
| Euronet Worldwide, Inc. (a)(b) | 109,781 | 14,287,997 | ||||||
| Evo Payments, Inc. - Class A (a)(b) | 447,722 | 10,337,901 | ||||||
| Fidelity National Information Services, Inc. | 422,975 | 42,475,150 | ||||||
| Fiserv, Inc. (a)(b) | 439,422 | 44,557,391 | ||||||
| FleetCor Technologies, Inc. (a) | 81,160 | 20,213,710 | ||||||
| Flywire Corp. (a) | 411,783 | 12,592,324 | ||||||
| Global Payments, Inc. | 220,580 | 30,184,167 | ||||||
| I3 Verticals, Inc. - Class A (a) | 137,349 | 3,826,543 | ||||||
| International Money Express, Inc. (a) | 167,235 | 3,446,713 | ||||||
| Jack Henry & Associates, Inc. (b) | 89,354 | 17,607,206 | ||||||
| Marqeta, Inc. - Class A (a) | 1,160,624 | 12,813,289 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Mobile Payments ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| MasterCard, Inc. - Class A | 142,054 | $ | 50,767,259 | |||||
| MoneyGram International, Inc. (a) | 321,317 | 3,393,108 | ||||||
| Net 1 UEPS Technologies, Inc. (a) | 349,800 | 2,053,326 | ||||||
| Payoneer Global, Inc. (a) | 2,379,202 | 10,611,241 | ||||||
| PayPal Holdings, Inc. (a) | 477,985 | 55,278,964 | ||||||
| Remitly Global, Inc. (a)(b) | 959,345 | 9,468,735 | ||||||
| Sezzle, Inc. (a)(b) | 1,549,116 | 1,559,132 | ||||||
| Shift4 Payments, Inc. - Class A (a)(b) | 246,600 | 15,271,938 | ||||||
| Visa, Inc. - Class A (b) | 233,743 | 51,837,184 | ||||||
| Western Union Co. (b) | 728,891 | 13,659,417 | ||||||
| WEX, Inc. (a) | 80,506 | 14,366,296 | ||||||
| Total IT Services | 514,529,164 | |||||||
| Software - 2.7% | ||||||||
| ACI Worldwide, Inc. (a)(b) | 345,395 | 10,876,489 | ||||||
| NCR Corp. (a) | 309,146 | 12,424,577 | ||||||
| Total Software | 23,301,066 | |||||||
| Total United States | 624,476,442 | |||||||
| TOTAL COMMON STOCKS (Cost $992,661,897) | 875,156,183 | |||||||
| INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL - 18.6% | ||||||||
| ETFMG Sit Ultra Short ETF (e) | 900,000 | 44,158,140 | ||||||
| Mount Vernon Liquid Assets Portfolio, LLC, 0.41% (c) | 119,644,335 | 119,644,335 | ||||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $164,650,852) | 163,802,475 | |||||||
| SHORT-TERM INVESTMENTS - 0.6% | ||||||||
| Money Market Funds - 0.6% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 5,381,430 | 5,381,430 | ||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $5,381,430) | 5,381,430 | |||||||
| Total Investments (Cost $1,162,694,179) - 118.6% | 1,044,340,088 | |||||||
| Liabilities in Excess of Other Assets - (18.6)% | (163,849,408 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 880,490,680 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Prime Mobile Payments ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
Percentages are stated as a percent of net assets.
ADR American Depositary Receipt
PLC Public Limited Company
| (a) | Non-income producing security. |
| (b) | All or a portion of this security was out on loan at March 31, 2022. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
| (d) | As of March 31, 2022 the Fund had a significant portion of its assets in the IT Services Industry. |
| (e) | Affiliated security. Please refer to Note 9 of the Notes to Financial Statements. |
| (f) | Restricted security as defined in Rule 144(a) under the Securities Act of 1933. Resale to the public may require registration or may extend only to qualified institutional buyers. At March 31, 2022, the market value of these securities total $110,419,850, which represents 12.5% of total net assets. |
| (g) | Value determined using significant unobservable inputs. The value of this security totals $0, which represents 0.0% of total net assets. Classified as Level 3 in the fair value hierarchy. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements
ETFMG™ ETFs
ETFMG Sit Ultra Short ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Principal | ||||||||
| Amount | Value | |||||||
| CORPORATE BONDS - 93.1% | ||||||||
| Aerospace & Defense - 1.9% | ||||||||
| L3Harris Technologies, Inc. | ||||||||
| 1.453%, (3 Month LIBOR + 0.750%), 03/10/2023 (b) | $ | 4,387,000 | $ | 4,404,044 | ||||
| Automotive - 10.0% | ||||||||
| American Honda Finance Corp. | ||||||||
| 0.630%, (3 Month LIBOR + 0.150%), 02/22/2023 (b) | 440,000 | 439,687 | ||||||
| 1.030%, (3 Month LIBOR + 0.420%), 09/08/2023 (b) | 1,771,000 | 1,773,081 | ||||||
| 0.518%, (3 Month LIBOR + 0.280%), 01/12/2024 (b) | 2,000,000 | 1,999,229 | ||||||
| BMW US Capital LLC | ||||||||
| 0.570%, (SOFRIX + 0.380%), 08/12/2024 (a)(b) | 1,000,000 | 995,390 | ||||||
| General Motors Financial Co., Inc. | ||||||||
| 1.009%, (SOFR + 0.760%), 03/08/2024 (b) | 2,244,000 | 2,229,251 | ||||||
| 0.739%, (SOFR + 0.620%), 10/15/2024 (b) | 1,000,000 | 984,473 | ||||||
| Hyundai Capital America | ||||||||
| 2.850%, 11/01/2022 (a) | 2,000,000 | 2,006,631 | ||||||
| 1.250%, 09/18/2023 (a) | 2,564,000 | 2,496,882 | ||||||
| John Deere Capital Corp. | ||||||||
| 0.216%, (SOFR + 0.120%), 07/10/2023 (b) | 865,000 | 861,956 | ||||||
| 0.296%, (SOFR + 0.200%), 10/11/2024 (b) | 1,000,000 | 997,340 | ||||||
| Penske Truck Leasing Co. Lp / PTL Finance Corp. | ||||||||
| 3.450%, 07/01/2024 (a) | 2,200,000 | 2,207,986 | ||||||
| SMBC Aviation Capital Finance DAC | ||||||||
| 3.550%, 04/15/2024 (a) | 395,000 | 393,695 | ||||||
| Toyota Motor Credit Corp. | ||||||||
| 0.538%, (SOFRIX + 0.260%), 06/18/2024 (b) | 2,242,000 | 2,226,729 | ||||||
| 0.553%, (SOFR + 0.290%), 09/13/2024 (b) | 3,200,000 | 3,173,772 | ||||||
| 22,786,102 | ||||||||
| Banks - 21.5% | ||||||||
| Bank of America Corp. | ||||||||
| 0.909%, (3 Month BSBY + 0.430%), 05/28/2024 (b) | 3,630,000 | 3,626,261 | ||||||
| 1.219%, (3 Month LIBOR + 0.960%), 07/23/2024 (b) | 2,500,000 | 2,512,762 | ||||||
| Bank of Montreal | ||||||||
| 0.423%, (SOFRIX + 0.320%), 07/09/2024 (b) | 2,663,000 | 2,640,894 | ||||||
| Bank of Nova Scotia | ||||||||
| 0.526%, (SOFR + 0.260%), 09/15/2023 (b) | 1,595,000 | 1,587,386 | ||||||
| 0.564%, (SOFRIX + 0.445%), 04/15/2024 (b) | 1,500,000 | 1,492,943 | ||||||
| Barclays PLC | ||||||||
| 1.839%, (3 Month LIBOR + 1.380%), 05/16/2024 (b) | 2,481,000 | 2,493,440 | ||||||
| Canadian Imperial Bank of Commerce | ||||||||
| 0.621%, (SOFR + 0.340%), 06/22/2023 (b) | 500,000 | 498,377 | ||||||
| 0.541%, (SOFR + 0.420%), 10/18/2024 (b) | 1,000,000 | 989,445 | ||||||
| Citizens Financial Group, Inc. | ||||||||
| 4.150%, 09/28/2022 (a) | 1,115,000 | 1,128,062 | ||||||
| 3.750%, 07/01/2024 | 500,000 | 501,738 | ||||||
| Cooperatieve Rabobank UA | ||||||||
| 0.711%, (3 Month LIBOR + 0.480%), 01/10/2023 (b) | 895,000 | 896,353 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Sit Ultra Short ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Principal | ||||||||
| Amount | Value | |||||||
| Huntington Bancshares, Inc. | ||||||||
| 4.350%, 02/04/2023 | $ | 1,766,000 | $ | 1,792,014 | ||||
| JPMorgan Chase & Co. | ||||||||
| 0.853%, (SOFR + 0.580%), 03/16/2024 (b) | 1,380,000 | 1,376,137 | ||||||
| 1.149%, (3 Month LIBOR + 0.890%), 07/23/2024 (b) | 3,648,000 | 3,669,173 | ||||||
| 0.765%, (SOFR + 0.535%), 06/01/2025 (b) | 500,000 | 495,402 | ||||||
| KeyBank NA | ||||||||
| 0.600%, (SOFR + 0.320%), 06/14/2024 (b) | 3,550,000 | 3,526,143 | ||||||
| Mizuho Financial Group, Inc. | ||||||||
| 1.081%, (3 Month LIBOR + 0.840%), 07/16/2023 (b) | 500,000 | 500,635 | ||||||
| 1.226%, (3 Month LIBOR + 0.990%), 07/10/2024 (b) | 1,400,000 | 1,406,476 | ||||||
| PNC Bank NA | ||||||||
| 0.768%, (3 Month LIBOR + 0.500%), 07/27/2022 (b) | 2,160,000 | 2,160,911 | ||||||
| Royal Bank of Canada | ||||||||
| 0.422%, (SOFRIX + 0.300%), 01/19/2024 (b) | 700,000 | 695,771 | ||||||
| 0.515%, (SOFRIX + 0.360%), 07/29/2024 (b) | 2,150,000 | 2,137,246 | ||||||
| Toronto-Dominion Bank | ||||||||
| 0.608%, (SOFR + 0.350%), 09/10/2024 (b) | 5,000,000 | 4,957,980 | ||||||
| Truist Bank | ||||||||
| 0.776%, (SOFR + 0.730%), 03/09/2023 (b) | 2,500,000 | 2,504,458 | ||||||
| 0.319%, (SOFR + 0.200%), 01/17/2024 (b) | 593,000 | 590,377 | ||||||
| US Bank NA | ||||||||
| 0.904%, (3 Month LIBOR + 0.440%), 05/23/2022 (b) | 805,000 | 804,942 | ||||||
| 0.666%, (3 Month BSBY + 0.170%), 06/02/2023 (b) | 1,696,000 | 1,691,675 | ||||||
| Webster Financial Corp. | ||||||||
| 4.375%, 02/15/2024 | 750,000 | 766,138 | ||||||
| Westpac Banking Corp. | ||||||||
| 0.806%, (3 Month LIBOR + 0.570%), 01/11/2023 (b) | 1,500,000 | 1,503,856 | ||||||
| 48,946,995 | ||||||||
| Capital Goods - 1.5% | ||||||||
| AerCap Ireland Capital DAC / AerCap Global Aviation Trust | ||||||||
| 1.150%, 10/29/2023 | 1,000,000 | 958,345 | ||||||
| 1.750%, 10/29/2024 | 1,500,000 | 1,415,638 | ||||||
| Air Lease Corp. | ||||||||
| 0.800%, 08/18/2024 | 1,040,000 | 981,151 | ||||||
| 3,355,134 | ||||||||
| Chemicals - 0.6% | ||||||||
| Cabot Corp. | ||||||||
| 3.700%, 07/15/2022 | 1,370,000 | 1,377,915 | ||||||
| Commercial and Industrial Machinery and Equipment Rental and Leasing - 1.5% | ||||||||
| Triton Container International, Ltd. | ||||||||
| 1.150%, 06/07/2024 (a) | 3,550,000 | 3,372,869 | ||||||
| Communications Equipment - 0.3% | ||||||||
| Motorola Solutions, Inc. | ||||||||
| 4.000%, 09/01/2024 | 580,000 | 590,047 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Sit Ultra Short ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Principal | ||||||||
| Amount | Value | |||||||
| Consumer Services - 2.7% | ||||||||
| 7-Eleven, Inc. | ||||||||
| 0.800%, 02/10/2024 (a) | $ | 3,505,000 | $ | 3,371,575 | ||||
| Expedia Group, Inc. | ||||||||
| 3.600%, 12/15/2023 | 1,500,000 | 1,514,232 | ||||||
| Starbucks Corp. | ||||||||
| 0.612%, (SOFRIX + 0.420%), 02/14/2024 (b) | 1,300,000 | 1,301,562 | ||||||
| 6,187,369 | ||||||||
| Diversified Financial Services - 8.6% | ||||||||
| Bank of New York Mellon Corp. | ||||||||
| 1.349%, (3 Month LIBOR + 1.050%), 10/30/2023 (b) | 910,000 | 914,165 | ||||||
| 0.404%, (SOFR + 0.260%), 04/26/2024 (b) | 500,000 | 498,401 | ||||||
| 0.340%, (SOFR + 0.200%), 10/25/2024 (b) | 1,648,000 | 1,638,425 | ||||||
| BGC Partners, Inc. | ||||||||
| 5.375%, 07/24/2023 | 1,245,000 | 1,274,722 | ||||||
| Capital One Financial Corp. | ||||||||
| 1.019%, (3 Month LIBOR + 0.720%), 01/30/2023 (b) | 2,506,000 | 2,507,818 | ||||||
| Charles Schwab Corp. | ||||||||
| 0.778%, (SOFR + 0.500%), 03/18/2024 (b) | 4,600,000 | 4,588,633 | ||||||
| Goldman Sachs Group, Inc. | ||||||||
| 0.758%, (SOFR + 0.500%), 09/10/2024 (b) | 4,932,000 | 4,882,121 | ||||||
| Morgan Stanley | ||||||||
| 1.559%, (3 Month LIBOR + 1.220%), 05/08/2024 (b) | 2,242,000 | 2,258,595 | ||||||
| National Rural Utilities Cooperative Finance Corp. | ||||||||
| 0.524%, (3 Month LIBOR + 0.065%), 02/16/2023 (b) | 1,137,000 | 1,135,147 | ||||||
| 19,698,027 | ||||||||
| Diversified Telecommunication Services - 0.6% | ||||||||
| AT&T, Inc. | ||||||||
| 1.983%, (3 Month LIBOR + 1.180%), 06/12/2024 (b) | 1,443,000 | 1,464,988 | ||||||
| Food Products - 3.1% | ||||||||
| Conagra Brands, Inc. | ||||||||
| 0.500%, 08/11/2023 | 700,000 | 678,310 | ||||||
| General Mills, Inc. | ||||||||
| 1.249%, (3 Month LIBOR + 1.010%), 10/17/2023 (b) | 4,929,000 | 4,990,332 | ||||||
| Hormel Foods Corp. | ||||||||
| 0.650%, 06/03/2024 | 1,536,000 | 1,476,897 | ||||||
| 7,145,539 | ||||||||
| Health Care Equipment & Supplies - 1.7% | ||||||||
| Baxter International, Inc. | ||||||||
| 0.668%, (SOFRIX + 0.440%), 11/29/2024 (a)(b) | 2,876,000 | 2,859,548 | ||||||
| Zimmer Biomet Holdings, Inc. | ||||||||
| 1.450%, 11/22/2024 | 1,000,000 | 960,950 | ||||||
| 3,820,498 | ||||||||
| Health Care Providers & Services - 0.9% | ||||||||
| Cigna Corp. | ||||||||
| 1.131%, (3 Month LIBOR + 0.890%), 07/15/2023 (b) | 2,020,000 | 2,035,084 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Sit Ultra Short ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Principal | ||||||||
| Amount | Value | |||||||
| Insurance - 15.5% | ||||||||
| Allstate Corp. | ||||||||
| 1.613%, (3 Month LIBOR + 0.630%), 03/29/2023 (b) | $ | 3,523,000 | $ | 3,527,124 | ||||
| Athene Global Funding | ||||||||
| 2.236%, (3 Month LIBOR + 1.230%), 07/01/2022 (a)(b) | 200,000 | 200,361 | ||||||
| Brighthouse Financial Global Funding | ||||||||
| 1.000%, 04/12/2024 (a) | 2,250,000 | 2,158,135 | ||||||
| 0.868%, (SOFR + 0.760%), 04/12/2024 (a)(b) | 3,693,000 | 3,703,085 | ||||||
| CNO Global Funding | ||||||||
| 1.650%, 01/06/2025 (a) | 1,000,000 | 954,196 | ||||||
| F&G Global Funding | ||||||||
| 0.900%, 09/20/2024 (a) | 2,700,000 | 2,549,924 | ||||||
| Fairfax US, Inc. | ||||||||
| 4.875%, 08/13/2024 (a) | 745,000 | 764,993 | ||||||
| Finial Holdings, Inc. | ||||||||
| 7.125%, 10/15/2023 | 1,415,000 | 1,499,972 | ||||||
| Jackson Financial, Inc. | ||||||||
| 1.125%, 11/22/2023 (a) | 500,000 | 485,534 | ||||||
| Jackson National Life Global Funding | ||||||||
| 0.696%, (SOFR + 0.600%), 01/06/2023 (a)(b) | 2,000,000 | 2,001,152 | ||||||
| John Hancock Life Insurance Co. | ||||||||
| 7.375%, 02/15/2024 (a) | 495,000 | 532,420 | ||||||
| Metropolitan Life Global Funding I | ||||||||
| 0.684%, (SOFR + 0.570%), 01/13/2023 (a)(b) | 2,000,000 | 2,001,714 | ||||||
| Metropolitan Life Insurance Co. | ||||||||
| 7.875%, 02/15/2024 (a) | 1,695,000 | 1,840,252 | ||||||
| Nationwide Mutual Insurance Co. | ||||||||
| 3.116%, (3 Month LIBOR + 2.290%), 12/15/2024 (a)(c) | 5,000,000 | 5,003,450 | ||||||
| New York Life Global Funding | ||||||||
| 0.447%, (SOFRIX + 0.330%), 01/14/2025 (a)(b) | 3,000,000 | 2,974,601 | ||||||
| Pacific Life Insurance Co. | ||||||||
| 7.900%, 12/30/2023 (a) | 1,700,000 | 1,844,891 | ||||||
| Principal Life Global Funding II | ||||||||
| 0.558%, (SOFR + 0.450%), 04/12/2024 (a)(b) | 934,000 | 932,602 | ||||||
| 0.604%, (SOFR + 0.380%), 08/23/2024 (a)(b) | 2,439,000 | 2,414,233 | ||||||
| 35,388,639 | ||||||||
| Life Sciences Tools & Services - 1.6% | ||||||||
| Thermo Fisher Scientific, Inc. | ||||||||
| 0.469%, (SOFRIX + 0.350%), 04/18/2023 (b) | 1,153,000 | 1,152,401 | ||||||
| 0.509%, (SOFR + 0.390%), 10/18/2023 (b) | 815,000 | 812,200 | ||||||
| 0.649%, (SOFR + 0.530%), 10/18/2024 (b) | 1,673,000 | 1,670,798 | ||||||
| 3,635,399 | ||||||||
| Mining - 0.4% | ||||||||
| Glencore Finance Canada, Ltd. | ||||||||
| 4.250%, 10/25/2022 (a) | 1,000,000 | 1,008,170 | ||||||
| Motion Picture and Video Industries - 0.8% | ||||||||
| Historic TW, Inc. | ||||||||
| 9.150%, 02/01/2023 | 1,650,000 | 1,727,894 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Sit Ultra Short ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Principal | ||||||||
| Amount | Value | |||||||
| Multi-Utilities - 11.6% | ||||||||
| American Electric Power Co., Inc. | ||||||||
| 0.750%, 11/01/2023 | $ | 1,115,000 | $ | 1,081,556 | ||||
| CenterPoint Energy Resources Corp. | ||||||||
| 1.004%, (3 Month LIBOR + 0.500%), 03/02/2023 (b) | 1,923,000 | 1,917,482 | ||||||
| CenterPoint Energy, Inc. | ||||||||
| 0.841%, (SOFRIX + 0.650%), 05/13/2024 (b) | 2,473,000 | 2,454,520 | ||||||
| Dominion Energy, Inc. | ||||||||
| 1.356%, (3 Month LIBOR + 0.530%), 09/15/2023 (b) | 5,538,000 | 5,529,965 | ||||||
| Duke Energy Florida Project Finance LLC | ||||||||
| 1.731%, 09/01/2024 | 43,640 | 43,510 | ||||||
| Entergy Louisiana LLC | ||||||||
| 0.950%, 10/01/2024 | 5,336,000 | 5,094,384 | ||||||
| Florida Power & Light Co. | ||||||||
| 0.299%, (SOFR + 0.250%), 05/10/2023 (b) | 3,911,000 | 3,901,619 | ||||||
| PPL Electric Utilities Corp. | ||||||||
| 1.216%, (3 Month LIBOR + 0.250%), 09/28/2023 (b) | 3,975,000 | 3,956,513 | ||||||
| 0.610%, (SOFR + 0.330%), 06/24/2024 (b) | 2,384,000 | 2,369,533 | ||||||
| 26,349,082 | ||||||||
| Oil, Gas & Consumable Fuels - 1.4% | ||||||||
| BP Capital Markets PLC | ||||||||
| 1.578%, (3 Month LIBOR + 0.650%), 09/19/2022 (b) | 515,000 | 515,327 | ||||||
| Kinder Morgan, Inc. | ||||||||
| 1.519%, (3 Month LIBOR + 1.280%), 01/15/2023 (b) | 2,588,000 | 2,603,597 | ||||||
| 3,118,924 | ||||||||
| Pharmaceuticals - 2.8% | ||||||||
| AbbVie, Inc. | ||||||||
| 1.130%, (3 Month LIBOR + 0.650%), 11/21/2022 (b) | 400,000 | 400,999 | ||||||
| AstraZeneca PLC | ||||||||
| 1.134%, (3 Month LIBOR + 0.665%), 08/17/2023 (b) | 3,165,000 | 3,177,077 | ||||||
| Bayer US Finance II LLC | ||||||||
| 3.875%, 12/15/2023 (a) | 2,000,000 | 2,022,936 | ||||||
| Pfizer, Inc. | ||||||||
| 1.156%, (3 Month LIBOR + 0.330%), 09/15/2023 (b) | 877,000 | 878,241 | ||||||
| 6,479,253 | ||||||||
| Real Estate Investment Trusts (REITs) - 1.6% | ||||||||
| Public Storage | ||||||||
| 0.609%, (SOFR + 0.470%), 04/23/2024 (b) | 3,596,000 | 3,596,294 | ||||||
| Retailing - 0.2% | ||||||||
| Genuine Parts Co. | ||||||||
| 1.750%, 02/01/2025 | 500,000 | 478,439 | ||||||
| Semiconductors & Semiconductor Equipment - 2.4% | ||||||||
| Analog Devices, Inc. | ||||||||
| 0.530%, (SOFR + 0.250%), 10/01/2024 (b) | 2,188,000 | 2,180,979 | ||||||
| NVIDIA Corp. | ||||||||
| 0.584%, 06/14/2024 | 2,000,000 | 1,920,891 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Sit Ultra Short ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Principal | ||||||||
| Amount | Value | |||||||
| QUALCOMM, Inc. | ||||||||
| 1.029%, (3 Month LIBOR + 0.730%), 01/30/2023 (b) | $ | 1,267,000 | 1,273,925 | |||||
| 5,375,795 | ||||||||
| TOTAL CORPORATE BONDS (Cost $214,941,062) | 212,342,500 | |||||||
| MUNICIPAL DEBT OBLIGATIONS - 1.9% | ||||||||
| City of Moline IL | ||||||||
| 2.130%, 12/01/2022 | 100,000 | 100,179 | ||||||
| City of Oakland CA | ||||||||
| 4.000%, 12/15/2022 | 700,000 | 711,992 | ||||||
| Colorado Bridge Enterprise | ||||||||
| 0.923%, 12/31/2023 | 2,000,000 | 1,935,599 | ||||||
| Homewood Educational Building Authority | ||||||||
| 2.000%, 12/01/2023 | 620,000 | 614,580 | ||||||
| Indiana Finance Authority | ||||||||
| 0.955%, 03/01/2024 | 450,000 | 434,644 | ||||||
| Kentucky Housing Corp. | ||||||||
| 0.800%, 01/01/2024 | 350,000 | 339,394 | ||||||
| North Springs Improvement District | ||||||||
| 1.000%, 05/01/2023 | 215,000 | 212,793 | ||||||
| TOTAL MUNICIPAL DEBT OBLIGATIONS (Cost $4,468,726) | 4,349,181 | |||||||
| U.S. GOVERNMENT NOTES/BONDS - 4.1% | ||||||||
| United States Treasury Inflation Indexed Bonds | ||||||||
| 0.125%, 01/15/2023 | 4,872,120 | 5,044,764 | ||||||
| 0.625%, 01/15/2024 | 2,409,860 | 2,537,071 | ||||||
| 0.500%, 04/15/2024 | 1,672,110 | 1,758,983 | ||||||
| TOTAL U.S. GOVERNMENT NOTES/BONDS (Cost $9,374,812) | 9,340,818 | |||||||
| SHORT-TERM INVESTMENTS - 0.6% | ||||||||
| Money Market Funds - 0.6% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (d) | 1,313,514 | 1,313,514 | ||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $1,313,514) | 1,313,514 | |||||||
| Total Investments (Cost $230,098,114) - 99.7% | 227,346,013 | |||||||
| Other Assets in Excess of Liabilities - 0.3% | 790,714 | |||||||
| TOTAL NET ASSETS - 100.0% | $ | 228,136,727 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Sit Ultra Short ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
Percentages are stated as a percent of net assets.
PLC Public Limited Company
| (a) | Restriced security as defined in Rule 144(a) under the Securities Act of 1933. Resale to the public may require registration or may extend only to qualified institutional buyers. At March 31, 2022, the market value of these securities total $52,225,287, which represents 22.89% of total net assets. |
| (b) | Variable rate security based on a reference index and spread. The rate reported is the rate in effect as of March 31, 2022. |
| (c) | Variable rate security. The coupon is based on an underlying pool of assets. The rate reported is the rate in effect as of March 31, 2022. |
| (d) | The rate shown is the annualized seven-day yield at period end. |
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Treatments, Testing and Advancements ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| COMMON STOCKS - 99.6% | ||||||||
| Canada - 3.5% | ||||||||
| Biotechnology - 1.1% (d) | ||||||||
| Arbutus Biopharma Corp. (a)(b) | 41,031 | $ | 122,272 | |||||
| IMV, Inc. (a)(b) | 31,592 | 44,545 | ||||||
| VBI Vaccines, Inc. (a)(b) | 78,048 | 129,560 | ||||||
| XBiotech, Inc. | 9,221 | 79,669 | ||||||
| Total Biotechnology | 376,046 | |||||||
| Life Sciences Tools & Services - 2.4% | ||||||||
| AbCellera Biologics, Inc. (a) | 86,123 | 839,699 | ||||||
| Total Canada | 1,215,745 | |||||||
| Cayman Islands - 5.2% | ||||||||
| Biotechnology - 5.2% (d) | ||||||||
| I-Mab - ADR (a)(b) | 24,244 | 393,723 | ||||||
| Zai Lab, Ltd. - ADR (a) | 31,488 | 1,384,842 | ||||||
| Total Biotechnology | 1,778,565 | |||||||
| Denmark - 0.1% | ||||||||
| Biotechnology - 0.1% (d) | ||||||||
| Evaxion Biotech A/S - ADR (a) | 7,020 | 21,411 | ||||||
| France - 0.7% | ||||||||
| Pharmaceuticals - 0.7% | ||||||||
| Sanofi - ADR (b) | 4,691 | 240,836 | ||||||
| Germany - 6.9% | ||||||||
| Biotechnology - 6.9% (d) | ||||||||
| BioNTech SE - ADR (a) | 13,898 | 2,370,442 | ||||||
| Japan - 0.7% | ||||||||
| Pharmaceuticals - 0.7% | ||||||||
| Takeda Pharmaceutical Co., Ltd. - ADR (a)(b) | 15,660 | 224,251 | ||||||
| Netherlands - 3.3% | ||||||||
| Biotechnology - 3.3% (d) | ||||||||
| CureVac NV (a)(b) | 56,601 | 1,109,946 | ||||||
| InflaRx NV (a) | 13,403 | 24,527 | ||||||
| Total Biotechnology | 1,134,473 | |||||||
| United Kingdom - 6.6% | ||||||||
| Biotechnology - 1.2% (d) | ||||||||
| Immunocore Holdings PLC - ADR (a)(b) | 13,534 | 404,667 | ||||||
| Health Care Equipment & Supplies - 3.9% | ||||||||
| Ortho Clinical Diagnostics Holdings PLC (a) | 71,942 | 1,342,438 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Treatments, Testing and Advancements ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Pharmaceuticals - 1.5% | ||||||||
| AstraZeneca PLC - ADR (b) | 3,918 | $ | 259,920 | |||||
| GlaxoSmithKline PLC - ADR | 5,678 | 247,334 | ||||||
| Total Pharmaceuticals | 507,254 | |||||||
| Total United Kingdom | 2,254,359 | |||||||
| United States - 72.6% | ||||||||
| Biotechnology - 41.0% (d) | ||||||||
| AbbVie, Inc. | 1,565 | 253,702 | ||||||
| Adagio Therapeutics, Inc. (a)(b) | 33,746 | 153,882 | ||||||
| Aligos Therapeutics, Inc. (a) | 12,927 | 27,793 | ||||||
| Alnylam Pharmaceuticals, Inc. (a)(b) | 11,978 | 1,955,888 | ||||||
| Altimmune, Inc. (a) | 12,054 | 73,409 | ||||||
| Arcturus Therapeutics Holdings, Inc. (a)(b) | 8,000 | 215,680 | ||||||
| Assembly Biosciences, Inc. (a) | 14,518 | 29,907 | ||||||
| Athersys, Inc. (a) | 71,354 | 43,205 | ||||||
| Atossa Therapeutics, Inc. (a) | 38,409 | 48,011 | ||||||
| BioCryst Pharmaceuticals, Inc. (a)(b) | 56,014 | 910,788 | ||||||
| CEL-SCI Corp. (a) | 13,127 | 51,589 | ||||||
| Chimerix, Inc. (a) | 26,398 | 120,903 | ||||||
| Codiak Biosciences, Inc. (a) | 6,784 | 42,536 | ||||||
| ContraFect Corp. (a) | 11,931 | 43,548 | ||||||
| Cue Biopharma, Inc. (a) | 9,634 | 47,014 | ||||||
| Dynavax Technologies Corp. (a)(b) | 37,893 | 410,760 | ||||||
| Emergent BioSolutions, Inc. (a) | 15,319 | 628,998 | ||||||
| Enanta Pharmaceuticals, Inc. (a) | 6,227 | 443,238 | ||||||
| Enochian Biosciences, Inc. (a)(b) | 15,965 | 131,711 | ||||||
| Gilead Sciences, Inc. | 3,814 | 226,742 | ||||||
| Gritstone bio, Inc. (a)(b) | 20,623 | 84,967 | ||||||
| Hookipa Pharma, Inc. (a)(b) | 9,087 | 20,718 | ||||||
| iBio, Inc. (a) | 66,151 | 28,326 | ||||||
| Icosavax, Inc. (a) | 11,843 | 83,375 | ||||||
| ImmunityBio, Inc. (a)(b) | 120,665 | 676,931 | ||||||
| Immunome, Inc. (a) | 3,670 | 20,846 | ||||||
| Inovio Pharmaceuticals, Inc. (a)(b) | 63,817 | 229,103 | ||||||
| Moderna, Inc. (a) | 13,971 | 2,406,643 | ||||||
| Novavax, Inc. (a)(b) | 16,367 | 1,205,430 | ||||||
| Ocugen, Inc. (a)(b) | 65,186 | 215,114 | ||||||
| OPKO Health, Inc. (a)(b) | 206,672 | 710,952 | ||||||
| PhaseBio Pharmaceuticals, Inc. (a) | 14,587 | 19,255 | ||||||
| Regeneron Pharmaceuticals, Inc. (a) | 385 | 268,892 | ||||||
| SAB Biotherapeutics, Inc. (a) | 13,187 | 49,583 | ||||||
| Silverback Therapeutics, Inc. (a) | 10,640 | 37,346 | ||||||
| Sorrento Therapeutics, Inc. (a)(b) | 95,417 | 222,322 | ||||||
| SQZ Biotechnologies Co. (a) | 8,513 | 40,948 | ||||||
| Tonix Pharmaceuticals Holding Corp. (a) | 150,526 | 34,651 | ||||||
| Vaxart, Inc. (a)(b) | 38,162 | 192,336 | ||||||
| Vaxcyte, Inc. (a) | 17,081 | 412,506 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
ETFMG Treatments, Testing and Advancements ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Vaxxinity, Inc. - Class A (a)(b) | 37,841 | $ | 162,716 | |||||
| Vir Biotechnology, Inc. (a)(b) | 40,132 | 1,032,195 | ||||||
| Total Biotechnology | 14,014,459 | |||||||
| Health Care Equipment & Supplies - 8.2% | ||||||||
| Abbott Laboratories | 1,946 | 230,329 | ||||||
| Co-Diagnostics, Inc. (a) | 8,845 | 54,662 | ||||||
| Cue Health, Inc. (a)(b) | 44,396 | 286,354 | ||||||
| Hologic, Inc. (a) | 3,320 | 255,042 | ||||||
| Lucira Health, Inc. (a) | 11,898 | 42,476 | ||||||
| Meridian Bioscience, Inc. (a) | 13,207 | 342,854 | ||||||
| OraSure Technologies, Inc. (a) | 21,851 | 148,150 | ||||||
| Quidel Corp. (a) | 12,673 | 1,425,205 | ||||||
| Total Health Care Equipment & Supplies | 2,785,072 | |||||||
| Health Care Providers & Services - 11.3% | ||||||||
| Enzo Biochem, Inc. (a) | 14,703 | 42,639 | ||||||
| Fulgent Genetics, Inc. (a)(b) | 9,177 | 572,737 | ||||||
| Laboratory Corp. of America Holdings (a) | 7,310 | 1,927,354 | ||||||
| Quest Diagnostics, Inc. (b) | 9,707 | 1,328,500 | ||||||
| Total Health Care Providers & Services | 3,871,230 | |||||||
| Life Sciences Tools & Services - 7.1% | ||||||||
| Adaptive Biotechnologies Corp. (a) | 42,947 | 596,104 | ||||||
| Bio-Rad Laboratories, Inc. - Class A (a)(b) | 3,248 | 1,829,372 | ||||||
| Total Life Sciences Tools & Services | 2,425,476 | |||||||
| Pharmaceuticals - 5.0% | ||||||||
| Atea Pharmaceuticals, Inc. (a) | 25,245 | 182,269 | ||||||
| Bristol-Myers Squibb Co. (b) | 3,406 | 248,740 | ||||||
| CorMedix, Inc. (a) | 11,553 | 63,310 | ||||||
| Eli Lilly and Co. | 910 | 260,598 | ||||||
| Johnson & Johnson | 1,397 | 247,590 | ||||||
| Merck & Co., Inc. (b) | 3,051 | 250,335 | ||||||
| Paratek Pharmaceuticals, Inc. (a) | 15,224 | 45,215 | ||||||
| Pfizer, Inc. | 4,921 | 254,760 | ||||||
| SIGA Technologies, Inc. (a) | 22,482 | 159,397 | ||||||
| Total Pharmaceuticals | 1,712,214 | |||||||
| Total United States | 24,808,451 | |||||||
| TOTAL COMMON STOCKS (Cost $51,559,535) | 34,048,533 | |||||||
| INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL - 33.4% | ||||||||
| ETFMG Sit Ultra Short ETF (e) | 25,000 | 1,226,615 | ||||||
| Mount Vernon Liquid Assets Portfolio, LLC, 0.41% (c) | 10,173,952 | 10,173,952 | ||||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $11,417,927) | 11,400,567 | |||||||
The accompanying notes are an integral part of these financial statements
ETFMG™ ETFs
ETFMG Treatments, Testing and Advancements ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| SHORT-TERM INVESTMENTS - 0.3% | ||||||||
| Money Market Funds - 0.3% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 119,716 | $ | 119,716 | |||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $119,716) | 119,716 | |||||||
| Total Investments (Cost $63,097,178) - 133.3% | 45,568,816 | |||||||
| Liabilities in Excess of Other Assets - (33.3)% | (11,393,567 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 34,175,249 | ||||||
Percentages are stated as a percent of net assets.
ADR American Depositary Receipt
PLC Public Limited Company
| (a) | Non-income producing security. |
| (b) | All or a portion of this security was out on loan at March 31, 2022. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
| (d) | As of March 31, 2022 the Fund had a significant portion of its assets in the Biotechnology Industry. |
| (e) | Affiliated security. Please refer to Note 9 of the Notes to Financial Statements. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 2022 (Unaudited)
| ETFMG Prime Cyber Security ETF |
ETFMG Prime Mobile Payments ETF |
ETFMG Sit Ultra Short ETF |
ETFMG Treatments, Testing and Advancements ETF |
|||||||||||||
| ASSETS | ||||||||||||||||
| Investments in unaffiliated securities, at value* | $ | 2,485,003,211 | $ | 1,000,181,948 | $ | 227,346,013 | $ | 44,342,201 | ||||||||
| Investments in affiliated securities, at value* | 85,863,050 | 44,158,140 | — | 1,226,615 | ||||||||||||
| Cash | — | 26 | — | — | ||||||||||||
| Foreign currency* | — | 78 | — | — | ||||||||||||
| Receivables: | ||||||||||||||||
| Dividends and interest receivable | 2,644,642 | 1,548,432 | 566,790 | 12,892 | ||||||||||||
| Securities lending income receivable | 55,205 | 27,367 | 1,752,974 | 31,347 | ||||||||||||
| Total Assets | 2,573,566,108 | 1,045,915,991 | 229,665,777 | 45,613,055 | ||||||||||||
| LIABILITIES | ||||||||||||||||
| Collateral received for securities loaned (Note 7) | 443,090,562 | 164,650,852 | — | 11,417,927 | ||||||||||||
| Payables: | ||||||||||||||||
| Foreign currency payable to custodian, at value | 39 | — | — | — | ||||||||||||
| Payable for investments purchased | — | — | 1,470,853 | — | ||||||||||||
| Payable for fund shares redeemed | — | 234,967 | — | — | ||||||||||||
| Management fees payable | 1,052,375 | 539,492 | 58,197 | 19,879 | ||||||||||||
| Total Liabilities | 444,142,976 | 165,425,311 | 1,529,050 | 11,437,806 | ||||||||||||
| Net Assets | $ | 2,129,423,132 | $ | 880,490,680 | $ | 228,136,727 | $ | 34,175,249 | ||||||||
| NET ASSETS CONSIST OF: | ||||||||||||||||
| Paid-in Capital | $ | 2,099,293,455 | $ | 1,107,519,673 | $ | 232,084,697 | $ | 55,022,130 | ||||||||
| Total Distributable Earnings (Accumulated Losses) | 30,129,677 | (227,028,993 | ) | (3,947,970 | ) | (20,846,881 | ) | |||||||||
| Net Assets | $ | 2,129,423,132 | $ | 880,490,680 | $ | 228,136,727 | $ | 34,175,249 | ||||||||
| *Identified Cost: | ||||||||||||||||
| Investments in unaffiliated securities | $ | 2,185,773,550 | $ | 1,117,686,076 | $ | 230,098,114 | $ | 61,853,203 | ||||||||
| Investments in affiliated securities | 87,417,317 | 45,008,103 | — | 1,243,975 | ||||||||||||
| Foreign currency | 39 | 78 | — | — | ||||||||||||
| Shares Outstanding^ | 36,300,000 | 16,850,000 | 4,650,000 | 1,250,000 | ||||||||||||
| Net Asset Value, Offering and Redemption Price per Share | $ | 58.66 | $ | 52.25 | $ | 49.06 | $ | 27.34 | ||||||||
^ No par value, unlimited number of shares authorized
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
For the Period Ended March 31, 2022 (Unaudited)
| ETFMG Prime Cyber Security ETF |
ETFMG Prime Mobile Payments ETF |
ETFMG Sit Ultra Short ETF |
ETFMG Treatments, Testing and Advancements ETF |
|||||||||||||
| INVESTMENT INCOME | ||||||||||||||||
| Income: | ||||||||||||||||
| Dividends from unaffiliated securities (net of foreign withholdings tax of $243,457, $95,251, $-, $-) | $ | 6,719,514 | $ | 2,782,247 | $ | — | $ | 90,948 | ||||||||
| Interest | 2,795 | 1,024 | 853,779 | 45 | ||||||||||||
| Securities lending income | 294,657 | 203,966 | — | 77,064 | ||||||||||||
| Total Investment Income | 7,016,966 | 2,987,237 | 853,779 | 168,057 | ||||||||||||
| Expenses: | ||||||||||||||||
| Management fees | 6,552,544 | 3,738,144 | 346,331 | 158,645 | ||||||||||||
| Total Expenses | 6,552,544 | 3,738,144 | 346,331 | 158,645 | ||||||||||||
| Net Investment Income (Loss) | 464,422 | (750,907 | ) | 507,448 | 9,412 | |||||||||||
| REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||||||||||
| Net Realized Gain (Loss) on: | ||||||||||||||||
| Unaffiliated Investments | (166,007,970 | ) | (47,969,371 | ) | 27,764 | (1,475,067 | ) | |||||||||
| In-Kind redemptions | 138,778,587 | 24,373,537 | — | 857,076 | ||||||||||||
| Foreign currency and foreign currency translation | (115,151 | ) | 175,965 | — | — | |||||||||||
| Net Realized Gain (Loss) on Investments and In-Kind redemptions | (27,344,534 | ) | (23,419,869 | ) | 27,764 | (617,991 | ) | |||||||||
| Net Change in Unrealized Appreciation (Depreciation) of: | ||||||||||||||||
| Unaffiliated Investments | (45,164,492 | ) | (250,544,260 | ) | (3,267,638 | ) | (18,790,076 | ) | ||||||||
| Affiliated Investments | (1,208,200 | ) | (621,360 | ) | — | (17,260 | ) | |||||||||
| Foreign currency and foreign currency translation | (4,430 | ) | (594 | ) | — | — | ||||||||||
| Net change in Unrealized Appreciation (Depreciation) of Investments | (46,377,122 | ) | (251,166,214 | ) | (3,267,638 | ) | (18,807,336 | ) | ||||||||
| Net Realized and Unrealized Gain (Loss) on Investments | (73,721,656 | ) | (274,586,083 | ) | (3,239,874 | ) | (19,425,327 | ) | ||||||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (73,257,234 | ) | $ | (275,336,990 | ) | $ | (2,732,426 | ) | $ | (19,415,915 | ) | ||||
The accompanying notes are an integral part of these financial statements.
ETFMG Prime Cyber Security ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||
| OPERATIONS | ||||||||
| Net investment income | $ | 464,422 | $ | 7,093,741 | ||||
| Net realized gain (loss) on investments and In-Kind Redemptions | (27,344,534 | ) | 330,529,386 | |||||
| Net change in unrealized appreciation/depreciation of | ||||||||
| investments and foreign currency and foreign currency translation | (46,377,122 | ) | 153,820,198 | |||||
| Net increase (decrease) in net assets resulting from operations | (73,257,234 | ) | 491,443,325 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | (1,526,505 | ) | (6,619,000 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase (decrease) in net assets derived from net change in outstanding shares | (103,468,595 | ) | 318,934,925 | |||||
| Transaction Fees (See Note 1) | 27,881 | 74,347 | ||||||
| Net increase (decrease) in net assets from capital share transactions | (103,440,714 | ) | 319,009,272 | |||||
| Total increase (decrease) in net assets | $ | (178,224,453 | ) | $ | 803,833,597 | |||
| NET ASSETS | ||||||||
| Beginning of Period | 2,307,647,585 | 1,503,813,988 | ||||||
| End of Period | $ | 2,129,423,132 | $ | 2,307,647,585 | ||||
Summary of share transactions is as follows:
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares Sold | 14,250,000 | $ | 812,395,855 | 16,750,000 | $ | 994,736,015 | ||||||||||
| Transaction Fees (See Note 1) | — | 27,881 | — | 27,881 | ||||||||||||
| Shares Redeemed | (15,800,000 | ) | (915,864,450 | ) | (11,200,000 | ) | (675,801,090 | ) | ||||||||
| Net Transactions in Fund Shares | (1,550,000 | ) | $ | (103,440,714 | ) | 5,550,000 | $ | 318,962,806 | ||||||||
| Beginning Shares | 37,850,000 | 32,300,000 | ||||||||||||||
| Ending Shares | 36,300,000 | 37,850,000 | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG Prime Mobile Payments ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||
| OPERATIONS | ||||||||
| Net investment loss | $ | (750,907 | ) | $ | (2,268,082 | ) | ||
| Net realized gain (loss) on investments and In-Kind Redemptions | (23,419,869 | ) | 143,616,233 | |||||
| Net change in unrealized appreciation/depreciation of investments and foreign currency and foreign currency translation | (251,166,214 | ) | 59,723,122 | |||||
| Net increase (decrease) in net assets resulting from operations | (275,336,990 | ) | 201,071,273 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | — | — | ||||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase (decrease) in net assets derived from net change in outstanding shares | (37,824,655 | ) | 194,384,200 | |||||
| Transaction Fees (See Note 1) | 15,192 | 39,220 | ||||||
| Net increase (decrease) in net assets from capital share transactions | (37,809,463 | ) | 194,423,420 | |||||
| Total increase (decrease) in net assets | $ | (313,146,453 | ) | $ | 395,494,693 | |||
| NET ASSETS | ||||||||
| Beginning of Period | 1,193,637,133 | 798,142,440 | ||||||
| End of Period | $ | 880,490,680 | $ | 1,193,637,133 | ||||
Summary of share transactions is as follows:
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares Sold | 2,100,000 | $ | 114,795,455 | 8,700,000 | $ | 593,606,155 | ||||||||||
| Transaction Fees (See Note 1) | — | 15,192 | — | 39,220 | ||||||||||||
| Shares Redeemed | (2,850,000 | ) | (152,620,110 | ) | (5,800,000 | ) | (399,221,955 | ) | ||||||||
| Net Transactions in Fund Shares | (750,000 | ) | $ | (37,809,463 | ) | 2,900,000 | $ | 194,423,420 | ||||||||
| Beginning Shares | 17,600,000 | 14,700,000 | ||||||||||||||
| Ending Shares | 16,850,000 | 17,600,000 | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG Sit Ultra Short ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||
| OPERATIONS | ||||||||
| Net investment income | $ | 507,448 | $ | 1,093,399 | ||||
| Net realized gain on investments and In-Kind Redemptions | 27,764 | 74,759 | ||||||
| Net change in unrealized appreciation (depreciation) of investments and foreign currency and foreign currency translation | (3,267,638 | ) | (112,246 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | (2,732,426 | ) | 1,055,912 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | (501,714 | ) | (1,070,997 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase (decrease) in net assets derived from net change in outstanding shares | (11,181,585 | ) | 136,797,377 | |||||
| Net increase (decrease) in net assets | $ | (14,415,725 | ) | $ | 136,782,292 | |||
| NET ASSETS | ||||||||
| Beginning of Period | 242,552,452 | 105,770,160 | ||||||
| End of Period | $ | 228,136,727 | $ | 242,552,452 | ||||
Summary of share transactions is as follows:
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||
| Shares Sold | — | $ | — | 3,050,000 | $ | 151,723,497 | |||||||||||
| Shares Redeemed | (225,000 | ) | (11,181,585 | ) | (300,000 | ) | (14,926,120 | ) | |||||||||
| Net Transactions in Fund Shares | (225,000 | ) | $ | (11,181,585 | ) | 2,750,000 | $ | 136,797,377 | |||||||||
| Beginning Shares | 4,875,000 | 2,125,000 | |||||||||||||||
| Ending Shares | 4,650,000 | 4,875,000 | |||||||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG Treatments, Testing and Advancements ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||
| OPERATIONS | ||||||||
| Net investment income | $ | 9,412 | $ | 578,226 | ||||
| Net realized gain (loss) on investments and In-Kind Redemptions | (617,991 | ) | 13,807,775 | |||||
| Net change in unrealized appreciation (depreciation) of investments and foreign currency and foreign currency translation | (18,807,336 | ) | 6,476,857 | |||||
| Net increase (decrease) in net assets resulting from operations | (19,415,915 | ) | 20,862,858 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | (1,444 | ) | (647,750 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net decrease in net assets derived from net change in outstanding shares | (9,887,985 | ) | (10,764,405 | ) | ||||
| Net increase (decrease) in net assets | $ | (29,305,344 | ) | $ | 9,450,703 | |||
| NET ASSETS | ||||||||
| Beginning of Period | 63,480,593 | 54,029,890 | ||||||
| End of Period | $ | 34,175,249 | $ | 63,480,593 | ||||
Summary of share transactions is as follows:
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||
| Shares Sold | 100,000 | $ | 2,739,590 | 900,000 | $ | 35,594,570 | |||||||||||
| Shares Redeemed | (400,000 | ) | (12,627,575 | ) | (1,300,000 | ) | (46,358,975 | ) | |||||||||
| Net Transactions in Fund Shares | (300,000 | ) | $ | (9,887,985 | ) | (400,000 | ) | $ | (10,764,405 | ) | |||||||
| Beginning Shares | 1,550,000 | 1,950,000 | |||||||||||||||
| Ending Shares | 1,250,000 | 1,550,000 | |||||||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG Prime Cyber Security ETF
For a capital share outstanding throughout each period/year
| Period Ended March 31, 2022 (Unaudited) | Year Ended September 30, 2021 | Year Ended September 30, 2020 | Year Ended September 30, 2019 | Year Ended September 30, 2018 | Year Ended September 30, 2017 | |||||||||||||||||||
| Net Asset Value, Beginning Period/Year | $ | 60.97 | $ | 46.56 | $ | 37.46 | $ | 40.08 | $ | 30.11 | $ | 27.91 | ||||||||||||
| Income (Loss) from Investment Operations: | ||||||||||||||||||||||||
| Net investment income (loss) 1 | 0.01 | 0.20 | 0.64 | 0.07 | 0.03 | (0.01 | ) | |||||||||||||||||
| Net realized and unrealized gain (loss) on investments | (2.28 | ) | 14.39 | 9.10 | (2.64 | ) | 9.94 | 2.34 | ||||||||||||||||
| Total from investment operations | (2.27 | ) | 14.59 | 9.74 | (2.57 | ) | 9.97 | 2.33 | ||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||
| Distributions from net investment income | (0.04 | ) | (0.18 | ) | (0.64 | ) | (0.05 | ) | (0.00 | )3 | (0.13 | ) | ||||||||||||
| Total distributions | (0.04 | ) | (0.18 | ) | (0.64 | ) | (0.05 | ) | (0.00 | )3 | (0.13 | ) | ||||||||||||
| Net asset value, end period/year | $ | 58.66 | $ | 60.97 | $ | 46.56 | $ | 37.46 | $ | 40.08 | $ | 30.11 | ||||||||||||
| Total Return | -3.71 | %4 | 31.34 | % | 26.75 | % | -6.42 | % | 33.16 | % | 8.42 | % | ||||||||||||
| Ratios/Supplemental Data: | ||||||||||||||||||||||||
| Net assets at end of period/year (000’s) | $ | 2,129,423 | $ | 2,307,648 | $ | 1,503,814 | $ | 1,427,200 | $ | 1,835,861 | $ | 1,097,360 | ||||||||||||
| Expenses to Average Net Assets before legal expense | 0.60 | %5 | 0.60 | % | 0.60 | % | 0.60 | % | 0.60 | % | 0.68 | % | ||||||||||||
| Gross Expenses to Average Net Assets | 0.60 | %5 | 0.60 | %2 | 0.60 | % | 0.60 | % | 0.60 | % | 0.72 | %2 | ||||||||||||
| Net Investment | ||||||||||||||||||||||||
| Income (Loss) to Average Net Assets | 0.04 | %5 | 0.35 | % | 1.50 | % | 0.19 | % | 0.07 | % | -0.03 | % | ||||||||||||
| Portfolio Turnover Rate | 34 | %4 | 34 | % | 33 | % | 36 | % | 41 | % | 53 | % | ||||||||||||
| 1 | Calculated based on average shares outstanding during the period/year. |
| 2 | The ratio of expenses to average net assets includes legal expense. |
| 3 | Per share amount is less than $0.01. |
| 4 | Not annualized. |
| 5 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG Prime Mobile Payments ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period/year
| Period Ended March 31, 2022 (Unaudited) | Year Ended September 30, 2021 | Year Ended September 30, 2020 | Year Ended September 30, 2019 | Year Ended September 30, 2018 | Year Ended September 30, 2017 | |||||||||||||||||||
| Net Asset Value, Beginning Period/Year | $ | 67.82 | $ | 54.30 | $ | 46.60 | $ | 42.86 | $ | 32.57 | $ | 24.96 | ||||||||||||
| Income (Loss) from Investment Operations: | ||||||||||||||||||||||||
| Net investment income (loss) 1 | (0.04 | ) | (0.13 | ) | (0.04 | ) | 0.03 | 0.07 | 0.03 | |||||||||||||||
| Net realized and unrealized gain (loss) on investments | (15.53 | ) | 13.65 | 7.75 | 3.93 | 10.22 | 7.60 | |||||||||||||||||
| Total from investment operations | (15.57 | ) | 13.52 | 7.71 | 3.96 | 10.29 | 7.63 | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||
| Distributions from net investment income | — | — | (0.02 | ) | (0.05 | ) | (0.01 | ) | (0.02 | ) | ||||||||||||||
| Net realized gains | — | — | — | (0.18 | ) | — | — | |||||||||||||||||
| Total distributions | — | — | (0.02 | ) | (0.23 | ) | (0.01 | ) | (0.02 | ) | ||||||||||||||
| Capital Share Transactions: | ||||||||||||||||||||||||
| Transaction fees added to paid-in capital | — | — | 0.01 | 0.01 | 0.01 | — | ||||||||||||||||||
| Net asset value, end period/year | $ | 52.25 | $ | 67.82 | $ | 54.30 | $ | 46.60 | $ | 42.86 | $ | 32.57 | ||||||||||||
| Total Return | -22.95 | %3 | 24.91 | % | 16.56 | % | 9.49 | % | 31.62 | % | 30.59 | % | ||||||||||||
| Ratios/Supplemental Data: | ||||||||||||||||||||||||
| Net assets at end period/year (000’s) | $ | 880,491 | $ | 1,193,637 | $ | 798,142 | $ | 743,198 | $ | 522,874 | $ | 170,993 | ||||||||||||
| Expenses to Average Net Assets before legal expense | 0.75 | %4 | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
| Gross Expenses to Average Net Assets | 0.75 | %4 | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.80 | %2 | ||||||||||||
| Net Investment Income (Loss) to Average Net Assets | -0.15 | %4 | -0.20 | % | -0.08 | % | 0.06 | % | 0.16 | % | 0.12 | % | ||||||||||||
| Portfolio Turnover Rate | 18 | %3 | 27 | % | 19 | % | 28 | % | 16 | % | 31 | % | ||||||||||||
| 1 | Calculated based on average shares outstanding during the period/year. |
| 2 | The ratio of expenses to average net assets includes legal expense. |
| 3 | Not annualized. |
| 4 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG Sit Ultra Short ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period/year
| Period Ended March 31, 2022 (Unaudited) | Year Ended September 30, 2021 | Period Ended September 30, 20201 | ||||||||||
| Net Asset Value, Beginning Year/Period | $ | 49.75 | $ | 49.77 | $ | 50.00 | ||||||
| Income from Investment Operations: | ||||||||||||
| Net investment income 2 | 0.11 | 0.39 | 0.86 | |||||||||
| Net realized and unrealized gain (loss) on investments | (0.69 | ) | (0.02 | ) | (0.27 | ) | ||||||
| Total from investment operations | (0.58 | ) | 0.37 | 0.59 | ||||||||
| Less Distributions: | ||||||||||||
| Distributions from net investment income | (0.11 | ) | (0.39 | ) | (0.82 | ) | ||||||
| Total distributions | (0.11 | ) | (0.39 | ) | (0.82 | ) | ||||||
| Net asset at end of year/period | $ | 49.06 | $ | 49.75 | $ | 49.77 | ||||||
| Total Return | -1.18 | %3 | 0.75 | %5 | 1.19 | %3 | ||||||
| Ratios/Supplemental Data: | ||||||||||||
| Net assets at end of year/period (000’s) | $ | 228,137 | $ | 242,552 | $ | 105,770 | ||||||
| Expenses to Average Net Assets before legal expense | 0.30 | %4 | 0.30 | % | 0.30 | %4 | ||||||
| Gross Expenses to Average Net Assets | 0.30 | %4 | 0.30 | % | 0.30 | %4 | ||||||
| Net Investment Income to Average Net Assets | 0.44 | %4 | 0.77 | % | 1.78 | %4 | ||||||
| Portfolio Turnover Rate | 27 | %3 | 55 | % | 132 | %3 | ||||||
| 1 | Commencement of operations on October 8, 2019. |
| 2 | Calculated based on average shares outstanding during the year/period. |
| 3 | Not annualized. |
| 4 | Annualized. |
| 5 | The returns reflect the actual performance for the period and do not include the impact of trades executed on the last business day of the period that were recorded on the first business day of the next period. |
The accompanying notes are an integral part of these financial statements.
ETFMG Treatments, Testing and Advancements ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period/year
| Period Ended March 31, 2022 (Unaudited) | Year Ended September 30, 2021 | Period Ended September 30, 20201 | ||||||||||
| Net Asset Value, Beginning Period/Year | $ | 40.96 | $ | 27.71 | $ | 25.00 | ||||||
| Income from Investment Operations: | ||||||||||||
| Net investment income 2 | 0.01 | 0.36 | 0.02 | |||||||||
| Net realized and unrealized gain (loss) on investments | (13.63 | ) | 13.28 | 2.69 | ||||||||
| Total from investment operations | (13.62 | ) | 13.64 | 2.71 | ||||||||
| Less Distributions: | ||||||||||||
| Distributions from net investment income | (0.00 | )3 | (0.39 | ) | — | |||||||
| Total distributions | (0.00 | )3 | (0.39 | ) | — | |||||||
| Net asset at end of period/year | $ | 27.34 | $ | 40.96 | $ | 27.71 | ||||||
| Total Return | -33.24 | %4 | 49.43 | %6 | 10.82 | %4 | ||||||
| Ratios/Supplemental Data: | ||||||||||||
| Net assets at end of period/year (000’s) | $ | 34,175 | $ | 63,481 | $ | 54,030 | ||||||
| Expenses to Average Net Assets before legal expense | 0.68 | %5 | 0.68 | % | 0.68 | %5 | ||||||
| Gross Expenses to Average Net Assets | 0.68 | %5 | 0.68 | % | 0.68 | %5 | ||||||
| Net Investment Income to Average Net Assets | 0.04 | %5 | 0.98 | % | 0.25 | %5 | ||||||
| Portfolio Turnover Rate | 16 | %4 | 39 | % | 41 | %4 | ||||||
| 1 | Commencement of operations on June 17, 2020. |
| 2 | Calculated based on average shares outstanding during the period/year. |
| 3 | Per share amount is less than $0.01. |
| 4 | Not annualized. |
| 5 | Annualized. |
| 6 | The returns reflect the actual performance for the period and do not include the impact of trades executed on the last business day of the period that were recorded on the first business day of the next period. |
The accompanying notes are an integral part of these financial statements.
ETFMG™ ETFs
March 31, 2022 (Unaudited)
NOTE 1 – ORGANIZATION
ETFMG Prime Cyber Security ETF (“HACK”), ETFMG Prime Mobile Payments ETF (“IPAY”), ETFMG Sit Ultra Short ETF (“VALT”), and ETFMG Treatments, Testing and Advancements ETF (“GERM”) (each a “Fund”, or collectively the “Funds”) are series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Funds’ shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”).
The following table is a summary of the Strategy Commencement Date and Strategy of the Funds:
| Fund Ticker | Strategy Commencement Date |
Strategy |
| ETFMG Prime Cyber Security ETF | 8/1/2017 | Seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield of the Prime Cyber Defense Index (“Prime Cyber Index”). |
| ETFMG Prime Mobile Payments ETF | 8/1/2017 | Seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Prime Mobile Payments Index (“Prime Mobile Index”). |
| ETFMG Sit Ultra Short ETF | 10/8/2019 | Seeks to achieve its investment objective by investing in a diversified portfolio of high-quality short-term U.S. dollar denominated domestic and foreign debt securities and other instruments. |
| ETFMG Treatments, Testing and Advancements ETF | 6/17/2020 | Seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Prime Treatments, Testing and Advancements Index. |
The Funds each currently offer one class of shares, which have no front end sales load, no deferred sales charges, and no redemption fees. The Funds may issue an unlimited number of shares of beneficial interest, with no par value. All shares of each Fund have equal rights and privileges.
Shares of the Funds are listed and traded on the NYSE Arca, Inc. Market prices for the shares may be different from their net asset value (“NAV”). Each Fund issues and redeems shares on a continuous basis at NAV only in blocks of 50,000 shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in a specified Index. Once created, shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, shares are not redeemable securities of a Fund. Shares of a Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the shares directly from a Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and may be subject to customary brokerage commissions or fees.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in Transaction Fees” in the Statements of Changes in Net Assets.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Funds may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (SEC). For more information about the underlying Fund’s operations and policies, please refer to those Fund’s semiannual and annual reports, which are filed with the SEC.
| A. | Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
Debt obligations are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security.
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Funds’ Board. The use of fair value pricing by a Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. As of March 31, 2022, the ETF Prime Mobile Payments ETF held one security that was fair valued by the Board.
As described above, the Funds utilize various methods to measure the fair value of their investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| Level 3 | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following is a summary of the inputs used to value the Funds’ net assets as of March 31, 2022:
| ETFMG Prime Cyber Security ETF | ||||||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 2,113,088,634 | $ | — | $ | — | $ | 2,113,088,634 | ||||||||
| Short-Term Investments | 16,241,332 | — | — | 16,241,332 | ||||||||||||
| ETFMG Sit Ultra Short ETF** | 85,863,050 | — | — | 85,863,050 | ||||||||||||
| Investments Purchased with Securities Lending Collateral* | — | — | — | 355,673,245 | ||||||||||||
| Total Investments in Securities | $ | 2,215,193,016 | $ | — | $ | — | $ | 2,570,866,261 | ||||||||
| ETFMG Prime Mobile Payments ETF | ||||||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 875,156,183 | $ | — | $ | — | $ | 875,156,183 | ||||||||
| Short-Term Investments | 5,381,430 | — | — | 5,381,430 | ||||||||||||
| ETFMG Sit Ultra Short ETF** | 44,158,140 | — | — | 44,158,140 | ||||||||||||
| Investments Purchased with Securities Lending Collateral* | — | — | — | 119,644,335 | ||||||||||||
| Total Investments in Securities | $ | 924,695,753 | $ | — | $ | — | $ | 1,044,340,088 | ||||||||
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| ETFMG Sit Ultra Short ETF | ||||||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Fixed Income | ||||||||||||||||
| Corporate Bonds | $ | — | $ | 212,342,500 | $ | — | $ | 212,342,500 | ||||||||
| Municipal Debt Obligations | — | 4,349,181 | — | 4,349,181 | ||||||||||||
| U.S. Government Notes/Bonds | — | 9,340,818 | — | 9,340,818 | ||||||||||||
| Short-Term Investments | 1,313,514 | — | — | 1,313,514 | ||||||||||||
| Total Investments in Securities | $ | 1,313,514 | $ | 226,032,499 | $ | — | $ | 227,346,013 | ||||||||
| ETFMG Treatments, Testing and Advancements ETF | ||||||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 34,048,533 | $ | — | $ | — | $ | 34,048,533 | ||||||||
| Short-Term Investments | 119,716 | — | — | 119,716 | ||||||||||||
| ETFMG Sit Ultra Short ETF** | 1,226,615 | — | — | 1,226,615 | ||||||||||||
| Investments Purchased with Securities Lending Collateral* | — | — | — | 10,173,952 | ||||||||||||
| Total Investments in Securities | $ | 35,394,864 | $ | — | $ | — | $ | 45,568,816 | ||||||||
| ^ | See Schedule of Investments for classifications by country and industry. |
| * | Certain investments that are measured at fair value used the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Schedules of Investments. |
| ** | Investment was purchased with collateral. |
| B. | Federal Income Taxes. The Funds have each elected to be taxed as a “regulated investment company” and intend to distribute substantially all taxable income to their shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
To avoid imposition of the excise tax applicable to regulated investment companies, each Fund intends to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of each Fund’s next taxable year.
Each Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Each Fund has analyzed its tax position and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Funds’ 2021 tax returns. The Funds identify their major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
As of March 31, 2022, management has reviewed the tax positions for open periods (for Federal purposes, four years from the date of filing and for state purposes, four years from the date of filing), as applicable to the Funds, and has determined that no provision for income tax is required in the Funds’ financial statements.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| C. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Funds may be subject to income, withholding or other taxes imposed by foreign countries. |
| D. | Foreign Currency Translations and Transactions. The Funds may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Funds do not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Funds do isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
| E. | Distributions to Shareholders. Distributions to shareholders from net investment income are generally declared and paid by each of the Funds on a quarterly basis. Distributions to shareholders from realized gains on securities for each Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
| G. | Share Valuation. The net asset value (“NAV”) per share of each Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Funds’ shares will not be priced on the days on which the NYSE is closed for trading. For Authorized Participants, the offering and redemption price per share for the Funds are equal to the Funds’ respective net asset value per share. |
| H. | Guarantees and Indemnifications. In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. |
NOTE 3 – RISK FACTORS
Investing in the Funds may involve certain risks, as discussed in the Funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a Fund will fluctuate, which means that an investor could lose money over short or long periods.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Investment Style Risk. The Funds, other than VALT, are not actively managed (“Index Funds”). Therefore, those Funds follow the securities included in its respective index during upturns as well as downturns. Because of their indexing strategies, the Index Funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Index Funds’ expenses, the Index Funds’ performance may be below that of their respective index.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Concentration Risk. To the extent that a Fund’s or an index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19), have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Funds and their investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect lobal, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under the circumstances, the Funds may have difficulty achieving their investment objectives which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Funds’ Sponsor and third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Funds’ investments. These factors can cause substantial market volatility. exchange trading suspensions and closures and can impact the ability of the Funds to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A widespread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on a Fund’s performance, resulting in losses to the Funds.
NOTE 4 – MANAGEMENT AND OTHER CONTRACTS
ETF Managers Group, LLC (the “Advisor”), serves as the investment advisor to the Funds. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Funds, and the Advisor, the Advisor provides investment advice to the Funds and oversees the day-to-day operations of the Funds, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Advisor is also responsible for arranging transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Funds to operate.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Under the Investment Advisory Agreement, the Advisor has overall responsibility for the general management and administration of the Funds and arranges for sub-advisory, transfer agency, custody, fund administration, securities lending, and all other non-distribution related services necessary for the Funds to operate. The Funds unitary fees are accrued daily and paid monthly. The Advisor bears the costs of all advisory and non-advisory services required to operate the Funds, in exchange for a single unitary fee at the following annual rates:
| ETFMG Prime Cyber Security ETF | 0.60% |
| ETFMG Prime Mobile Payments ETF | 0.75% |
| ETFMG Sit Ultra Short ETF | 0.30% |
| ETFMG Treatments, Testing and Advancements ETF | 0.68% |
Under the Investment Advisory Agreement, the Advisor has agreed to pay all expenses of the Funds, except for: the fee paid to the Advisor pursuant to the Investment Advisory Agreement, interest charges on any borrowings, 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”). The Advisor has entered into an agreement with its affiliate ETFMG Financial, LLC to serve as distributor to the Funds (the “Distributor”). The Distributor provides marketing support for the Funds, including distributing marketing materials related to the Funds. Level ETF Ventures, LLC (“Level”) serves as the index provider for HACK, IPAY, and GERM. Level is not affiliated with the Trust or the Advisor.
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services (the “Administrator”) provides fund accounting, fund administration, and transfer agency services to the Funds. The Advisor compensates the Administrator for these services under an administration agreement between the two parties.
The Advisor pays each independent Trustee a quarterly fee for service to the Funds. Each Trustee is also reimbursed by the Advisor for all reasonable out-of-pocket expenses incurred in connection with his duties as Trustee, including travel and related expenses incurred in attending Board meetings.
NOTE 5 – DISTRIBUTION PLAN
The Funds have each adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, each Fund may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to each Fund, with the amount of such compensation not to exceed an annual rate of 0.25% of each Fund’s average daily net assets. During the period ended March 31, 2022, the Funds did not incur any 12b-1 expenses.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 6 – PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, during the period ended March 31, 2022:
| Purchases | Sales | |||||||
| ETFMG Prime Cyber Security ETF | $ | 769,162,255 | $ | 789,810,894 | ||||
| ETFMG Prime Mobile Payments ETF | 192,130,137 | 192,701,455 | ||||||
| ETFMG Sit Ultra Short ETF | 61,128,900 | 62,731,495 | ||||||
| ETFMG Treatments, Testing and Advancements ETF | 8,005,118 | 8,213,609 | ||||||
The costs of purchases and sales of in-kind transactions associated with creations and redemptions during the period ended March 31, 2022:
| Purchases In- | Sales In- | |||||||
| Kind | Kind | |||||||
| ETFMG Prime Cyber Security ETF | $ | 794,966,651 | $ | 891,710,270 | ||||
| ETFMG Prime Mobile Payments ETF | 112,395,435 | 148,832,072 | ||||||
| ETFMG Sit Ultra Short ETF | — | — | ||||||
| ETFMG Treatments, Testing and Advancements ETF | 2,711,339 | 12,246,911 | ||||||
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all in-kind sales. Net capital gains or losses resulting from in-kind redemptions are excluded from the Funds’ determination of taxable gains and are not distributed to shareholders.
There were no purchases or sales of U.S. Government obligations during the period ended March 31, 2022.
NOTE 7 – SECURITIES LENDING
The Funds, except for VALT, may lend up to 33 1⁄3% of the value of the securities in their portfolios to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending program administered by U.S. Bank N.A. (the “Custodian”). The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the value of any loaned securities at the time of the loan, plus accrued interest. The Funds receive compensation in the form of fees and earn interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Funds continue to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss on the fair value of securities loaned that may occur during the term of the loan will be for the account of the Funds. The Funds have the right under the terms of the securities lending agreement to recall the securities from the borrower on demand. The cash collateral is invested by the Custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations, either directly on behalf of each Fund or through one or more joint accounts, money market funds, or short-term bond funds, including those advised by or affiliated with the Advisor; however, all such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. Other investment companies in which a Fund may invest cash collateral can be expected to incur fees and expenses for operations, such as investment advisory and administration fees, which would be in addition to those incurred by the Fund, and which may be received in full or in part by the Advisor. Pursuant to guidance issued by the SEC staff, fees and expenses of money market funds used for cash collateral received in connection with loans of securities are not treated as Acquired Fund Fees and Expenses, which reflect a Fund’s pro rata share of the fees and expenses incurred by other investment companies in which the Fund invests (as disclosed in the Prospectus, as applicable). The Funds could also experience delays in recovering their securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Fund is indemnified from this risk by contract with the securities lending agent.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
As of the period ended March 31, 2022 the value of the securities on loan and payable for collateral due to broker were as follows:
| Value of Securities on Loan Collateral Received | ||||||||
| Values of | Fund | |||||||
| Securities on | Collateral | |||||||
| Fund | Loan | Received* | ||||||
| ETFMG Prime Cyber Security ETF | $ | 429,432,910 | $ | 443,090,562 | ||||
| ETFMG Prime Mobile Payments ETF | 158,212,346 | 164,650,852 | ||||||
| ETFMG Treatments, Testing and Advancements ETF | 10,899,114 | 11,417,927 | ||||||
* The cash collateral received was invested in the Mount Vernon Liquid Assets Portfolio, a money market fund with an overnight and continuous maturity, and ETFMG Sit Ultra Short ETF as shown on the Schedule of Investments.
NOTE 8 – FEDERAL INCOME TAXES
The components of distributable earnings (losses) and cost basis of investments for federal income tax purposes at September 30, 2021 were as follows:
| Cost | Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Appreciation |
|||||||||||||
| ETFMG Prime Cyber Security ETF | $ | 2,401,040,537 | $ | 441,995,693 | $ | (156,489,208 | ) | $ | 285,506,485 | |||||||
| ETFMG Prime Mobile Payments ETF | 1,301,934,331 | 203,125,831 | (97,401,406 | ) | 105,724,425 | |||||||||||
| ETFMG Sit Ultra Short ETF | 239,654,901 | 550,557 | (38,878 | ) | 511,679 | |||||||||||
| ETFMG Treatments, Testing and Advancements ETF | 73,631,811 | 9,416,918 | (8,718,871 | ) | 698,047 | |||||||||||
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
As of September 30, 2021, the components of distributable earnings (loss) on a tax basis were as follows:
| Undistributed Ordinary Income |
Undistributed Long-Term |
Total Distributable Earnings |
Other Accumulated Loss |
Total Accumulated Gain (Loss) |
||||||||||||||||
| ETFMG Prime Cyber Security ETF | $ | 629,031 | $ | — | $ | 629,031 | $ | (181,222,100 | ) | $ | 104,913,416 | |||||||||
| ETFMG Prime Mobile Payments ETF | — | — | — | (57,416,428 | ) | 48,307,997 | ||||||||||||||
| ETFMG Sit Ultra Short ETF | 116,138 | — | 116,139 | (1,341,647 | ) | (713,830 | ) | |||||||||||||
| ETFMG Treatments, Testing and Advancements ETF | 1,444 | — | 1,444 | (2,129,013 | ) | (1,429,522 | ) | |||||||||||||
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
As of September 30, 2021, the Funds had accumulated capital loss carryovers of:
| Capital Loss Carryforward ST |
Capital Loss Carryforward LT |
Expires | |||||||||
| ETFMG Prime | |||||||||||
| Cyber Security ETF | $ | (74,327,872 | ) | $ | (106,894,241 | ) | Indefinite | ||||
| ETFMG Prime Mobile Payments ETF | (20,056,769 | ) | (35,819,530 | ) | Indefinite | ||||||
| ETFMG Sit Ultra Short ETF | (1,341,647 | ) | — | Indefinite | |||||||
| ETFMG Treatments, Testing and Advancements ETF | (2,129,013 | ) | — | Indefinite | |||||||
Under current tax law, capital and currency losses realized after October 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The following Funds had deferred post-October capital and currency losses, which will be treated as arising on the first business day of the year ending September 30, 2021.
| Late Year Ordinary Loss |
Post- October Capital Loss |
|||||||
| ETFMG Prime Cyber Security ETF | $ | — | $ | — | ||||
| ETFMG Prime Mobile Payments ETF | 1,542,196 | — | ||||||
| ETFMG Sit Ultra Short ETF | — | — | ||||||
| ETFMG Treatments, Testing and Advancements ETF | — | — | ||||||
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The tax charter of distributions paid during the period ended March 31, 2022, and the year ended September 30, 2021 were as follows:
| Period Ended March 31, 2022 |
Year Ended September 30, 2021 |
|||||||||||||||
| From Ordinary Income |
From Capital Gains |
From Ordinary Income |
From Capital Gains |
|||||||||||||
| ETFMG Prime | ||||||||||||||||
| Cyber Security ETF | $ | 1,526,505 | $ | — | $ | 6,619,000 | $ | — | ||||||||
| ETFMG Prime Mobile Payments ETF | — | — | — | — | ||||||||||||
| ETFMG Sit Ultra Short ETF | 501,714 | — | 1,070,997 | — | ||||||||||||
| ETFMG Treatments, Testing and Advancements ETF | 1,444 | — | 647,750 | — | ||||||||||||
NOTE 9 – INVESTMENTS IN AFFILIATES
ETFMG Prime Cyber Security ETF
ETFMG Prime Cyber Security ETF owned the following company during the period ended March 31, 2022. ETFMG Sit Ultra Short ETF is deemed to be an affiliate of the Fund as defined by the 1940 Act as of the period ended March 31, 2022. Transactions during the period in this security was as follows:
| Security Name | Value at September 30, 2021 | Purchases | Sales | Realized Gain (Loss)(1) | Change in Unrealized Appreciation (Depreciation) | Dividend Income | Value at March 31, 2022 | Ending Shares | ||||||||||||||||||||||||
| ETFMG Sit Ultra Short ETF * | 87,071,250 | — | — | — | (1,208,200 | ) | — | 85,863,050 | 1,750,000 | |||||||||||||||||||||||
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
ETFMG Prime Mobile Payments ETF
ETFMG Prime Mobile Payments ETF owned the following company during the period ended March 31, 2022. ETFMG Sit Ultra Short ETF is deemed to be an affiliate of the Fund as defined by the 1940 Act as of the period ended March 31, 2022. Transactions during the period in this security was as follows:
| Security Name | Value at September 30, 2021 | Purchases | Sales | Realized Gain (Loss)(1) | Change in Unrealized Appreciation (Depreciation) | Dividend Income | Value at March 31, 2022 | Ending Shares | ||||||||||||||||||||||||
| ETFMG Sit Ultra Short ETF * | $ | 44,779,500 | $ | — | $ | — | $ | — | $ | (621,360 | ) | $ | — | $ | 44,158,140 | 900,000 | ||||||||||||||||
ETFMG Treatments, Testing and Advancements ETF
ETFMG Treatments, Testing and Advancements ETF owned the following company during the period ended March 31, 2022. ETFMG Sit Ultra Short ETF is deemed to be an affiliate of the Fund as defined by the 1940 Act as of the period ended March 31, 2022. Transactions during the period in this security was as follows:
| Security Name | Value at September 30, 2021 | Purchases | Sales | Realized Gain (Loss)(1) | Change in Unrealized Appreciation (Depreciation) | Dividend Income | Value at March 31, 2022 | Ending Shares | ||||||||||||||||||||||||
| ETFMG Sit Ultra Short ETF * | $ | 1,243,875 | $ | — | $ | — | $ | — | $ | (17,260 | ) | $ | — | $ | 1,226,615 | 25,000 | ||||||||||||||||
*Affiliate as of March 31, 2022.
1 Realized Losses include transactions in affiliated investments and affiliated in-kind redemptions.
As of March 31, 2022, 97.31% of outstanding shares of VALT were owned by affiliates.
NOTE 10 – LEGAL MATTERS
The Adviser and its parent, ETFMG, were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled[.]”
ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C-152-21. This action asserts breach of contract and tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action. The new action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022, the Adviser, together with the other named affiliates, filed a motion for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied. The defendants intend to vigorously defend themselves in this new action.
ETFMG™ ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 11 – SUBSEQUENT EVENTS
In preparing these financial statements, the Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed below, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the financial statements.
With respect to Note 10 – Legal Matters, on May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust as well as, all claims asserted against the Adviser Defendants, aside from the defamation claim. The Adviser Defendants intend to vigorously defend themselves against this sole remaining claim.
ETFMG Prime Cyber Security ETF
ETFMG Prime Mobile Payments ETF
ETFMG Sit Ultra Short ETF
ETFMG Treatments, Testing and Advancements ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on March 28-29, 2022, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the renewal of:
| ● | the Amended and Restated Investment Advisory Agreement (the “Advisory Agreement”) between ETF Managers Group LLC (the “Adviser”) and the Trust, on behalf of each of ETFMG Treatments, Testing and Advancements ETF (“GERM”), ETFMG Prime Cyber Security ETF (“HACK”), ETFMG Prime Mobile Payments ETF (“IPAY”) and ETFMG Sit Ultra Short ETF (“VALT”) (each a “Fund” and collectively, the “Funds”); and |
| ● | a Sub-Advisory Agreement between the Adviser and Sit Fixed Income Advisors II, LLC (the “Sub-Adviser”) with respect to the Fund (the “Sub-Advisory Agreement” and, together with the Advisory Agreement, the “Agreements”). |
Pursuant to Section 15(c) of the 1940 Act, the Board must annually review and approve the Agreements after their initial two-year term: (i) by the vote of the Trustees or by a vote of the shareholders of the Funds; and (ii) by the vote of a majority of the Trustees who are not parties to the Agreements or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. Each year, the Board calls and holds a meeting to decide whether to renew the Agreements for an additional one-year term. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser and Sub-Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services provided to the Funds by the Adviser and Sub-Adviser; (ii) the investment performance of the Funds; (iii) the Adviser’s costs and profits realized in providing services to the Funds, including any fall-out benefits enjoyed by the Adviser; (iv) comparative fee and expense data for the Funds in relation to other similar investment companies; (v) the extent to which economies of scale would be realized as the Funds grow and whether the advisory fees for the Funds reflect these economies of scale for the benefit of the Funds; and (vi) other financial benefits to the Adviser or Sub-Adviser and their affiliates resulting from services rendered to the Funds. The Board’s review included written and oral information furnished to the Board prior to and at the meeting held on March 28-29, 2022, and throughout the year. Among other things, each of the Adviser and Sub-Adviser provided responses to a detailed series of questions, which included information about the Adviser’s and Sub-Adviser’s operations, service offerings, personnel, risk assessment and compliance programs and financial condition. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentations and any other information that the Board received at the meeting, and deliberated on the renewal of the Agreements in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the renewal of the Agreements, and the weight to be given to each such factor. The conclusions reached with respect to the Agreements were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to each Fund. The Independent Trustees conferred amongst themselves and independent legal counsel during an executive session held prior to the meeting and also conferred in executive sessions both with and without representatives of management before and during the meeting. The Independent Trustees requested, received and considered additional information arising out of these executive sessions.
ETFMG Prime Cyber Security ETF
ETFMG Prime Mobile Payments ETF
ETFMG Sit Ultra Short ETF
ETFMG Treatments, Testing and Advancements ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
Nature, Extent and Quality of Services Provided by the Adviser
The Trustees considered the scope of services provided under the Advisory Agreement, noting that the Adviser provides investment management services to the Funds. The Board discussed the responsibilities of the Adviser, including: responsibility for the general management of the day-to-day investment and reinvestment of the assets of the Funds; determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis; responsibility for daily monitoring of tracking error and quarterly reporting to the Board; and implementation of Board directives as they relate to the Funds. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel and the quality of the Adviser’s compliance and risk assessment infrastructure. The Board also considered the Adviser’s experience managing exchange-traded funds (“ETFs”), as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
The Board also considered other services provided to the Funds, such as overseeing the activities of the Sub-Adviser, as well as the Funds’ other service providers, monitoring adherence to the Fund’s investment restrictions, and monitoring compliance with various policies and procedures and with applicable securities laws.
With respect to VALT, the Board then considered the scope of services provided under the Sub-Advisory Agreement, noting that the Sub-Adviser will be providing investment sub-advisory services to the Adviser in the form of selecting and trading portfolio securities on behalf of the Fund and selecting broker-dealers to execute purchase and sale transactions, subject to the supervision of the Adviser and the oversight of the Board.
In considering the nature, extent and quality of the services to be provided by the Sub-Adviser, the Board noted that it had received a copy of the Sub-Adviser’s Form ADV, as well as the response of the Sub-Adviser to a detailed series of questions which included, among other things, information about the background and experience of the Sub-Adviser’s personnel. The Board considered the experience of the Sub-Adviser’s personnel in the financial services industry, particularly in regards to fixed-income securities. The Board also considered the quality of the Sub-Adviser’s compliance program and Code of Ethics.
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Funds by the Adviser and Sub-Adviser, as applicable.
Historical Performance
The Board then considered the past performance of the Funds over various time periods ending December 31, 2021. The Board also considered each Fund’s performance as compared to that of comparable ETFs, as determined by the Adviser (“peer group”) using data received from an independent thrid party.
With respect to GERM, HACK and IPAY, which are index-based ETFs, the Board additionally reviewed information regarding each Fund’s performance as compared to its respective underlying index for various time periods. The Board noted management’s explanation that analysis of investment performance, in absolute terms, is less relevant for the index-based Funds than it is for actively managed funds, given the Funds’ index-based investment objectives. The Board also noted management’s further explanation that it is more relevant to review the performance of the Funds by focusing on the extent to which each Fund tracked its underlying index. The Board reviewed information regarding each Fund’s index tracking, discussing, as applicable, factors which contributed to each Fund’s tracking error. The Board noted that the Funds had underperformed their underlying indexes over certain periods, but that such underperformance was, at least in part, a result of costs incurred by the Funds not incurred by their underlying indexes. The Board considered other factors that contributed to the Funds’ tracking error, including cash drag and the process of rebalancing the Funds’ portfolios. The Board noted management’s representations that the Funds’ performance in tracking their underlying indexes was within the range of expectations. The Board concluded that, after taking these factors into account, each of the Funds satisfactorily tracked its underlying index.
ETFMG Prime Cyber Security ETF
ETFMG Prime Mobile Payments ETF
ETFMG Sit Ultra Short ETF
ETFMG Treatments, Testing and Advancements ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
With respect to VALT, the Board considered management’s discussion of VALT’s performance, noting the effect of adverse credit market developments at the beginning of the COVID-19 pandemic on the Fund’s performance.
The Board further noted that it had received and would continue to receive regular reports regarding each Fund’s performance, including with respect to its tracking error, at its quarterly meetings.
Cost of Services Provided, Profits and Economies of Scale
The Board reviewed the advisory fees for the Funds and compared them to the total operating expenses of comparable ETFs, as determined by the Adviser using data received from an independent third party. Among other information, the Board noted that the advisory fee for each of GERM, IPAY and VALT was higher than the average of median expense ratios for its peer group and that the advisory fee for HACK was slightly higher than the average and higher than the median expense ratios for its peer group. The Board took into consideration management’s discussion of the fees, including that the Funds have niche investment strategies that are substantially different than the strategies of many of the peer funds and, therefore, the information provided about the comparable ETFs may not provide meaningful direct comparisons to the Funds.
The Board noted the importance of the fact that the advisory fee for each Fund is a “unified fee,” meaning that the shareholders of the Funds pay no expenses other than the advisory fee and certain other costs such as interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, non-standard Board-related expenses and litigation against the Board, Trustees, Funds, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses. The Board also noted that the Adviser was responsible for compensating the Trust’s other service providers and paying the Funds’ other expenses (except as noted above) out of its own fees and resources. The Board concluded that the advisory fee for each of the Funds is reasonable in light of the factors considered.
The Board also evaluated the compensation and other benefits received by the Adviser from its relationship with the Funds, taking into account profitability information provided by the Adviser. The Board received and reviewed profitability information on a fund by fund basis and considered how profit margins could affect the Adviser’s long-term viability and ability to attract and retain high-quality personnel. The Board also considered the impact on the Adviser’s profitability of payments made to, or received from, partners involved with certain of the Funds. Based on the information provided to the Trustees, the Trustees concluded that the net revenue retained by the Adviser from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund. The Board further considered other benefits derived by the Adviser and its affiliates from the Adviser’s relationship with the Funds.
ETFMG Prime Cyber Security ETF
ETFMG Prime Mobile Payments ETF
ETFMG Sit Ultra Short ETF
ETFMG Treatments, Testing and Advancements ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
In addition, the Board considered whether economies of scale may be realized for the Funds. The Board noted that the Adviser regularly considers whether fee reductions are appropriate as the Funds grow in size. The Board noted that a unitary fee provides a level of certainty in expenses for the Funds and effectively acts as a cap on the fees and expenses (except as noted above) that are borne by the Funds. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the continued provision of high-quality services to the Funds, such as the hiring of new trading, legal and compliance personnel, and enhancements to technology and related systems. The Board concluded that no changes to the advisory fee structure of the Funds were necessary.
The Board also reviewed the sub-advisory fee paid to the Sub -Adviser for its services to VALT under the Sub-Advisory Agreement. The Board considered this fee in light of the services the Sub-Adviser provides as investment sub-adviser to VALT. The Board determined that the fee reflected an appropriate allocation of the advisory fee paid to the Adviser and Sub-Adviser given the work performed by each firm. The Board concluded that the proposed sub-advisory fee was reasonable in light of the services rendered.
The Board also considered that the sub-advisory fee paid to the Sub-Adviser is paid out of the Adviser’s unified fee and represents an arm’s-length negotiation between the Adviser and the Sub-Adviser. For these reasons, the Trustees determined that the profitability to the Sub-Adviser from its relationship with VALT was not a material factor in their deliberations with respect to consideration of approval of the Sub-Advisory Agreement. The Board considered that, because the sub -advisory fee was paid by the Adviser out of its unified fee, any economies of scale would not benefit shareholders and, thus, were not relevant for the consideration of the approval of the sub-advisory fee.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision.
Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Agreements are fair and reasonable; (b) concluded that the Adviser’s and Sub-Adviser’s fee is reasonable in light of the services that the Adviser and Sub-Adviser each provide to the Funds, as applicable; and (c) approved the renewal of the Agreements for another year.
ETFMG™ ETFs
Period Ended March 31, 2022 (Unaudited)
As a shareholder of the Funds you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The examples are based on an investment of $1,000 invested for the period of time as indicated in the table below.
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then, multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
| Fund Name | Beginning Account Value October 1, 2021 | Ending Account Value March 31, 2022 | Expenses Paid During the Period^ | Annualized Expense Ratio During the Period October 1, 2021 to March 31, 2022 | |||||||||||
| ETFMG Prime Cyber Security ETF | |||||||||||||||
| Actual | 1,000.00 | 962.90 | 2.94 | 0.60 | % | ||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,021.94 | 3.02 | 0.60 | % | ||||||||||
| ETFMG Prime Mobile Payments ETF | |||||||||||||||
| Actual | 1,000.00 | 770.50 | 3.31 | 0.75 | % | ||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,021.19 | 3.78 | 0.75 | % | ||||||||||
| ETFMG Sit Ultra Short ETF | |||||||||||||||
| Actual | 1,000.00 | 988.20 | 1.49 | 0.30 | % | ||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,023.44 | 1.51 | 0.30 | % | ||||||||||
| ETFMG Treatments, Testing and Advancements ETF | |||||||||||||||
| Actual | 1,000.00 | 667.60 | 2.83 | 0.68 | % | ||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,021.54 | 3.43 | 0.68 | % | ||||||||||
^ The dollar amounts shown as expenses paid during the period are equal to the annualized six-month expense ratio multiplied by the average account value during the period, multiplied by 182/365 (to reflect the one-half year period).
ETFMG™ ETFs
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
March 31, 2022 (Unaudited)
ETF Managers Trust (the “Trust”) has adopted a liquidity risk management program (the “Program”). The Trust’s Board of Trustees (the “Board”) has designated ETF Managers Group LLC (the “Program Administrator”) as the administrator of the Program. The Program Administrator has designated a committee (the “Committee”), composed of personnel from multiple departments, including investment operations and compliance, that is responsible for the implementation and ongoing administration of the Program, which includes assessing the liquidity risk of ETFMG Treatments, Testing and Advancements ETF, ETFMG Prime Cyber Security ETF, ETFMG Prime Mobile Payments ETF and ETFMG Sit Ultra Short ETF (each a “Fund” and, collectively, the “Funds”) under both normal and reasonably foreseeable stressed conditions.
Under the Program, the Program Administrator assesses, manages and periodically reviews each Fund’s liquidity risk, based on factors specific to the circumstances of the Fund. Liquidity risk is the risk that a Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in that Fund. This risk is managed by monitoring the degree of liquidity of each Fund’s investments and limiting the amount of the Fund’s illiquid investments, among other means. The Program Administrator’s process of determining the degree of liquidity of each Fund’s investments is supported by one or more third-party liquidity assessment vendors.
At a meeting of the Board on March 28-29, 2022, the Adviser provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, the operation of any Highly Liquid Investment Minimum, where applicable, and any material changes to the Program, for the period from March 1, 2021 through March 1, 2022 (the “Reporting Period”). No significant liquidity events impacting any Fund were noted in the report and it was represented that, as of December 31, 2021, each Fund was primarily highly liquid and, during the Reporting Period, each Fund held less than 15% in illiquid securities. In addition, the Program Administrator provided its assessment that Program implementation was effective and that the Program operated adequately and effectively to enable the Program Administrator to oversee and manage liquidity risk and ensure each Fund is able to meet requests to redeem shares without significant dilution to the remaining investors’ interest in the Fund.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to your Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
ETFMG™ ETFs
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Interested Trustee and Officers | ||||
| Samuel Masucci, III (1962) | Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) | Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). | 20 | None |
| John A. Flanagan, (1946) | Treasurer (since 2015) | President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). | n/a | n/a |
| Reshma A. Tanczos (1978) | Chief Compliance Officer (since 2016) | Chief Compliance Officer of ETFMG Financial LLC (Since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). | n/a | n/a |
| Matthew J. Bromberg (1973) | Assistant Secretary (since 2020) | General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015-2016). | n/a | n/a |
| * Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. | ||||
ETFMG™ ETFs
Board of Trustees (Continued)
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Terry Loebs (1963) | Trustee (since 2014); Lead Independent Trustee (since 2020) | Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). | 20 | None |
| Eric Wiegel (1960) | Trustee (since 2020) | Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018). | 20 | None |
ETFMG TM ETFs
March 31, 2022 (Unaudited)
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of each Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.etfmgfunds.com.
NOTE 2 – FEDERAL TAX INFORMATION
Qualified Dividend Income/Dividends Received Deduction
For the fiscal year ended September 30, 2021, certain dividends paid by the Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
| Fund Name | Qualified Dividend Income |
| ETFMG Prime Cyber Security ETF | 100.00% |
| ETFMG Prime Mobile Payments ETF | 0.00% |
| ETFMG Sit Ultra Short ETF | 0.00% |
| ETFMG Treatments, Testing and Advancements | 40.33% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September 30, 2021 was as follows:
| Fund Name | Dividends Received Deduction |
| ETFMG Prime Cyber Security ETF | 100.00% |
| ETFMG Prime Mobile Payments ETF | 0.00% |
| ETFMG Sit Ultra Short ETF | 0.00% |
| ETFMG Treatments, Testing and Advancements | 27.46% |
Short Term Capital Gain
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871 (k)(2)(C) for each Fund were as follows:
| Fund Name | Short-Term Capital Gain |
| ETFMG Prime Cyber Security ETF | 0.00% |
| ETFMG Prime Mobile Payments ETF | 0.00% |
| ETFMG Sit Ultra Short ETF | 0.00% |
| ETFMG Treatments, Testing and Advancements | 0.00% |
ETFMG™ ETFs
SUPPLEMENTARY INFORMATION
March 31, 2022 (Unaudited) (Continued)
NOTE 3 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the Securities and Exchange Commission (“SEC”) on Part F of Form N-PORT. The Funds’ Part F of Form N-PORT is available on the website of the SEC at www.sec.gov and the Funds’ website at www.etfmgfunds.com. Each Fund’s portfolio holdings are posted on their website at www.etfmgfunds.com daily.
NOTE 4 – INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at (877) 756-7873, by accessing the SEC’s website at www.sec.gov, or by accessing the Funds’ website at www.etfmgfunds.com.
Information regarding how the Funds voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at (877) 756-7873 or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF -MGRS (1-844-383-6477) or by visiting www.etfmgfunds.com. Read the prospectus carefully before investing.
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services 615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006
ETFMG Real Estate Tech ETF
HHH
Semi-Annual Report
March 31, 2022
(Unaudited)
The funds are series of ETF Managers Trust.
ETFMG Real Estate Tech ETF
TABLE OF CONTENTS
March 31, 2022 (Unaudited)
ETFMG Real Estate Tech ETF
The ETFMG Real Estate Tech ETF (the “Fund”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Real Estate Technology Index (the “Index”). The following information pertains to the fiscal period from the inception of the Fund on October 19, 2021 to March 31, 2022.
Over the period, the total return for the Fund was -34.91%, while the total return for the Index was -34.75%. The best performers in the Fund, on the basis of contribution to return were Tricon Residential Inc, Pexa Group Ltd, Gatechnologies Co Ltd, Airbnb Inc-Class A and Lifull Co Ltd, while the worst performers were Opendoor Technologies Inc, Ke Holdings Inc-Adr, Ming Yuan Cloud Group Holdin, Exp World Holdings Inc and Zillow Group Inc – A
At the end of the reporting period, the Fund saw an average approximate allocation of 36.57% to Real Estate, 20.44% to Communication Services and 15.56% to Financials. The portfolio securities of the Fund were exposed predominately to the United States at 62.4% , 9.12% to Australia and 6.45% to Germany.
We thank you for your interest in the Fund. You can find further details about HHH by visiting www.etfmg.com, or by calling 1-844-ETF-MGRS (1-844-383-6477).
Sincerely,
Samuel Masucci III
Chairman of the Board
ETFMG Real Estate Tech ETF
| Average Cumulative Returns Period Ended March 31, 2022 |
Since Inception (10/19/2021) |
Value of $10,000 (3/31/2022) |
||||||
| ETFMG Real Estate Tech ETF (NAV) | -34.91 | % | $ | 6,509 | ||||
| ETFMG Real Estate Tech ETF (Market) | -34.38 | % | $ | 6,562 | ||||
| S&P 500 Index | 0.89 | % | $ | 10,089 | ||||
| Prime Real Estate Technology Index GTR | -34.75 | % | $ | 6,525 | ||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more of less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on October 19, 2021, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG Real Estate Tech ETF
Top Ten Holdings as of March 31, 2022 (Unaudited)*
| Security | % of Total Investments |
||
| 1 | CoStar Group, Inc. | 5.81% | |
| 2 | Airbnb, Inc. - Class A | 5.78% | |
| 3 | REA Group, Ltd. | 5.16% | |
| 4 | Black Knight, Inc. | 4.94% | |
| 5 | Rightmove PLC | 4.70% | |
| 6 | Zillow Group, Inc. - Class A | 4.61% | |
| 7 | WeWork, Inc. - Class A | 4.54% | |
| 8 | Opendoor Technologies, Inc. | 4.53% | |
| 9 | Tricon Residential, Inc. | 4.23% | |
| 10 | Rocket Cos., Inc. - Class A | 4.06% | |
| Top Ten Holdings = 48.36% of Total Investments | |||
| * Current Fund holdings may not be indicative of future Fund holdings. | |||
ETFMG Real Estate Tech ETF
Important Disclosures and Key Risk Factors
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
HHH
The Fund is non diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Investments in smaller companies tend to have limited liquidity and greater price volatility than large capitalization companies. Technology companies may have limited product lines, markets, financial resources or personnel. The products of technology companies may face obsolescence due to rapid technological developments and frequent new product introduction, and such companies may face unpredictable changes in growth rates, competition for the services of qualified personnel and competition from foreign competitors with lower production costs. Companies in the technology sector are heavily dependent on patent and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies.
The Fund is a recently organized investment company with limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision. There can be no assurance that the Fund will grow to or maintain an economically viable size.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
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, or sectors in which the Fund invests such as political, market and economic developments, as well as events that impact specific issuers.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
ETF Managers Group LLC is the investment adviser to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG is not affiliated with Prime Indexes.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
ETFMG Real Estate Tech ETF
As of March 31, 2022 (Unaudited)
| ETFMG Real Estate Tech ETF |
||||
| As a percent of Net Assets: | ||||
| Australia | 9.1 | % | ||
| Canada | 6.3 | |||
| Cayman Islands | 6.3 | |||
| Germany | 6.5 | |||
| Italy | 1.4 | |||
| Japan | 1.1 | |||
| Sweden | 1.4 | |||
| United Kingdom | 4.7 | |||
| United States | 62.4 | |||
| Short-Term and other Net Assets (Liabilities) | 0.8 | |||
| 100.0 | % | |||
ETFMG Real Estate Tech ETF
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| COMMON STOCKS - 99.2% | ||||||||
| Australia - 9.1% | ||||||||
| Interactive Media & Services - 6.9% | ||||||||
| Domain Holdings Australia, Ltd. | 9,192 | $ | 27,582 | |||||
| REA Group, Ltd. | 829 | 84,038 | ||||||
| Total Interactive Media & Services | 111,620 | |||||||
| Real Estate Management & Development - 2.2% (c) | ||||||||
| PEXA Group, Ltd. (a) | 2,781 | 36,772 | ||||||
| Total Australia | 148,392 | |||||||
| Canada - 6.3% | ||||||||
| Real Estate Management & Development - 6.3% (c) | ||||||||
| Altus Group, Ltd. | 715 | 28,883 | ||||||
| Real Matters, Inc. (a) | 1,249 | 5,315 | ||||||
| Tricon Residential, Inc. | 4,331 | 68,837 | ||||||
| Total Real Estate Management & Development | 103,035 | |||||||
| Cayman Islands - 6.3% | ||||||||
| Real Estate Management & Development - 3.7% (c) | ||||||||
| KE Holdings, Inc. - ADR (a) | 4,804 | 59,425 | ||||||
| Software - 2.6% | ||||||||
| Ming Yuan Cloud Group Holdings, Ltd. | 31,070 | 42,758 | ||||||
| Total Cayman Islands | 102,183 | |||||||
| Germany - 6.5% | ||||||||
| Diversified Financial Services - 2.5% | ||||||||
| Hypoport SE (a) | 104 | 39,623 | ||||||
| Interactive Media & Services - 4.0% | ||||||||
| Scout24 SE (d) | 1,133 | 65,176 | ||||||
| Total Germany | 104,799 | |||||||
| Italy - 1.4% | ||||||||
| Consumer Finance - 1.4% | ||||||||
| Gruppo MutuiOnline SPA | 639 | 22,903 | ||||||
| Japan - 1.1% | ||||||||
| Interactive Media & Services - 0.7% | ||||||||
| GA Technologies Co., Ltd. (a) | 571 | 6,332 | ||||||
| LIFULL Co., Ltd. | 2,121 | 4,303 | ||||||
| Total Interactive Media & Services | 10,635 | |||||||
| Real Estate Management & Development - 0.4% (c) | ||||||||
| SRE Holdings Corp. (a) | 246 | 6,860 | ||||||
| Total Japan | 17,495 | |||||||
| Sweden - 1.4% | ||||||||
| Interactive Media & Services - 1.4% | ||||||||
| Hemnet Group AB | 1,540 | 23,274 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG Real Estate Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| United Kingdom - 4.7% | ||||||||
| Interactive Media & Services - 4.7% | ||||||||
| Rightmove PLC | 9,211 | $ | 76,569 | |||||
| United States - 62.4% | ||||||||
| Electronic Equipment, Instruments & Components - 1.0% | ||||||||
| SmartRent, Inc. (a) | 3,080 | 15,585 | ||||||
| Hotels, Restaurants & Leisure - 5.8% | ||||||||
| Airbnb, Inc. - Class A (a) | 548 | 94,124 | ||||||
| Insurance - 2.7% | ||||||||
| Hippo Holdings, Inc. (a) | 8,939 | 17,789 | ||||||
| Lemonade, Inc. (a) | 980 | 25,843 | ||||||
| Total Insurance | 43,632 | |||||||
| Interactive Media & Services - 2.8% | ||||||||
| Angi, Inc. (a) | 7,969 | 45,184 | ||||||
| Internet & Direct Marketing Retail - 0.6% | ||||||||
| Porch Group, Inc. (a) | 1,556 | 10,806 | ||||||
| Professional Services - 5.8% | ||||||||
| CoStar Group, Inc. (a) | 1,419 | 94,520 | ||||||
| Real Estate Management & Development - 23.9% (c) | ||||||||
| Compass, Inc. - Class A (a) | 6,704 | 52,693 | ||||||
| Doma Holdings, Inc. (a) | 5,137 | 11,147 | ||||||
| eXp World Holdings, Inc. | 2,363 | 50,025 | ||||||
| Fathom Holdings, Inc. (a) | 257 | 2,750 | ||||||
| Offerpad Solutions, Inc. (a) | 3,796 | 19,094 | ||||||
| Opendoor Technologies, Inc. (a) | 8,518 | 73,681 | ||||||
| Redfin Corp. (a) | 1,690 | 30,488 | ||||||
| WeWork, Inc. - Class A (a) | 10,835 | 73,895 | ||||||
| Zillow Group, Inc. - Class A (a) | 1,557 | 75,094 | ||||||
| Total Real Estate Management & Development | 388,867 | |||||||
| Software - 10.8% | ||||||||
| Appfolio, Inc. - Class A (a) | 553 | 62,605 | ||||||
| Black Knight, Inc. (a) | 1,387 | 80,432 | ||||||
| Matterport, Inc. (a) | 4,022 | 32,659 | ||||||
| Total Software | 175,696 | |||||||
| Thrifts & Mortgage Finance - 9.0% | ||||||||
| loanDepot, Inc. - Class A | 4,910 | 20,377 | ||||||
| Radian Group, Inc. | 2,732 | 60,678 | ||||||
| Rocket Cos., Inc. - Class A | 5,949 | 66,153 | ||||||
| Total Thrifts & Mortgage Finance | 147,208 | |||||||
| Total United States | 1,015,622 | |||||||
| TOTAL COMMON STOCKS (Cost $2,448,293) | 1,614,272 | |||||||
The accompanying notes are an integral part of these financial statements.
ETFMG Real Estate Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| SHORT-TERM INVESTMENTS - 0.8% | ||||||||
| Money Market Funds - 0.8% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (b) | 13,625 | $ | 13,625 | |||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $13,625) | 13,625 | |||||||
| Total Investments (Cost $2,461,918) - 100.0% | 1,627,897 | |||||||
| Liabilities in Excess of Other Assets - (0.0)% (e) | (746 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 1,627,151 | ||||||
Percentages are stated as a percent of net assets.
| ADR | American Depositary Receipt |
| PLC | Public Limited Company |
| (a) | Non-income producing security. |
| (b) | The rate shown is the annualized seven-day yield at March 31, 2022. |
| (c) | As of March 31, 2022, the Fund had a significant portion of its assets invested in the Real Estate Management & Development industry. |
| (d) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. This security may be resold in transactions exempt from registration to qualified insitutional investors. At March 31, 2022, the market value of these securities total $65,176, which represents 4.0% of total net assets. |
| (e) | Less than 0.05% |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
ETFMG Real Estate Tech ETF
STATEMENT OF ASSETS AND LIABILITIES
As of March 31, 2022 (Unaudited)
| ETFMG Real Estate Tech ETF |
||||
| ASSETS | ||||
| Investments in securities, at value* | $ | 1,627,897 | ||
| Receivables: | ||||
| Dividends and interest receivable | 288 | |||
| Total Assets | 1,628,185 | |||
| LIABILITIES | ||||
| Payables: | ||||
| Management fees payable | 1,034 | |||
| Total Liabilities | 1,034 | |||
| Net Assets | $ | 1,627,151 | ||
| NET ASSETS CONSIST OF: | ||||
| Paid-in capital | $ | 2,500,000 | ||
| Total distributable earnings (accumulated losses) | (872,849 | ) | ||
| Net Assets | $ | 1,627,151 | ||
| *Identified Cost: | ||||
| Investments in securities | $ | 2,461,918 | ||
| Shares Outstanding^ | 100,000 | |||
| Net Asset Value, Offering and Redemption Price per Share | $ | 16.27 | ||
| ^ | No par value, unlimited number of shares authorized |
The accompanying notes are an integral part of these financial statements.
ETFMG Real Estate Tech ETF
STATEMENT OF OPERATIONS
For the Period Ended March 31, 2022 (Unaudited)1
| ETFMG Real Estate Tech ETF |
||||
| INVESTMENT INCOME | ||||
| Income: | ||||
| Dividends from unaffiliated securities (net of foreign witholding tax of $96) | $ | 9,545 | ||
| Interest | 2 | |||
| Total Investment Income | 9,547 | |||
| Expenses: | ||||
| Management fees | 6,770 | |||
| Total Expenses | 6,770 | |||
| Net Investment Income | 2,777 | |||
| REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||
| Net Realized Gain (Loss) on: | ||||
| Unaffiliated investments | (41,529 | ) | ||
| Foreign Currency | (76 | ) | ||
| Net Realized Loss on Investments and In-Kind Redemptions | (41,605 | ) | ||
| Net Change in Unrealized Appreciation/Depreciation of: | ||||
| Unaffiliated investments | (834,021 | ) | ||
| Net Change in Unrealized Appreciation/Depreciation of Investments | (834,021 | ) | ||
| Net Realized and Unrealized Loss on Investments | (875,626 | ) | ||
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (872,849 | ) | |
| 1 | The Fund commenced operations on October 19, 2021. |
The accompanying notes are an integral part of these financial statements.
ETFMG Real Estate Tech ETF
STATEMENT OF CHANGES IN NET ASSETS
| Period Ended March 31, 2022 (Unaudited)1 |
||||
| OPERATIONS | ||||
| Net investment income | $ | 2,777 | ||
| Net realized loss on investments and In-Kind Redemptions | (41,605 | ) | ||
| Net change in unrealized appreciation/depreciation of investments | (834,021 | ) | ||
| Net decrease in net assets resulting from operations | (872,849 | ) | ||
| CAPITAL SHARE TRANSACTIONS | ||||
| Net increase in net assets derived from net change in outstanding shares | 2,500,000 | |||
| Net increase in net assets | 1,627,151 | |||
| NET ASSETS | ||||
| Beginning of Period | — | |||
| End of Period | $ | 1,627,151 | ||
Summary of share transactions is as follows:
| Period Ended March 31, 2022 (Unaudited)1 |
|||||||||
| Shares | Amount | ||||||||
| Shares Sold | 100,000 | $ | 2,500,000 | ||||||
| Shares Redeemed | — | — | |||||||
| Net Transactions in Fund Shares | 100,000 | $ | 2,500,000 | ||||||
| Beginning Shares | — | ||||||||
| Ending Shares | 100,000 | ||||||||
| 1 | The Fund commenced operations on October 19, 2021. |
The accompanying notes are an integral part of these financial statements.
ETFMG Real Estate Tech ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout the period
| Period Ended March 31, 2022 (Unaudited)1 |
||||
| Net Asset Value, Beginning of Period | $ | 25.00 | ||
| Income (Loss) from Investment Operations: | ||||
| Net Investment Income2 | 0.03 | |||
| Net realized and unrealized loss on investments | (8.76 | ) | ||
| Total from investment operations | (8.73 | ) | ||
| Net asset value, end of period | $ | 16.27 | ||
| Total Return | -34.91 | % | ||
| Ratios/Supplemental Data: | ||||
| Net assets at end of period (000’s) | $ | 1,627 | ||
| Expenses to Average Net Assets | 0.75 | %4 | ||
| Net Investment Income (Loss) to Average Net Assets | 0.31 | %4 | ||
| Portfolio Turnover Rate | 12 | %3 | ||
| 1 | The Fund commenced operations on October 19, 2021. |
| 2 | Calculated based on average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG Real Estate Tech ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited)
NOTE 1 – ORGANIZATION
ETFMG Real Estate Tech ETF (the “Fund”) is a series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Fund’s shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”). The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Real Estate Technology Index – U.S. (“the Index”). The Fund commenced operations on October 19, 2021.
The Fund currently offers one class of shares, which has no front end sales load, no deferred sales charges, and no redemption fees. The Fund may issue an unlimited number of shares of beneficial interest, with no par value. All shares of the Fund have equal rights and privileges.
Shares of the Fund are listed and traded on the NYSE Arca, Inc. Market prices for the Shares may be different from their net asset value (“NAV”). The Fund issues and redeems Shares on a continuous basis at NAV only in blocks of 25,000 shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in the Index. Once created, Shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, Shares are not redeemable securities of the Fund. Shares of the Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the Shares directly from the Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and may be subject to customary brokerage commissions or fees.
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Transaction Fees” in the Statements of Changes in Net Assets.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Fund may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (“SEC”). For more information about the underlying fund’s operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the SEC.
ETFMG Real Estate Tech ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| A. | Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Fund’s Board. The use of fair value pricing by the Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. As of March 31, 2022, the Fund did not hold any fair valued securities.
As described above, the Fund utilizes various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. |
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| Level 3 | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
ETFMG Real Estate Tech ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The following table presents a summary of the inputs used to value the Fund’s net assets as of March 31, 2022:
ETFMG Real Estate Tech ETF
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 1,614,272 | $ | — | $ | — | $ | 1,614,272 | ||||||||
| Short-Term Investments | 13,625 | — | — | 13,625 | ||||||||||||
| Total Investments in Securities | $ | 1,627,897 | $ | — | $ | — | $ | 1,627,897 | ||||||||
^ See Schedule of Investments for classifications by sector or country.
| B. | Federal Income Taxes. The Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
To avoid imposition of the excise tax applicable to regulated investment companies, the Fund intends to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of the Fund’s next taxable year.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The Fund has analyzed its tax position and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Fund’s 2021 tax returns. The Fund identifies its major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
As of March 31, 2022, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the Fund, and has determined that no provision for income tax is required in the Fund’s financial statements.
| C. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Fund may be subject to income, withholding or other taxes imposed by foreign countries. |
| D. | Foreign Currency Translations and Transactions. The Fund may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Fund does not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Fund does isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
ETFMG Real Estate Tech ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| E. | Distributions to Shareholders. Distributions to shareholders from net investment income, if any, are declared and paid by the Fund on a quarterly basis. Distributions to shareholders from net realized gains on securities of the Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
| G. | Share Valuation. The net asset value (“NAV”) per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding by the Fund, rounded to the nearest cent. The Fund’s shares will not be priced on the days on which the NYSE is closed for trading. The offering and redemption price per share for the Fund is equal to the Fund’s net asset value per share. |
| H. | Guarantees and Indemnifications. In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote. |
NOTE 3 – RISK FACTORS
Investing in the ETFMG Real Estate Tech ETF may involve certain risks, as discussed in the Fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The Fund is not actively managed. Therefore, the Fund follows the securities included in its respective index during upturns as well as downturns. Because of its indexing strategy, the Fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Fund’s expenses, the Fund’s performance may be below that of its index.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
ETFMG Real Estate Tech ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Concentration Risk. To the extent that the Fund’s or its underlying index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the Fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19), have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Fund and its investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect global, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under these circumstances, the Fund may have difficulty achieving its investment objective which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Fund’s third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. These factors can cause substantial market volatility, exchange trading suspensions and closures and can impact the ability of the Fund to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A widespread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on the Fund’s performance, resulting in losses to the Fund.
NOTE 4 – MANAGEMENT AND CONTRACTS
ETF Managers Group, LLC (the “Advisor”), serves as the investment advisor to the Fund. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Fund, and the Advisor, the Advisor provides investment advice to the Fund and oversees the day-today operations of the Fund, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Advisor is also responsible for arranging transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Fund to operate.
Under the Investment Advisory Agreement with the Fund, the Advisor has overall responsibility for the general management and administration of the Fund and arranges for sub-advisory, transfer agency, custody, fund administration, securities lending, and all other non -distribution related services necessary for the Fund to operate. The Advisor bears the costs of all advisory and non-advisory services required to operate the Fund, in exchange for a single unitary fee. For services provided the Fund pays the Advisor at an annual rate of 0.75% of the Fund’s average daily net assets. Under the Investment Advisory Agreement, the Advisor has agreed to pay all expenses of the Fund, except for: the fee paid to the Advisor pursuant to the Investment Advisory Agreement, interest charges on any borrowings, 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”). The Advisor has entered into an agreement with its affiliate, ETFMG Financial, LLC, to serve as distributor to the Fund (the “Distributor”). The Distributor provides marketing support for the Fund, including distributing marketing materials related to the Fund.
ETFMG Real Estate Tech ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services (the “Administrator”) provides fund accounting, fund administration, and transfer agency services to the Fund. The Advisor compensates the Administrator for these services under an administration agreement between the two entities.
The Advisor pays each independent Trustee a quarterly fee for service to the Fund. Each Trustee is also reimbursed by the Advisor for all reasonable out-of-pocket expenses incurred in connection with his duties as Trustee, including travel and related expenses incurred in attending Board meetings.
NOTE 5 – DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to the Fund, with the amount of such compensation not to exceed an annual rate of 0.25% of each Fund’s average daily net assets. For the period ended March 31, 2022, the Fund did not incur any 12b-1 expenses.
NOTE 6 – PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, for the period ended March 31, 2022:
| Purchases | Sales | |||||||
| ETFMG Real Estate Tech ETF | $ | 245,882 | $ | 267,652 | ||||
The costs of purchases and sales of in-kind transactions associated with creations and redemptions for the period ended March 31, 2022:
| Purchases In- Kind |
Sales In- Kind |
|||||||
| ETFMG Real Estate Tech ETF | $ | 2,511,593 | $ | — | ||||
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all proceeds from in-kind sales. Net capital gains or losses resulting from in-kind redemptions are excluded from the determination of the Fund’s taxable gains and are not distributed to shareholders.
There were no purchases or sales of U.S. Government obligations for the period ended March 31, 2022.
NOTE 7 – LEGAL MATTERS
The Adviser and its parent, ETFMG, were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled[.]”
ETFMG Real Estate Tech ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (together with the Adviser, the “Adviser Defendants”) have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C -152-21 (the “NJ Action”). The NJ Action asserts breach of contract, defamation and other tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action. The NJ Action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022, the Adviser, together with the other named affiliates, filed a motion for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied.
NOTE 8 – SUBSEQUENT EVENTS
In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed below, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the Financial Statements.
With respect to Note 7 – Legal Matters, on May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust as well as, all claims asserted against the Adviser Defendants, aside from the defamation claim. The Adviser Defendants intend to vigorously defend themselves against this sole remaining claim.
ETFMG Real Estate Tech ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on August 24, 2021, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the approval of the Amended and Restated Investment Advisory Agreement (the “Agreement”) between ETF Managers Group LLC (the “Adviser”) and the Trust, on behalf of ETFMG Prime Real Estate Tech ETF (the “Fund”).
Pursuant to Section 15 of the 1940 Act, the Agreement must be approved by the vote of a majority of the Trustees who are not parties to the Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services to be provided to the Fund shareholders by the Adviser; (ii) comparative fee and expense data for the Fund in relation to other similar investment companies; (iii) the extent to which economies of scale may be realized as the Fund grows and whether the proposed advisory fee for the Fund reflects these expected economies of scale for the benefit of the Fund; and (iv) other financial benefits to the Adviser and its affiliates resulting from services to be rendered to the Fund. The Board’s review included written and oral information about the Adviser and services providers furnished to the Board prior to and at the meeting held on August 24, 2021, and throughout the year. Among other things, the Adviser provided responses to a detailed series of questions, which included information about the Adviser’s operations, service offerings, personnel, risk assessment and compliance programs and financial condition. Representatives of the Adviser discussed the services to be provided to the Fund, the rationale for launching the Fund, the marketing strategy and the Fund’s proposed fees in comparison to the fees of comparable investment companies. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentation and any other information that the Board received at the meeting and deliberated on the approval of the Agreement in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the approval of the Agreement, and the weight to be given to each such factor. The conclusions reached with respect to the Agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to the Fund. The matters discussed were also considered separately by the Independent Trustees in executive session with independent legal counsel, at which no representatives of management were present.
Nature, Extent and Quality of Services Provided.
The Trustees considered the scope of services to be provided under the Advisory Agreement, noting that the Adviser would be providing investment advisory services to the Fund. The Board discussed the responsibilities of the Adviser, including: the investment of the Fund’s assets in accordance with its investment objective and monitoring compliance with various fund policies and procedures and with applicable securities regulations, and arranging for transfer agency, custody, fund administration, and all other non-distribution related services necessary for the Fund to operate. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the quality of the Adviser’s compliance infrastructure and risk assessment capabilities; the marketing strategy for the Fund and the determination of the Trust’s Chief Compliance Officer that the Adviser has appropriate compliance policies and procedures in place that are reasonably designed to prevent violations of the Federal Securities laws. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the provision of high-quality services to the Fund, such as the hiring of trading, legal and compliance personnel, and enhancements to technology and related systems. The Board also considered the Adviser’s experience managing ETFs, as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
ETFMG Real Estate Tech ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services to be provided to the Fund by the Adviser.
Historical Performance.
The Board noted that the Fund has not yet commenced operations and that therefore there was no prior performance to review.
Cost of Services Provided, Fall-Out Benefits and Economies of Scale.
The Board reviewed the proposed investment advisory fee for the Fund and compared it to the total operating expenses of other funds in the industry falling within the same style category, or peer group, as the Fund, as determined by the Adviser, using data received from an independent third party. The Board noted that the expense ratio for the Fund was higher than the average and median expense ratio for its peer ETFs. The Board took into consideration management’s discussion of the fees, including that there are limited true peers for the Fund because of its niche strategies and certain differences between the strategies of the Fund and its peer funds.
The Board also noted the importance of the fact that the advisory fee for the Fund was a “unified fee,” meaning that the shareholders of the Fund would pay no expenses other than the advisory fee, interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, certain proxy solicitation costs and non-standard Board-related expenses and litigation against the Board, Trustees, Fund, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses (the “Excluded Expenses”). The Board also noted that the Adviser would be responsible for compensating the Fund’s other service providers and paying the Fund’s other expenses out of its own fee and resources. The Board further noted that because the Fund is new, it was difficult to estimate the profitability of the Fund to the Adviser. The Board, however, considered collateral or “fall-out” benefits that ETFMG and its affiliates may derive as a result of their relationship with the Fund.
The Board noted that because the Fund is new, it also was difficult to estimate whether the Fund would experience economies of scale. The Board noted that the Adviser will review expenses as the Fund’s assets grow. The Board determined to evaluate economies of scale on an ongoing basis if the Fund achieved asset growth.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision. Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Agreement are fair and reasonable; (b) concluded that the Adviser’s fees are reasonable in light of the services that the Adviser will provide to the Fund; and (c) approved the Agreement for an initial term of two years.
ETFMG TM ETFs
Expense Example
Period Ended March 31, 2022 (Unaudited)
As a shareholder of ETFMG Real Estate Tech ETF (the “Fund”) you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 19, 2021 to March 31, 2022), except as noted in footnotes below.
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then, multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher
ETFMG Real Estate Tech ETF
| Beginning Account Value October 1, 2021 |
Ending Account Value March 31, 2022 |
Expenses Paid During the Period^ |
Annualized Expense Ratio During Period |
|||||||||||||
| Actual | $ | 1,000.00 | $ | 650.90 | $ | 2.78 | (1) | 0.75 | % | |||||||
| Hypothetical (5% annual) | $ | 1,000.00 | $ | 1,021.19 | $ | 3.78 | (2) | 0.75 | % | |||||||
| (^) | Fund commenced operations on October 19, 2021. |
| (1) | Actual expenses are calculated using the Fund’s annualized expense ratio, multiplied by the average account value during the period, multiplied by the number of days in the most recent inception period, 164 days, and divided by the number of days in the most recent twelve-month period, 365 days. |
| (2) | Hypothetical expenses are calculated using the Fund’s annualized expense ratio multiplied by the average account value during the period, multiplied by the number of days in the most recent six-month period, 182 days, and divided by the number of days in the most recent twelve-month period, 365 days. For comparative purposes only as the Fund was not in operation for the full six-month period. |
ETFMG Real Estate Tech ETF
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
March 31, 2022 (Unaudited)
ETF Managers Trust (the “Trust”) has adopted a liquidity risk management program (the “Program”). The Trust’s Board of Trustees (the “Board”) has designated ETF Managers Group LLC (the “Program Administrator”) as the administrator of the Program. The Program Administrator has designated a committee (the “Committee”), composed of personnel from multiple departments, including investment operations and compliance, that is responsible for the implementation and ongoing administration of the Program, which includes assessing the liquidity risk of the ETFMG Prime Real Estate Tech ETF (the “Fund”) under both normal and reasonably foreseeable stressed conditions.
Under the Program, the Program Administrator assesses, manages and periodically reviews the Fund’s liquidity risk, based on factors specific to the circumstances of the Fund. Liquidity risk is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments and limiting the amount of the Fund’s illiquid investments, among other means. The Program Administrator’s process of determining the degree of liquidity of the Fund’s investments is supported by one or more third-party liquidity assessment vendors.
At a meeting of the Board on March 28-29, 2022, the Adviser provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, the operation of any Highly Liquid Investment Minimum, where applicable, and any material changes to the Program, for the period from March 1, 2021 through March 1, 2022 (the “Reporting Period”). No significant liquidity events impacting the Fund were noted in the report and it was represented that, as of December 31, 2021, the Fund was primarily highly liquid and, during the Reporting Period, the Fund held less than 15% in illiquid securities. In addition, the Program Administrator provided its assessment that Program implementation was effective and that the Program operated adequately and effectively to enable the Program Administrator to oversee and manage liquidity risk and ensure the Fund is able to meet requests to redeem shares without significant dilution to the remaining investors’ interest in the Fund.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
ETFMG TM ETFs
SUPPLEMENTARY INFORMATION
March 31, 2022 (Unaudited)
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of the Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.etfmgfunds.com.
NOTE 2 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund files a complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Part F of Form N-PORT. Once filed, the Fund’s Part F of Form N-PORT is available without charge, upon request on the SEC’s website (www.sec.gov), the Fund’s website (www.etfmgfunds.com) and is available by calling (877) 756-7873. The Fund’s portfolio holdings are posted on the Fund’s website at www.etfmgfunds.com daily.
NOTE 3 – INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477), by accessing the SEC’s website at www.sec.gov, or by accessing the Fund’s website at www.etfmgfunds.com.
Information regarding how the Fund voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477) or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF -MGRS (1-844-383-6477) or by visiting www.etfmgfunds.com. Read the prospectus carefully before investing.
ETFMG TM ETFs
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
| 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 |
Number
of Portfolios in Fund Complex Overseen By Trustee |
Other Directorships Held by Trustee During Past 5 Years |
| Interested Trustee and Officers | ||||
| Samuel Masucci, III (1962) |
Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) | Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). | 20 | None |
| John A. Flanagan, (1946) |
Treasurer (since 2015) | President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). | n/a | n/a |
| Reshma A. Tanczos (1978) |
Chief Compliance Officer (since 2016) | Chief Compliance Officer of ETFMG Financial LLC (since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). | n/a | n/a |
| Matthew J. Bromberg (1973) |
Assistant Secretary (since 2020) | General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015-2016). | n/a | n/a |
| * Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. | ||||
ETFMG TM ETFs
Board of Trustees (Continued)
| 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 |
Number of Portfolios in Fund Complex Overseen By Trustee |
Other Directorships Held by Trustee During Past 5 Years |
| Independent Trustees | ||||
| Terry Loebs (1963) |
Trustee (since 2014); Lead Independent Trustee (since 2020) | Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). | 20 | None |
| Eric Wiegel (1960) |
Trustee (since 2020) | Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018). | 20 | None |
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services
615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006
ETFMG Alternative Harvest ETF
MJ
ETFMG U.S. Alternative Harvest ETF
MJUS
ETFMG 2x Daily Alternative Harvest ETF
MJXL
ETFMG 2x Daily Inverse Alternative
Harvest ETF
MJIN
Semi-Annual Report
March 31, 2022
(Unaudited)
The funds are series of ETF Managers Trust.
ETFMG TM ETFs
TABLE OF CONTENTS
March 31, 2022 (Unaudited)
ETFMG TM ETFs
On behalf of the entire team, we want to express our appreciation for the confidence you have placed in our ETFs. The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
Performance Overview
During the 6-month period ended March 31, 2022, the S&P 500 Index, a broad measure of US companies, returned 5.91%. Below is a performance overview for each Fund for the same 6-month period.
ETFMG Alternative Harvest ETF (MJ) Performance Review
The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022. MJ seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Prime Alternative Harvest Index (the “Index”). Over the period, the total return for MJ was -27.64%, while the total return for the Index was -27.64%. The best performers, on the basis of contribution to return, were Arena Pharmaceuticals Inc, Vector Group Ltd, British American Tobacco Plc, Jazz Pharmaceuticals Plc and Wm Technology Inc, while the worst performers Canopy Growth Corp, Growgeneration Corp, Aurora Cannabis Inc, Hexo Corp and Tilray Brands Inc.
During the reporting period, MJ saw an average approximate allocation of 60.5% to Health Care, 21.85% to Consumer Staples and 5.96% to Consumer Discretionary. The portfolio securities of MJ were exposed predominately to Canada at 53.37%, 34.91% to the United States and 4.6% to United Kingdom.
ETFMG U.S. Alternative Harvest ETF (MJUS) Performance Review
The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022. MJUS seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Prime U.S. Alternative Harvest Index (the “U.S. Index”).
Over the period, the total return for MJUS was -36.10%, while the total return the for the U.S. Index was -34.54%. The best performers in MJUS, on the basis of contribution to return, were Medicine Man Technologies In, Riv Capital Inc, Harvest Health & Recreation and Cansortium Inc and Ceres Acquisition Corp - A, while the worst performers were Curaleaf Holdings Inc, Hydrofarm Holdings Group Inc, Growgeneration Corp, Green Thumb Industries Inc and Cresco Labs Inc-Subordinate.
During the reporting period, MJUS saw an allocation of 66.01% to Health Care, 12.87% to Real Estate and 5.92% to Industrials
The portfolio securities of MJUS were primarily exposed to the United States at 82.95% and Canada at 18.03%.
ETFMG 2x Daily Alternative Harvest ETF (MJXL); and
ETFMG 2X Daily Inverse Alternative Harvest ETF (MJIN)
Operational Review
The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022. MJXL and MJIN (collectively, the “Funds”) are leveraged and seek daily investment results, before fees and expenses, of 200%, with respect to MJXL or -200% with respect to MJIN, of the performance of the Index. The Funds, as stated above, seek daily investment results. Neither of the Funds seek to track a multiple of the Index for periods of longer than one day and the performance of the Funds, over longer periods, may not correlate to the Index performance. The Funds should not be held by investors for long periods and should be used as short-term trading vehicles. These products are not suitable for all investors and should be utilized only by sophisticated investors who understand the risks associated with the use of leverage, the consequences of seeking daily leveraged investment results and intend to actively monitor and manage their investments.
ETFMG TM ETFs
MJXL attempts to provide investment results that correlate to 200% of the return of the Index, meaning MJXL attempts to move in the same direction as the Index. MJIN attempts to provide investment results that correlate to -200% of the return of the Index, meaning that MJIN attempts to move in the opposite, or inverse, direction of the Index.
In seeking to achieve the Funds’ daily investment results, ETF Managers Group LLC (the “Adviser”) relies upon quantitative analysis to generate orders resulting in repositioning the Funds’ investments in accordance with its daily investment objective. Using this approach, the Adviser determines the type, quantity and mix of investment positions that it believes in combination should produce daily returns consistent with the Funds’ objectives. As a consequence, if the Funds are performing as designed, the return of the Index will dictate the return for the Funds. Each MJIN and MJXL pursues its investment objective regardless of market conditions and does not take defensive positions. Each MJIN and MJXL has a clearly articulated goal which requires it to seek economic exposure significantly in excess of its net assets. To meet its objectives, each of the Funds invests in some combination of financial instruments, including significant investment in derivatives primarily comprised of swap agreements. The Adviser uses these types of investments to produce economically “leveraged” investment results. Leveraging allows the Adviser to generate a greater positive or negative return than what would be generated on the invested capital without leverage, thus changing small market movements into larger changes in the value of the investments of the Funds.
The Funds use of certain investment techniques, including investments in derivatives, may be considered aggressive. Investments in derivatives in general, are subject to market risks that may cause their prices to fluctuate dramatically over time. Additionally, use of such instruments will most likely increase the volatility of the Funds. The use of derivatives may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives, such as counterparty risk. The use of derivatives may also result in larger losses or smaller gains than otherwise would be the case.
Because each of the Funds seek daily investment results of the Index, a comparison of the return of the Funds to the Index does not provide an indication of whether either or the Funds met its respective investment objective. To determine if each of the Funds met its daily investment goals, the Adviser performs quantitative analysis seeking to determine the expected performance of each of the Funds as compared to Index. The quantitative analysis includes predictive models as well as stress-testing and back-testing. Factors Affecting Performance of the Funds:
Leverage – Each of the Funds seeks daily investment results (before fees and expenses) of 200% or - 200% of the performance of the Index. The use of leverage magnifies the Funds’ gains or losses and increases the investment’s risk and volatility.
Index Performance – The daily performance of Index, and the factors and market conditions implicitly affecting the Index, are the primary factors driving each of the Funds’ performance. Given the daily goals, the daily
Index returns are most important. The market conditions that affected the Index during the past year are described in the Performance Overview section.
Volatility and Compounding – The goal of the Funds is to provide the specified multiple of the daily return of the Index. Over periods longer than a single day, neither of the Funds should be expected to provide the multiple of the return of the underlying index. Due to the effects of compounding, a universal mathematical concept that applies to all investments, returns of the Funds over longer periods are greater or less than its daily stated goal. Periods of high volatility that lack a clear trend hurt the Funds’ performance while trending, low volatility markets enhance the Funds’ performance.
ETFMG TM ETFs
Cost of Financing – In order to attain leveraged or inverse leveraged exposure, each of the Funds receives OBFR plus or minus a spread as applied to the borrowed portion of the Funds’ exposure. The spread varies between each of the Funds and counterparty and is a function of market demand, hedging costs, access to balance sheet, borrow volatility, current counterparty exposure and administrative costs associated with the swap counterparty. An increase in interest rates which effects the cost of financing will further impact the performance of each of the Funds and its ability to track the Index.
Fees, Expenses, and Transaction Costs – Fees and expenses are listed in each of the Funds’ prospectus and may be higher than many traditional index funds’ fees, which cause a greater negative impact on performance. Transactions costs are not included in the expense ratio of the Funds. Transaction costs can be higher due to the use of derivatives, shorting securities, frequent creation and redemption activity, or trading securities that are comparatively less liquid.
Swap Agreements:
During the reporting period, the Funds invested in swap agreements in order to gain the desired exposure to the Index. These derivatives generally tracked the performance of MJ and the Funds were generally negatively impacted from financing rates associated with their use. The Funds entered into swap agreements with counterparties that the Adviser determined to be significant global financial institutions.
If a counterparty becomes insolvent or otherwise fails to perform on its obligations, the value of investments in the Funds may decline. The Funds have sought to mitigate this risk by generally requiring counterparties to post collateral for the benefit of the Funds, marked to market daily, in an amount approximately equal to the amount the counterparty owed each of the Funds, subject to certain minimum thresholds.
Performance Review
The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
ETFMG 2X Daily Alternative Harvest ETF (MJXL)
MJXL seeks to provide daily investment results, before fees and expenses, that correspond to two times (2x) the return of the Index for a single day, not for any other period. Over the reporting period, the Index had a total return of -27.64% and a volatility of 45.2%. Given the daily investment objectives of MJXL and the path dependency of returns for longer periods, the return of the Index for the reporting period alone should not generate expectations of MJXL performance for the same period. MJXL returned -53.04% for the reporting period and had a volatility of 91.2%. For the reporting period MJXL had an average daily volume of 11,875 shares and an average daily statistical correlation of 99.4% to the return of the Index.
ETFMG 2X Daily Inverse Alternative Harvest ETF (MJIN) Performance Review
The following information pertains to the fiscal period from the inception of MJIN on October 5, 2021, to March 31, 2022. MJIN seeks to provide daily investment results, before fees and expenses, that correspond to two times (2x) the return of the Index for a single day, not for any other period. Over the reporting period applicable to MJIN, the Index had a total return of -26.67 % and a volatility of 45.9%. Given the daily investment objectives of MJIN and the path dependency of returns for longer periods, the return of the Index for the reporting period alone should not generate expectations of MJIN performance for the same period. MJIN returned 20.49% for the reporting period and had a volatility of 93.9%. For the reporting period MJIN had an average daily volume of 3,477 shares and an average daily statistical correlation of -99.4% to the return of the Index.
ETFMG TM ETFs
We thank you for your interest in our ETFs. You can find further details about MJ, MJUS, MJXL and MJIN by visiting www.etfmg.com, or by calling 1-844-ETF-MGRS (1-844-383-6477).
Sincerely,
Samuel Masucci III
Chairman of the Board
ETFMG Alternative Harvest ETF
|
Average Annual Returns |
1 Year Return |
5 Year Return |
Since Inception (12/03/15) |
Value of $10,000 (3/31/2022) |
|||||||||||
| ETFMG Alternative Harvest ETF (NAV) | -53.98 | % | -15.69 | % | -8.42 | % | $ | 5,734 | |||||||
| ETFMG Alternative Harvest ETF(Market) | -54.11 | % | -15.73 | % | -8.94 | % | $ | 5,530 | |||||||
| S&P 500 Index | 15.65 | % | 15.99 | % | 15.51 | % | $ | 24,897 | |||||||
| Prime Alternative Harvest Index* | -54.12 | % | -16.49 | % | -8.94 | % | $ | 5,531 | |||||||
* On December 26, 2017, the Fund’s investment objective and principal investment strategy were substantially revised; therefore, the performance and average annual total returns shown for periods prior to December 26, 2017 is likely to have differed had the Fund’s current investment strategy been in effect during those periods. The Fund’s prior investment objective sought to provide investment results that corresponded to the performance of the Solactive Latin America Real Estate Index, which tracked equities with primary listings in the Latin America region that derived most of their income from real estate and real estate services. The Fund began tracking the Prime Alternative Harvest Index on December 26, 2017.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on December 3, 2015, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG Alternative Harvest ETF
Top Ten Holdings as of March 31, 2022 (Unaudited)*
| Security |
% of Total Investments |
||||
| 1 | ETFMG Sit Ultra Short ETF** | 7.79% | |||
| 2 | Tilray Brands, Inc. | 6.91% | |||
| 3 | Canopy Growth Corp. | 5.14% | |||
| 4 | Sundial Growers, Inc. - ADR | 5.02% | |||
| 5 | Cronos Group, Inc. | 4.10% | |||
| 6 | GrowGeneration Corp. | 3.96% | |||
| 7 | Aurora Cannabis, Inc. | 3.67% | |||
| 8 | Organigram Holdings, Inc. | 2.94% | |||
| 9 | WM Technology, Inc. | 2.28% | |||
| 10 | High Tide, Inc. | 2.03% |
Top Ten Holdings= 43.84% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
** Affiliated security. Please refer to Note 9 of the Notes to Financial Statements.
ETFMG U.S. Alternative Harvest ETF
Growth of $10,000 (Unaudited)
|
Average Cumulative Returns Period Ended March 31, 2022 |
Since Inception (5/12/2021) |
Value of $10,000 (3/31/2022) |
|||||
| ETFMG U.S. Alternative Harvest ETF (NAV) | -50.68 | % | $ | 4,932 | |||
| ETFMG U.S. Alternative Harvest ETF (Market) | -50.70 | % | $ | 4,930 | |||
| S&P 500 Index | 12.92 | % | $ | 11,292 | |||
| Prime US Alternative Harvest Index NTR | -48.57 | % | $ | 5,143 | |||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844 -ETF-MGRS (1-844-383 -6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on May 12, 2021, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG U.S. Alternative Harvest ETF
Top Holdings as of March 31, 2022 (Unaudited)*
| Security |
% of Total Investments |
||||
| 1 | Innovative Industrial Properties, Inc. | 19.59% | |||
| 2 | WM Technology, Inc. | 10.15% | |||
| 3 | GrowGeneration Corp. | 8.79% | |||
| 4 | Charlottes Web Holdings, Inc. | 7.47% | |||
| 5 | Hydrofarm Holdings Group, Inc. | 7.15% | |||
| 6 | AFC Gamma, Inc. | 6.95% | |||
| 7 | Power REIT | 4.45% | |||
| 8 | Flora Growth Corp. | 4.29% | |||
| 9 | Agrify Corp. | 3.90% | |||
| 10 | Zynerba Pharmaceuticals, Inc. | 2.96% |
Top Holdings = 75.70% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
ETFMG 2x Daily Alternative Harvest ETF
Growth of $10,000 (Unaudited)
|
Average Cumulative Returns Period Ended March 31, 2022 |
Since Inception (7/6/2021) |
Value of $10,000 (3/31/2022) |
|||||
| ETFMG 2x Daily Alternative Harvest ETF (NAV) | -76.00 | % | $ | 2,400 | |||
| ETFMG 2x Daily Alternative Harvest ETF (Market) | -75.40 | % | $ | 2,460 | |||
| S&P 500 Index | 5.38 | % | $ | 10,538 | |||
| Prime Alternative Harvest Index NTR | -47.80 | % | $ | 5,220 | |||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on July 6, 2021, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG 2x Daily Inverse
Alternative Harvest ETF
Growth of $10,000 (Unaudited)
|
Average Cumulative Returns Period Ended March 31, 2022 |
Since Inception (10/5/2021) |
Value of $10,000 (3/31/2022) |
|||||
| ETFMG 2x Daily Inverse Alternative Harvest ETF (NAV) | 20.49 | % | $ | 12,041 | |||
| ETFMG 2x Daily Inverse Alternative Harvest ETF (Market) | 20.16 | % | $ | 12,016 | |||
| S&P 500 Index | 4.97 | % | $ | 10,497 | |||
| Prime Alternative Harvest Index NTR | -27.12 | % | $ | 7,288 | |||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on October 5, 2021, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
ETFMG TM ETFs
Important Disclosures and Key Risk Factors
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
MJ
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 legalizes its use for medicinal and recreational purposes. Cannabis companies and pharmaceutical companies may never be able to legally produce and sell products in the United States or other national or local jurisdictions.
The Fund’s investments will be concentrated in an industry or group of industries to the extent that the Index is so concentrated. In such event, the value of the Fund’s shares may rise and fall more than the value of shares of a fund that invests in securities of companies in a broader range of industries. The consumer staples sector may be affected by the permissibility of using various product components and production methods, marketing campaigns and other factors affecting consumer demand. Tobacco companies, in particular, may be adversely affected by new laws, regulations and litigation. The consumer staples sector may also be adversely affected by changes or trends in commodity prices, which may be influenced or characterized by unpredictable factors.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
ETF Managers Group LLC is the investment adviser to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG Financial is not affiliated with Prime Indexes.
ETFMG TM ETFs
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
MJUS
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 legalizes its use for medicinal and recreational purposes. Cannabis companies and pharmaceutical companies may never be able to legally produce and sell products in the United States or other national or local jurisdictions.
The Fund’s investments will be concentrated in an industry or group of industries to the extent that the Index is so concentrated. In such event, the value of the Fund’s shares may rise and fall more than the value of shares of a fund that invests in securities of companies in a broader range of industries. The consumer staples sector may be affected by the permissibility of using various product components and production methods, marketing campaigns and other factors affecting consumer demand. Tobacco companies, in particular, may be adversely affected by new laws, regulations and litigation. The consumer staples sector may also be adversely affected by changes or trends in commodity prices, which may be influenced or characterized by unpredictable factors.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
The Fund is a recently organized, diversified management investment company with limited operating history. ETF Managers Group LLC is the investment adviser to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG is not affiliated with Prime Indexes.
ETFMG TM ETFs
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
MJXL and MJIN
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 legalizes its use for medicinal and recreational purposes. Cannabis companies and pharmaceutical companies may never be able to legally produce and sell products in the United States or other national or local jurisdictions.
The Fund’s investments will be concentrated in an industry or group of industries to the extent that the Index is so concentrated. In such event, the value of the Fund’s shares may rise and fall more than the value of shares of a fund that invests in securities of companies in a broader range of industries. The consumer staples sector may be affected by the permissibility of using various product components and production methods, marketing campaigns and other factors affecting consumer demand. Tobacco companies, in particular, may be adversely affected by new laws, regulations and litigation. The consumer staples sector may also be adversely affected by changes or trends in commodity prices, which may be influenced or characterized by unpredictable factors.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
Investing in an ETFMG 2x Daily Leveraged ETF may be more volatile than investing in broadly diversified funds. The use of leverage by an ETF increases the risk to the ETF. The ETFMG 2x Daily Leveraged ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment.
The use of derivatives such as swaps are subject to additional risks that may cause prices to fluctuate over time and include the effects of compounding, market volatility, leverage risk, aggressive investment techniques risk, counterparty risk, and intra-day investment risk. Please see the summary and full prospectuses for a more complete description of these and other risks of investing in the Fund.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
ETFMG TM ETFs
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
The Fund is a recently organized, diversified management investment company with limited operating history. ETF Managers Group LLC is the investment advisor to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG is not affiliated with Prime Indexes.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
ETFMG TM ETFs
As of March 31, 2022 (Unaudited)
|
ETFMG Alternative Harvest ETF |
ETFMG U.S. Alternative Harvest ETF |
ETFMG 2x Daily Alternative Harvest ETF |
ETFMG 2x Daily Inverse Alternative Harvest ETF |
|||||||||
| As a percent of Net Assets: | ||||||||||||
| Australia | 1.5 | % | — | % | — | % | — | % | ||||
| Canada | 45.0 | 6.3 | — | — | ||||||||
| Denmark | 0.6 | — | — | — | ||||||||
| Ireland | 2.8 | — | — | — | ||||||||
| Israel | 1.7 | — | — | — | ||||||||
| Sweden | 2.5 | — | — | — | ||||||||
| United Kingdom | 4.6 | — | — | — | ||||||||
| United States | 40.5 | 34.3 | — | — | ||||||||
| Exchange Traded Funds | 11.7 | — | — | — | ||||||||
| Short-Term and other Net Assets | ||||||||||||
| (Liabilities) | (10.9 | ) | 59.4 | 100.0 | 100.0 | |||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||
ETFMG Alternative Harvest ETF
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| COMMON STOCKS - 99.2% | ||||||||
| Australia - 1.5% | ||||||||
| Pharmaceuticals - 0.0% (d)(g) | ||||||||
| Incannex Healthcare, Ltd. (a)(c) | 1,816,890 | $ | 251,522 | |||||
| Tobacco - 1.5% | ||||||||
| Incannex Healthcare, Ltd. (a) | 27,509,723 | 11,013,276 | ||||||
| Total Australia | 11,264,798 | |||||||
| Canada - 45.0% | ||||||||
| Food Products - 2.8% | ||||||||
| Village Farms International, Inc. (a)(b) | 3,784,105 | 19,980,074 | ||||||
| Pharmaceuticals - 42.2% (g) | ||||||||
| Aurora Cannabis, Inc. (a)(b) | 9,979,874 | 39,919,496 | ||||||
| Auxly Cannabis Group, Inc. (a)(b) | 60,203,719 | 7,945,937 | ||||||
| Canopy Growth Corp. (a)(b) | 7,362,266 | 55,805,976 | ||||||
| Charlottes Web Holdings, Inc. (a)(b) | 13,187,118 | 14,240,379 | ||||||
| Clever Leaves Holdings, Inc. (a)(b) | 982,521 | 2,446,477 | ||||||
| Cronos Group, Inc. (a)(b) | 11,461,731 | 44,586,134 | ||||||
| HEXO Corp. (a)(b)(f) | 31,038,928 | 19,241,031 | ||||||
| High Tide, Inc. (a)(b) | 4,850,145 | 22,075,211 | ||||||
| MediPharm Labs Corp. (a)(b) | 17,616,231 | 2,606,889 | ||||||
| Organigram Holdings, Inc. (a)(b)(f) | 19,248,707 | 31,952,854 | ||||||
| Sundial Growers, Inc. (a)(b) | 77,898,736 | 54,529,115 | ||||||
| Valens Co, Inc. (a)(b) | 5,312,211 | 9,008,429 | ||||||
| Total Pharmaceuticals | 304,357,928 | |||||||
| Total Canada | 324,338,002 | |||||||
| Denmark - 0.6% | ||||||||
| Tobacco - 0.6% | ||||||||
| Scandinavian Tobacco Group AS | 199,257 | 4,261,263 | ||||||
| Ireland - 2.8% | ||||||||
| Pharmaceuticals - 2.8% (g) | ||||||||
| Jazz Pharmaceuticals PLC (a) | 130,573 | 20,326,299 | ||||||
| Israel - 1.7% | ||||||||
| Pharmaceuticals - 1.7% (g) | ||||||||
| Intercure, Ltd. (a)(b) | 1,710,037 | 12,055,761 | ||||||
| Mexico - 0.0% (d) | ||||||||
| Construction & Engineering - 0.0% (d) | ||||||||
| Empresas ICA SAB de CV (a)(c) | 155,893 | — | ||||||
| Sweden - 2.5% | ||||||||
| Tobacco - 2.5% | ||||||||
| Swedish Match | 2,386,641 | 17,991,695 | ||||||
The accompanying notes are an integral part of these financial statements.
ETFMG Alternative Harvest ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| United Kingdom - 4.6% | ||||||||
| Tobacco - 4.6% | ||||||||
| British American Tobacco PLC | 414,447 | $ | 17,392,031 | |||||
| Imperial Brands PLC | 747,973 | 15,824,320 | ||||||
| Total Tobacco | 33,216,351 | |||||||
| Total United Kingdom | 33,216,351 | |||||||
| United States - 40.5% | ||||||||
| Biotechnology - 0.8% | ||||||||
| Corbus Pharmaceuticals Holdings, Inc. (a)(b)(f) | 11,380,099 | 6,048,523 | ||||||
| Chemicals - 2.0% | ||||||||
| Scotts Miracle-Gro Co. | 120,004 | 14,755,692 | ||||||
| Machinery - 3.1% | ||||||||
| Agrify Corp. (a)(b)(f) | 1,578,149 | 7,306,830 | ||||||
| Hydrofarm Holdings Group, Inc. (a) | 1,015,183 | 15,380,022 | ||||||
| Total Machinery | 22,686,852 | |||||||
| Paper & Forest Products - 2.3% | ||||||||
| Schweitzer-Mauduit International, Inc. | 587,002 | 16,142,555 | ||||||
| Pharmaceuticals - 11.5% (g) | ||||||||
| Tilray Brands, Inc. (a)(b) | 9,661,222 | 75,067,696 | ||||||
| Zynerba Pharmaceuticals, Inc. (a)(b)(f) | 3,649,762 | 7,482,012 | ||||||
| Total Pharmaceuticals | 82,549,708 | |||||||
| Software - 3.4% | ||||||||
| WM Technology, Inc. (a)(b) | 3,162,293 | 24,729,131 | ||||||
| Specialty Retail - 6.0% | ||||||||
| GrowGeneration Corp. (a)(b)(f) | 4,672,004 | 43,029,157 | ||||||
| Tobacco - 11.4% | ||||||||
| 22nd Century Group, Inc. (a)(b)(f) | 8,861,305 | 20,558,228 | ||||||
| Altria Group, Inc. | 350,301 | 18,303,227 | ||||||
| Philip Morris International, Inc. | 172,448 | 16,199,765 | ||||||
| Turning Point Brands, Inc. | 254,704 | 8,662,483 | ||||||
| Vector Group, Ltd. | 1,561,908 | 18,805,372 | ||||||
| Total Tobacco | 82,529,075 | |||||||
| Total United States | 292,470,693 | |||||||
| TOTAL COMMON STOCKS (Cost $1,278,568,143) | 715,924,862 | |||||||
| INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL - 50.6% | ||||||||
| ETFMG Sit Ultra Short ETF (f) | 1,725,000 | 84,636,435 | ||||||
| Mount Vernon Liquid Assets Portfolio, LLC, 0.41% (e) | 280,761,005 | 280,761,005 | ||||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $366,579,603) | 365,397,440 | |||||||
The accompanying notes are an integral part of these financial statements.
ETFMG Alternative Harvest ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| SHORT-TERM INVESTMENTS - 0.7% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (e) | 5,224,893 | $ | 5,224,893 | |||||
| TOTAL SHORT- TERM INVESTMENTS (Cost $5,224,893) | 5,224,893 | |||||||
| Total Investments (Cost $1,650,372,639) - 150.5% | 1,086,547,195 | |||||||
| Liabilities in Excess of Other Assets - (50.5)% | (364,485,435 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 722,061,760 | ||||||
Percentages are stated as a percent of net assets.
PLC Public Limited Company
| (a) | Non-income producing security. |
| (b) | This security or a portion of this security was out on loan at March 31, 2022. |
| (c) | Value determined using significant unobservable inputs. The value of these securities totals $251,522, which represents 0.0% of total net assets. Classified as Level 3 in the fair value hierarchy. |
| (d) | Less than 0.05% |
| (e) | The rate shown is the annualized seven-day yield at period end. |
| (f) | Affiliated security. Please refer to Note 9 of the Notes to Financial Statements. |
| (g) | As of March 31, 2022 the Fund had a significant portion of its assets in the Pharmaceutical Industry. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
ETFMG U.S. Alternative Harvest ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| COMMON STOCKS - 40.6% | ||||||||
| Canada - 6.3% | ||||||||
| Personal Products - 2.3% | ||||||||
| Flora Growth Corp. (a) | 46,809 | $ | 91,746 | |||||
| Pharmaceuticals - 4.0% | ||||||||
| Charlottes Web Holdings, Inc. (a) | 147,997 | 159,817 | ||||||
| Total Canada | 251,563 | |||||||
| United States - 34.3% | ||||||||
| Machinery - 6.0% | ||||||||
| Agrify Corp. (a) | 18,047 | 83,558 | ||||||
| Hydrofarm Holdings Group, Inc. (a) | 10,096 | 152,954 | ||||||
| Total Machinery | 236,512 | |||||||
| Pharmaceuticals - 1.6% | ||||||||
| Zynerba Pharmaceuticals, Inc. (a) | 30,892 | 63,329 | ||||||
| Real Estate Investment Trusts (REITs) - 16.6% | ||||||||
| AFC Gamma, Inc. | 7,785 | 148,849 | ||||||
| Innovative Industrial Properties, Inc. | 2,041 | 419,222 | ||||||
| Power REIT (a) | 2,418 | 95,245 | ||||||
| Total Real Estate Investment Trusts (REITs) | 663,316 | |||||||
| Software - 5.4% | ||||||||
| WM Technology, Inc. (a) | 27,778 | 217,224 | ||||||
| Specialty Retail - 4.7% | ||||||||
| GrowGeneration Corp. (a) | 20,435 | 188,206 | ||||||
| Total United States | 1,368,587 | |||||||
| TOTAL COMMON STOCKS (Cost $2,514,310) | 1,620,150 | |||||||
| SHORT-TERM INVESTMENTS - 13.0% | ||||||||
| Money Market Funds - 13.0% | ||||||||
| First American Government Obligations Fund - Class X, 0.19% (b) | 520,048 | 520,048 | ||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $520,048) | 520,048 | |||||||
| Total Investments (Cost $3,034,358) - 53.6% | 2,140,198 | |||||||
| Other Assets in Excess of Liabilities - 46.4% | 1,854,530 | |||||||
| TOTAL NET ASSETS - 100.0% | $ | 3,994,728 | ||||||
Percentages are stated as a percent of net assets.
| (a) | Non-income producing security. |
| (b) | The rate shown is the seven-day yield at March 31, 2022. |
The accompanying notes are an integral part of these financial statements.
ETFMG U.S. Alternative Harvest ETF
Schedule of Total Return Swaps
March 31, 2022 (Unaudited)
|
Long Total Return Equity Swaps |
Counterparty |
Payment Frequency |
Financing Rate | Expiration Date |
Notional Amount |
Unrealized Appreciation (Depreciation) |
||||||||||
| AYR Wellness | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | $ | 166,274 | $ | — | ||||||||
| Columbia Care | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 151,935 | — | ||||||||||
| Cresco Labs | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 188,995 | — | ||||||||||
| Curaleaf Holdings | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 404,345 | — | ||||||||||
| Green Thumb Industries | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 329,452 | — | ||||||||||
| Jushi Holdings - Class B | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 133,070 | — | ||||||||||
| Marimed | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 150,987 | — | ||||||||||
| Medicine Man Technologies | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 67,536 | — | ||||||||||
| Planet 13 Holdings | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 144,693 | — | ||||||||||
| Terrascend | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 165,933 | — | ||||||||||
| Trulieve Cannabis | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 284,533 | — | ||||||||||
| Verano Holdings - Class A | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 1.50% | May 16, 2022 | 226,543 | — | ||||||||||
| $ | 2,414,297 | $ | — | |||||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG 2x Daily Alternative Harvest ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| SHORT-TERM INVESTMENTS - 43.3% | ||||||||
| Money Market Funds - 43.3% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (a) | 446,277 | $ | 446,277 | |||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $446,277) | 446,277 | |||||||
| Total Investments (Cost $446,277) - 43.3% | 446,277 | |||||||
| Assets in Excess of Other Liabilities - 56.7% | 585,214 | |||||||
| TOTAL NET ASSETS - 100.0% | $ | 1,031,491 | ||||||
(a) The rate shown is the annualized seven-day yield at period end.
The accompanying notes are an integral part of these financial statements.
ETFMG 2x Daily Alternative Harvest ETF
Schedule of Total Return Swaps
March 31, 2022 (Unaudited)
|
Reference Entity |
Fund Pays/Receives Reference Entity |
Counterparty |
Payment Frequency |
Financing Rate |
Upfront Premiums Paid/Received |
Notional Amount |
Unrealized Appreciation (Depreciation) |
|||||||||||||
| ETFMG Alternative Harvest ETF | Receives | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index + 0.25% | $ | — | $ | 2,022,409 | $ | — | ||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG 2x Daily Inverse Alternative Harvest ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| SHORT-TERM INVESTMENTS - 51.5% | ||||||||
| Money Market Funds - 51.5% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (a) | 347,771 | $ | 347,771 | |||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $347,771) | 347,771 | |||||||
| Total Investments (Cost $347,771) - 51.5% | 347,771 | |||||||
| Assets in Excess of Other Liabilities - 48.5% | 327,469 | |||||||
| TOTAL NET ASSETS - 100.0% | $ | 675,240 | ||||||
(a) The rate shown is the annualized seven-day yield at period end.
The accompanying notes are an integral part of these financial statements.
ETFMG 2x Daily Inverse Alternative Harvest ETF
Schedule of Total Return Swaps
March 31, 2022 (Unaudited)
|
Reference Entity |
Fund Pays/Receives Reference Entity |
Counterparty |
Payment Frequency |
Financing Rate |
Upfront Premiums Paid/Received |
Notional Amount |
Unrealized Appreciation (Depreciation) |
|||||||||||||
| ETFMG Daily Inverse Alternative Harvest ETF Swap | Pays | Cowen and Company, LLC | Monthly | Overnight Bank Funding Rate Index -0.39% | $ | — | $ | (1,308,901 | ) | $ | — | |||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
STATEMENTS OF ASSETS AND LIABILITIES
As of March 31, 2022 (Unaudited)
|
ETFMG Alternative Harvest ETF |
ETFMG U.S. Alternative Harvest ETF |
ETFMG 2x Daily Alternative Harvest ETF |
ETFMG 2x Daily Inverse Alternative Harvest ETF |
|||||||||||||
| ASSETS | ||||||||||||||||
| Investments in unaffiliated securities, at value* | $ | 866,292,126 | $ | 2,140,198 | $ | 446,277 | $ | 347,771 | ||||||||
| Investments in affiliated securities, at value* | 220,255,069 | — | — | — | ||||||||||||
| Deposits at Broker for total return swap contracts | — | 1,995,528 | 443,540 | 520,000 | ||||||||||||
| Receivables: | ||||||||||||||||
| Receivable for fund shares issued | 3,622,780 | — | 146,696 | — | ||||||||||||
| Dividends and interest receivable | 1,295,258 | 7,917 | 20 | 31 | ||||||||||||
| Securities lending income receivable | 1,123,732 | — | — | — | ||||||||||||
| Total assets | 1,092,588,965 | 4,143,643 | 1,036,533 | 867,802 | ||||||||||||
| LIABILITIES | ||||||||||||||||
| Collateral received for securities loaned (Note 7) | 366,579,603 | — | — | — | ||||||||||||
| Payables: | ||||||||||||||||
| Payable for investments purchased | 3,590,027 | — | — | — | ||||||||||||
| Payable for open swap contracts | — | 146,466 | 4,554 | 191,865 | ||||||||||||
| Management fees payable | 357,575 | 2,449 | 488 | 697 | ||||||||||||
| Total liabilities | 370,527,205 | 148,915 | 5,042 | 192,562 | ||||||||||||
| Net Assets | $ | 722,061,760 | $ | 3,994,728 | $ | 1,031,491 | $ | 675,240 | ||||||||
| NET ASSETS CONSIST OF: | ||||||||||||||||
| Paid-in Capital | $ | 2,170,749,671 | $ | 6,734,880 | $ | 1,693,059 | $ | 628,664 | ||||||||
| Total Distributable Earnings (Accumulated Losses) | (1,448,687,911 | ) | (2,740,152 | ) | (661,568 | ) | 46,576 | |||||||||
| Net Assets | $ | 722,061,760 | $ | 3,994,728 | $ | 1,031,491 | $ | 675,240 | ||||||||
| *Identified Cost: | ||||||||||||||||
| Investments in unaffiliated securities | $ | 1,231,581,390 | $ | 3,034,358 | $ | 446,277 | $ | 347,771 | ||||||||
| Investments in affiliated securities | 418,791,249 | — | — | — | ||||||||||||
| Shares Outstanding^ | 69,750,000 | 810,000 | 430,000 | 60,000 | ||||||||||||
| Net Asset Value, Offering and Redemption Price per Share | $ | 10.35 | $ | 4.93 | $ | 2.40 | $ | 11.25 | ||||||||
| ^ | No par value, unlimited number of shares authorized |
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
For the Period Ended March 31, 2022 (Unaudited)
|
ETFMG Alternative Harvest ETF |
ETFMG U.S. Alternative Harvest ETF |
ETFMG 2x Daily Alternative Harvest ETF |
ETFMG 2x Daily Inverse Alternative Harvest ETF(1) |
|||||||||||||
| INVESTMENT INCOME | ||||||||||||||||
| Income: | ||||||||||||||||
| Dividends from unaffiliated securities (net of foreign withholdings tax & issuance fees of $-, $-, $-, $-) | $ | 5,341,676 | $ | 18,512 | $ | — | $ | — | ||||||||
| Interest | 1,135 | 453 | 246 | 39 | ||||||||||||
| Securities lending income | 3,359,111 | 299 | — | — | ||||||||||||
| Total Investment Income | 8,701,922 | 19,264 | 246 | 39 | ||||||||||||
| Expenses: | ||||||||||||||||
| Management fees | 3,156,398 | 19,195 | 3,204 | 3,553 | ||||||||||||
| Total Expenses | 3,156,398 | 19,195 | 3,204 | 3,553 | ||||||||||||
| Net Investment Income (Loss) | 5,545,524 | 69 | (2,958 | ) | (3,514 | ) | ||||||||||
| REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS AND SWAP CONTRACTS | ||||||||||||||||
| Net Realized Gain (Loss) on: | ||||||||||||||||
| Unaffiliated Investments | (31,445,238 | ) | (114,671 | ) | — | — | ||||||||||
| Affiliated Investments | (22,903,159 | ) | — | — | — | |||||||||||
| In-Kind redemptions | (9,287,599 | ) | (72,398 | ) | — | — | ||||||||||
| Foreign currency and foreign currency translation | (228,432 | ) | 128 | — | — | |||||||||||
| Swap contracts | — | (1,576,224 | ) | (581,866 | ) | 103,013 | ||||||||||
| Net Realized Gain (Loss) on Investments, Swap Contracts and In-Kind redemptions | (63,864,428 | ) | (1,763,165 | ) | (581,866 | ) | 103,013 | |||||||||
| Net Change in Unrealized Appreciation (Depreciation) of: | ||||||||||||||||
| Unaffiliated Investments | (138,999,885 | ) | (689,408 | ) | — | — | ||||||||||
| Affiliated Investments | (101,006,564 | ) | — | — | — | |||||||||||
| Foreign currency and foreign currency translation | (4,952 | ) | — | — | — | |||||||||||
| Net change in Unrealized Appreciation (Depreciation) on Investments and Swap Contracts | (240,011,401 | ) | (689,408 | ) | — | — | ||||||||||
| Net Realized and Unrealized Gain (Loss) on Investments and Swap Contracts | (303,875,829 | ) | (2,452,573 | ) | (581,866 | ) | 103,013 | |||||||||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (298,330,305 | ) | $ | (2,452,504 | ) | $ | (584,824 | ) | $ | 99,499 | |||||
| (1) | The Fund commenced operations on October 5, 2021. |
The accompanying notes are an integral part of these financial statements.
ETFMG Alternative Harvest ETF
STATEMENTS OF CHANGES IN NET ASSETS
|
Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||
| OPERATIONS | ||||||||
| Net investment income | $ | 5,545,524 | $ | 18,791,771 | ||||
| Net realized gain (loss) on investments and In-Kind Redemptions | (63,864,428 | ) | (26,438,605 | ) | ||||
| Net change in unrealized appreciation (depreciation) of investments and foreign currency and foreign currency translation | (240,011,401 | ) | 174,690,515 | |||||
| Net increase (decrease) in net assets resulting from operations | (298,330,305 | ) | 167,043,681 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | (5,362,389 | ) | (17,257,000 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase (decrease) in net assets derived from net change in outstanding shares | (41,872,165 | ) | 421,833,537 | |||||
| Transaction Fees (See Note 1) | 17,315 | 18,289 | ||||||
| Net increase (decrease) in net assets from capital share transactions | (41,854,850 | ) | 421,851,826 | |||||
| Total increase (decrease) in net assets | (345,547,544 | ) | 571,638,507 | |||||
| NET ASSETS | ||||||||
| Beginning of Period | 1,067,609,304 | 495,970,797 | ||||||
| End of Period | $ | 722,061,760 | $ | 1,067,609,304 | ||||
Summary of share transactions is as follows:
|
Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares Sold | 3,700,000 | $ | 47,940,235 | 57,650,000 | $ | 1,053,114,312 | ||||||||||
| Transaction Fees (See Note 1) | — | 17,315 | — | 18,289 | ||||||||||||
| Shares Redeemed | (8,100,000 | ) | (89,812,400 | ) | (31,350,000 | ) | (631,269,872 | ) | ||||||||
| Net Transactions in Fund Shares | (4,400,000 | ) | $ | (41,854,850 | ) | 26,300,000 | $ | 421,862,729 | ||||||||
| Beginning Shares | 74,150,000 | 47,850,000 | ||||||||||||||
| Ending Shares | 69,750,000 | 74,150,000 | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
ETFMG U.S. Alternative Harvest ETF
STATEMENTS OF CHANGES IN NET ASSETS
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 2021(1) |
|||||||
| OPERATIONS | ||||||||
| Net investment income (loss) | $ | 69 | $ | (9,128 | ) | |||
| Net realized gain (loss) on investments, swap contracts and In-Kind Redemptions | (1,763,165 | ) | (1,493,703 | ) | ||||
| Net change in unrealized appreciation (depreciation) of investments and swap contracts | (689,408 | ) | (204,752 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | (2,452,504 | ) | (1,707,583 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase (decrease) in net assets from capital share transactions | 349,910 | 7,804,905 | ||||||
| Total increase (decrease) in net assets | (2,102,594 | ) | 6,097,322 | |||||
| NET ASSETS | ||||||||
| Beginning of Period | 6,097,322 | — | ||||||
| End of Period | $ | 3,994,728 | $ | 6,097,322 | ||||
Summary of share transactions is as follows:
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 2021(1) |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares Sold | 450,000 | $ | 2,677,785 | 790,000 | $ | 7,804,905 | ||||||||||
| Shares Redeemed | (430,000 | ) | (2,327,875 | ) | — | — | ||||||||||
| Net Transactions in Fund Shares | 20,000 | $ | 349,910 | 790,000 | $ | 7,804,905 | ||||||||||
| Beginning Shares | 790,000 | — | ||||||||||||||
| Ending Shares | 810,000 | 790,000 | ||||||||||||||
(1) The Fund commenced operations on May 12, 2021.
The accompanying notes are an integral part of these financial statements.
ETFMG 2x Daily Alternative Harvest ETF
STATEMENTS OF CHANGES IN NET ASSETS
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 2021(1) |
|||||||
| OPERATIONS | ||||||||
| Net investment income (loss) | $ | (2,958 | ) | $ | (1,069 | ) | ||
| Net realized gain (loss) on investments, swap contracts and In-Kind Redemptions | (581,866 | ) | (396,127 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | (584,824 | ) | (397,196 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase (decrease) in net assets from capital share transactions | 1,054,242 | 959,269 | ||||||
| Total increase (decrease) in net assets | 469,418 | 562,073 | ||||||
| NET ASSETS | ||||||||
| Beginning of Period | 562,073 | — | ||||||
| End of Period | $ | 1,031,491 | $ | 562,073 | ||||
Summary of share transactions is as follows:
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 2021(1) |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares Sold | 320,000 | $ | 1,054,242 | 110,000 | $ | 959,269 | ||||||||||
| Shares Redeemed | — | — | — | — | ||||||||||||
| Net Transactions in Fund Shares | 320,000 | $ | 1,054,242 | 110,000 | $ | 959,269 | ||||||||||
| Beginning Shares | 110,000 | — | ||||||||||||||
| Ending Shares | 430,000 | 110,000 | ||||||||||||||
(1) The Fund commenced operations on July 6, 2021.
The accompanying notes are an integral part of these financial statements.
ETFMG 2x Daily Inverse Alternative Harvest ETF
STATEMENTS OF CHANGES IN NET ASSETS
|
Period Ended March 31, 2022 (Unaudited)(1) |
||||
| OPERATIONS | ||||
| Net investment income (loss) | $ | (3,514 | ) | |
| Net realized gain (loss) on investments, swap contracts and In-Kind Redemptions | 103,013 | |||
| Net increase (decrease) in net assets resulting from operations | 99,499 | |||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||
| Total distributions from distributable earnings | (52,923 | ) | ||
| CAPITAL SHARE TRANSACTIONS | ||||
| Net increase (decrease) in net assets from capital share transactions | 628,664 | |||
| Total increase (decrease) in net assets | 675,240 | |||
| NET ASSETS | ||||
| Beginning of Period | — | |||
| End of Period | $ | 675,240 | ||
Summary of share transactions is as follows:
|
Period Ended March 31, 2022 (Unaudited)(1) |
||||||||
| Shares | Amount | |||||||
| Shares Sold | 150,000 | $ | 2,033,417 | |||||
| Shares Redeemed | (90,000 | ) | (1,404,753 | ) | ||||
| Net Transactions in Fund Shares | 60,000 | $ | 628,664 | |||||
| Beginning Shares | — | |||||||
| Ending Shares | 60,000 | |||||||
(1) The Fund commenced operations on October 5, 2021.
The accompanying notes are an integral part of these financial statements.
ETFMG Alternative Harvest ETF
For a capital share outstanding throughout each period/year
|
Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
Year Ended September 30, 2020 |
Year Ended September 30, 2019 |
Year Ended September 30, 2018 |
Year Ended September 30, 2017 |
|||||||||||||||||||
| Net Asset Value, Beginning Period/Year | $ | 14.40 | $ | 10.37 | $ | 20.83 | $ | 39.74 | $ | 31.36 | $ | 29.64 | ||||||||||||
| Income from Investment Operations: | ||||||||||||||||||||||||
| Net investment income1 | 0.08 | 0.26 | 0.91 | 1.02 | 0.37 | 0.57 | ||||||||||||||||||
| Net realized and unrealized gain (loss) on investments | (4.06 | ) | 4.01 | (10.49 | ) | (18.96 | ) | 8.95 | 4.42 | |||||||||||||||
| Total from investment operations | (3.98 | ) | 4.27 | (9.58 | ) | (17.94 | ) | 9.32 | 4.99 | |||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||
| Distributions from net investment income | (0.07 | ) | (0.24 | ) | (0.88 | ) | (0.97 | ) | (0.74 | ) | (2.56 | ) | ||||||||||||
| Net realized gains | — | — | — | — | (0.20 | ) | (0.71 | ) | ||||||||||||||||
| Total distributions | (0.07 | ) | (0.24 | ) | (0.88 | ) | (0.97 | ) | (0.94 | ) | (3.27 | ) | ||||||||||||
| Net asset value, end period/year | $ | 10.35 | $ | 14.40 | $ | 10.37 | $ | 20.83 | $ | 39.74 | $ | 31.36 | ||||||||||||
| Total Return | -27.64 | %2 | 40.90 | % | -46.83 | % | -45.60 | % | 33.85 | % | 20.23 | % | ||||||||||||
| Ratios/Supplemental Data: | ||||||||||||||||||||||||
| Net assets at end period/year (000’s) | $ | 722,062 | $ | 1,067,609 | $ | 495,971 | $ | 800,957 | $ | 679,559 | $ | 6,271 | ||||||||||||
| Gross Expenses to Average Net Assets | 0.75 | %3 | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.79 | % | ||||||||||||
| Net Investment Income to Average Net Assets | 1.32 | %3 | 1.39 | % | 6.27 | % | 3.26 | % | 1.18 | % | 1.98 | % | ||||||||||||
| Portfolio Turnover Rate | 34 | %2 | 75 | % | 46 | % | 71 | % | 97 | % | 44 | % | ||||||||||||
| 1 | Calculated based on average shares outstanding during the period/year. |
| 2 | Not annualized. |
| 3 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG U.S. Alternative Harvest ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 20211 |
|||||||
| Net Asset Value, Beginning Period | $ | 7.72 | $ | 10.00 | ||||
| Income (Loss) from Investment Operations: | ||||||||
| Net investment income (loss) 2 | 0.00 | 5 | (0.01 | ) | ||||
| Net realized and unrealized gain (loss) on investments | (2.79 | ) | (2.27 | ) | ||||
| Total from investment operations | (2.79 | ) | (2.28 | ) | ||||
| Net asset value, end period | $ | 4.93 | $ | 7.72 | ||||
| Total Return | -36.10 | %3 | -22.82 | %3 | ||||
| Ratios/Supplemental Data: | ||||||||
| Net assets at end of period (000’s) | $ | 3,995 | $ | 6,097 | ||||
| Gross Expenses to Average Net Assets | 0.75 | %4 | 0.75 | %4 | ||||
| Net Investment Income (Loss) to Average Net Assets | 0.00 | %4 | -0.38 | %4 | ||||
| Portfolio Turnover Rate | 18 | %3 | 16 | %3 | ||||
| 1 | The Fund commenced operations on May 12, 2021. |
| 2 | Calculated based on average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Annualized. |
| 5 | Amount less than $0.005. |
The accompanying notes are an integral part of these financial statements.
ETFMG 2x Daily Alternative Harvest ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
|
Period Ended March 31, 2022 (Unaudited) |
Period Ended September 30, 20211 |
|||||||
| Net Asset Value, Beginning Period | $ | 5.11 | $ | 10.00 | ||||
| Income (Loss) from Investment Operations: | ||||||||
| Net investment income (loss) 2 | (0.01 | ) | (0.01 | ) | ||||
| Net realized and unrealized gain (loss) on investments | (2.70 | ) | (4.88 | ) | ||||
| Total from investment operations | (2.71 | ) | (4.89 | ) | ||||
| Net asset value, end period | $ | 2.40 | $ | 5.11 | ||||
| Total Return | -53.04 | %3 | -48.90 | %3 | ||||
| Ratios/Supplemental Data: | ||||||||
| Net assets at end of period (000’s) | $ | 1,031 | $ | 562 | ||||
| Gross Expenses to Average Net Assets | 0.95 | %4 | 0.95 | %4 | ||||
| Net Investment Income (Loss) to Average Net Assets | -0.88 | %4 | -0.72 | %4 | ||||
| Portfolio Turnover Rate | 0 | %3 | 0 | %3 | ||||
| 1 | The Fund commenced operations on July 6, 2021. |
| 2 | Calculated based on average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG 2x Daily Inverse Alternative Harvest ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout the period
|
Period Ended March 31, 2022 (Unaudited)1 |
||||
| Net Asset Value, Beginning Period | $ | 10.00 | ||
| Income (Loss) from Investment Operations: | ||||
| Net investment income (loss) 2 | (0.06 | ) | ||
| Net realized and unrealized gain (loss) on investments | 2.19 | |||
| Total from investment operations | 2.13 | |||
| Less Distributions: | ||||
| Distributions from net investment income | (0.88 | ) | ||
| Total distributions | (0.88 | ) | ||
| Net asset value, end period | $ | 11.25 | ||
| Total Return | 20.49 | %3 | ||
| Ratios/Supplemental Data: | ||||
| Net assets at end of period (000’s) | $ | 675 | ||
| Gross Expenses to Average Net Assets | 0.95 | %4 | ||
| Net Investment Income (Loss) to Average Net Assets | -0.94 | %4 | ||
| Portfolio Turnover Rate | 0 | %3 | ||
| 1 | The Fund commenced operations on October 5, 2021. |
| 2 | Calculated based on average shares outstanding during the period. |
| 3 | Not annualized. |
| 4 | Annualized. |
The accompanying notes are an integral part of these financial statements.
ETFMG TM ETFs
March 31, 2022 (Unaudited)
NOTE 1 – ORGANIZATION
ETFMG Alternative Harvest ETF (“MJ”), ETFMG U.S. Alternative Harvest ETF (“MJUS”), ETFMG 2x Daily Alternative Harvest ETF (“MJXL”) and ETFMG 2x Daily Inverse Alternative Harvest ETF (“MJIN”) (each a “Fund”, or collectively the “Funds”) are series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Funds’ shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”).
The following table is a summary of the Strategy Commencement Date and Strategy of the Funds:
| Fund Ticker |
Strategy Commencement Date |
Strategy |
| ETFMG Alternative Harvest ETF |
12/3/2015 | Seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Prime Alternative Harvest Index (the “Index”). |
| ETFMG U.S. Alternative Harvest ETF |
5/12/2021 | Seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in securities of companies that derive at least 50% of their net revenue from the “Cannabis Business” in the United States, and in derivatives that have economic characteristics similar to such securities. |
| ETFMG
2x Daily Alternative Harvest ETF |
7/6/2021 | Seeks daily investment results, before fees and expenses, that correspond to two times (2x) the return of the Index for a single day, not for any other period. |
| ETFMG
2x Daily Inverse Alternative Harvest ETF |
10/5/2021 | Seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) (or opposite) of the return of the Index for a single day, not for any other period. |
The Funds may use a combination of swaps on the Index and swaps on an ETF whose investment objective is to track the performance of the same, or a substantially similar index to achieve their investment objective.
The Funds each currently offer one class of shares, which have no front end sales load, no deferred sales charges, and no redemption fees. The Funds may issue an unlimited number of shares of beneficial interest, with no par value. All shares of each Fund have equal rights and privileges.
Shares of the Funds are listed and traded on the NYSE Arca, Inc. Market prices for the shares may be different from their net asset value (“NAV”). Each Fund issues and redeems shares on a continuous basis at NAV only in blocks of 50,000 shares for MJ and MJUS and 10,000 shares for MJXL and MJIN, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in a specified Index. Once created, shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, shares are not redeemable securities of a Fund. Shares of a Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the shares directly from a Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and may be subject to customary brokerage commissions or fees.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in Transaction Fees” in the Statements of Changes in Net Assets.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Fund may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (SEC). For more information about the underlying Fund’s operations and policies, please refer to those Fund’s semiannual and annual reports, which are filed with the SEC.
| A. | Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Funds’ Board. The use of fair value pricing by a Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. As of March 31, 2022, the ETFMG Alternative Harvest ETF held two securities that were fair valued by the Board.
As described above, the Funds utilize various methods to measure the fair value of their investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| Level 3 | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following table presents a summary of the Funds’ investments in securities and swap contracts at fair value, as of March 31, 2022:
| ETFMG Alternative Harvest ETF | |||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Common Stocks | $ | 715,924,862 | $ | — | $ | — | $ | 715,924,862 | |||||
| Short Term Investments | 5,224,893 | — | — | 5,224,893 | |||||||||
| ETFMG Sit Ultra Short ETF** | 84,636,435 | — | — | 84,636,435 | |||||||||
| Investments Purchased with Securities Lending Collateral* | — | — | — | 280,761,005 | |||||||||
| Total Investments in Securities | $ | 805,786,190 | $ | — | $ | — | $ | 1,086,547,195 | |||||
| ETFMG U.S. Alternative Harvest ETF | |||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Common Stocks | $ | 1,620,150 | $ | — | $ | — | $ | 1,620,150 | |||||
| Short Term Investments | 520,048 | — | — | 520,048 | |||||||||
| Total Investments in Securities | $ | 2,140,198 | $ | — | $ | — | $ | 2,140,198 | |||||
| Swap Contracts *** | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Long Total Return Equity Swap Contracts | $ | — | $ | — | $ | — | $ | — | |||||
| Total Swap Contracts | $ | — | $ | — | $ | — | $ | — | |||||
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| ETFMG 2x Daily Alternative Harvest ETF | |||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Short-Term Investments | $ | 446,277 | $ | — | $ | — | $ | 446,277 | |||||
| Total Investments in Securities | $ | 446,277 | $ | — | $ | — | $ | 446,277 | |||||
| Swap Contracts*** | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Long Total Return Equity Swap Contracts | $ | — | $ | — | $ | — | $ | — | |||||
| Total Swap Contracts | $ | — | $ | — | $ | — | $ | — | |||||
| ETFMG 2x Daily Inverse Alternative Harvest ETF | |||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Short-Term Investments | $ | 347,771 | $ | — | $ | — | $ | 347,771 | |||||
| Total Investments in Securities | $ | 347,771 | $ | — | $ | — | $ | 347,771 | |||||
| Swap Contracts*** | Level 1 | Level 2 | Level 3 | Total | |||||||||
| Long Total Return Equity Swap Contracts | $ | — | $ | — | $ | — | $ | — | |||||
| Total Swap Contracts | $ | — | $ | — | $ | — | $ | — | |||||
| ^ | See Schedule of Investments for classifications by country and industry. |
| * | Certain investments that are measured at fair value used the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Schedules of Investments. |
| ** | Investment was purchased with collateral. |
| *** | Swap contracts are derivative instruments, which are presented at the unrealized appreciation/depreciation on the instrument. |
| B. | Federal Income Taxes. The Funds have each elected to be taxed as a “regulated investment company” and intend to distribute substantially all taxable income to their shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
To avoid imposition of the excise tax applicable to regulated investment companies, each Fund intends to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of each Fund’s next taxable year.
Each Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Each Fund has analyzed its tax position and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Funds’ 2021 tax returns. The Funds identify their major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
As of March 31, 2022, management has reviewed the tax positions for open periods (for Federal purposes, four years from the date of filing and for state purposes, four years from the date of filing), as applicable to the Funds, and has determined that no provision for income tax is required in the Funds’ financial statements.
| C. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Funds may be subject to income, withholding or other taxes imposed by foreign countries. |
| D. | Foreign Currency Translations and Transactions. The Funds may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Funds do not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Funds do isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
| E. | Distributions to Shareholders. Distributions to shareholders from net investment income are generally declared and paid by each of the Funds on a quarterly basis. Distributions to shareholders from realized gains on securities for each Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
| G. | Share Valuation. The net asset value (“NAV”) per share of each Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Funds’ shares will not be priced on the days on which the NYSE is closed for trading. For Authorized Participants, the offering and redemption price per share for the Funds are equal to the Funds’ respective net asset value per share. |
| H. | Guarantees and Indemnifications. In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. |
Derivatives
The Funds may enter into swap agreements; including interest rate, index, and total return swap agreements. Swap agreements are contracts between parties in which one party agrees to make periodic payments to the other party based on the change in market value or level of a specified rate, index or asset. In return, the other party agrees to make payments to the first party based on the return of a different specified rate, index or asset. Swap agreements will usually be done on a net basis, i.e., where the two parties make net payments with a Fund receiving or paying, as the case may be, only the net amount of the two payments. The net amount of the excess, if any, of a Fund’s obligations over its entitlements with respect to each swap is accrued on a daily basis and an amount of cash or equivalents having an aggregate value at least equal to the accrued excess is maintained by the Fund. The total return swap contracts are subject to master netting agreements, which are agreements between a Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund through a single payment, in the event of default or termination. Amounts presented on the schedule of total return swaps are gross settlement amounts.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The following table presents the Funds’ gross derivative assets and liabilities by counterparty and contract type, net of amounts available for offset under a master netting agreement and the related collateral received or pledged by the Funds as of March 31, 2022.
ETFMG U.S. Alternative Harvest ETF
| Counterparty | Investment Type |
Gross Amounts of Recognized Assets Presented in the Statements of Assets & Liabilities |
Gross |
Net |
Gross Amounts not offset in the Statements of Assets & Liabilities |
Net Amount |
||||||||||||||
|
Financial |
Collateral Received |
|||||||||||||||||||
| Cowen and Company, LLC | Total Return Swap Contracts | $ | (146,466 | ) | $ | — | $ | (146,466 | ) | $ | — | $ | — | |
$ | (146,466) | ||||
ETFMG 2x Daily Alternative Harvest ETF
| Counterparty | Investment Type |
Gross Amounts of Recognized Assets Presented in the Statements of Assets & Liabilities |
Gross Amounts Available Offset |
Net Amounts |
Gross Amounts not offset in the Statements of Assets & Liabilities |
Net Amount |
||||||||||||||
|
Financial |
Collateral Received |
|||||||||||||||||||
| Cowen and Company, LLC | Total Return Swap Contract | $ | (4,554 | ) | $ | — | $ | (4,554 | ) | $ | — | $ | — | $ | (4,554) | |||||
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
ETFMG 2x Daily Inverse Alternative Harvest ETF
| Counterparty | Investment Type |
Gross Amounts of Recognized Assets Presented in the Statements of Assets & Liabilities |
Gross |
Net Amounts |
Gross Amounts not offset in the Statements of Assets & Liabilities |
Net Amount |
||||||||||||||
|
Financial |
Collateral Received |
|||||||||||||||||||
| Cowen and Company, LLC | Total Return Swap Contract | $ | (191,865 | ) | $ | — | $ | (191,865 | ) | $ | — | $ | — | $ | (191,865) | |||||
The average monthly notional amount of the swap contracts during the period ended March 31, 2022 for the Funds were:
| ETFMG U.S. Alternative Harvest ETF | Swap Contracts | $ | 3,581,337 | ||||
| ETFMG 2x Daily Alternative Harvest ETF | Swap Contract | $ | 1,404,372 | ||||
| ETFMG 2x Daily Inverse Alternative Harvest ETF | Swap Contract | $ | (1,523,873 | ) |
The following is a summary of the effect of swap contracts on the Funds’ Statements of Assets and Liabilities as of March 31, 2022:
| Assets | Liabilities | Net Unrealized Gain (Loss) |
||||||||||||
| ETFMG U.S. Alternative Harvest ETF | Swap Contracts | $ | — | $ | 146,466 | $ | — | |||||||
| ETFMG 2x Daily Alternative Harvest ETF | Swap Contract | $ | — | $ | 4,554 | $ | — | |||||||
| ETFMG 2x Daily Inverse Alternative Harvest ETF | Swap Contract | $ | — | $ | 191,865 | $ | — | |||||||
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The following is a summary of the effect of swap contracts on the Funds’ Statements of Operations for the period ended March 31, 2022:
| Realized Gain (Loss) | Change in Unrealized Appreciation/ Depreciation |
|||||||||
| ETFMG U.S. Alternative Harvest ETF | Swap Contracts | $ | (1,576,224 | ) | $ | — | ||||
| ETFMG 2x Daily Alternative Harvest ETF | Swap Contract | $ | (581,866 | ) | $ | — | ||||
| ETFMG 2x Daily Inverse Alternative Harvest ETF | Swap Contract | $ | 103,013 | $ | — | |||||
NOTE 3 – RISK FACTORS
Investing in the Funds may involve certain risks, as discussed in the Funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a Fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The Funds are not actively managed (“Index Funds”). Therefore, those Funds follow the securities included in its respective index during upturns as well as downturns. Because of their indexing strategies, the Index Funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Index Funds’ expenses, the Index Funds’ performance may be below that of their respective index.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Concentration Risk. To the extent that a Fund’s or an index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19),have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Funds and their investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect lobal, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under the circumstances, the Funds may have difficulty achieving their investment objectives which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Funds’ Sponsor and third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Funds’ investments. These factors can cause substantial market volatility. exchange trading suspensions and closures and can impact the ability of the Funds to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A widespread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on a Fund’s performance, resulting in losses to the Funds.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs), interest rates or indexes. A Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other ordinary investments, including risk related to the market, leverage, imperfect daily correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions. The use of derivatives is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The use of derivatives may result in larger losses or smaller gains than directly investing in securities. When a Fund uses derivatives, there may be imperfect correlation between the value of the reference assets and the derivative, which may prevent the Fund from achieving its investment objective. Because derivatives often require only a limited initial investment, the use of derivatives may expose a Fund to losses in excess of those amounts initially invested.
Daily Index Correlation/Tracking Risk. There is no guarantee that a Fund will achieve a high degree of correlation to the Index and therefore achieve its daily leveraged investment objective. To achieve a high degree of correlation with the Index, a Fund seeks to rebalance its portfolio daily to keep leverage consistent with its daily leveraged investment objective. In addition, a Fund’s exposure to the Index is impacted by the Index’s movement. Because of this, it is unlikely that a Fund will be perfectly exposed to the Index at the end of each day. The possibility of the Fund being materially over-or under-exposed to the Index increases on days when the Index is volatile near the close of the trading day. Market disruptions, regulatory restrictions and extreme volatility will also adversely affect a Fund’s ability to adjust exposure to the required levels.
NOTE 4 – MANAGEMENT AND OTHER CONTRACTS
ETF Managers Group, LLC (the “Advisor”), serves as the investment advisor to the Funds. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Funds, and the Advisor, the Advisor provides investment advice to the Funds and oversees the day-to-day operations of the Funds, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Advisor is also responsible for arranging transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Funds to operate.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Under the Investment Advisory Agreement, the Advisor has overall responsibility for the general management and administration of the Funds and arranges for sub-advisory, transfer agency, custody, fund administration, securities lending, and all other non-distribution related services necessary for the Funds to operate. The Funds unitary fees are accrued daily and paid monthly. The Advisor bears the costs of all advisory and non-advisory services required to operate the Funds, in exchange for a single unitary fee at the following annual rates:
| ETFMG Alternative Harvest ETF | 0.75% |
| ETFMG U.S. Alternative Harvest ETF | 0.75% |
| ETFMG 2x Daily Alternative Harvest ETF | 0.95% |
| ETFMG 2x Daily Inverse Alternative Harvest ETF | 0.95% |
Under the Investment Advisory Agreement, the Advisor has agreed to pay all expenses of the Funds, except for: the fee paid to the Advisor pursuant to the Investment Advisory Agreement, interest charges on any borrowings, 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”). The Advisor has entered into an agreement with its affiliate ETFMG Financial, LLC to serve as distributor to the Funds (the “Distributor”). The Distributor provides marketing support for the Funds, including distributing marketing materials related to the Funds. Level ETF Ventures, LLC (“Level”) serves as the index provider for MJ, MJUS, MJXL and MJIN. Level is not affiliated with the Trust or the Advisor.
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services (the “Administrator”) provides fund accounting, fund administration, and transfer agency services to the Funds. The Advisor compensates the Administrator for these services under an administration agreement between the two parties.
The Advisor pays each independent Trustee a quarterly fee for service to the Funds. Each Trustee is also reimbursed by the Advisor for all reasonable out-of-pocket expenses incurred in connection with his duties as Trustee, including travel and related expenses incurred in attending Board meetings.
NOTE 5 – DISTRIBUTION PLAN
The Funds have each adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, each Fund may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to each Fund, with the amount of such compensation not to exceed an annual rate of 0.25% of each Fund’s average daily net assets. During the period ended March 31, 2022, the Funds did not incur any 12b-1 expenses.
NOTE 6 – PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, during the period ended March 31, 2022:
| Purchases | Sales | |||||||
| ETFMG Alternative Harvest ETF | $ | 310,409,311 | $ | 316,667,887 | ||||
| ETFMG U.S. Alternative Harvest ETF | 1,155,985 | 286,504 | ||||||
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The costs of purchases and sales of in-kind transactions associated with creations and redemptions during the period ended March 31, 2022:
| Purchases In-Kind | Sales In-Kind | |||||||
| ETFMG Alternative Harvest ETF | $ | 45,141,895 | $ | 82,932,084 | ||||
| ETFMG U.S. Alternative Harvest ETF | 787,971 | 651,777 | ||||||
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all in-kind sales. Net capital gains or losses resulting from in-kind redemptions are excluded from the Funds’ determination of taxable gains and are not distributed to shareholders.
There were no purchases or sales of U.S. Government obligations during the period ended March 31, 2022.
NOTE 7 – SECURITIES LENDING
The Fund may lend up to 33 1⁄3% of the value of the securities in its portfolio to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending program administered by U.S. Bank N.A. (“the Custodian”). The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the value of any loaned securities at the time of the loan, plus accrued interest. The Fund receives compensation in the form of fees and earn interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Fund continues to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss in the fair value of securities loaned that may occur during the term of the loan will be for the account of the Fund. The Fund has the right under the terms of the securities lending agreement to recall the securities from the borrower on demand. The cash collateral is invested by the Custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short -term obligations either directly on behalf of the Fund or through one or more joint accounts, money market funds, or short-term bond funds, including those advised by or affiliated with the Advisor; however, such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. Other investment companies, in which the Fund may invest cash collateral, can be expected to incur fees and expenses for operations, such as investment advisory and administration fees, which would be in addition to those incurred by the Fund, and which may be received in full or in part by the Advisor. Pursuant to guidance issued by the SEC staff, fees and expenses of money market funds used for cash collateral received in connection with loans of securities are not treated as Acquired Fund Fees and Expenses, which reflect a fund’s pro rata share of the fees and expenses incurred by other investment companies in which the Fund invests (as disclosed in the Prospectus, as applicable). The Fund could also experience delays in recovering its securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Fund is indemnified from this risk by contract with the securities lending agent.
As of the period ended March 31, 2022 the value of the securities on loan and payable for collateral due to broker were as follows:
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| Value of Securities on Loan Collateral Received | ||||||||
| Fund | Values of Securities on Loan |
Fund Collateral Received* |
||||||
| ETFMG Alternative Harvest ETF | $ | 306,711,413 | $ | 366,579,603 | ||||
* The cash collateral received was invested in the Mount Vernon Liquid Assets Portfolio, a money market fund with an overnight and continuous maturity, and ETFMG Sit Ultra Short ETF as shown on the Schedule of Investments.
NOTE 8 – FEDERAL INCOME TAXES
The components of distributable earnings (losses) and cost basis of investments for federal income tax purposes at September 30, 2021 were as follows:
| Cost | Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Unrealized Appreciation (Depreciation) |
|||||||||||||
| ETFMG Alternative Harvest ETF | $ | 1,747,712,784 | $ | 13,790,736 | $ | (414,230,097 | ) | $ | (400,439,361 | ) | ||||||
| ETFMG U.S. Alternative Harvest ETF | 1,778,251 | 140,373 | (350,740 | ) | (210,367 | ) | ||||||||||
| ETFMG 2x Daily Alternative Harvest ETF | — | — | — | — | ||||||||||||
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
As of September 30, 2021, the components of distributable earnings (loss) on a tax basis were as follows:
| Undistributed Ordinary Income |
Undistributed Long-Term Gain |
Total Distributable Earnings |
Other Accumulated Loss |
Total Accumulated Gain (Loss) |
||||||||||||||||
| ETFMG Alternative Harvest ETF | $ | 2,014,017 | $ | — | $ | 2,014,017 | $ | (746,569,873 | ) | $ | (1,144,995,217 | ) | ||||||||
| ETFMG U.S. Alternative Harvest ETF | — | — | — | (77,281 | ) | (287,648 | ) | |||||||||||||
| ETFMG 2x Daily Alternative Harvest ETF | — | — | — | (76,744 | ) | (76,744 | ) | |||||||||||||
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
As of September 30, 2021, the Funds had accumulated capital loss carryovers of:
| Capital Loss Carryforward ST |
Capital Loss Carryforward LT |
Expires | ||||||||||
| ETFMG Alternative Harvest ETF | $ | (225,753,428 | ) | $ | (520,821,254 | ) | Indefinite | |||||
| ETFMG U.S. Alternative Harvest ETF | (77,281 | ) | — | Indefinite | ||||||||
| ETFMG 2x Daily Alternative Harvest ETF | (76,744 | ) | — | Indefinite | ||||||||
Under current tax law, capital and currency losses realized after October 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The following Funds had deferred post-October capital and currency losses, which will be treated as arising on the first business day of the year ending September 30, 2021.
| Late Year Ordinary Loss |
Post- October Capital Loss |
|||||||
| ETFMG Alternative Harvest ETF | $ | — | $ | — | ||||
| ETFMG U.S. Alternative Harvest ETF | — | — | ||||||
| ETFMG 2x Daily Alternative Harvest ETF | — | — | ||||||
The tax character of distributions paid during the period ended March 31, 2022, and the year ended September 30, 2021 were as follows:
| Period Ended March 31, 2022 |
Year Ended September 30, 2021 |
||||||||||||||
| From Ordinary Income |
From Capital Gains |
From Ordinary Income |
From Capital Gains |
||||||||||||
| ETFMG Alternative Harvest ETF | $ | 5,362,389 | — | $ | 17,257,000 | — | |||||||||
| ETFMG U.S. Alternative Harvest ETF | — | — | — | — | |||||||||||
| ETFMG 2x Daily Alternative Harvest ETF | — | — | — | — | |||||||||||
| ETFMG 2x Daily Inverse Alternative Harvest ETF | 52,923 | — | — | — | |||||||||||
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 9 – INVESTMENTS IN AFFILIATES
ETFMG Alternative Harvest ETF
ETFMG Alternative Harvest ETF owned the following companies during the period ended March 31, 2022. 22nd Century Group, Inc., Agrify, Corp., Corbus Pharmaceuticals Holdings, Inc., GrowGeneration Corp., Hexo Corp., Organigram Holdings, Inc., Village Farms International, Inc., Zynerba Pharmaceuticals, Inc., and ETFMG Sit Ultra Short ETF are deemed to be affiliates of the Fund as defined by the 1940 Act as of the period ended March 31, 2022. Transactions during the period in these securities were as follows:
| Security Name | Value at September 30, 2021 |
Purchases | Sales | Realized Gain (Loss)(1) |
Change in Unrealized Appreciation (Depreciation) |
Dividend Income |
Value at March 31, 2022 |
Ending Shares |
||||||||||||||||||||||||
| 22nd Century Group, Inc.* | $ | 38,141,530 | $ | 2,430,717 | $ | (13,178,369 | ) | $ | (3,886,891 | ) | $ | (2,948,759 | ) | $ | — | $ | 20,558,228 | 8,861,305 | ||||||||||||||
| Agrify Corp. * | 11,585,590 | 11,655,591 | (1,196,451 | ) | (620,298 | ) | (14,117,602 | ) | — | 7,306,830 | 1,578,149 | |||||||||||||||||||||
| Aurora Cannabis, Inc. ** | 77,960,284 | 9,281,375 | (13,981,765 | ) | (10,023,718 | ) | (23,316,680 | ) | — | 39,919,496 | 9,979,874 | |||||||||||||||||||||
| Clever Leaves Holdings, Inc. ** | 17,915,605 | 544,662 | (5,758,410 | ) | (11,243,311 | ) | 987,931 | — | 2,446,477 | 982,521 | ||||||||||||||||||||||
| Corbus Pharmaceuticals Holdings, Inc. * | 14,383,541 | 1,255,592 | (2,103,747 | ) | (5,448,191 | ) | (2,038,672 | ) | — | 6,048,523 | 11,380,099 | |||||||||||||||||||||
| ETFMG Sit Ultra Short ETF * | 85,827,375 | — | — | — | (1,190,940 | ) | — | 84,636,435 | 1,725,000 | |||||||||||||||||||||||
| GrowGeneration Corp. * | 63,275,318 | 27,667,264 | (4,324,440 | ) | (2,368,587 | ) | (41,220,398 | ) | — | 43,029,157 | 4,672,004 | |||||||||||||||||||||
| Hexo Corp. * | 24,321,019 | 25,876,440 | (2,109,509 | ) | (1,568,105 | ) | (27,278,814 | ) | — | 19,241,031 | 31,038,928 | |||||||||||||||||||||
| Organigram Holdings, Inc. * | 60,578,493 | 6,717,506 | (23,637,133 | ) | (5,993,457 | ) | (5,712,555 | ) | — | 31,952,854 | 19,248,707 | |||||||||||||||||||||
| Village Farms International, Inc. ** | 36,150,781 | 2,362,020 | (6,879,453 | ) | (1,457,694 | ) | (10,195,580 | ) | — | 19,980,074 | 3,784,105 | |||||||||||||||||||||
| Zynerba Pharmaceuticals, Inc. * | 18,879,935 | 2,016,858 | (3,898,328 | ) | (3,017,630 | ) | (6,498,823 | ) | — | 7,482,012 | 3,649,762 | |||||||||||||||||||||
*Affiliate as of March 31, 2022.
** This security was not affiliated as of March 31, 2022.
1 Realized Losses include transactions in affiliated investments and affiliated in-kind redemptions.
NOTE 10 – LEGAL MATTERS
The Adviser and its parent, ETFMG, were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled[.]”
ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (together with the Adviser, the “Adviser Defendants”) have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C-152-21 (the “NJ Action”). The NJ Action asserts breach of contract, defamation and other tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action. The NJ Action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022, the Adviser, together with the other named affiliates, filed a motion for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied.
ETFMG TM ETFs
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 11 – SUBSEQUENT EVENTS
In preparing these financial statements, the Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed below, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the financial statements.
With respect to Note 10 – Legal Matters, on May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust as well as, all claims asserted against the Adviser Defendants, aside from the defamation claim. The Adviser Defendants intend to vigorously defend themselves against this sole remaining claim.
ETFMG TM ETFs
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on March 28-29, 2022, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the renewal of the Amended and Restated Investment Advisory Agreement (the “Advisory Agreement”) between ETF Managers Group LLC (the “Adviser”) and the Trust, on behalf of each of ETFMG Alternative Harvest ETF (“MJ”), ETFMG U.S. Alternative Harvest ETF (“MJUS”) and ETFMG 2x Daily Alternative Harvest ETF (“MJXL”) (each a “Fund” and collectively, the “Funds”).
Pursuant to Section 15(c) of the 1940 Act, the Board must annually review and approve the Advisory Agreement after its initial two-year term: (i) by the vote of the Trustees or by a vote of the shareholders of the Fund; and (ii) by the vote of a majority of the Trustees who are not parties to the Advisory Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. Each year, the Board calls and holds a meeting to decide whether to renew the Advisory Agreement for an additional one-year term. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services provided to each Fund by the Adviser; (ii) the investment performance of each Fund; (iii) the Adviser’s costs and profits realized in providing services to the Funds, including any fall-out benefits enjoyed by the Adviser; (iv) comparative fee and expense data for each Fund in relation to other similar investment companies; (v) the extent to which economies of scale would be realized as each Fund grows and whether the advisory fees for each Fund reflects these economies of scale for the benefit of the Fund; and (vi) other
financial benefits to the Adviser and its affiliates resulting from services rendered to the Funds. The Board’s review included written and oral information furnished to the Board prior to and at the meeting held on March 28-29, 2022, and throughout the year. Among other things, the Adviser provided responses to a detailed series of questions, which included information about the Adviser’s operations, service offerings, personnel, risk assessment process, compliance program and financial condition. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentations and any other information that the Board received at the meeting, and deliberated on the renewal of the Advisory Agreement in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the renewal of the Advisory Agreement, and the weight to be given to each such factor. The conclusions reached with respect to the Advisory Agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to the Fund. The Independent Trustees conferred amongst themselves and independent legal counsel during an executive session held prior to the meeting and also conferred in executive sessions both with and without representatives of management before and during the meeting. The Independent Trustees requested, received and considered additional information arising out of these executive sessions.
Nature, Extent and Quality of Services Provided by the Adviser
The Trustees considered the scope of services provided under the Advisory Agreement, noting that the Adviser provides investment management services to the Funds. The Board discussed the responsibilities of the Adviser, including: responsibility for the general management of the day-to-day investment and reinvestment of the assets of the Funds; determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis; responsibility for daily monitoring of tracking error and quarterly reporting to the Board; and implementation of Board directives as they relate to the Funds. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel in managing funds with significant derivatives exposure; and the quality of the Adviser’s compliance and risk assessment infrastructure. The Board also considered the Adviser’s experience managing exchange-traded funds (“ETFs”), as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
ETFMG TM ETFs
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board also considered other services provided to the Funds, such as overseeing the Funds’ service providers, monitoring adherence to the Funds’ investment restrictions, and monitoring compliance with various policies and procedures and with applicable securities laws.
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Funds by the Adviser.
Historical Performance
The Board then considered the past performance of the Funds over various time periods ending December 31, 2021. The Board also considered each Fund’s performance as compared to that of comparable ETFs, as determined by the Adviser (“peer group”), using data received from an independent thrid party. In this regard, the Board noted the short time that each of MJUS and MJXL has been in operation.
The Board additionally reviewed the performance of MJ and MJXL as compared to the Funds’ underlying index and the correlation of returns to benchmark information, respectively, for various time periods. The Board noted management’s explanation that analysis of investment performance, in absolute terms, is less relevant for these Funds than it is for actively managed funds, given the Funds’ investment objectives. The Board also noted management’s further explanation that it is more relevant to review the performance of these Funds by focusing on the correlation of performance versus the benchmark (or relevant multiple thereof). The Board reviewed information regarding MJ’s and MJXL’s correlation of returns to the benchmark, discussing, as applicable, factors which contributed to each Fund’s correlation of returns. The Board noted underperformance by each Fund relative to its benchmark (or relative multiple thereof) over certain periods, but that such underperformance was, at least in part, a result of costs incurred by the Fund not incurred by its underlying index, cash drag, the process of rebalancing the Fund’s portfolio and regulatory requirements. Additionally, with respect to MJ, the Board considered that the Fund had changed its underlying index during the time period for which performance was reviewed. The Board noted management’s representations that MJ’s and MJXL’s correlation of returns versus target performance was within the range of what was expected. The Board concluded that, after taking these factors into account, each Fund’s correlation of returns versus target performance was satisfactory.
With respect to MJUS, the Board considered management’s discussion of the Fund’s performance, noting the effect of the cost of financing swap transactions on performance.
The Board further noted that it had received and would continue to receive regular reports regarding each Fund’s performance, including with respect to its tracking error, at its quarterly meetings.
Cost of Services Provided, Profits and Economies of Scale
The Board reviewed the advisory fees for the Funds and compared them to the total operating expenses of comparable ETFs, as determined by the Adviser, using data received from an independent third party. Among other information, the Board noted that the advisory fee for each of MJ and MJUS was higher than the average and equal to the median expense ratios for its respective peer group and that with respect to MJXL, the advisory fee was lower than the average and median expense ratios for its peer group. The Board took into consideration management’s discussion of the fees, including that the Funds have niche investment strategies that are substantially different than the strategies of many of the peer ETFs and, therefore, the information provided about the comparable ETFs may not provide meaningful direct comparisons to the Funds.
ETFMG TM ETFs
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board noted the importance of the fact that the advisory fee for each Fund is a “unified fee,” meaning that the shareholders of the Funds pay no expenses other than the advisory fee and certain other costs such as interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, non-standard Board-related expenses and litigation against the Board, Trustees, Funds, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses. The Board also noted that the Adviser was responsible for compensating the Trust’s other service providers and paying the Funds’ other expenses (except as noted above) out of its own fees and resources. The Board concluded that the advisory fee for each of the Funds is reasonable in light of the factors considered.
The Board also evaluated the compensation and other benefits received by the Adviser from its relationship with the Funds, taking into account profitability information provided by the Adviser. The Board received and reviewed profitability information on a fund by fund basis and considered how profit margins could affect the Adviser’s long-term viability and ability to attract and retain high-quality personnel. The Board also considered the impact on the Adviser’s profitability of payments made to, or received from, partners involved with certain of the Funds. Based on the information provided to the Trustees, the Trustees concluded that the net revenue retained by the Adviser from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund. The Board further considered other benefits derived by the Adviser and its affiliates from the Adviser’s relationship with the Funds.
In addition, the Board considered whether economies of scale may be realized for the Funds. The Board noted that the Adviser regularly considers whether fee reductions are appropriate as the Funds grow in size. The Board noted that a unitary fee provides a level of certainty in expenses for the Funds and effectively acts as a cap on the fees and expenses (except as noted above) that are borne by the Funds. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the continued provision of high-quality services to the Funds, such as the hiring of new trading, legal and compliance personnel, and enhancements to technology and related systems. The Board concluded that no changes to the advisory fee structure of the Funds were necessary.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision.
Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Advisory Agreement are fair and reasonable; (b) concluded that the Adviser’s fees are reasonable in light of the services that the Adviser provides to the Funds; and (c) approved the renewal of the Advisory Agreement for another year.
ETFMG TM ETFs
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on August 24, 2021, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the approval of the Amended and Restated Investment Advisory Agreement (the “Agreement”) between ETF Managers Group LLC (the “Adviser”) and the Trust, on behalf of ETFMG 2X Daily Inverse Alternative Harvest ETF (the “Fund”).
Pursuant to Section 15 of the 1940 Act, the Agreement must be approved by the vote of a majority of the Trustees who are not parties to the Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services to be provided to the Fund by the Adviser; (ii) comparative fee and expense data for the Fund in relation to other similar investment companies; (iii) the extent to which economies of scale may be realized as the Fund grows and whether the proposed advisory fee for the Fund reflects these expected economies of scale for the benefit of the Fund; and (iv) other financial benefits to the Adviser and its affiliates resulting from services to be rendered to the Fund. The Board’s review included written and oral information about the Adviser and service providers furnished to the Board prior to and at the meeting held on August 24, 2021, and throughout the year. Among other things, the Adviser provided responses to a detailed series of questions, which included information about the Adviser’s operations, service offerings, personnel, risk assessment and compliance programs and financial condition. Representatives of the Adviser discussed the services to be provided to the Fund, the rationale for launching the Fund, the marketing strategy and the Fund’s proposed fees in comparison to the fees of comparable investment companies. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentation and any other information that the Board received at the meeting and deliberated on the approval of the Agreement in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the approval of the Agreement, and the weight to be given to each such factor. The conclusions reached with respect to the Agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to the Fund. The matters discussed were also considered separately by the Independent Trustees in executive session with independent legal counsel, at which no representatives of management were present.
Nature, Extent and Quality of Services Provided.
The Trustees considered the scope of services to be provided under the Advisory Agreement, noting that the Adviser would be providing investment advisory services to the Fund. The Board discussed the responsibilities of the Adviser, including: the investment of the Fund’s assets in accordance with its investment objective and monitoring compliance with various fund policies and procedures and with applicable securities regulations, and arranging for transfer agency, custody, fund administration, and all other non-distribution related services necessary for the Fund to operate. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel in managing funds with significant derivatives exposure, as applicable; the quality of the Adviser’s compliance infrastructure and risk assessment capabilities; the marketing strategy for the Fund and the determination of the Trust’s Chief Compliance Officer that the Adviser has appropriate compliance policies and procedures in place that are reasonably designed to prevent violations of the Federal Securities laws. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the provision of high-quality services to the Fund, such as the hiring of trading, legal and compliance personnel, and enhancements to technology and related systems. The Board also considered the Adviser’s experience managing ETFs, as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
ETFMG TM ETFs
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services to be provided to the Fund by the Adviser.
Historical Performance.
The Board noted that the Fund has not yet commenced operations and that therefore there was no prior performance to review.
Cost of Services Provided, Fall-Out Benefits and Economies of Scale.
The Board reviewed the proposed investment advisory fee for the Fund and compared it to the total operating expenses of other funds in the industry falling within the same style category, or peer group, as the Fund, as determined by the Adviser, using data received from an independent third party. The Board noted that the expense ratio for the Fund was lower than the average and equal to the median expense ratio for its peer ETFs. The Board took into consideration management’s discussion of the fees, including that there are limited true peers for the Fund because of its niche strategies and certain differences between the strategies of the Fund and its peer funds.
The Board also noted the importance of the fact that the advisory fee for the Fund was a “unified fee,” meaning that the shareholders of the Fund would pay no expenses other than the advisory fee, interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, certain proxy solicitation costs and non-standard Board-related expenses and litigation against the Board, Trustees, Fund, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses (the “Excluded Expenses”). The Board also noted that the Adviser would be responsible for compensating the Fund’s other service providers and paying the Fund’s other expenses out of its own fee and resources. The Board further noted that because the Fund is new, it was difficult to estimate the profitability of the Fund to the Adviser. The Board, however, considered collateral or “fall-out” benefits that ETFMG and its affiliates may derive as a result of their relationship with the Fund.
The Board noted that because the Fund is new, it also was difficult to estimate whether the Fund would experience economies of scale. The Board noted that the Adviser will review expenses as the Fund’s assets grow. The Board determined to evaluate economies of scale on an ongoing basis if the Fund achieved asset growth.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision. Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Agreement are fair and reasonable; (b) concluded that the Adviser’s fees are reasonable in light of the services that the Adviser will provide to the Fund; and (c) approved the Agreement for an initial term of two years.
ETFMG TM ETFs
March 31, 2022 (Unaudited)
As a shareholder of the Funds you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The examples are based on an investment of $1,000 invested for the period of time as indicated in the table below.
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then, multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
| Fund Name | Beginning Account Value October 1, 2021 |
Ending Account Value March 31, 2022 |
Expenses Paid During the Period |
Annualized Expense Ratio During the Period October 1, 2021 to March 31, 2022 |
||||||||||||
| ETFMG Alternative Harvest ETF | ||||||||||||||||
| Actual | 1,000.00 | 723.60 | 3.22 | (1) | 0.75 | % | ||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,021.19 | 3.78 | (1) | 0.75 | % | ||||||||||
| ETFMG U.S. Alternative Harvest ETF | ||||||||||||||||
| Actual | 1,000.00 | 639.00 | 3.06 | (1) | 0.75 | % | ||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,021.19 | 3.78 | (1) | 0.75 | % | ||||||||||
| ETFMG 2x Daily Alternative Harvest ETF | ||||||||||||||||
| Actual | 1,000.00 | 469.60 | 3.48 | (1) | 0.95 | % | ||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,020.19 | 4.78 | (1) | 0.95 | % | ||||||||||
| ETFMG 2x Daily Inverse Alternative Harvest ETF | ||||||||||||||||
| Actual | 1,000.00 | 1,204.90 | 5.11 | (2) | 0.95 | % | ||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,020.19 | 4.78 | (3) | 0.95 | % | ||||||||||
| (1) | Expenses are calculated using the Fund’s annualized expense ratio, multiplied by the average account value during the period, multiplied by 182/365 days (to reflect the six-month period). |
| (2) | Expenses are calculated using the Fund’s annualized expense ratio, multiplied by the average account value during the period, multiplied by 178/365 days (to reflect the period since the Fund’s inception). |
| (3) | For comparative purposes only as the Fund was not in operation for the full six-month period. |
ETFMG TM ETFs
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
March 31, 2022 (Unaudited)
ETF Managers Trust (the “Trust”) has adopted a liquidity risk management program (the “Program”). The Trust’s Board of Trustees (the “Board”) has designated ETF Managers Group LLC (the “Program Administrator”) as the administrator of the Program. The Program Administrator has designated a committee (the “Committee”), composed of personnel from multiple departments, including investment operations and compliance, that is responsible for the implementation and ongoing administration of the Program, which includes assessing the liquidity risk of ETFMG Alternative Harvest ETF, ETFMG U.S. Alternative Harvest ETF, ETFMG 2x Daily Alternative Harvest ETF and ETFMG 2X Daily Inverse Alternative Harvest ETF (each a “Fund” and, collectively, the “Funds”) under both normal and reasonably foreseeable stressed conditions.
Under the Program, the Program Administrator assesses, manages and periodically reviews each Fund’s liquidity risk, based on factors specific to the circumstances of the Fund. Liquidity risk is the risk that a Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in that Fund. This risk is managed by monitoring the degree of liquidity of each Fund’s investments and limiting the amount of the Fund’s illiquid investments, among other means. The Program Administrator’s process of determining the degree of liquidity of each Fund’s investments is supported by one or more third-party liquidity assessment vendors.
At a meeting of the Board on March 28-29, 2022, the Adviser provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, the operation of any Highly Liquid Investment Minimum, where applicable, and any material changes to the Program, for the period from March 1, 2021 through March 1, 2022 (the “Reporting Period”). No significant liquidity events impacting any Fund were noted in the report and it was represented that, as of December 31, 2021, each Fund, except the ETFMG Alternative Harvest ETF (“MJ”), was primarily highly liquid and, during the Reporting Period, each Fund held less than 15% in illiquid securities. The highly liquid investment minimum of MJ was discussed. In addition, the Program Administrator provided its assessment that Program implementation was effective and that the Program operated adequately and effectively to enable the Program Administrator to oversee and manage liquidity risk and ensure each Fund is able to meet requests to redeem shares without significant dilution to the remaining investors’ interest in the Fund.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to your Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
ETFMG TM ETFs
March 31, 2022 (Unaudited)
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of each Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.etfmgfunds.com.
NOTE 2 – FEDERAL TAX INFORMATION
Qualified Dividend Income/Dividends Received Deduction
For the fiscal year ended September 30, 2021, certain dividends paid by the Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
| Fund Name | Qualified Dividend Income |
| ETFMG Alternative Harvest ETF | 100.00% |
| ETFMG U.S. Alternative Harvest ETF | 0.00% |
| ETFMG 2x Daily Alternative Harvest ETF | 0.00% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September 30, 2021 was as follows:
| Fund Name | Dividends Received Deduction |
| ETFMG Alternative Harvest ETF | 74.28% |
| ETFMG U.S. Alternative Harvest ETF | 0.00% |
| ETFMG 2x Daily Alternative Harvest ETF | 0.00% |
Short Term Capital Gain
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871 (k)(2)(C) for each Fund were as follows:
| Fund Name | Short-Term Capital Gain |
| ETFMG Alternative Harvest ETF | 0.00% |
| ETFMG U.S. Alternative Harvest ETF | 0.00% |
| ETFMG 2x Daily Alternative Harvest ETF | 0.00% |
During the year ended September 30, 2021, the Funds did not declare any long-term realized gains distributions.
Pursuant to Section 853 of the Internal Revenue Code, the Fund designated the following amounts as foreign taxes paid for the year ended September 30, 2021. Foreign taxes paid for purposes of Section 853 may be less than actual foreign taxes paid for financial statement purposes.
| Per Share | ||||||||||
| Fund | Gross Foreign Source Income |
Foreign Taxes Passthrough |
Gross Foreign Source Income |
Foreign Taxes Passthrough |
Shares Outstanding at 9/30/21 |
|||||
| ETFMG Alternative Harvest ETF | 4,249,571 | 256,535 | 0.05731047 | 0.00345968 | 74,150,000 | |||||
ETFMG TM ETFs
SUPPLEMENTARY INFORMATION
March 31, 2022 (Unaudited) (Continued)
Foreign taxes paid or withheld should be included to taxable income with an offsetting deduction from gross income or as a credit for taxes paid to foreign governments.
Above figures may differ from those cited elsewhere in this report due to difference in the calculation of income and gains under GAAP purposes and Internal Revenue Service purposes.
NOTE 3 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the Securities and Exchange Commission (“SEC”) on Part F of Form N-PORT. The Funds’ Part F of Form N-PORT is available on the website of the SEC at www.sec.gov and the Funds’ website at www.etfmgfunds.com. Each Fund’s portfolio holdings are posted on their website at www.etfmgfunds.com daily.
NOTE 4 – INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at (877) 756-7873, by accessing the SEC’s website at www.sec.gov, or by accessing the Funds’ website at www.etfmgfunds.com.
Information regarding how the Funds voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at (877) 756-7873 or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477) or by visiting www.etfmgfunds.com. Read the prospectus carefully before investing.
ETFMG TM ETFs
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
| 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 |
Number of Portfolios in Fund Complex Overseen By Trustee |
Other Directorships Held by Trustee During Past 5 Years |
| Interested Trustee and Officers | ||||
| Samuel
Masucci, III (1962) |
Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) | Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). | 20 | None |
| John
A. Flanagan, (1946) |
Treasurer (since 2015) | President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). | n/a | n/a |
| Reshma
A. Tanczos (1978) |
Chief Compliance Officer (since 2016) | Chief Compliance Officer of ETFMG Financial LLC (Since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). | n/a | n/a |
| Matthew
J. Bromberg (1973) |
Assistant Secretary (since 2020) | General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015-2016). | n/a | n/a |
|
* Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. |
||||
ETFMG Alternative Harvest ETF
Board of Trustees (Continued)
| 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 |
Number of Portfolios in Fund Complex Overseen By Trustee |
Other Directorships Held by Trustee During Past 5 Years |
| Terry
Loebs (1963) |
Trustee (since 2014); Lead
Independent Trustee (since 2020) |
Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). | 20 | None |
| Eric
Wiegel (1960) |
Trustee (since 2020) | Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018). | 20 | None |
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services
615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006
Semi-Annual Report
March 31, 2022
(Unaudited)
AI Powered Equity ETF
Ticker: AIEQ
|
|
The fund is a series of ETF Managers Trust.
| AI Powered Equity ETF | |
| TABLE OF CONTENTS | |
| March 31, 2022 (Unaudited) | |
| Page | |
| Shareholder Letter | 2 |
| Growth of $10,000 Investment | 3 |
| Top 10 Holdings | 4 |
| Important Disclosures and Key Risk Factors | 5 |
| Portfolio Allocations | 6 |
| Schedule of Investments | 7 |
| Statement of Assets and Liabilities | 12 |
| Statement of Operations | 13 |
| Statements of Changes in Net Assets | 14 |
| Financial Highlights | 15 |
| Notes to the Financial Statements | 16 |
| Approval of Advisory Agreements and Board Considerations | 26 |
| Expense Example | 30 |
| Statement Regarding Liquidity Risk Management Program | 31 |
| Supplementary Information | 32 |
| Information About Portfolio Holdings | 32 |
| Information About Proxy Voting | 32 |
| Trustees and Officers Table | 33 |
AI Powered Equity ETF
On behalf of the entire team, we want to express our appreciation for the confidence you have placed in the AI Powered Equity Exchange-Traded Fund (“AIEQ” or the “Fund”). The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
The AI Powered Equity ETF is actively managed and seeks capital appreciation. Over the period, the total return for the Fund was -8.96%, while the total return for its benchmark, the S&P 500 Index, was 5.92%. The best performers in the Fund, based on contribution to return, were Microsoft Corp, Cheniere Energy Inc, Mosaic Co/The, Cloudflare Inc - Class A and Crowdstrike Holdings Inc – A, while the worst performers were Moderna Inc, Denbury Inc, Enphase Energy Inc, Neogenomics Inc, Twitter Inc and Pentair Plc.
During the reporting period, the Fund saw an allocation of 25.77% to Information Technology, 12.37% to Consumer Discretionary and 11.01% to Financials with the exposure of all portfolio securities being to the United States.
AIEQ invests primarily in equity securities listed on a U.S. exchange, based on the results of a proprietary, quantitative model developed by EquBot LLC that runs on the Watson™ platform. Each day, the EquBot Model ranks each company based on the probability of the company benefiting from current economic conditions, trends, and world events and identifies approximately 30 to 200 companies with the greatest potential, over the next twelve months, for appreciation and weights those companies to seek a level of volatility comparable to that of the broader U.S. equity market. EquBot, the Fund’s sub-adviser, is a technology-based company focused on applying artificial intelligence (“AI”) based solutions to investment analyses.
You can find further details about AIEQ by visiting www.etfmg.com, or by calling 1-844-ETF-MGRS (1-844-383-6477).
Sincerely,
Samuel Masucci III
Chairman of the Board
Growth of $10,000 (Unaudited)
| Since | Value of | ||||||||
| Average Annual Returns | 1 Year | 3 Year | Inception | $10,000 | |||||
| Period Ended March 31, 2022 | Return | Return | (10/17/17) | (3/31/2022) | |||||
| AI Powered Equity ETF (NAV) | -1.98% | 13.37% | 12.15% | $ | 16,658 | ||||
| AI Powered Equity ETF (Market) | -2.04% | 13.52% | 12.07% | $ | 16,605 | ||||
| S&P 500 Index | 15.65% | 18.92% | 15.74% | $ | 19,172 | ||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on October 17, 2017, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends. The chart assumes reinvestment of capital gains and dividends, if any. The index returns do not reflect fees or expenses and are not available for direct investment.
Top Ten Holdings as of March 31, 2022 (Unaudited)*
| % of Total | ||
| Security | Investments | |
| 1 | Hershey Co. | 2.86% |
| 2 | Bank of New York Mellon Corp. | 2.59% |
| 3 | Fastenal Co. | 2.51% |
| 4 | Amazon.com, Inc. | 2.50% |
| 5 | Analog Devices, Inc. | 2.44% |
| 6 | Lockheed Martin Corp. | 2.37% |
| 7 | General Dynamics Corp. | 2.37% |
| 8 | American Electric Power Co., Inc. | 2.31% |
| 9 | Albemarle Corp. | 2.29% |
| 10 | McDonalds Corp. | 2.17% |
| Top Ten Holdings = 24.41% of Total Investments |
| * Current Fund holdings may not be indicative of future Fund holdings. |
AI Powered Equity ETF
| Important Disclosures and Key Risk Factors |
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
AIEQ
The AI Powered Equity Technology ETF (the “Fund”) seeks long-term capital appreciation within risk constraints commensurate with broad market US equity indices.
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, or sectors in which the Fund invests such as political, market and economic developments, as well as events that impact specific issuers.
The Fund is actively-managed and may not meet its investment objective based on the success or failure of the Equbot Model to identify investment opportunities. Fund holdings are subject to change. For full holdings information, please visit www.etfmg.com.
The portfolio managers may actively and frequently trade securities or other instruments in the Fund’s portfolio to carry out its investment strategies. A high portfolio turnover rate increases transaction costs, which may increase the Fund’s expenses. Some of the models used by the Adviser for the Fund are predictive in nature. The use of predictive models has inherent risks. When Models and Data prove to be incorrect or incomplete, any decisions made in reliance thereon expose the Fund to potential risks. For example, by relying on Models and Data, the Adviser may be induced to buy certain investments at prices that are too high, to sell certain other investments at prices that are too low, or to miss favorable opportunities altogether. Similarly, any hedging based on faulty Models and Data may prove to be unsuccessful.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
ETF Managers Group LLC is the investment adviser to the fund. Equbot LLC serves as the sub-advisor to the Fund.
The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG is not affiliated with Equbot.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
AI Powered Equity ETF
PORTFOLIO ALLOCATIONS
As of March 31, 2022 (Unaudited)
| AI Powered | ||||
| Equity ETF | ||||
| As a percent of Net Assets: | ||||
| Cayman Islands | 0.1 | % | ||
| Ireland | 0.6 | |||
| Netherlands | 1.6 | |||
| Switzerland | 0.2 | |||
| United Kingdom | 0.2 | |||
| United States | 90.7 | |||
| Virgin Islands | 0.0 | * | ||
| Short-Term and other Net Assets (Liabilities) | 6.6 | |||
| 100.0 | % | |||
*Amount is less than 0.05%.
AI Powered Equity ETF
Schedule of Investments
| Shares | Value | |||||||
| COMMON STOCKS - 93.4% | ||||||||
| Cayman Islands - 0.1% | ||||||||
| Semiconductors & Semiconductor Equipment - 0.1% | ||||||||
| Ambarella, Inc. (a) | 949 | $ | 99,569 | |||||
| Ireland - 0.6% | ||||||||
| Electrical Equipment - 0.2% | ||||||||
| Eaton Corp. PLC | 2,549 | 386,836 | ||||||
| Insurance - 0.2% | ||||||||
| Aon PLC - Class A | 803 | 261,481 | ||||||
| Pharmaceuticals - 0.2% | ||||||||
| Jazz Pharmaceuticals PLC (a) | 1,645 | 256,077 | ||||||
| Total Ireland | 904,394 | |||||||
| Netherlands - 1.6% | ||||||||
| Semiconductors & Semiconductor Equipment - 1.6% | ||||||||
| NXP Semiconductors NV | 12,362 | 2,287,959 | ||||||
| Switzerland - 0.2% | ||||||||
| Electronic Equipment, Instruments & Components - 0.2% | ||||||||
| TE Connectivity, Ltd. | 1,922 | 251,744 | ||||||
| United Kingdom - 0.2% | ||||||||
| Electrical Equipment - 0.2% | ||||||||
| Sensata Technologies Holding PLC (a) | 4,928 | 250,589 | ||||||
| United States - 90.7% | ||||||||
| Aerospace & Defense - 5.2% | ||||||||
| General Dynamics Corp. | 14,747 | 3,556,681 | ||||||
| Lockheed Martin Corp. | 8,061 | 3,558,125 | ||||||
| Textron, Inc. | 3,451 | 256,685 | ||||||
| Total Aerospace & Defense | 7,371,491 | |||||||
| Airlines - 0.2% | ||||||||
| Alaska Air Group, Inc. (a) | 5,972 | 346,436 | ||||||
| Automobiles - 1.5% | ||||||||
| Tesla, Inc. (a)(b) | 1,967 | 2,119,639 | ||||||
| Banks - 3.2% | ||||||||
| First Horizon Corp. | 11,128 | 261,397 | ||||||
| First Republic Bank | 1,615 | 261,792 | ||||||
| SVB Financial Group (a) | 2,754 | 1,540,725 | ||||||
| Truist Financial Corp. | 4,372 | 247,892 | ||||||
| Wells Fargo & Co. | 45,511 | 2,205,463 | ||||||
| Total Banks | 4,517,269 | |||||||
| Biotechnology - 1.2% | ||||||||
| Exelixis, Inc. (a) | 77,121 | 1,748,333 | ||||||
The accompanying notes are an integral part of these financial statements.
AI Powered Equity ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Capital Markets - 4.1% | ||||||||
| Bank of New York Mellon Corp. | 78,337 | $ | 3,887,865 | |||||
| Morgan Stanley | 1,841 | 160,903 | ||||||
| S&P Global, Inc. | 4,076 | 1,672,023 | ||||||
| Total Capital Markets | 5,720,791 | |||||||
| Chemicals - 2.6% | ||||||||
| Albemarle Corp. | 15,546 | 3,437,998 | ||||||
| Mosaic Co. | 3,956 | 263,074 | ||||||
| Total Chemicals | 3,701,072 | |||||||
| Commercial Services & Supplies - 0.2% | ||||||||
| Republic Services, Inc. | 1,959 | 259,568 | ||||||
| Communications Equipment - 1.4% | ||||||||
| Lumentum Holdings, Inc. (a)(b) | 20,876 | 2,037,498 | ||||||
| Construction Materials - 0.2% | ||||||||
| Vulcan Materials Co. | 1,381 | 253,690 | ||||||
| Consumer Finance - 1.0% | ||||||||
| Discover Financial Services | 13,045 | 1,437,429 | ||||||
| Containers & Packaging - 0.5% | ||||||||
| Avery Dennison Corp. | 1,464 | 254,692 | ||||||
| Greif, Inc. - Class A | 7,389 | 480,728 | ||||||
| Total Containers & Packaging | 735,420 | |||||||
| Diversified Consumer Services - 0.2% | ||||||||
| Service Corp. International | 4,080 | 268,546 | ||||||
| Diversified Financial Services - 0.4% | ||||||||
| Berkshire Hathaway, Inc. - Class B (a) | 855 | 301,738 | ||||||
| Voya Financial, Inc. | 3,841 | 254,850 | ||||||
| Total Diversified Financial Services | 556,588 | |||||||
| Electric Utilities - 4.9% | ||||||||
| American Electric Power Co., Inc. | 34,859 | 3,477,882 | ||||||
| Entergy Corp. | 15,608 | 1,822,234 | ||||||
| NRG Energy, Inc. | 40,497 | 1,553,465 | ||||||
| Total Electric Utilities | 6,853,581 | |||||||
| Electronic Equipment, Instruments & Components - 0.2% | ||||||||
| Jabil, Inc. | 5,449 | 336,366 | ||||||
| Energy Equipment & Services - 1.2% | ||||||||
| Halliburton Co. | 43,892 | 1,662,190 | ||||||
| Entertainment - 0.8% | ||||||||
| Madison Square Garden Sports Corp. (a) | 6,360 | 1,140,730 | ||||||
| Food & Staples Retailing - 0.5% | ||||||||
| Sysco Corp. | 8,747 | 714,193 | ||||||
| Food Products - 3.7% | ||||||||
| Conagra Brands, Inc. | 7,866 | 264,062 | ||||||
| Hershey Co. | 19,858 | 4,301,838 | ||||||
| McCormick & Co., Inc. | 6,450 | 643,710 | ||||||
| Total Food Products | 5,209,610 | |||||||
The accompanying notes are an integral part of these financial statements.
AI Powered Equity ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Gas Utilities - 1.5% | ||||||||
| Atmos Energy Corp. | 2,205 | $ | 263,475 | |||||
| National Fuel Gas Co. | 26,815 | 1,842,191 | ||||||
| Total Gas Utilities | 2,105,666 | |||||||
| Health Care Equipment & Supplies - 3.6% | ||||||||
| Boston Scientific Corp. (a) | 10,588 | 468,943 | ||||||
| DexCom, Inc. (a) | 1,144 | 585,270 | ||||||
| Intuitive Surgical, Inc. (a) | 344 | 103,778 | ||||||
| Stryker Corp. | 9,801 | 2,620,297 | ||||||
| Teleflex, Inc. | 3,551 | 1,260,001 | ||||||
| Total Health Care Equipment & Supplies | 5,038,289 | |||||||
| Hotels, Restaurants & Leisure - 3.0% | ||||||||
| McDonald’s Corp. | 13,166 | 3,255,689 | ||||||
| Penn National Gaming, Inc. (a) | 17,139 | 727,037 | ||||||
| Yum! Brands, Inc. | 2,140 | 253,654 | ||||||
| Total Hotels, Restaurants & Leisure | 4,236,380 | |||||||
| Industrial Conglomerates - 0.4% | ||||||||
| Honeywell International, Inc. | 1,322 | 257,235 | ||||||
| Roper Technologies, Inc. | 548 | 258,782 | ||||||
| Total Industrial Conglomerates | 516,017 | |||||||
| Insurance - 1.1% | ||||||||
| American International Group, Inc. | 13,343 | 837,540 | ||||||
| Assurant, Inc. | 1,439 | 261,653 | ||||||
| Principal Financial Group, Inc. | 3,494 | 256,495 | ||||||
| Travelers Cos., Inc. | 1,425 | 260,390 | ||||||
| Total Insurance | 1,616,078 | |||||||
| Interactive Media & Services - 4.0% | ||||||||
| Alphabet, Inc. - Class A (a) | 1,056 | 2,937,105 | ||||||
| Alphabet, Inc. - Class C (a)(b) | 979 | 2,734,337 | ||||||
| Total Interactive Media & Services | 5,671,442 | |||||||
| Internet & Direct Marketing Retail - 2.7% | ||||||||
| Amazon.com, Inc. (a) | 1,152 | 3,755,462 | ||||||
| IT Services - 1.6% | ||||||||
| Jack Henry & Associates, Inc. | 1,324 | 260,894 | ||||||
| Visa, Inc. - Class A (b) | 8,924 | 1,979,076 | ||||||
| Total IT Services | 2,239,970 | |||||||
| Life Sciences Tools & Services - 2.7% | ||||||||
| Danaher Corp. | 5,801 | 1,701,607 | ||||||
| NeoGenomics, Inc. (a)(b) | 156,558 | 1,902,180 | ||||||
| Waters Corp. (a) | 803 | 249,243 | ||||||
| Total Life Sciences Tools & Services | 3,853,030 | |||||||
| Multi-Utilities - 0.2% | ||||||||
| Ameren Corp. | 2,827 | 265,060 | ||||||
| Oil, Gas & Consumable Fuels - 2.8% | ||||||||
| Antero Resources Corp. (a) | 8,422 | 257,124 | ||||||
| Matador Resources Co. | 22,094 | 1,170,540 | ||||||
| PDC Energy, Inc. | 35,353 | 2,569,456 | ||||||
| Total Oil, Gas & Consumable Fuels | 3,997,120 | |||||||
The accompanying notes are an integral part of these financial statements.
AI Powered Equity ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Pharmaceuticals - 2.5% | ||||||||
| Johnson & Johnson | 14,615 | $ | 2,590,217 | |||||
| Pfizer, Inc. | 4,949 | 256,210 | ||||||
| Zoetis, Inc. | 3,541 | 667,797 | ||||||
| Total Pharmaceuticals | 3,514,224 | |||||||
| Professional Services - 0.2% | ||||||||
| TransUnion | 2,517 | 260,107 | ||||||
| Real Estate Investment Trust (REIT) - 1.0% | ||||||||
| Hannon Armstrong Sustainable Infrastructure Capital Inc. | 29,662 | 1,406,869 | ||||||
| Road & Rail - 0.2% | ||||||||
| Norfolk Southern Corp. | 909 | 259,265 | ||||||
| Semiconductors & Semiconductor Equipment - 9.8% | ||||||||
| Advanced Micro Devices, Inc. (a) | 27,126 | 2,965,957 | ||||||
| Amkor Technology, Inc. | 75,599 | 1,642,010 | ||||||
| Analog Devices, Inc. | 22,224 | 3,670,960 | ||||||
| Broadcom, Inc. | 4,526 | 2,849,932 | ||||||
| MACOM Technology Solutions Holdings, Inc. (a)(b) | 18,049 | 1,080,594 | ||||||
| MaxLinear, Inc. (a)(b) | 12,978 | 757,266 | ||||||
| Synaptics, Inc. (a)(b) | 4,011 | 800,195 | ||||||
| Total Semiconductors & Semiconductor Equipment | 13,766,914 | |||||||
| Software - 10.1% | ||||||||
| Crowdstrike Holdings, Inc. - Class A (a) | 12,104 | 2,748,575 | ||||||
| Datadog, Inc. - Class A (a) | 15,546 | 2,354,753 | ||||||
| Dropbox, Inc. - Class A (a) | 80,097 | 1,862,255 | ||||||
| Dynatrace, Inc. (a) | 77 | 3,627 | ||||||
| HubSpot, Inc. (a)(b) | 1,516 | 720,009 | ||||||
| Microsoft Corp. | 4,318 | 1,331,283 | ||||||
| New Relic, Inc. (a)(b) | 18,453 | 1,234,137 | ||||||
| Oracle Corp. | 16,915 | 1,399,378 | ||||||
| salesforce.com, Inc. (a) | 10,476 | 2,224,264 | ||||||
| SecureWorks Corp. - Class A (a) | 7,821 | 103,628 | ||||||
| Synopsys, Inc. (a) | 576 | 191,964 | ||||||
| Total Software | 14,173,873 | |||||||
| Specialty Retail - 2.6% | ||||||||
| Advance Auto Parts, Inc. (b) | 10,415 | 2,155,488 | ||||||
| GameStop Corp. - Class A (a) | 7,709 | 1,284,165 | ||||||
| TJX Cos., Inc. | 4,103 | 248,560 | ||||||
| Total Specialty Retail | 3,688,213 | |||||||
| Technology Hardware, Storage & Peripherals - 0.6% | ||||||||
| Apple, Inc. | 4,573 | 798,492 | ||||||
| Textiles, Apparel & Luxury Goods - 2.4% | ||||||||
| Lululemon Athletica, Inc. (a) | 709 | 258,948 | ||||||
| PVH Corp. | 40,121 | 3,073,670 | ||||||
| Total Textiles, Apparel & Luxury Goods | 3,332,618 | |||||||
| Tobacco - 1.1% | ||||||||
| Altria Group, Inc. | 28,293 | 1,478,309 | ||||||
The accompanying notes are an integral part of these financial statements.
AI Powered Equity ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Trading Companies & Distributors - 3.2% | ||||||||
| Fastenal Co. | 63,483 | $ | 3,770,891 | |||||
| United Rentals, Inc. (a) | 2,026 | 719,655 | ||||||
| Total Trading Companies & Distributors | 4,490,546 | |||||||
| Water Utilities - 0.2% | ||||||||
| American Water Works Co., Inc. | 1,595 | 264,020 | ||||||
| Total United States | 127,718,404 | |||||||
| Virgin Islands (UK) - 0.0% (d) | ||||||||
| Textiles, Apparel & Luxury Goods - 0.0% (d) | ||||||||
| Capri Holdings, Ltd. (a) | 273 | 14,029 | ||||||
| TOTAL COMMON STOCKS (Cost $131,377,527) | 131,526,688 | |||||||
| INVESTMENTS PURCHASED WITH PROCEEDS FROM | ||||||||
| SECURITIES LENDING COLLATERAL - 8.6% | ||||||||
| Mount Vernon Liquid Assets Portfolio, LLC, 0.41% (c) | 12,070,426 | 12,070,426 | ||||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $12,070,426) | 12,070,426 | |||||||
| SHORT-TERM INVESTMENTS - 4.7% | ||||||||
| Money Market Funds - 4.7% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 6,648,154 | 6,648,154 | ||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $6,648,154) | 6,648,154 | |||||||
| Total Investments (Cost $150,096,107) - 106.7% | 150,245,268 | |||||||
| Liabilities in Excess of Other Assets - (6.7)% | (9,462,593 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 140,782,675 | ||||||
Percentages are stated as a percent of net assets.
PLC Public Limited Company
| (a) | Non-income producing security. |
| (b) | All or portion of this security was out on loan at March 31, 2022. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
| (d) | Amount is less than 0.05%. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
AI Powered Equity ETF
STATEMENT OF ASSETS AND LIABILITIES
As of March 31, 2022 (Unaudited)
| AI Powered | ||||
| Equity ETF | ||||
| ASSETS | ||||
| Investments in securities, at value* | $ | 150,245,268 | ||
| Receivables: | ||||
| Receivable for fund shares issued | 31,228,230 | |||
| Dividends and interest receivable | 97,755 | |||
| Securities lending income receivable | 2,478 | |||
| Receivable for investments sold | 57,902,698 | |||
| Total Assets | 239,476,429 | |||
| LIABILITIES | ||||
| Collateral received for securities loaned (Note 7) | 12,070,426 | |||
| Payables: | ||||
| Payable for investments purchased | 55,708,672 | |||
| Payable for fund shares redeemed | 30,825,548 | |||
| Unitary fees payable | 89,108 | |||
| Total Liabilities | 98,693,754 | |||
| Net Assets | $ | 140,782,675 | ||
| NET ASSETS CONSIST OF: | ||||
| Paid-in Capital | $ | 154,672,050 | ||
| Total distributable earnings (accumulated losses) | (13,889,375 | ) | ||
| Net Assets | $ | 140,782,675 | ||
| *Identified Cost: | ||||
| Investments in securities | $ | 150,096,107 | ||
| Shares Outstanding^ | 3,825,000 | |||
| Net Asset Value, Offering and Redemption Price per Share | $ | 36.81 | ||
| ^ No par value, unlimited number of shares authorized | ||||
The accompanying notes are an integral part of these financial statements.
AI Powered Equity ETF
For the Period Ended March 31, 2022 (Unaudited)
| AI Powered | ||||
| Equity ETF | ||||
| INVESTMENT INCOME | ||||
| Income: | ||||
| Dividends from investments (net of foreign withholdings tax of $0) | 751,638 | |||
| Interest | 516 | |||
| Securities lending income | 11,302 | |||
| Total Investment Income | 763,456 | |||
| Expenses: | ||||
| Unitary fees | 599,697 | |||
| Total Expenses | 599,697 | |||
| Net Investment Income | 163,759 | |||
| REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||
| Net Realized Gain (Loss) on: | ||||
| Investments | (29,510,291 | ) | ||
| In-Kind Redemptions | 17,686,292 | |||
| Net Realized Gain (Loss) on Investments and In-Kind Redemptions | (11,823,999 | ) | ||
| Net Change in Unrealized Appreciation/Depreciation of: | ||||
| Investments | (2,118,600 | ) | ||
| Net Change in Unrealized Appreciation/Depreciation of Investments | (2,118,600 | ) | ||
| Net Realized and Unrealized Gain (Loss) on Investments | (13,942,599 | ) | ||
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | (13,778,840 | ) | ||
The accompanying notes are an integral part of these financial statements.
AI Powered Equity ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||
| OPERATIONS | ||||||||
| Net investment income (loss) | $ | 163,759 | $ | (149,583 | ) | |||
| Net realized gain (loss) on investments and in-kind | ||||||||
| redemptions | (11,823,999 | ) | 47,269,564 | |||||
| Net change in unrealized appreciation/depreciation of | ||||||||
| investments | (2,118,600 | ) | (13,078,850 | ) | ||||
| Net increase (decrease) in net assets resulting from | ||||||||
| operations | (13,778,840 | ) | 34,041,131 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | (2,903,688 | ) | (145,000 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase (decrease) in net assets derived from net | ||||||||
| change in outstanding shares | (10,097,150 | ) | 40,773,047 | |||||
| Net increase (decrease) in net assets | (26,779,678 | ) | 74,629,178 | |||||
| NET ASSETS | ||||||||
| Beginning of Period | 167,562,353 | 92,933,175 | ||||||
| End of Period | $ | 140,782,675 | $ | 167,562,353 | ||||
Summary of share transactions is as follows:
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares Sold | 4,550,000 | $ | 187,547,448 | 7,000,000 | $ | 282,430,807 | ||||||||||
| Shares Redeemed | (4,800,000 | ) | (197,644,598 | ) | (5,950,000 | ) | (241,697,760 | ) | ||||||||
| Net Transactions in Fund Shares | (250,000 | ) | $ | (10,097,150 | ) | 1,050,000 | $ | 40,733,047 | ||||||||
| Beginning Shares | 4,075,000 | 3,025,000 | ||||||||||||||
| Ending Shares | 3,825,000 | 4,075,000 | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
AI Powered Equity ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each year/period
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
Year Ended September 30, 2020 |
Year Ended September 30, 2019 |
Period Ended September 30, 20181 |
||||||||||||||||
| Net Asset Value, Beginning of Year/Period | $ | 41.12 | $ | 30.72 | $ | 26.19 | $ | 29.50 | $ | 25.00 | ||||||||||
| Income from Investment Operations: | ||||||||||||||||||||
| Net investment income (loss) 2 | 0.04 | (0.03 | ) | 0.14 | 0.16 | 0.14 | ||||||||||||||
| Net realized and unrealized gain (loss) on | ||||||||||||||||||||
| Investments | (3.63 | ) | 10.47 | 4.52 | (1.41 | ) | 4.49 | |||||||||||||
| Total from investment operations | (3.59 | ) | 10.44 | 4.66 | (1.25 | ) | 4.63 | |||||||||||||
| Less Distributions: | ||||||||||||||||||||
| Distributions from net investment income | — | (0.04 | ) | (0.13 | ) | (0.17 | ) | (0.12 | ) | |||||||||||
| Net realized gains | (0.72 | ) | — | — | (1.89 | ) | (0.01 | ) | ||||||||||||
| Total distributions | (0.72 | ) | (0.04 | ) | (0.13 | ) | (2.06 | ) | (0.13 | ) | ||||||||||
| Net asset value, end of year/period | $ | 36.81 | $ | 41.12 | $ | 30.72 | $ | 26.19 | $ | 29.50 | ||||||||||
| Total Return | -8.96 | %3 | 34.00 | % | 17.94 | % | -2.32 | % | 18.53 | %3 | ||||||||||
| Ratios/Supplemental Data: | ||||||||||||||||||||
| Net Assets at end of year/period (000’s) | $ | 140,783 | $ | 167,562 | $ | 92,933 | $ | 114,573 | $ | 206,472 | ||||||||||
| Expenses to Average Net Assets | 0.75 | %4 | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | %4 | ||||||||||
| Net Investment Income (Loss) to Average Net Assets | 0.20 | %4 | -0.09 | % | 0.49 | % | 0.64 | % | 0.52 | %4 | ||||||||||
| Portfolio Turnover Rate | 434 | %3 | 540 | % | 239 | % | 129 | % | 260 | %3 | ||||||||||
| 1 | Commencement of operations on October 17, 2017. | |
| 2 | Calculated based on average shares outstanding during the year/period. | |
| 3 | Not annualized. | |
| 4 | Annualized. |
The accompanying notes are an integral part of these financial statements.
AI Powered Equity ETF
March 31, 2022 (Unaudited)
NOTE 1 – ORGANIZATION
The AI Powered Equity ETF (the “Fund”) is a series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Fund’s shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”). The investment objective of the Fund is capital appreciation. The Fund commenced operations on October 17, 2017.
The Fund currently offers one class of shares, which has no front end sales load, no deferred sales charges, and no redemption fees. The Fund may issue an unlimited number of shares of beneficial interest, with no par value. All shares of the Fund have equal rights and privileges.
Shares of the Fund are listed and traded on the NYSE Arca, Inc. Market prices for the Shares may be different from their net asset value (“NAV”). The Fund issues and redeems Shares on a continuous basis at NAV only in blocks of 25,000 shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in a specified Index. Once created, Shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, Shares are not redeemable securities of the Fund. Shares of the Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participant”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the Shares directly from the Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and are subject to customary brokerage commissions or fees.
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Transaction Fees” in the Statements of Changes in Net Assets.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Fund may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR for this reporting period, which is filed with the U.S. Securities and Exchange Commission (“SEC”). For more information about the underlying Fund’s operations and policies, please refer to those fund’s semiannual and annual reports, which are filed with the SEC.
| A. | Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
AI Powered Equity ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Fund’s Board. The use of fair value pricing by a fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. As of March 31, 2022, the Fund did not hold any fair valued securities.
As described above, the Fund utilizes various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. |
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| Level 3 | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following table presents a summary of the Fund’s investments in securities, at fair value, as of March 31, 2022:
AI Powered Equity ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
AI Powered Equity ETF
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 131,526,688 | $ | — | $ | — | $ | 131,526,688 | ||||||||
| Short-Term Investments | 6,648,154 | — | — | 6,648,154 | ||||||||||||
| Investments Purchased with Securities Lending Collateral* | — | — | — | 12,070,426 | ||||||||||||
| Total Investments in Securities | $ | 138,174,842 | $ | — | $ | — | $ | 150,245,268 | ||||||||
^ For further information regarding security characteristics, see the Schedule of Investments.
* Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Schedule of Investments.
| B. | Federal Income Taxes. The Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
To avoid imposition of the excise tax applicable to regulated investment companies, the Fund intends to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of the Fund’s next taxable year.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The Fund has analyzed its tax position and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Fund’s 2021 tax returns. The Fund identifies its major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however, the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
As of March 31, 2022, management has reviewed the tax positions for open periods (for Federal purposes, three years from the date of filing and for state purposes, four years from the date of filing), as applicable to the Fund, and has determined that no provision for income tax is required in the Fund’s financial statements.
| C. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Fund may be subject to income, withholding or other taxes imposed by foreign countries. |
AI Powered Equity ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| D. | Foreign Currency Translations and Transactions. The Fund may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Fund does not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Fund does isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
| E. | Distributions to Shareholders. Distributions to shareholders from net investment income are declared and paid for the Fund on a quarterly basis. Net realized gains on securities for the Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
| G. | Share Valuation. The NAV per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be priced on the days on which the NYSE is closed for trading. The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share. |
| H. | Guarantees and Indemnifications. In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote. |
NOTE 3 – RISK FACTORS
Investing in the AI Powered Equity ETF may involve certain risks, as discussed in the Fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Equity Market 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, or sectors in which the Fund invests such as political, market and economic developments, as well as events that impact specific issuers.
Management Risk. The Fund is subject to management risk as an actively-managed investment portfolio. The Adviser’s investment approach may fail to produce the intended results. If the Adviser’s implementation of the EquBot Model is inaccurate or incomplete, the Fund may not perform as expected and your investment could lose value over short or long-term periods. Additionally, the Adviser has not previously managed a Fund whose strategy relies on the use of AI, which may create additional risks for the Fund.
AI Powered Equity ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Market Trading Risk. An investment in the Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, periods of high volatility and disruption in the creation/redemption process of the Fund. Any of these factors, among others, may lead to the Fund’s shares trading at a premium or discount to NAV.
Models and Data Risk. The Fund relies heavily on 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 expose the Fund to potential risks.
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 small 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 small 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.
Portfolio Turnover Risk. The portfolio managers may actively and frequently trade securities or other instruments in the Fund’s portfolio to carry out its investment strategies. A high portfolio turnover rate increases transaction costs, which may increase the Fund’s expenses.
Real Estate Investment Trust (“REIT”) Investment 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. REITs may be affected by changes in the value of their underlying properties or mortgages or by defaults by their borrowers or tenants. Furthermore, these entities depend upon specialized management skills, have limited diversification and are, therefore, subject to risks inherent in financing a limited number of projects. In addition, the performance of a REIT may be affected by changes in the tax laws or by its failure to qualify for tax-free pass-through of income.
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.
Smaller Companies Risk. Smaller companies in which the Fund may invest may be more vulnerable to adverse business or economic events than larger, more established companies, and may underperform other segments of the market or the equity market as a whole. The securities of smaller companies also tend to be bought and sold less frequently and at significantly lower trading volumes than the securities of larger companies. As a result, it may be more difficult for the Fund to buy or sell a significant amount of the securities of a smaller company without an adverse impact on the price of the company’s securities, or the Fund may have to sell such securities in smaller quantities over a longer period of time, which may increase the Fund’s tracking error.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19), have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Fund and its investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect global, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under these circumstances, the Fund may have difficulty achieving its investment objective which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Fund’s third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. These factors can cause substantial market volatility, exchange trading suspensions and closures and can impact the ability of the Fund to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A widespread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on the Fund’s performance, resulting in losses to the Fund.
AI Powered Equity ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 4 – MANAGEMENT AND OTHER CONTRACTS
ETF Managers Group, LLC (the “Adviser”), serves as the investment Adviser to the Fund. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Fund, and the Adviser, the Adviser provides investment advice to the Fund and oversees the day-to-day operations of the Fund, subject to the direction and control of the Board and the officers of the Trust.
Under the Investment Advisory Agreement with the Fund, the Adviser has overall responsibility for the general management and administration of the Fund and arranges for sub-Advisory, transfer agency, custody, fund administration, securities lending, and all other non-distribution related services necessary for the Fund to operate. The Adviser bears the costs of all Advisory and non-Advisory services required to operate the Fund, in exchange for a single unitary fee. For services provided the Fund pays the Adviser at an annual rate of 0.75% of the Fund’s average daily net assets. The Adviser has an agreement with, and is dependent on, a third party to pay the Fund’s expenses in excess of 0.75% of the Fund’s average daily net assets. Additionally, under the Investment Advisory Agreement, the Adviser has agreed to pay all expenses of the Fund, except for: the fee paid to the Adviser pursuant to the Investment Advisory Agreement, interest charges on any borrowings, 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”). The Adviser has entered into an Agreement with its affiliate, ETFMG Financial, LLC, to serve as distributor the Fund (the “Distributor”). The Distributor provides marketing support for the Fund, including distributing marketing materials related to the Fund.
EquBot, LLC serves as the sub-adviser to the Fund (the “Sub-Adviser”) and provides investment advice using the EquBot Model to the Adviser and the Fund. The Adviser is responsible for paying the entire amount of the Sub-Adviser’s fee for the Fund. The Sub-Adviser also provides marketing support for the Fund.
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services (the “Administrator”) provides fund accounting, fund administration, and transfer agency services to the Fund. The Adviser compensates the Administrator for these services under an administration agreement between the two entities.
The Adviser pays each independent Trustee a quarterly fee for service to the Fund. Each Trustee is also reimbursed by the Adviser for all reasonable out-of-pocket expenses incurred in connection with their duties as Trustee, including travel and related expenses incurred in attending Board meetings.
AI Powered Equity ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 5 – DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to the Fund, with the amount of such compensation not to exceed an annual rate of 0.25% of the Fund’s daily average net assets. For the period ended March 31, 2022, the Fund did not incur any 12b-1 expenses.
NOTE 6 – PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, for the period ended March 31, 2022:
| Purchases | Sales | |||||||
| AI Powered Equity ETF | $ | 677,113,543 | $ | 686,862,280 | ||||
The costs of purchases and sales of in-kind transactions associated with creations and redemptions for the period ended March 31, 2022:
| Purchases In- | Sales In- | |||||||
| Kind | Kind | |||||||
| AI Powered Equity ETF | $ | 182,601,868 | $ | 193,630,773 | ||||
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all in-kind sales. Net capital gains or losses resulting from in- kind redemptions are excluded from the Fund’s taxable gains and are not distributed to shareholders.
There were no purchases or sales of U.S. Government obligations for the period ended March 31, 2022.
NOTE 7 – SECURITIES LENDING
The Fund may lend up to 33 1⁄3% of the value of the securities in its portfolio to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending program administered by U.S. Bank N.A. (“the Custodian”). The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the value of any loaned securities at the time of the loan, plus accrued interest. The Fund receives compensation in the form of fees and earn interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Fund continues to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss in the fair value of securities loaned that may occur during the term of the loan will be for the account of the Fund. The Fund has the right under the terms of the securities lending agreement to recall the securities from the borrower on demand. The cash collateral is invested by the Custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations either directly on behalf of the Fund or through one or more joint accounts, money market funds, or short-term bond funds, including those advised by or affiliated with the Adviser; however, such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. Other investment companies, in which the Fund may invest cash collateral, can be expected to incur fees and expenses for operations, such as investment Advisory and administration fees, which would be in addition to those incurred by the Fund, and which may be received in full or in part by the Adviser. Pursuant to guidance issued by the SEC staff, fees and expenses of money market funds used for cash collateral received in connection with loans of securities are not treated as Acquired Fund Fees and Expenses, which reflect a fund’s pro rata share of the fees and expenses incurred by other investment companies in which the Fund invests (as disclosed in the Prospectus, as applicable). The Fund could also experience delays in recovering its securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Fund is indemnified from this risk by contract with the securities lending agent.
AI Powered Equity ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
As of March 31, 2022, the value of the securities on loan and payable for collateral due to broker were as follows:
Value of Securities on Loan Collateral Received
| Fund | Values of Securities on Loan |
Fund Collateral Received* |
||||||
| AI Powered Equity ETF | $ | 11,613,059 | $ | 12,070,426 | ||||
* The cash collateral received was invested in the Mount Vernon Liquid Assets Portfolio, LLC, an investment with an overnight and continuous maturity, as shown on the Schedule of Investments.
NOTE 8 – FEDERAL INCOME TAXES
The components of distributable earnings (losses) and cost basis of investments for federal income tax purposes at September 30, 2021, were as follows:
| Cost | Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Unrealized Appreciation (Depreciation) |
|||||||||||||
| AI Powered Equity ETF | $ | 195,964,868 | $ | 6,522,605 | $ | (6,401,231 | ) | $ | 121,374 | |||||||
| Undistributed Ordinary Income |
Undistributed Long-Term Gain |
Total Distributable Earnings |
Other Accumulated (Loss) |
Total Accumulated Gain |
||||||||||||||||
| AI Powered Equity ETF | $ | — | $ | 2,903,650 | $ | 2,903,650 | $ | (231,871 | ) | $ | 2,793,153 | |||||||||
As of September 30, 2021, the Fund had accumulated capital loss carryovers of:
| Capital Loss Carryover ST |
Capital Loss Carryover LT |
Expires | ||||
| AI Powered Equity ETF | None | None | Indefinite | |||
Under current tax law, capital and currency losses realized after October 31 of a fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The Fund had deferred post-October capital and currency losses, which will be treated as arising on the first business day of the year ended September 30, 2021.
|
Later Year Ordinary Loss |
Post-October Loss |
|||||
| AI Powered Equity ETF | $ | (231,871 | ) | None | ||
AI Powered Equity ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The tax character of distributions paid by the Fund during the fiscal periods ended March 31, 2022 and September 30, 2021 are as follows:
| Period Ended March 31, 2022 |
Year Ended September 30, 2021 |
|||||||||||||||
| From Ordinary Income |
From Capital Gains |
From Ordinary Income |
From Capital Gains |
|||||||||||||
| AI Powered Equity ETF | $ | — | $ | 2,903,688 | $ | 145,000 | $ | — | ||||||||
NOTE 9 – LEGAL MATTERS
The Adviser and its parent, ETFMG, were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled[.]”
ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (together with the Adviser, the “Adviser Defendants”) have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C-152-21 (the “NJ Action”). The NJ Action asserts breach of contract, defamation and other tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action. The NJ Action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022, the Adviser, together with the other named affiliates, filed a motion for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied.
AI Powered Equity ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 10 – SUBSEQUENT EVENTS
In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed below, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the financial statements.
With respect to Note 9 – Legal Matters, on May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust as well as, all claims asserted against the Adviser Defendants, aside from the defamation claim. The Adviser Defendants intend to vigorously defend themselves against this sole remaining claim.
AI Powered Equity ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on March 28-29, 2022, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the renewal of the following agreements:
| ● | an Amended and Restated Investment Advisory Agreement between ETF Managers Group, LLC (the “Adviser”) and the Trust, on behalf of AI Powered Equity ETF (the “Fund”) (the “Advisory Agreement”); and |
| ● | a Sub-Advisory Agreement between the Adviser and Equbot LLC (the “Sub-Adviser”) with respect to the Fund (the “Sub-Advisory Agreement” and, together with the Advisory Agreement, the “Agreements”). |
Pursuant to Section 15(c) of the 1940 Act, the Board must annually review and approve the Agreements after their initial two-year term: (i) by the vote of the Trustees or by a vote of the shareholders of the Fund; and (ii) by the vote of a majority of the Trustees who are not parties to the Agreements or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. Each year, the Board calls and holds a meeting to decide whether to renew the Agreements for an additional one-year term. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser and Sub-Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services provided to the Fund by the Adviser and Sub-Adviser; (ii) the investment performance of the Fund; (iii) the Adviser’s costs and profits realized in providing services to the Fund, including any fall-out benefits enjoyed by the Adviser; (iv) comparative fee and expense data for the Fund in relation to other similar investment companies; (v) the extent to which economies of scale would be realized as the Fund grows and whether the advisory fees for the Fund reflects these economies of scale for the benefit of the Fund; and (vi) other financial benefits to the Adviser or Sub-Adviser and their affiliates resulting from services rendered to the Fund. The Board’s review included written and oral information furnished to the Board prior to and at the meeting held on March 28-29, 2022, and throughout the year. Among other things, each of the Adviser and Sub-Adviser provided responses to a detailed series of questions, which included information about the Adviser’s and Sub-Adviser’s operations, service offerings, personnel, risk assessment process and compliance program and financial condition. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentations and any other information that the Board received at the meeting, and deliberated on the renewal of the Agreements in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the renewal of the Agreements, and the weight to be given to each such factor. The conclusions reached with respect to the Agreements were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to the Fund. The Independent Trustees conferred amongst themselves and independent legal counsel during an executive session held prior to the meeting and also conferred in executive sessions both with and without representatives of management before and during the meeting. The Independent Trustees requested, received and considered additional information arising out of these executive sessions.
AI Powered Equity ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
Nature, Extent and Quality of Services Provided by the Adviser
The Trustees considered the scope of services provided under the Advisory Agreement, noting that the Adviser provides investment management services to the Fund. The Board discussed the responsibilities of the Adviser, including: responsibility for the general management of the day-to-day investment and reinvestment of the assets of the Fund, based on recommendations provided by the Sub-Adviser; determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis; responsibility for daily monitoring of tracking error and quarterly reporting to the Board; and implementation of Board directives as they relate to the Fund. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel and the quality of the Adviser’s compliance and risk assessment infrastructure. The Board also considered the Adviser’s experience managing exchange-traded funds (“ETFs”), as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
The Board also considered other services provided to the Fund, such as overseeing the activities of the Sub-Adviser, as well as the Fund’s other service providers, monitoring adherence to the Fund’s investment restrictions, and monitoring compliance with various policies and procedures and with applicable securities laws.
The Board then considered the scope of services provided under the Sub-Advisory Agreement, noting that the Sub-Adviser provides investment sub-advisory services to the Adviser in the form of recommendations based on the Sub-Adviser’s algorithm-based model. The Board noted that the responsibility for trading the Fund’s portfolio securities would continue to rest with the Adviser. In considering the nature, extent and quality of the services provided by the Sub-Adviser, the Board noted that it had received a copy of the Sub-Adviser’s Form ADV, as well as the response of the Sub-Adviser to a detailed series of questions which included, among other things, information about the background and experience of the Sub-Adviser’s personnel. The Board considered the experience of the Sub-Adviser’s personnel in the financial services and artificial intelligence businesses. The Board also considered the quality of the Sub-Adviser’s compliance program and Code of Ethics.
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Fund by the Adviser and Sub-Adviser.
Historical Performance
The Board then considered the Fund’s performance history over various time periods ending December 31, 2021, including the one-year, three-year and since inception periods. The Board also considered the Fund’s performance as compared to that of comparable ETFs, as determined by the Adviser (“peer group”) using data received from an independent third party. The Board considered management’s discussion of AIEQ’s performance, noting that, over time, the model powered by artificial intelligence employed in the management of the Fund becomes more refined. The Board further noted that it had received and would continue to receive regular reports regarding the Fund’s performance at its quarterly meetings.
Cost of Services Provided, Profits and Economies of Scale
The Board reviewed the advisory fee for the Fund and compared it to the total operating expenses of comparable ETFs, as determined by the Adviser using data received from an independent third party.. The Board noted that the expense ratio for the Fund was higher than the average and median expense ratios of its peer group. The Board considered the unique technology and processes required to manage this active fund as well as the Adviser’s explanations of how this Fund differs from others in the peer group.
AI Powered Equity ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board noted the importance of the fact that the advisory fee for the Fund is a “unified fee,” meaning that the shareholders of the Fund pay no expenses other than the advisory fee and certain other costs such as interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, non-standard Board-related expenses and litigation against the Board, Trustees, Fund, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses. The Board also noted that the Adviser was responsible for compensating the Trust’s other service providers (including the Sub-Adviser) and paying the Fund’s other expenses (except as noted above) out of its own fees and resources. The Board concluded that the advisory fee for the Fund is reasonable in light of the factors considered.
The Board also evaluated the compensation and other benefits received by the Adviser from its relationship with the Fund, taking into account profitability information provided by the Adviser. The Board received and reviewed profitability information with respect to the Fund and considered how profit margins could affect the Adviser’s long-term viability and ability to attract and retain high-quality personnel. The Board also considered the impact on the Adviser’s profitability of payments made to partners involved with the Fund. Based on the information provided to the Trustees, the Trustees concluded that the net revenue retained by the Adviser from providing services to the Fund was not excessive in view of the nature, extent and quality of services provided to the Fund The Board further considered other benefits derived by the Adviser and its affiliates from the Adviser’s relationship with the Fund.
In addition, the Board considered whether economies of scale may be realized for the Fund. The Board noted that the Adviser regularly considers whether fee reductions are appropriate as the Fund grows in size. The Board noted that a unitary fee provides a level of certainty in expenses for the Fund and effectively acts as a cap on the fees and expenses (except as noted above) that are borne by the Fund. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the continued provision of high-quality services to the Funds, such as the hiring of new trading, legal and compliance personnel, and enhancements to technology and related systems. The Board concluded that no changes to the advisory fee structure of the Fund were necessary.
The Board also reviewed the sub-advisory fee paid to the Sub-Adviser for its services to the Fund under the Sub-Advisory Agreement. The Board considered this fee in light of the services the Sub-Adviser provides as investment sub-adviser to the Fund. The Board determined that the fee reflected an appropriate allocation of the advisory fee paid to the Adviser and Sub-Adviser given the work performed by each firm.
The Board also considered that the sub-advisory fee paid to the Sub-Adviser is paid out of the Adviser’s unified fee and represents an arm’s-length negotiation between the Adviser and the Sub-Adviser. For these reasons, the Trustees determined that the profitability to the Sub-Adviser from its relationship with the Fund was not a material factor in their deliberations with respect to consideration of approval of the Sub-Advisory Agreement. The Board concluded that the proposed sub-advisory fee was reasonable in light of the services rendered. The Board considered that, because the proposed sub-advisory fee would be paid by the Adviser out of its unified fee, any economies of scale would not benefit shareholders and, thus, were not relevant for the consideration of the approval of the sub-advisory fee.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision.
AI Powered Equity ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Agreements are fair and reasonable; (b) concluded that the Adviser’s and Sub-Adviser’s fee is reasonable in light of the services that the Adviser and Sub-Adviser each provide to the Fund; and (c) approved the renewal of the Agreements for another year.
AI Powered Equity ETF
Period Ended March 31, 2022 (Unaudited)
As a shareholder of AI Powered Equity ETF (the “Fund”) you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 1, 2021 to March 31, 2022).
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then, multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
AI Powered Equity ETF
| Beginning Account Value October 1, 2021 |
Ending Account Value March 31, 2022 |
Expenses Paid During the Period^ |
Annualized Expense Ratio During Period October 1, 2021 to March 31, 2022 |
|||||||||||||
| Actual | $ | 1,000.00 | $ | 910.40 | $ | 3.57 | 0.75 | % | ||||||||
| Hypothetical (5% annual) | $ | 1,000.00 | $ | 1,021.19 | $ | 3.78 | 0.75 | % | ||||||||
^ The dollar amounts shown as expenses paid during the period are equal to the annualized six-month expense ratio multiplied by the average account value during the period, multiplied by 182/365 (to reflect the period from October 1, 2021 to March 31, 2022).
AI Powered Equity ETF
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
March 31, 2022 (Unaudited)
ETF Managers Trust (the “Trust”) has adopted a liquidity risk management program (the “Program”). The Trust’s Board of Trustees (the “Board”) has designated ETF Managers Group LLC (the “Program Administrator”) as the administrator of the Program. The Program Administrator has designated a committee (the “Committee”), composed of personnel from multiple departments, including investment operations and compliance, that is responsible for the implementation and ongoing administration of the Program, which includes assessing the liquidity risk of the AI Powered Equity ETF (the “Fund”) under both normal and reasonably foreseeable stressed conditions.
Under the Program, the Program Administrator assesses, manages and periodically reviews the Fund’s liquidity risk, based on factors specific to the circumstances of the Fund. Liquidity risk is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments and limiting the amount of the Fund’s illiquid investments, among other means. The Program Administrator’s process of determining the degree of liquidity of the Fund’s investments is supported by one or more third-party liquidity assessment vendors.
At a meeting of the Board on March 28-29, 2022, the Adviser provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, the operation of any Highly Liquid Investment Minimum, where applicable, and any material changes to the Program, for the period from March 1, 2021 through March 1, 2022 (the “Reporting Period”). No significant liquidity events impacting the Fund were noted in the report and it was represented that, as of December 31, 2021, the Fund was primarily highly liquid and, during the Reporting Period, the Fund held less than 15% in illiquid securities. In addition, the Program Administrator provided its assessment that Program implementation was effective and that the Program operated adequately and effectively to enable the Program Administrator to oversee and manage liquidity risk and ensure the Fund is able to meet requests to redeem shares without significant dilution to the remaining investors’ interest in the Fund.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
AI Powered Equity ETF
March 31, 2022 (Unaudited)
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of the Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.etfmgfunds.com.
NOTE 2 – FEDERAL TAX INFORMATION
Qualified Dividend Income/Dividends Received Deduction
For the fiscal year ended September 30, 2021, certain dividends paid by the Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
| Fund Name | Qualified Dividend Income |
| AI Powered Equity ETF | 100.00% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September 30, 2021 was as follows:
| Fund Name | Dividends Received Deduction |
| AI Powered Equity ETF | 100.00% |
Short Term Capital Gain
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871 (k)(2)(C) for the Fund were as follows:
| Fund Name | Short-Term Capital Gain |
| AI Powered Equity ETF | 0.00% |
NOTE 3 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund files a complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Part F of Form N-PORT. Once filed, the Fund’s Part F of Form N-PORT is available, without charge, upon request on the SEC’s website (www.sec.gov), the Fund’s website (www.etfmgfund.com) and is available by calling (877) 756-7873. The Fund’s portfolio holdings are posted on its website at www.etfmgfunds.com daily.
NOTE 4 – INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477), by accessing the SEC’s website at www.sec.gov, or by accessing the Fund’s website at www.etfmgfunds.com.
Information regarding how the Fund voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477) or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477) or by visiting www.etfmgfunds.com. Read the prospectus carefully before investing.
AI Powered Equity ETF
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Interested Trustee and Officers | ||||
| Samuel Masucci, III (1962) |
Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) | Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). | 20 | None |
| John A. Flanagan, (1946) |
Treasurer (since 2015) | President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). | n/a | n/a |
| Reshma A. Tanczos (1978) |
Chief Compliance Officer (since 2016) | Chief Compliance Officer of ETFMG Financial LLC (Since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). | n/a | n/a |
| Matthew J. Bromberg (1973) |
Assistant Secretary (since 2020) | General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015-2016). | n/a | n/a |
| * Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. | ||||
AI Powered Equity ETF
Board of Trustees (Continued)
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Terry Loebs (1963) |
Trustee (since 2014); Lead Independent Trustee (since 2020) | Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). | 20 | None |
| Eric Wiegel (1960) |
Trustee (since 2020) | Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018). | 20 | None |
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services
615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006
Semi-Annual Report
March 31, 2022
(Unaudited)
Etho Climate Leadership U.S. ETF
Ticker: ETHO
The fund is a series of ETF Managers Trust.
Etho Climate Leadership U.S. ETF
TABLE OF CONTENTS
March 31, 2022 (Unaudited)
Etho Climate Leadership U.S. ETF
On behalf of the entire team, we want to express our appreciation for the confidence you have placed in the Etho Climate Leadership U.S. Exchange-Traded Fund (“ETHO” or the “Fund”). The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Etho Climate Leadership Index – U.S. (the “Index”).
For the six-month period ended March 31, 2021, the total return for the Fund was -1.31% while the total return for the Index was -1.53%. The best performers in the Fund, on the basis of contribution to its return, were Gladstone Land Corp, Arista Networks Inc, Rambus Inc, Ameresco Inc-Cl A and Nvidia Corp, while the worst performers were Paypal Holdings Inc, Tempur Sealy International I, Avita Medical Inc, Netflix Inc and Xl Fleet Corp.
At the end of the reporting period, the Fund saw an allocation of 26.12% to Information Technology, 17.81% to Industrials and 15.45% to Financials. The portfolio securities of the Fund are primarily exposed to the United States.
As you may know, the Etho Climate Leadership U.S. ETF offers broad diversification across companies that have demonstrated efficiency and leadership with their use of resources and their supply chains when compared to industry peers. The Fund holds the equity securities of companies with a carbon impact at least 50% better than commonly used broad-based securities indices, on an equally weighted basis The Index generally excludes companies in industries or sub-industries or specific companies that are broadly associated with negative environmental, social, or corporate governance profiles such as any direct fossil fuel companies. Equal weighting of the portfolio securities allows for the elimination of equities that do not meet ETHO’s standards without there being a significant impact on the diversification or performance of the Fund. It also creates broad exposure to both the sectors and factors that potentially make for greater stability and higher performance.
There is much ahead for environmentally sustainable and socially responsible investing. We are thankful you have joined us by investing in the Etho Climate Leadership U.S. ETF. You can find further details about ETHO by visiting www.etfmg.com, or by calling 1-844-ETF-MGRS (1-844-383-6477).
Sincerely,
Samuel Masucci III
Chairman of the Board
Etho Climate Leadership U.S. ETF
Growth of $10,000 (Unaudited)
| Average Annual Returns Period Ended March 31, 2022 | 1 Year Return |
5 Year Return |
Since Inception (11/18/2015) |
Value of $10,000 (3/31/2022) |
||||||||||||
| Etho Climate Leadership U.S. ETF (NAV) | 2.94 | % | 15.71 | % | 15.25 | % | $ | 24,682 | ||||||||
| Etho Climate Leadership U.S. ETF (Market) | 2.23 | % | 15.64 | % | 15.27 | % | $ | 24,710 | ||||||||
| S&P 500 Index | 15.65 | % | 15.99 | % | 15.12 | % | $ | 24,516 | ||||||||
| Etho Climate Leadership Index - U.S. | 2.46 | % | 15.26 | % | 14.71 | % | $ | 23,961 | ||||||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more of less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on November 18, 2015, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
Etho Climate Leadership U.S. ETF
Top Ten Holdings as of March 31, 2022 (Unaudited)*
| Security | % of Total Investments |
|||
| 1 | NVIDIA Corp. | 0.63% | ||
| 2 | Gladstone Land Corp. | 0.63% | ||
| 3 | Arista Networks, Inc. | 0.57% | ||
| 4 | American National Group, Inc. | 0.55% | ||
| 5 | Herc Holdings, Inc. | 0.51% | ||
| 6 | Rambus, Inc. | 0.51% | ||
| 7 | Ameresco, Inc. - Class A | 0.51% | ||
| 8 | Gartner, Inc. | 0.51% | ||
| 9 | Tesla, Inc. | 0.50% | ||
| 10 | Liberty Media Corp. - Liberty Formula One - Class C | 0.50% | ||
| Top Ten Holdings 5.42% of Total Investments | ||||
| * Current Fund holdings may not be indicative of future Fund holdings. |
Etho Climate Leadership U.S. ETF
Important Disclosures and Key Risk Factors
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
ETHO
The ETHO Climate Leadership US ETF (the “Fund”) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Etho Climate Leadership Index (the “Index”).
The Fund’s return may not match or achieve a high degree of correlation with the return of the Etho Climate Leadership Index — US.
To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Index.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
ETF Managers Group LLC serves as the investment adviser to the Fund.
The Fund is distributed by ETFMG Financial LLC. Both ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG Financial LLC is not affiliated with Etho Capital.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
Etho Climate Leadership U.S. ETF
PORTFOLIO ALLOCATIONS
As of March 31, 2022 (Unaudited)
| Etho Climate Leadership U.S. ETF |
||||
| As a percent of Net Assets: | ||||
| Guernsey | 0.4 | % | ||
| United States | 99.0 | |||
| Short-Term and other Net Assets (Liabilities) | 0.6 | |||
| 100.0 | % | |||
Etho Climate Leadership U.S. ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| COMMON STOCKS - 99.4% | ||||||||
| Guernsey - 0.4% | ||||||||
| IT Services - 0.4% | ||||||||
| Amdocs, Ltd. | 10,048 | $ | 826,046 | |||||
| United States - 99.0% | ||||||||
| Air Freight & Logistics - 0.5% | ||||||||
| United Parcel Service, Inc. - Class B | 4,152 | 890,438 | ||||||
| Auto Components - 0.9% | ||||||||
| BorgWarner, Inc. | 15,108 | 587,701 | ||||||
| Gentex Corp. | 19,629 | 572,578 | ||||||
| QuantumScape Corp. (a)(b) | 15,531 | 310,465 | ||||||
| XL Fleet Corp. (a)(b) | 77,393 | 154,012 | ||||||
| Total Auto Components | 1,624,756 | |||||||
| Automobiles - 1.2% | ||||||||
| Canoo, Inc. (a)(b) | 76,965 | 424,847 | ||||||
| Fisker, Inc. (a)(b) | 40,359 | 520,631 | ||||||
| Lordstown Motors Corp. - Class A (a)(b) | 59,048 | 201,354 | ||||||
| Tesla, Inc. (a)(b) | 1,041 | 1,121,781 | ||||||
| Total Automobiles | 2,268,613 | |||||||
| Banks - 3.3% | ||||||||
| Amalgamated Financial Corp. | 42,462 | 763,042 | ||||||
| Bank of Hawaii Corp. (b) | 7,899 | 662,884 | ||||||
| Commerce Bancshares, Inc. (b) | 9,598 | 687,121 | ||||||
| Cullen Frost Bankers, Inc. | 6,472 | 895,790 | ||||||
| First Horizon Corp. | 41,878 | 983,713 | ||||||
| South State Corp. (b) | 9,001 | 734,392 | ||||||
| SVB Financial Group (a) | 1,408 | 787,706 | ||||||
| Truist Financial Corp. | 12,174 | 690,266 | ||||||
| Total Banks | 6,204,914 | |||||||
| Biotechnology - 1.9% | ||||||||
| Agios Pharmaceuticals, Inc. (a)(b) | 13,458 | 391,762 | ||||||
| Alnylam Pharmaceuticals, Inc. (a) | 4,922 | 803,714 | ||||||
| Avita Medical, Inc. (a)(b) | 35,065 | 297,351 | ||||||
| Biogen, Inc. (a) | 2,484 | 523,130 | ||||||
| Seagen, Inc. (a) | 5,005 | 720,970 | ||||||
| Vertex Pharmaceuticals, Inc. (a) | 3,234 | 843,978 | ||||||
| Total Biotechnology | 3,580,905 | |||||||
| Building Products - 2.7% | ||||||||
| A.O. Smith Corp. | 10,393 | 664,009 | ||||||
| Advanced Drainage Systems, Inc. (b) | 6,735 | 800,186 | ||||||
| Armstrong World Industries, Inc. | 7,747 | 697,307 | ||||||
| Fortune Brands Home & Security, Inc. | 7,291 | 541,575 | ||||||
| Lennox International, Inc. | 2,244 | 578,638 | ||||||
| Masco Corp. | 11,694 | 596,394 | ||||||
| Simpson Manufacturing Co., Inc. (b) | 6,730 | 733,839 | ||||||
| Trex Co., Inc. (a)(b) | 7,592 | 495,985 | ||||||
| Total Building Products | 5,107,933 | |||||||
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Capital Markets - 3.6% | ||||||||
| Affiliated Managers Group, Inc. | 4,664 | $ | 657,391 | |||||
| Ares Management Corp. - Class A | 12,580 | 1,021,874 | ||||||
| Charles Schwab Corp. | 10,733 | 904,899 | ||||||
| Interactive Brokers Group, Inc. - Class A | 9,544 | 629,045 | ||||||
| KKR & Co., Inc. | 14,317 | 837,115 | ||||||
| MarketAxess Holdings, Inc. | 1,402 | 476,960 | ||||||
| MSCI, Inc. | 1,666 | 837,798 | ||||||
| Northern Trust Corp. | 6,696 | 779,749 | ||||||
| T. Rowe Price Group, Inc. | 4,141 | 626,078 | ||||||
| Total Capital Markets | 6,770,909 | |||||||
| Chemicals - 0.3% | ||||||||
| Ecolab, Inc. | 3,262 | 575,939 | ||||||
| Commercial Services & Supplies - 2.1% | ||||||||
| Cintas Corp. | 2,050 | 872,049 | ||||||
| Clean Harbors, Inc. (a) | 8,268 | 923,039 | ||||||
| Copart, Inc. (a) | 6,399 | 802,883 | ||||||
| Rollins, Inc. (b) | 20,370 | 713,969 | ||||||
| Steelcase, Inc. - Class A | 49,466 | 591,119 | ||||||
| Total Commercial Services & Supplies | 3,903,059 | |||||||
| Communications Equipment - 1.9% | ||||||||
| Arista Networks, Inc. (a) | 9,209 | 1,279,867 | ||||||
| Cisco Systems, Inc. | 13,625 | 759,730 | ||||||
| F5 Networks, Inc. (a) | 3,331 | 696,012 | ||||||
| Motorola Solutions, Inc. | 3,720 | 900,984 | ||||||
| Total Communications Equipment | 3,636,593 | |||||||
| Construction & Engineering - 1.0% | ||||||||
| Ameresco, Inc. - Class A (a)(b) | 14,291 | 1,136,135 | ||||||
| EMCOR Group, Inc. | 6,215 | 699,995 | ||||||
| Total Construction & Engineering | 1,836,130 | |||||||
| Construction Materials - 0.4% | ||||||||
| Vulcan Materials Co. | 4,135 | 759,600 | ||||||
| Consumer Finance - 1.6% | ||||||||
| American Express Co. | 4,940 | 923,779 | ||||||
| Discover Financial Services | 7,398 | 815,186 | ||||||
| PROG Holdings, Inc. (a) | 16,054 | 461,874 | ||||||
| SLM Corp. (b) | 38,927 | 714,700 | ||||||
| Total Consumer Finance | 2,915,539 | |||||||
| Containers & Packaging - 1.6% | ||||||||
| AptarGroup, Inc. | 4,946 | 581,155 | ||||||
| Avery Dennison Corp. | 3,809 | 662,652 | ||||||
| Crown Holdings, Inc. | 7,190 | 899,396 | ||||||
| Packaging Corp. of America | 5,245 | 818,797 | ||||||
| Total Containers & Packaging | 2,962,000 | |||||||
| Distributors - 1.3% | ||||||||
| Genuine Parts Co. | 6,095 | 768,092 | ||||||
| LKQ Corp. | 16,468 | 747,812 | ||||||
| Pool Corp. | 2,020 | 854,157 | ||||||
| Total Distributors | 2,370,061 | |||||||
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Diversified Financial Services - 0.6% | ||||||||
| Cannae Holdings, Inc. (a) | 17,541 | $ | 419,581 | |||||
| Voya Financial, Inc. (b) | 10,983 | 728,722 | ||||||
| Total Diversified Financial Services | 1,148,303 | |||||||
| Diversified Telecommunication Services - 0.9% | ||||||||
| AT&T, Inc. | 23,900 | 564,757 | ||||||
| ATN International, Inc. | 14,264 | 568,848 | ||||||
| Verizon Communications, Inc. | 12,247 | 623,863 | ||||||
| Total Diversified Telecommunication Services | 1,757,468 | |||||||
| Electrical Equipment - 1.8% | ||||||||
| Array Technologies, Inc. (a)(b) | 23,306 | 262,659 | ||||||
| ChargePoint Holdings, Inc. (a)(b) | 26,030 | 517,476 | ||||||
| FuelCell Energy, Inc. (a)(b) | 48,230 | 277,805 | ||||||
| Hubbell, Inc. | 3,758 | 690,608 | ||||||
| Rockwell Automation, Inc. (b) | 2,646 | 740,958 | ||||||
| Romeo Power, Inc. (a)(b) | 83,432 | 124,314 | ||||||
| Shoals Technologies Group, Inc. - Class A (a)(b) | 19,982 | 340,493 | ||||||
| Sunrun, Inc. (a)(b) | 11,491 | 348,982 | ||||||
| Total Electrical Equipment | 3,303,295 | |||||||
| Electronic Equipment, Instruments & Components - 2.9% | ||||||||
| CDW Corp. | 4,213 | 753,664 | ||||||
| Corning, Inc. | 16,172 | 596,909 | ||||||
| IPG Photonics Corp. (a)(b) | 3,295 | 361,659 | ||||||
| Itron, Inc. (a) | 7,840 | 413,011 | ||||||
| Keysight Technologies, Inc. (a) | 4,847 | 765,681 | ||||||
| Littelfuse, Inc. | 2,642 | 658,941 | ||||||
| National Instruments Corp. | 16,390 | 665,270 | ||||||
| Trimble, Inc. (a) | 8,934 | 644,499 | ||||||
| Zebra Technologies Corp. - Class A (a) | 1,432 | 592,418 | ||||||
| Total Electronic Equipment, Instruments & Components | 5,452,052 | |||||||
| Entertainment - 2.3% | ||||||||
| Activision Blizzard, Inc. | 7,498 | 600,665 | ||||||
| Liberty Media Corp. - Liberty Formula One - Class C (a) | 16,054 | 1,121,211 | ||||||
| Live Nation Entertainment, Inc. (a)(b) | 8,210 | 965,824 | ||||||
| Netflix, Inc. (a) | 1,332 | 498,954 | ||||||
| Take-Two Interactive Software, Inc. (a)(b) | 3,933 | 604,659 | ||||||
| Walt Disney Co. (a) | 3,766 | 516,545 | ||||||
| Total Entertainment | 4,307,858 | |||||||
| Food & Staples Retailing - 0.7% | ||||||||
| PriceSmart, Inc. | 7,235 | 570,624 | ||||||
| Sysco Corp. | 8,937 | 729,707 | ||||||
| Total Food & Staples Retailing | 1,300,331 | |||||||
| Food Products - 1.1% | ||||||||
| Beyond Meat, Inc. (a)(b) | 5,341 | 258,024 | ||||||
| Hain Celestial Group, Inc. (a) | 15,940 | 548,335 | ||||||
| Lamb Weston Holdings, Inc. | 9,061 | 542,845 | ||||||
| McCormick & Co., Inc. | 7,882 | 786,623 | ||||||
| Total Food Products | 2,135,827 | |||||||
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Health Care Equipment & Supplies - 3.0% | ||||||||
| Align Technology, Inc. (a) | 1,283 | $ | 559,388 | |||||
| Cooper Cos. (b) | 1,810 | 755,838 | ||||||
| DexCom, Inc. (a) | 1,934 | 989,435 | ||||||
| Edwards Lifesciences Corp. (a) | 8,309 | 978,135 | ||||||
| IDEXX Laboratories, Inc. (a) | 1,420 | 776,825 | ||||||
| ResMed, Inc. (b) | 3,599 | 872,793 | ||||||
| Teleflex, Inc. | 1,676 | 594,695 | ||||||
| Total Health Care Equipment & Supplies | 5,527,109 | |||||||
| Health Care Providers & Services - 1.0% | ||||||||
| AMN Healthcare Services, Inc. (a) | 9,430 | 983,832 | ||||||
| Henry Schein, Inc. (a) | 10,037 | 875,126 | ||||||
| Total Health Care Providers & Services | 1,858,958 | |||||||
| Health Care Technology - 0.6% | ||||||||
| Cerner Corp. | 9,728 | 910,152 | ||||||
| Teladoc Health, Inc. (a)(b) | 3,824 | 275,825 | ||||||
| Total Health Care Technology | 1,185,977 | |||||||
| Hotels, Restaurants & Leisure - 1.3% | ||||||||
| Booking Holdings, Inc. (a) | 298 | 699,838 | ||||||
| Chipotle Mexican Grill, Inc. (a) | 489 | 773,613 | ||||||
| Hilton Worldwide Holdings, Inc. (a) | 5,748 | 872,201 | ||||||
| Total Hotels, Restaurants & Leisure | 2,345,652 | |||||||
| Household Durables - 1.2% | ||||||||
| GoPro, Inc. - Class A (a)(b) | 59,707 | 509,301 | ||||||
| NVR, Inc. (a) | 148 | 661,156 | ||||||
| Tempur Sealy International, Inc. | 19,089 | 532,965 | ||||||
| TopBuild Corp. (a) | 3,318 | 601,852 | ||||||
| Total Household Durables | 2,305,274 | |||||||
| Household Products - 0.4% | ||||||||
| Church & Dwight Co., Inc. | 8,020 | 797,028 | ||||||
| Independent Power and Renewable Electricity Producers - 1.1% | ||||||||
| Clearway Energy, Inc. - Class A | 26,845 | 894,475 | ||||||
| Ormat Technologies, Inc. (b) | 8,882 | 726,814 | ||||||
| Sunnova Energy International, Inc. (a) | 17,026 | 392,620 | ||||||
| Total Independent Power and Renewable Electricity Producers | 2,013,909 | |||||||
| Insurance - 4.0% | ||||||||
| American Financial Group, Inc. | 7,050 | 1,026,621 | ||||||
| American National Group, Inc. | 6,506 | 1,230,220 | ||||||
| Cincinnati Financial Corp. | 6,818 | 926,975 | ||||||
| Citizens, Inc. (a)(b) | 120,033 | 508,940 | ||||||
| Erie Indemnity Co. - Class A (b) | 3,183 | 560,622 | ||||||
| Globe Life, Inc. | 7,224 | 726,734 | ||||||
| Hartford Financial Services Group, Inc. | 10,524 | 755,728 | ||||||
| MetLife, Inc. | 11,672 | 820,308 | ||||||
| W R Berkley Corp. | 14,079 | 937,521 | ||||||
| Total Insurance | 7,493,669 | |||||||
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Interactive Media & Services - 0.5% | ||||||||
| Alphabet, Inc. - Class A (a) | 337 | $ | 937,315 | |||||
| Internet & Direct Marketing Retail - 1.0% | ||||||||
| Amazon.com, Inc. (a) | 225 | 733,489 | ||||||
| eBay, Inc. | 11,412 | 653,451 | ||||||
| Etsy, Inc. (a)(b) | 3,446 | 428,269 | ||||||
| Total Internet & Direct Marketing Retail | 1,815,209 | |||||||
| IT Services - 5.4% | ||||||||
| Akamai Technologies, Inc. (a)(b) | 6,820 | 814,240 | ||||||
| Broadridge Financial Solutions, Inc. | 4,574 | 712,218 | ||||||
| DXC Technology Co. (a) | 22,233 | 725,463 | ||||||
| Fidelity National Information Services, Inc. | 4,975 | 499,590 | ||||||
| Fiserv, Inc. (a) | 5,838 | 591,973 | ||||||
| Gartner, Inc. (a) | 3,807 | 1,132,429 | ||||||
| Global Payments, Inc. | 3,458 | 473,193 | ||||||
| International Business Machines Corp. | 5,392 | 701,068 | ||||||
| Jack Henry & Associates, Inc. | 4,609 | 908,203 | ||||||
| Kyndryl Holdings, Inc. (a) | 1,060 | 13,907 | ||||||
| MasterCard, Inc. - Class A | 1,957 | 699,393 | ||||||
| Paychex, Inc. | 7,209 | 983,812 | ||||||
| PayPal Holdings, Inc. (a) | 2,862 | 330,990 | ||||||
| VeriSign, Inc. (a) | 3,497 | 777,943 | ||||||
| Visa, Inc. - Class A (b) | 3,297 | 731,176 | ||||||
| Total IT Services | 10,095,598 | |||||||
| Leisure Products - 0.3% | ||||||||
| Hasbro, Inc. | 7,375 | 604,160 | ||||||
| Life Sciences Tools & Services - 1.8% | ||||||||
| Bio-Techne Corp. | 1,823 | 789,432 | ||||||
| Danaher Corp. | 3,092 | 906,976 | ||||||
| Illumina, Inc. (a) | 1,810 | 632,414 | ||||||
| West Pharmaceutical Services, Inc. (b) | 2,470 | 1,014,454 | ||||||
| Total Life Sciences Tools & Services | 3,343,276 | |||||||
| Machinery - 3.6% | ||||||||
| Deere & Co. | 1,869 | 776,495 | ||||||
| Dover Corp. | 5,101 | 800,347 | ||||||
| Energy Recovery, Inc. (a) | 37,895 | 763,205 | ||||||
| Hyliion Holdings Corp. (a)(b) | 65,135 | 288,548 | ||||||
| Illinois Tool Works, Inc. | 3,172 | 664,217 | ||||||
| Mueller Water Products, Inc. - Class A | 50,561 | 653,248 | ||||||
| Parker-Hannifin Corp. | 2,224 | 631,082 | ||||||
| Watts Water Technologies, Inc. - Class A | 5,869 | 819,254 | ||||||
| Westinghouse Air Brake Technologies Corp. | 8,805 | 846,778 | ||||||
| Xylem, Inc. | 6,654 | 567,320 | ||||||
| Total Machinery | 6,810,494 | |||||||
| Media - 2.1% | ||||||||
| Discovery, Inc. - Class A (a)(b) | 15,991 | 398,496 | ||||||
| John Wiley & Sons, Inc. - Class A (b) | 12,990 | 688,860 | ||||||
| Liberty Broadband Corp. - Class C (a) | 4,629 | 626,396 | ||||||
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| New York Times Co. - Class A | 13,772 | $ | 631,308 | |||||
| Sirius XM Holdings, Inc. (b) | 118,044 | 781,451 | ||||||
| TEGNA, Inc. | 37,296 | 835,431 | ||||||
| Total Media | 3,961,942 | |||||||
| Metals & Mining - 0.4% | ||||||||
| Compass Minerals International, Inc. | 11,271 | 707,706 | ||||||
| Multiline Retail - 0.7% | ||||||||
| Kohl’s Corp. (b) | 11,774 | 711,856 | ||||||
| Nordstrom, Inc. (b) | 18,352 | 497,523 | ||||||
| Total Multiline Retail | 1,209,379 | |||||||
| Personal Products - 0.4% | ||||||||
| Estee Lauder Cos., Inc. - Class A | 2,398 | 653,023 | ||||||
| Pharmaceuticals - 2.2% | ||||||||
| Bristol-Myers Squibb Co. | 11,197 | 817,717 | ||||||
| Catalent, Inc. (a) | 6,599 | 731,829 | ||||||
| Merck & Co, Inc. | 9,187 | 753,793 | ||||||
| Organon & Co. | 912 | 31,856 | ||||||
| Pfizer, Inc. | 19,660 | 1,017,798 | ||||||
| Zoetis, Inc. | 4,430 | 835,454 | ||||||
| Total Pharmaceuticals | 4,188,447 | |||||||
| Professional Services - 1.0% | ||||||||
| Robert Half International, Inc. | 8,973 | 1,024,537 | ||||||
| Verisk Analytics, Inc. | 3,945 | 846,715 | ||||||
| Total Professional Services | 1,871,252 | |||||||
| Real Estate Investment Trusts (REITs) - 5.2% | ||||||||
| AGNC Investment Corp. (b) | 43,648 | 571,789 | ||||||
| Annaly Capital Management, Inc. (b) | 85,251 | 600,167 | ||||||
| Camden Property Trust | 6,397 | 1,063,181 | ||||||
| Gladstone Land Corp. (b) | 38,502 | 1,402,243 | ||||||
| Hannon Armstrong Sustainable Infrastructure | ||||||||
| Capital, Inc. (b) | 12,557 | 595,579 | ||||||
| Hudson Pacific Properties, Inc. (b) | 26,132 | 725,163 | ||||||
| Prologis, Inc. | 6,620 | 1,068,997 | ||||||
| Public Storage, Inc. | 2,853 | 1,113,469 | ||||||
| Regency Centers Corp. (b) | 12,482 | 890,466 | ||||||
| SBA Communications Corp. | 2,513 | 864,723 | ||||||
| UDR, Inc. | 16,069 | 921,879 | ||||||
| Total Real Estate Investment Trusts (REITs) | 9,817,656 | |||||||
| Road & Rail - 2.7% | ||||||||
| AMERCO | 1,136 | 678,124 | ||||||
| CSX Corp. | 21,748 | 814,463 | ||||||
| JB Hunt Transport Services, Inc. | 4,156 | 834,483 | ||||||
| Landstar System, Inc. (b) | 4,261 | 642,687 | ||||||
| Lyft, Inc. - Class A (a) | 11,000 | 422,400 | ||||||
| Old Dominion Freight Line, Inc. (b) | 2,895 | 864,678 | ||||||
| Ryder System, Inc. | 9,376 | 743,798 | ||||||
| Total Road & Rail | 5,000,633 | |||||||
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Semiconductors & Semiconductor Equipment - 7.5% | ||||||||
| Advanced Micro Devices, Inc. (a) | 8,853 | $ | 967,987 | |||||
| Analog Devices, Inc. | 4,520 | 746,614 | ||||||
| Applied Materials, Inc. | 5,228 | 689,050 | ||||||
| Enphase Energy, Inc. (a) | 4,286 | 864,829 | ||||||
| First Solar, Inc. (a)(b) | 7,961 | 666,654 | ||||||
| KLA Corp. | 2,120 | 776,047 | ||||||
| Lam Research Corp. | 1,173 | 630,617 | ||||||
| NVIDIA Corp. | 5,209 | 1,421,328 | ||||||
| ON Semiconductor Corp. (a) | 16,702 | 1,045,712 | ||||||
| Power Integrations, Inc. (b) | 8,555 | 792,877 | ||||||
| Qorvo, Inc. (a) | 3,804 | 472,076 | ||||||
| Qualcomm, Inc. | 5,291 | 808,571 | ||||||
| Rambus, Inc. (a) | 35,751 | 1,140,099 | ||||||
| SunPower Corp. (a)(b) | 20,777 | 446,290 | ||||||
| Teradyne, Inc. | 5,724 | 676,749 | ||||||
| Texas Instruments, Inc. | 3,739 | 686,032 | ||||||
| Universal Display Corp. (b) | 2,942 | 491,167 | ||||||
| Wolfspeed, Inc. (a)(b) | 6,427 | 731,778 | ||||||
| Total Semiconductors & Semiconductor Equipment | 14,054,477 | |||||||
| Software - 6.3% | ||||||||
| Adobe Systems, Inc. (a) | 1,462 | 666,116 | ||||||
| Ansys, Inc. (a) | 2,047 | 650,230 | ||||||
| Autodesk, Inc. (a) | 2,508 | 537,590 | ||||||
| Cadence Design System, Inc. (a) | 5,073 | 834,306 | ||||||
| Dolby Laboratories, Inc. - Class A | 7,094 | 554,893 | ||||||
| Intuit, Inc. | 1,821 | 875,610 | ||||||
| Mandiant, Inc. (a)(b) | 35,513 | 792,295 | ||||||
| Microsoft Corp. | 2,965 | 914,139 | ||||||
| NCR Corp. (a) | 18,313 | 735,999 | ||||||
| Paycom Software, Inc. (a) | 1,878 | 650,502 | ||||||
| salesforce.com, Inc. (a) | 3,280 | 696,410 | ||||||
| ServiceNow, Inc. (a) | 1,390 | 774,077 | ||||||
| Splunk, Inc. (a) | 5,130 | 762,369 | ||||||
| Tyler Technologies, Inc. (a) | 1,637 | 728,285 | ||||||
| VMware, Inc. - Class A | 5,284 | 601,689 | ||||||
| Workday, Inc. - Class A (a) | 2,798 | 670,009 | ||||||
| Zoom Video Communications, Inc. - Class A (a) | 2,163 | 253,568 | ||||||
| Total Software | 11,698,087 | |||||||
| Specialty Retail - 3.0% | ||||||||
| Advance Auto Parts, Inc. | 3,825 | 791,622 | ||||||
| Bath & Body Works, Inc. (b) | 11,317 | 540,953 | ||||||
| Foot Locker, Inc. | 12,530 | 371,640 | ||||||
| Gap, Inc. | 23,587 | 332,105 | ||||||
| Lowe’s Cos., Inc. (b) | 3,690 | 746,081 | ||||||
| Ross Stores, Inc. | 5,826 | 527,020 | ||||||
| TJX Cos., Inc. | 10,615 | 643,057 | ||||||
| Tractor Supply Co. | 3,958 | 923,677 | ||||||
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Victoria’s Secret & Co. (a)(b) | 3,751 | $ | 192,651 | |||||
| Williams-Sonoma, Inc. (b) | 3,921 | 568,545 | ||||||
| Total Specialty Retail | 5,637,351 | |||||||
| Technology Hardware, Storage & Peripherals - 1.6% | ||||||||
| 3D Systems Corp. (a)(b) | 25,328 | 422,471 | ||||||
| Apple, Inc. | 5,713 | 997,547 | ||||||
| Hewlett Packard Enterprise Co. | 44,889 | 750,095 | ||||||
| NetApp, Inc. | 9,678 | 803,274 | ||||||
| Total Technology Hardware, Storage & Peripherals | 2,973,387 | |||||||
| Thrifts & Mortgage Finance - 1.4% | ||||||||
| Capitol Federal Financial, Inc. | 55,432 | 603,100 | ||||||
| New York Community Bancorp, Inc. (b) | 57,302 | 614,277 | ||||||
| TFS Financial Corp. | 35,133 | 583,208 | ||||||
| Washington Federal, Inc. | 23,002 | 754,926 | ||||||
| Total Thrifts & Mortgage Finance | 2,555,511 | |||||||
| Trading Companies & Distributors - 2.4% | ||||||||
| Herc Holdings, Inc. (b) | 6,890 | 1,151,251 | ||||||
| MSC Industrial Direct Co., Inc. - Class A | 7,893 | 672,563 | ||||||
| United Rentals, Inc. (a) | 2,110 | 749,493 | ||||||
| W.W. Grainger, Inc. | 1,751 | 903,148 | ||||||
| WESCO International, Inc. (a) | 8,032 | 1,045,284 | ||||||
| Total Trading Companies & Distributors | 4,521,739 | |||||||
| Water Utilities - 1.8% | ||||||||
| American States Water Co. | 9,298 | 827,708 | ||||||
| American Water Works Co., Inc. | 4,684 | 775,343 | ||||||
| California Water Service Group | 12,468 | 739,103 | ||||||
| Middlesex Water Co. (b) | 8,869 | 932,752 | ||||||
| Total Water Utilities | 3,274,906 | |||||||
| Wireless Telecommunication Services - 0.4% | ||||||||
| T-Mobile US, Inc. (a) | 5,547 | 711,957 | ||||||
| Total United States | 184,783,604 | |||||||
| TOTAL COMMON STOCKS (Cost $162,826,153) | 185,609,650 | |||||||
| INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL - 19.9% | ||||||||
| Mount Vernon Liquid Assets Portfolio, LLC, 0.41% (c) | 37,296,589 | 37,296,589 | ||||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $37,296,589) | 37,296,589 | |||||||
| SHORT-TERM INVESTMENTS - 0.6% | ||||||||
| Money Market Funds - 0.6% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 1,075,125 | |||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $1,075,125) | 1,075,125 | |||||||
| Total Investments (Cost $201,197,867) - 119.9% | 223,981,364 | |||||||
| Liabilities in Excess of Other Assets - (19.9)% | (37,228,738 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 186,752,626 | ||||||
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
Percentages are stated as a percent of net assets.
| (a) | Non-income producing security. |
| (b) | All or a portion of this security was out on loan at March 31, 2022. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
STATEMENT OF ASSETS AND LIABILITIES
As of March 31, 2022 (Unaudited)
| Etho Climate Leadership U.S. ETF |
||||
| ASSETS | ||||
| Investments in securities, at value* | $ | 223,981,364 | ||
| Receivables: | ||||
| Dividends and interest receivable | 127,616 | |||
| Securities lending income receivable | 10,087 | |||
| Total Assets | 224,119,067 | |||
| LIABILITIES | ||||
| Collateral received for securities loaned (Note 7) | 37,296,589 | |||
| Payables: | ||||
| Management fees payable | 69,852 | |||
| Total Liabilities | 37,366,441 | |||
| Net Assets | $ | 186,752,626 | ||
| NET ASSETS CONSIST OF: | ||||
| Paid-in capital | $ | 168,515,394 | ||
| Total Distributable Earnings (Accumulated Losses) | 18,237,232 | |||
| Net Assets | $ | 186,752,626 | ||
| *Identified Cost: | ||||
| Investments in securities | $ | 201,197,867 | ||
| Shares Outstanding^ | 3,200,000 | |||
| Net Asset Value, Offering and Redemption Price per Share | $ | 58.36 | ||
| ^ | No par value, unlimited number of shares authorized |
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
STATEMENT OF OPERATIONS
For the Period Ended March 31, 2022 (Unaudited)
| Etho Climate Leadership U.S. ETF |
||||
| INVESTMENT INCOME | ||||
| Income: | ||||
| Dividends from unaffiliated securities (net of foreign witholding tax of $0) | $ | 1,200,528 | ||
| Interest | 218 | |||
| Securities lending income | 36,043 | |||
| Total Investment Income | 1,236,789 | |||
| Expenses: | ||||
| Management fees | 425,999 | |||
| Total Expenses | 425,999 | |||
| Net Investment Income | 810,790 | |||
| REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||
| Net Realized Gain (Loss) on: | ||||
| Unaffiliated investments | 308,470 | |||
| In-Kind redemptions | 836 | |||
| Net Realized Gain on Investments and In-Kind Redemptions | 309,306 | |||
| Net Change in Unrealized Appreciation/Depreciation of: | ||||
| Unaffiliated investments | (4,343,661 | ) | ||
| Net Change in Unrealized Appreciation/Depreciation of Investments | (4,343,661 | ) | ||
| Net Realized and Unrealized Loss on Investments | (4,034,355 | ) | ||
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (3,223,565 | ) | |
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||
| OPERATIONS | ||||||||
| Net investment income | $ | 810,790 | $ | 1,122,668 | ||||
| Net realized gain (loss) on investments and In-Kind Redemptions | 309,306 | 24,800,863 | ||||||
| Net change in unrealized appreciation/depreciation of investments | (4,343,661 | ) | 9,213,851 | |||||
| Net increase (decrease) in net assets resulting from operations | (3,223,565 | ) | 35,137,382 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total Distributions to Shareholders | (726,849 | ) | (1,179,000 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase in net assets derived from net change in outstanding shares | 12,632,865 | 53,551,110 | ||||||
| Net increase in net assets | 8,682,451 | 87,509,492 | ||||||
| NET ASSETS | ||||||||
| Beginning of Period | 178,070,175 | 90,560,683 | ||||||
| End of Period | $ | 186,752,626 | $ | 178,070,175 | ||||
| Summary of share transactions is as follows: | ||||||||
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||
| Shares Sold | 200,000 | $ | 12,632,865 | 2,100,000 | $ | 120,572,535 | |||||||||||
| Shares Redeemed | — | — | (1,150,000 | ) | (67,021,425 | ) | |||||||||||
| Net Transactions in Fund Shares | 200,000 | $ | 12,632,865 | 950,000 | $ | 53,551,110 | |||||||||||
| Beginning Shares | 3,000,000 | 2,050,000 | |||||||||||||||
| Ending Shares | 3,200,000 | 3,000,000 | |||||||||||||||
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
For a capital share outstanding throughout the period/year
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
Year Ended September 30, 2020 |
Year Ended September 30, 2019 |
Year Ended September 30, 2018 |
Year Ended September 30, 2017 |
|||||||||||||||||||
| Net Asset Value, Beginning of Period/Year | $ | 59.36 | $ | 44.18 | $ | 39.58 | $ | 37.50 | $ | 32.01 | $ | 27.00 | ||||||||||||
| Income from Investment Operations: | ||||||||||||||||||||||||
| Net Investment Income (Loss) 1 | 0.26 | 0.47 | 0.41 | 0.33 | 0.29 | 0.31 | ||||||||||||||||||
| Net realized and unrealized gain (loss) on investments | (1.03 | ) | 15.17 | 4.54 | 2.08 | 5.51 | 5.09 | |||||||||||||||||
| Total from investment operations | (0.77 | ) | 15.64 | 4.95 | 2.41 | 5.80 | 5.40 | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||
| Distributions from net investment income | (0.23 | ) | (0.46 | ) | (0.35 | ) | (0.33 | ) | (0.29 | ) | (0.25 | ) | ||||||||||||
| Net realized gains | — | — | — | — | (0.02 | ) | (0.14 | ) | ||||||||||||||||
| Total distributions | (0.23 | ) | (0.46 | ) | (0.35 | ) | (0.33 | ) | (0.31 | ) | (0.39 | ) | ||||||||||||
| Net assets value, end of period/year | $ | 58.36 | $ | 59.36 | $ | 44.18 | $ | 39.58 | $ | 37.50 | $ | 32.01 | ||||||||||||
| Total Return | -1.31 | %2 | 35.48 | % | 12.59 | % | 6.53 | % | 18.16 | % | 20.14 | % | ||||||||||||
| Ratios/Supplemental Data: | ||||||||||||||||||||||||
| Net assets at end of period/year (000’s) | $ | 186,753 | $ | 178,070 | $ | 90,561 | $ | 53,431 | $ | 35,627 | $ | 19,208 | ||||||||||||
| Expenses to Average Net Assets | 0.45 | %3 | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | ||||||||||||
| Net Investment Income (Loss) to Average Net Assets | 0.86 | %3 | 0.83 | % | 1.00 | % | 0.88 | % | 0.82 | % | 1.03 | % | ||||||||||||
| Portfolio Turnover Rate | 1 | %2 | 45 | % | 37 | % | 41 | % | 19 | % | 45 | % | ||||||||||||
| 1 | Calculated based on average shares outstanding during the period/year. |
| 2 | Not annualized. |
| 3 | Annualized. |
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
March 31, 2022 (Unaudited)
NOTE 1 – ORGANIZATION
Etho Climate Leadership U.S. ETF (the “Fund”) is a series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Fund’s shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”). The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Etho Climate Leadership Index – U.S. (“the Index”). The Fund commenced operations on November 18, 2015.
The Fund currently offers one class of shares, which has no front end sales load, no deferred sales charges, and no redemption fees. The Fund may issue an unlimited number of shares of beneficial interest, with no par value. All shares of the Fund have equal rights and privileges.
Shares of the Fund are listed and traded on the NYSE Arca, Inc. Market prices for the Shares may be different from their net asset value (“NAV”). The Fund issues and redeems Shares on a continuous basis at NAV only in blocks of 50,000 shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in the Index. Once created, Shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, Shares are not redeemable securities of the Fund. Shares of the Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the Shares directly from the Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and may be subject to customary brokerage commissions or fees.
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Transaction Fees” in the Statements of Changes in Net Assets.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Fund may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (“SEC”). For more information about the underlying fund’s operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the SEC.
Etho Climate Leadership U.S. ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| A. | Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Fund’s Board. The use of fair value pricing by the Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. As of March 31, 2022, the Fund did not hold any fair valued securities.
As described above, the Fund utilizes various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. |
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| Level 3 | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Etho Climate Leadership U.S. ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The following table presents a summary of the inputs used to value the Fund’s net assets as of March 31, 2022:
Etho Climate Leadership U.S. ETF
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 185,609,650 | $ | — | $ | — | $ | 185,609,650 | ||||||||
| Short-Term Investments | 1,075,125 | — | — | 1,075,125 | ||||||||||||
| Investments Purchased with Securities Lending Collateral* | — | — | — | 37,296,589 | ||||||||||||
| Total Investments in Securities | $ | 186,684,775 | $ | — | $ | — | $ | 223,981,364 | ||||||||
^ See Schedule of Investments for classifications by sector or country.
* Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Schedule of Investments.
| B. | Federal Income Taxes. The Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
To avoid imposition of the excise tax applicable to regulated investment companies, the Fund intends to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of the Fund’s next taxable year.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The Fund has analyzed its tax position and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Fund’s 2021 tax returns. The Fund identifies its major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
As of March 31, 2022, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the Fund, and has determined that no provision for income tax is required in the Fund’s financial statements.
| C. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Fund may be subject to income, withholding or other taxes imposed by foreign countries. |
Etho Climate Leadership U.S. ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| D. | Foreign Currency Translations and Transactions. The Fund may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Fund does not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Fund does isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
| E. | Distributions to Shareholders. Distributions to shareholders from net investment income, if any, are declared and paid by the Fund on a quarterly basis. Distributions to shareholders from net realized gains on securities of the Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
| G. | Share Valuation. The net asset value (“NAV”) per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding by the Fund, rounded to the nearest cent. The Fund’s shares will not be priced on the days on which the NYSE is closed for trading. The offering and redemption price per share for the Fund is equal to the Fund’s net asset value per share. |
| H. | Guarantees and Indemnifications. In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote. |
NOTE 3 – RISK FACTORS
Investing in the Etho Climate Leadership U.S. ETF may involve certain risks, as discussed in the Fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The Fund is not actively managed. Therefore, the Fund follows the securities included in its respective index during upturns as well as downturns. Because of its indexing strategy, the Fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Fund’s expenses, the Fund’s performance may be below that of its index.
Etho Climate Leadership U.S. ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Concentration Risk. To the extent that the Fund’s or its underlying index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the Fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19), have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Fund and its investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect global, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under these circumstances, the Fund may have difficulty achieving its investment objective which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Fund’s third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. These factors can cause substantial market volatility, exchange trading suspensions and closures and can impact the ability of the Fund to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A widespread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on the Fund’s performance, resulting in losses to the Fund.
NOTE 4 – MANAGEMENT AND CONTRACTS
ETF Managers Group, LLC (the “Advisor”), serves as the investment advisor to the Fund. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Fund, and the Advisor, the Advisor provides investment advice to the Fund and oversees the day-today operations of the Fund, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Advisor is also responsible for arranging transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Fund to operate.
Under the Investment Advisory Agreement with the Fund, the Advisor has overall responsibility for the general management and administration of the Fund and arranges for sub-advisory, transfer agency, custody, fund administration, securities lending, and all other non-distribution related services necessary for the Fund to operate. The Advisor bears the costs of all advisory and non-advisory services required to operate the Fund, in exchange for a single unitary fee. For services provided the Fund pays the Advisor at an annual rate of 0.45% of the Fund’s average daily net assets. Under the Investment Advisory Agreement, the Advisor has agreed to pay all expenses of the Fund, except for: the fee paid to the Advisor pursuant to the Investment Advisory Agreement, interest charges on any borrowings, 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”). The Advisor has entered into an agreement with its affiliate, ETFMG Financial, LLC, to serve as distributor to the Fund (the “Distributor”). The Distributor provides marketing support for the Fund, including distributing marketing materials related to the Fund.
Etho Climate Leadership U.S. ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The Advisor has entered into an Agreement with Etho Capital, LLC ( “Etho”), under which Etho agrees to sublicense the use of the Underlying Index to the Advisor. Etho also provides marketing support for the Fund. Etho does not make investment decisions, provide investment advice, or otherwise act in the capacity of an investment Advisor to the Fund.
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services (the “Administrator”) provides fund accounting, fund administration, and transfer agency services to the Fund. The Advisor compensates the Administrator for these services under an administration agreement between the two parties.
The Advisor pays each independent Trustee a quarterly fee for service to the Fund. Each Trustee is also reimbursed by the Advisor for all reasonable out-of-pocket expenses incurred in connection with his duties as Trustee, including travel and related expenses incurred in attending Board meetings.
NOTE 5 – DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to the Fund, with the amount of such compensation not to exceed an annual rate of 0.25% of each Fund’s average daily net assets. For the period ended March 31, 2022, the Fund did not incur any 12b-1 expenses.
NOTE 6 – PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, for the period ended March 31, 2022:
| Purchases | Sales | |||||||
| Etho Climate Leadership U.S. ETF | $ | 1,109,160 | $ | 1,058,000 | ||||
The costs of purchases and sales of in-kind transactions associated with creations and redemptions for the period ended March 31, 2022:
| Purchases In- Kind |
Sales In- Kind |
|||||||
| Etho Climate Leadership U.S. ETF | $ | 12,437,483 | $ | — | ||||
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all proceeds from in-kind sales. Net capital gains or losses resulting from in-kind redemptions are excluded from the determination of the Fund’s taxable gains and are not distributed to shareholders.
Etho Climate Leadership U.S. ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
There were no purchases or sales of U.S. Government obligations for the period ended March 31, 2022.
NOTE 7 – SECURITIES LENDING
The Fund may lend up to 33 1⁄3% of the value of the securities in its portfolio to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending program administered by U.S. Bank N.A. (“the Custodian”). The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the value of any loaned securities at the time of the loan, plus accrued interest. The Fund receives compensation in the form of fees and earn interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Fund continues to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss in the fair value of securities loaned that may occur during the term of the loan will be for the account of the Fund. The Fund has the right under the terms of the securities lending agreement to recall the securities from the borrower on demand. The cash collateral is invested by the Custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations either directly on behalf of the Fund or through one or more joint accounts, money market funds, or short-term bond funds, including those advised by or affiliated with the Advisor; however, such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. Other investment companies, in which the Fund may invest cash collateral, can be expected to incur fees and expenses for operations, such as investment advisory and administration fees, which would be in addition to those incurred by the Fund, and which may be received in full or in part by the Advisor. Pursuant to guidance issued by the SEC staff, fees and expenses of money market funds used for cash collateral received in connection with loans of securities are not treated as Acquired Fund Fees and Expenses, which reflect a fund’s pro rata share of the fees and expenses incurred by other investment companies in which the Fund invests (as disclosed in the Prospectus, as applicable). The Fund could also experience delays in recovering its securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Fund is indemnified from this risk by contract with the securities lending agent.
As of March 31, 2022, the value of the securities on loan and payable for collateral due to broker were as follows:
Value of Securities on Loan Collateral Received
| Fund | Values of Securities on Loan |
Fund Collateral Received* |
||||||
| Etho Climate Leadership U.S. ETF | $ | 35,811,493 | $ | 37,296,589 | ||||
* The cash collateral received was invested in the Mount Vernon Liquid Assets Portfolio as shown on the Schedule of Investments, an investment with an overnight and continuous maturity.
Etho Climate Leadership U.S. ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 8 – FEDERAL INCOME TAXES
The components of distributable earnings (losses) and cost basis of investments for federal income tax purposes at September 30, 2021, were as follows:
| Cost | Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Unrealized Appreciation (Depreciation) |
|||||||||||||
| Etho Climate Leadership U.S. ETF | $ | 183,876,941 | $ | 34,421,633 | $ | (8,158,380 | ) | $ | 26,263,253 | |||||||
| Undistributed Ordinary Income |
Undistributed Long-Term Gain |
Total Distributable Earnings |
Other Accumulated (Loss) |
Total Accumulated Gain |
||||||||||||||||
| Etho Climate Leadership U.S. ETF | $ | 31,915 | $ | — | $ | 31,915 | $ | (4,107,522 | ) | $ | 22,187,646 | |||||||||
As of September 30, 2021, the Fund had accumulated capital loss carryovers of:
| Capital Loss Carryover ST |
Capital Loss Carryover LT |
Expires | ||||||||||
| Etho Climate Leadership U.S. ETF | $ | (4,107,522 | ) | $ | — | Indefinite | ||||||
Under current tax law, capital and currency losses realized after October 31 of a fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The Fund had deferred post-October capital and currency losses, which will be treated as arising on the first business day of the year ended September 30, 2021.
| Later Year Ordinary Loss |
Post-October Loss | |||
| Etho Climate Leadership U.S. ETF | None | None |
The tax character of distributions paid by the Fund during the fiscal periods ended March 31, 2022 and September 30, 2021 are as follows:
| Period Ended March 31, 2022 |
Year Ended September 30, 2021 |
|||||||||||||||
| From Ordinary Income |
From Capital Gains |
From Ordinary Income |
From Capital Gains |
|||||||||||||
| Etho Climate Leadership U.S. ETF | $ | 726,849 | $ | — | $ | 1,179,000 | $ | — | ||||||||
NOTE 9 – LEGAL MATTERS
The Adviser and its parent, ETFMG, were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled[.]”
Etho Climate Leadership U.S. ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (together with the Adviser, the “Adviser Defendants”) have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C-152-21 (the “NJ Action”). The NJ Action asserts breach of contract, defamation and other tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action. The NJ Action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022, the Adviser, together with the other named affiliates, filed a motion for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied.
NOTE 10 – SUBSEQUENT EVENTS
In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed below, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the Financial Statements.
With respect to Note 9 – Legal Matters, on May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust as well as, all claims asserted against the Adviser Defendants, aside from the defamation claim. The Adviser Defendants intend to vigorously defend themselves against this sole remaining claim.
Etho Climate Leadership U.S. ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on March 28-29, 2022, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the renewal of the Amended and Restated Investment Advisory Agreement (the “Advisory Agreement”) between ETF Managers Group LLC (the “Adviser”) and the Trust, on behalf of Etho Climate Leadership U.S. ETF (the “Fund”).
Pursuant to Section 15(c) of the 1940 Act, the Board must annually review and approve the Advisory Agreement after its initial two-year term: (i) by the vote of the Trustees or by a vote of the shareholders of the Fund; and (ii) by the vote of a majority of the Trustees who are not parties to the Advisory Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. Each year, the Board calls and holds a meeting to decide whether to renew the Advisory Agreement for an additional one-year term. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services provided to the Fund by the Adviser; (ii) the investment performance of the Fund; (iii) the Adviser’s costs and profits realized in providing services to the Fund, including any fall-out benefits enjoyed by the Adviser; (iv) comparative fee and expense data for the Fund in relation to other similar investment companies; (v) the extent to which economies of scale would be realized as the Fund grows and whether the advisory fees for the Fund reflects these economies of scale for the benefit of the Fund; and (vi) other financial benefits to the Adviser and its affiliates resulting from services rendered to the Fund. The Board’s review included written and oral information furnished to the Board prior to and at the meeting held on March 28-29, 2022, and throughout the year. Among other things, the Adviser provided responses to a detailed series of questions, which included information about the Adviser’s operations, service offerings, personnel, risk assessment process and compliance program and financial condition. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentations and any other information that the Board received at the meeting, and deliberated on the renewal of the Advisory Agreement in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the renewal of the Advisory Agreement, and the weight to be given to each such factor. The conclusions reached with respect to the Advisory Agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to the Fund. The Independent Trustees conferred amongst themselves and independent legal counsel during an executive session held prior to the meeting and also conferred in executive sessions both with and without representatives of management before and during the meeting. The Independent Trustees requested, received and considered additional information arising out of these executive sessions.
Nature, Extent and Quality of Services Provided by the Adviser
The Trustees considered the scope of services provided under the Advisory Agreement, noting that the Adviser provides investment management services to the Fund. The Board discussed the responsibilities of the Adviser, including: responsibility for the general management of the day-to-day investment and reinvestment of the assets of the Fund; determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis; responsibility for daily monitoring of tracking error and quarterly reporting to the Board; and implementation of Board directives as they relate to the Fund. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel and the quality of the Adviser’s compliance and risk assessment infrastructure. The Board also considered the Adviser’s experience managing exchange-traded funds (“ETFs”), as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
Etho Climate Leadership U.S. ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board also considered other services provided to the Fund, such as overseeing the Fund’s service providers, monitoring adherence to the Fund’s investment restrictions, and monitoring compliance with various policies and procedures and with applicable securities laws.
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Fund by the Adviser.
Historical Performance
The Board then considered the performance of the Fund over various time periods ending December 31, 2021, including the one-year, three-year, five-year and since inception periods. The Board also considered the Fund’s performance as compared to that of comparable ETFs, as determined by the Adviser (“peer group”) using data received from an independent third party. The Board additionally reviewed the performance of the Fund as compared to its underlying index for various time periods. The Board noted management’s explanation that analysis of investment performance, in absolute terms, is less relevant for the Fund than it is for actively managed funds, given the Fund’s index-based investment objectives. The Board also noted management’s further explanation that it is more relevant to review the performance of the Fund by focusing on the extent to which the Fund tracked its underlying index. The Board reviewed information regarding the Fund’s index tracking, discussing, as applicable, factors which contributed to the Fund’s tracking error. The Board noted management’s representations that the Fund’s performance in tracking its underlying index was within the range of expectations, and the Board concluded that the Fund satisfactorily tracked its underlying index. The Board further noted that it had received and would continue to receive regular reports regarding the Fund’s performance, including with respect to its tracking error, at its quarterly meetings.
Cost of Services Provided, Profits and Economies of Scale
The Board reviewed the advisory fee for the Fund and compared it to the total operating expenses of comparable ETFs, as determined by the Adviser using data received from an independent third party. Among other information, the Board noted that the advisory fee of the Fund was slightly higher than the average expense ratio of its peer group and higher than the median expense ratio of its peer group. The Board took into consideration management’s discussion of the fees, including that the Fund has a niche investment strategy that is substantially different than the strategies of many of the funds in the peer group and, therefore, the information provided about the comparable ETFs may not provide meaningful direct comparisons to the Fund.
The Board noted the importance of the fact that the advisory fee for the Fund is a “unified fee,” meaning that the shareholders of the Fund pay no expenses other than the advisory fee and certain other costs such as interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, non-standard Board-related expenses and litigation against the Board, Trustees, Fund, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses. The Board also noted that the Adviser was responsible for compensating the Trust’s other service providers and paying the Fund’s other expenses (except as noted above) out of its own fees and resources. The Board concluded that the advisory fee for the Fund is reasonable in light of the factors considered.
The Board also evaluated the compensation and other benefits received by the Adviser from its relationship with the Fund, taking into account profitability information provided by the Adviser. The Board received and reviewed profitability information with respect to the Fund and considered how profit margins could affect the Adviser’s long-term viability and ability to attract and retain high-quality personnel. The Board also considered the impact on the Adviser’s profitability of payments received from partners involved with the Fund. Based on the information provided to the Trustees, the Trustees concluded that the net revenue retained by the Adviser from providing services to the Fund was not excessive in view of the nature, extent and quality of services provided to the Fund. The Board further considered other benefits derived by the Adviser and its affiliates from the Adviser’s relationship with the Fund.
Etho Climate Leadership U.S. ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
In addition, the Board considered whether economies of scale may be realized for the Fund. The Board noted that the Adviser regularly considers whether fee reductions are appropriate as the Fund grows in size. The Board noted that a unitary fee provides a level of certainty in expenses for the Fund and effectively acts as a cap on the fees and expenses (except as noted above) that are borne by the Fund. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the continued provision of high-quality services to the Funds, such as the hiring of new trading, legal and compliance personnel, and enhancements to technology and related systems. The Board concluded that no changes to the advisory fee structure of the Fund were necessary.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision.
Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Advisory Agreement are fair and reasonable; (b) concluded that the Adviser’s fees are reasonable in light of the services that the Adviser provides to the Fund; and (c) approved the renewal of the Advisory Agreement for another year.
Etho Climate Leadership U.S. ETF
Period Ended March 31, 2022 (Unaudited)
As a shareholder of Etho Climate Leadership U.S. ETF (the “Fund”) you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 1, 2021 to March 31, 2022).
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then, multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
Etho Climate Leadership U.S. ETF
| Beginning Account Value October 1, 2021 |
Ending Account Value March 31, 2022 |
Expenses Paid During the Period^ |
Annualized Expense Ratio During Period October 1, 2021 to March 31, 2022 |
|||||||||||||
| Actual | $ | 1,000.00 | $ | 986.90 | $ | 2.23 | 0.45 | % | ||||||||
| Hypothetical (5% annual) | $ | 1,000.00 | $ | 1,022.69 | $ | 2.27 | 0.45 | % | ||||||||
^ The dollar amounts shown as expenses paid during the period are equal to the annualized six-month expense ratio multiplied by the average account value during the period, multiplied by 182/365 (to reflect the period from October 1, 2021 to March 31, 2022).
Etho Climate Leadership U.S. ETF
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
March 31, 2022 (Unaudited)
ETF Managers Trust (the “Trust”) has adopted a liquidity risk management program (the “Program”). The Trust’s Board of Trustees (the “Board”) has designated ETF Managers Group LLC (the “Program Administrator”) as the administrator of the Program. The Program Administrator has designated a committee (the “Committee”), composed of personnel from multiple departments, including investment operations and compliance, that is responsible for the implementation and ongoing administration of the Program, which includes assessing the liquidity risk of the Etho Climate Leadership U.S. ETF (the “Fund”) under both normal and reasonably foreseeable stressed conditions.
Under the Program, the Program Administrator assesses, manages and periodically reviews the Fund’s liquidity risk, based on factors specific to the circumstances of the Fund. Liquidity risk is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments and limiting the amount of the Fund’s illiquid investments, among other means. The Program Administrator’s process of determining the degree of liquidity of the Fund’s investments is supported by one or more third-party liquidity assessment vendors.
At a meeting of the Board on March 28-29, 2022, the Adviser provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, the operation of any Highly Liquid Investment Minimum, where applicable, and any material changes to the Program, for the period from March 1, 2021 through March 1, 2022 (the “Reporting Period”). No significant liquidity events impacting the Fund were noted in the report and it was represented that, as of December 31, 2021, the Fund was primarily highly liquid and, during the Reporting Period, the Fund held less than 15% in illiquid securities. In addition, the Program Administrator provided its assessment that Program implementation was effective and that the Program operated adequately and effectively to enable the Program Administrator to oversee and manage liquidity risk and ensure the Fund is able to meet requests to redeem shares without significant dilution to the remaining investors’ interest in the Fund.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
Etho Climate Leadership U.S. ETF
March 31, 2022 (Unaudited)
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of the Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.etfmgfunds.com.
NOTE 2 – FEDERAL TAX INFORMATION
Qualified Dividend Income/Dividends Received Deduction
For the fiscal year ended September 30, 2021, certain dividends paid by the Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
| Fund Name | Qualified Dividend Income |
| Etho Climate Leadership U.S. ETF | 100.00% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September 30, 2021 was as follows:
| Fund Name | Dividends Received Deduction |
| Etho Climate Leadership U.S. ETF | 100.00% |
Short Term Capital Gain
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871 (k)(2)(C) for each Fund were as follows:
| Fund Name | Short-Term Capital Gain |
| Etho Climate Leadership U.S. ETF | 0.00% |
NOTE 3 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund files a complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Part F of Form N-PORT. Once filed, the Fund’s Part F of Form N-PORT is available without charge, upon request on the SEC’s website (www.sec.gov), the Fund’s website (www.etfmgfunds.com) and is available by calling (877) 756-7873. The Fund’s portfolio holdings are posted on the Fund’s website at www.etfmgfunds.com daily.
NOTE 4 – INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477), by accessing the SEC’s website at www.sec.gov, or by accessing the Fund’s website at www.etfmgfunds.com. Information regarding how the Fund voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477) or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477) or by visiting www.etfmgfunds.com. Read the prospectus carefully before investing.
Etho Climate Leadership U.S. ETF
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Interested Trustee and Officers | ||||
| Samuel Masucci, III (1962) | Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) | Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). | 20 | None |
| John A. Flanagan, (1946) | Treasurer (since 2015) | President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). | n/a | n/a |
| Reshma A. Tanczos (1978) | Chief Compliance Officer (since 2016) | Chief Compliance Officer of ETFMG Financial LLC (Since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). | n/a | n/a |
| Matthew J. Bromberg (1973) | Assistant Secretary (since 2020) | General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015-2016). | n/a | n/a |
| * Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. | ||||
Etho Climate Leadership U.S. ETF
Board of Trustees (Continued)
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Terry Loebs (1963) | Trustee (since 2014); Lead Independent Trustee (since 2020) | Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). | 20 | None |
| Eric Wiegel (1960) | Trustee (since 2020) | Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018). | 20 | None |
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services
615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006
Semi-Annual Report
March 31, 2022
(Unaudited)
BlueStar Israel Technology ETF
Ticker: ITEQ
The fund is a series of ETF Managers Trust.
BlueStar Israel Technology ETF
TABLE OF CONTENTS
March 31, 2022 (Unaudited)
BlueStar Israel Technology ETF
On behalf of the entire team, we want to express our appreciation for the confidence you have placed in the BlueStar Israel Technology ETF (“ITEQ” or the “Fund”). The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022.
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the BlueStar Israel Global Technology IndexTM (the “Index”).
Over the 6-month period ending March 31, 2022, the total return for the Fund was -15.27% while the total return for the Index, which does not incur Fund expenses, was -15.22%. The best performers in the Fund, on the basis of contribution to its return, were Check Point Software Tech, Solaredge Technologies Inc, Elbit Systems Ltd, Tower Semiconductor Ltd and Amdocs Ltd while the worst performers were Wix.Com Ltd, Fiverr International Ltd, Nice Ltd - Spon Adr, Kornit Digital Ltd and Inmode Ltd.
At the end of the reporting period, the Fund saw an allocation of 68.24% to Information Technology, 7.87% to Industrials and 6.5% to Health Care. The portfolio securities of the Fund were exposed predominately to Israel at 56.11%, followed by 42.37% to the United States
We continue to believe Israeli companies play an essential role in the global high technology value chain. Most technology users, from online shoppers to Fortune 500 companies, are unaware that they use Israeli technology applications and solutions every day. From cybersecurity and defense to clean energy and agriculture, Israeli innovations power some of the biggest names in the technology industry today.
Even in industries where Israeli companies do not have dominant individual market share, the collective footprint of Israeli companies is significant in many key technology subsectors, and Israel-based Research & Development and non-public companies are usually significant contributors to that same sub-industry’s ecosystem.
There is much ahead for Israeli technology companies and we are thankful you have joined us. You can find further details about ITEQ by visiting www.etfmg.com, or by calling 1-844-ETF-MGRS. (1-844-383-6477).
Sincerely,
Sincerely,
Samuel Masucci III
Chairman of the Board
BlueStar Israel Technology ETF
| Average Annual Returns Period Ended March 31, 2022 |
1 Year Return |
5 Year Return |
Since Inception (11/2/2015) |
Value of $10,000 (3/31/2022) |
||||||||||||
| BlueStar Israel Technology ETF (NAV) | -13.66 | % | 14.90 | % | 13.75 | % | $ | 22,837 | ||||||||
| BlueStar Israel Technology ETF (Market) | -13.84 | % | 14.80 | % | 13.74 | % | $ | 22,823 | ||||||||
| S&P 500 Index | 15.65 | % | 15.99 | % | 14.87 | % | $ | 24,321 | ||||||||
| BlueStar Israel Global Technology IndexTM | -13.87 | % | 15.80 | % | 14.61 | % | $ | 23,971 | ||||||||
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on November 2, 2015, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
BlueStar Israel Technology ETF
Top Ten Holdings as of March 31, 2022 (Unaudited)*
| Security | % of Total Investments |
||
| 1 | Check Point Software Technologies, Ltd. | 9.34% | |
| 2 | SolarEdge Technologies, Inc. | 7.39% | |
| 3 | Amdocs, Ltd. | 5.80% | |
| 4 | Nice, Ltd. | 5.64% | |
| 5 | CyberArk Software, Ltd. | 4.34% | |
| 6 | Elbit Systems, Ltd. | 3.96% | |
| 7 | Wix.com, Ltd. | 3.33% | |
| 8 | Novocure, Ltd. | 3.10% | |
| 9 | Tower Semiconductor Ltd. | 2.97% | |
| 10 | Varonis Systems, Ltd. | 2.59% |
Top Ten Holdings = 48.46% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
BlueStar Israel Technology ETF
Important Disclosures and Key Risk Factors
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
ITEQ
The BlueStar Israel Technology ETF (the “Fund”) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the BlueStar Israel Global Technology Index (the “Index”).
The Fund invests in Israeli companies. Foreign investing involves special risks such as currency fluctuations and political uncertainty. Funds that invest in smaller companies may experience greater volatility. Funds that emphasize investments in technology generally will experience greater price volatility. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund.
ETF shares are not individually redeemable, and owners of the shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in Creation Units only, in blocks of 50,000 shares.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
Distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG Financial LLC is not affiliated with BlueStar Indexes.
BlueStar Israel Technology ETF
As of March 31, 2022 (Unaudited)
| BlueStar Israel Technology ETF |
||||
| As a percent of Net Assets: | ||||
| Cayman Islands | 0.6 | % | ||
| Gibraltar | 0.5 | |||
| Guernsey | 6.6 | |||
| Israel | 66.9 | |||
| Jersey | 3.6 | |||
| United States | 21.1 | |||
| Short-Term and other Net Assets (Liabilities) | 0.7 | |||
| 100.0 | % | |||
BlueStar Israel Technology ETF
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| COMMON STOCKS - 99.3% | ||||||||
| Cayman Islands - 0.6% | ||||||||
| Software - 0.6% (d) | ||||||||
| Sapiens International Corp. NV | 34,474 | $ | 875,295 | |||||
| Gibraltar - 0.5% | ||||||||
| Hotels, Restaurants & Leisure - 0.5% | ||||||||
| 888 Holdings PLC | 297,058 | 719,973 | ||||||
| Guernsey - 6.6% | ||||||||
| IT Services - 6.6% | ||||||||
| Amdocs, Ltd. | 114,342 | 9,400,056 | ||||||
| Israel - 66.9% | ||||||||
| Aerospace & Defense - 5.2% | ||||||||
| Elbit Systems, Ltd. (a) | 29,130 | 6,421,709 | ||||||
| RADA Electronic Industries, Ltd. (a)(b) | 65,244 | 908,849 | ||||||
| Total Aerospace & Defense | 7,330,558 | |||||||
| Auto Components - 0.1% | ||||||||
| REE Automotive, Ltd. (a)(b) | 97,207 | 184,693 | ||||||
| Biotechnology - 0.2% | ||||||||
| Kamada, Ltd. (b) | 53,682 | 299,438 | ||||||
| Capital Markets - 0.3% | ||||||||
| Electreon Wireless, Ltd. (b) | 7,399 | 358,925 | ||||||
| Communications Equipment - 2.5% | ||||||||
| AudioCodes, Ltd. | 27,564 | 704,260 | ||||||
| BATM Advanced Communications, Ltd. | 361,591 | 248,901 | ||||||
| Ceragon Networks, Ltd. (b) | 119,442 | 254,411 | ||||||
| Gilat Satellite Networks, Ltd. (b) | 58,633 | 516,557 | ||||||
| Ituran Location and Control, Ltd. | 13,580 | 312,612 | ||||||
| Radware, Ltd. (a)(b) | 38,542 | 1,232,188 | ||||||
| Silicom, Ltd. (b) | 8,356 | 328,976 | ||||||
| Total Communications Equipment | 3,597,905 | |||||||
| Diversified Financial Services - 1.3% | ||||||||
| Plus500, Ltd. | 104,725 | 1,943,198 | ||||||
| Diversified Telecommunication Services - 3.0% | ||||||||
| Bezeq The Israeli Telecommunication Corp., Ltd. | 2,421,317 | 4,166,416 | ||||||
| Electrical Equipment - 0.1% | ||||||||
| Augwind Energy Tech Storage, Ltd. (b) | 18,871 | 154,405 | ||||||
| Electronic Equipment, Instruments & Components - 0.6% | ||||||||
| Arbe Robotics, Ltd. (a)(b) | 53,497 | 372,339 | ||||||
| Innoviz Technologies, Ltd. (a)(b) | 123,876 | 448,431 | ||||||
| Total Electronic Equipment, Instruments & Components | 820,770 | |||||||
The accompanying notes are an integral part of these financial statements.
BlueStar Israel Technology ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Health Care Equipment & Supplies - 2.0% | ||||||||
| Inmode, Ltd. (b) | 59,246 | $ | 2,186,770 | |||||
| Nano-X Imaging, Ltd. (a)(b) | 44,546 | 482,879 | ||||||
| Sisram Medical, Ltd. | 226,209 | 262,789 | ||||||
| Total Health Care Equipment & Supplies | 2,932,438 | |||||||
| Household Durables - 0.6% | ||||||||
| Maytronics, Ltd. | 47,033 | 922,362 | ||||||
| Independent Power and Renewable Electricity Producers - 2.0% | ||||||||
| Doral Group Renewable Energy Resources, Ltd. (b) | 76,584 | 350,869 | ||||||
| Energix-Renewable Energies, Ltd. | 221,684 | 851,001 | ||||||
| Enlight Renewable Energy, Ltd. (b) | 679,536 | 1,600,724 | ||||||
| Total Independent Power and Renewable Electricity Producers | 2,802,594 | |||||||
| Interactive Media & Services - 0.9% | ||||||||
| Taboola.com, Ltd. (a)(b) | 242,447 | 1,251,027 | ||||||
| Internet & Direct Marketing Retail - 2.0% | ||||||||
| Fiverr International, Ltd. (a)(b) | 35,976 | 2,736,695 | ||||||
| IT Services - 5.3% | ||||||||
| Formula Systems 1985, Ltd. | 8,308 | 835,200 | ||||||
| Matrix IT, Ltd. | 33,333 | 872,209 | ||||||
| One Software Technologies, Ltd. | 25,929 | 451,367 | ||||||
| Wix.com, Ltd. (b) | 51,663 | 5,396,717 | ||||||
| Total IT Services | 7,555,493 | |||||||
| Life Sciences Tools & Services - 0.2% | ||||||||
| Compugen, Ltd. (a)(b) | 92,693 | 298,471 | ||||||
| Machinery - 2.6% | ||||||||
| Kornit Digital, Ltd. (b) | 45,184 | 3,736,265 | ||||||
| Media - 1.1% | ||||||||
| Perion Network Ltd. (b) | 36,531 | 821,582 | ||||||
| Tremor International, Ltd. (b) | 104,783 | 814,875 | ||||||
| Total Media | 1,636,457 | |||||||
| Semiconductors & Semiconductor Equipment - 6.1% | ||||||||
| Camtek, Ltd. (b) | 29,491 | 898,296 | ||||||
| Nova, Ltd. (b) | 27,421 | 2,985,598 | ||||||
| Tower Semiconductor, Ltd. (b) | 99,629 | 4,822,044 | ||||||
| Total Semiconductors & Semiconductor Equipment | 8,705,938 | |||||||
| Software - 29.1% (d) | ||||||||
| Allot Communications, Ltd. (b) | 37,782 | 306,034 | ||||||
| Cellebrite DI, Ltd. (a)(b) | 54,590 | 349,376 | ||||||
| Check Point Software Technologies, Ltd. (b) | 109,511 | 15,140,990 | ||||||
| Cognyte Software, Ltd. (b) | 59,677 | 674,947 | ||||||
| CyberArk Software, Ltd. (b) | 41,670 | 7,031,813 | ||||||
| Hilan, Ltd. | 11,376 | 705,497 | ||||||
| ironSource, Ltd. (b) | 446,890 | 2,145,072 | ||||||
| Jfrog, Ltd. (b) | 64,182 | 1,729,705 | ||||||
| Magic Software Enterprises, Ltd. | 23,067 | 405,883 | ||||||
| Monday.com, Ltd. (b) | 16,498 | 2,607,839 | ||||||
| Nice, Ltd. - ADR (a)(b) | 41,750 | 9,143,249 | ||||||
The accompanying notes are an integral part of these financial statements.
BlueStar Israel Technology ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Riskified, Ltd. (b) | 38,607 | $ | 233,186 | |||||
| SimilarWeb, Ltd. (a)(b) | 20,735 | 268,518 | ||||||
| Tufin Software Technologies, Ltd. (b) | 39,016 | 348,413 | ||||||
| WalkMe, Ltd. (b) | 28,451 | 429,326 | ||||||
| Total Software | 41,519,848 | |||||||
| Technology Hardware, Storage & Peripherals - 1.7% | ||||||||
| Nano Dimension, Ltd. - ADR (a)(b) | 290,762 | 1,035,113 | ||||||
| Stratasys, Ltd. (b) | 54,305 | 1,378,804 | ||||||
| Total Technology Hardware, Storage & Peripherals | 2,413,917 | |||||||
| Total Israel | 95,367,813 | |||||||
| Jersey - 3.6% | ||||||||
| Health Care Equipment & Supplies - 3.6% | ||||||||
| Novocure, Ltd. (a)(b) | 60,695 | 5,028,580 | ||||||
| United States - 21.1% | ||||||||
| Biotechnology - 0.2% | ||||||||
| Lineage Cell Therapeutics, Inc. (b) | 192,627 | 296,646 | ||||||
| Pluristem Therapeutics, Inc. (b) | 1 | 2 | ||||||
| Total Biotechnology | 296,648 | |||||||
| Electronic Equipment, Instruments & Components – 0.3% | ||||||||
| Vishay Precision Group, Inc. (b) | 13,690 | 440,134 | ||||||
| Entertainment - 1.5% | ||||||||
| Playtika Holding Corp. (b) | 113,787 | 2,199,503 | ||||||
| Independent Power & Renewable Energy - 2.4% | ||||||||
| Ormat Technologies, Inc. | 42,817 | 3,465,774 | ||||||
| Insurance - 0.9% | ||||||||
| Lemonade, Inc. (a)(b) | 49,542 | 1,306,423 | ||||||
| IT Services - 0.7% | ||||||||
| Payoneer Global, Inc. (b) | 219,990 | 981,155 | ||||||
| Pharmaceuticals - 0.3% | ||||||||
| Oramed Pharmaceuticals, Inc. (b) | 49,289 | 426,350 | ||||||
| Semiconductors & Semiconductor Equipment - 9.0% | ||||||||
| CEVA, Inc. (b) | 21,942 | 891,942 | ||||||
| SolarEdge Technologies, Inc. (a)(b) | 37,192 | 11,989,585 | ||||||
| Total Semiconductors & Semiconductor Equipment | 12,881,527 | |||||||
| Software - 5.8% (d) | ||||||||
| LivePerson, Inc. (b) | 53,112 | 1,296,995 | ||||||
| Varonis Systems, Inc. (a)(b) | 88,256 | 4,195,690 | ||||||
| Verint Systems, Inc. (b) | 54,785 | 2,832,385 | ||||||
| Total Software | 8,325,070 | |||||||
| Total United States | 30,322,584 | |||||||
| TOTAL COMMON STOCKS (Cost $151,850,378) | 141,714,301 | |||||||
The accompanying notes are an integral part of these financial statements.
BlueStar Israel Technology ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| INVESTMENTS PURCHASED WITH SECURITIES LENDING COLLATERAL - 14.1% | ||||||||
| Mount Vernon Liquid Assets Portfolio, LLC 0.41% (c) | 20,117,427 | $ | 20,117,427 | |||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $20,117,427) | 20,117,427 | |||||||
| SHORT-TERM INVESTMENTS - 0.2% | ||||||||
| Money Market Funds - 0.2% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 356,072 | 356,072 | ||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $356,072) | 356,072 | |||||||
| Total Investments (Cost $172,323,877) - 113.6% | 162,187,800 | |||||||
| Liabilities in Excess of Other Assets - (13.6)% | (19,382,250 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 142,805,550 | ||||||
Percentages are stated as a percent of net assets.
| PLC | Public Limited Company |
| ADR | American Depositary Receipt |
| (a) | This security or a portion of this security was out on loan at March 31, 2022. |
| (b) | Non-income producing security. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
| (d) | As of March 31, 2022 the Fund had a significant portion of its assets in the Software Industry. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
BlueStar Israel Technology ETF
STATEMENT OF ASSETS AND LIABILITIES
As of March 31, 2022 (Unaudited)
| BlueStar | ||||
| Israel | ||||
| Technology ETF |
||||
| ASSETS | ||||
| Investments in securities, at value* | $ | 162,187,800 | ||
| Foreign currency* | 6,268 | |||
| Receivables: | ||||
| Receivable for investments sold | 680,614 | |||
| Dividends and interest receivable | 109,574 | |||
| Securities lending income receivable | 29,180 | |||
| Total Assets | 163,013,436 | |||
| LIABILITIES | ||||
| Collateral received for securities loaned (Note 7) | 20,117,427 | |||
| Payables: | ||||
| Unitary fees payable | 90,459 | |||
| Total Liabilities | 20,207,886 | |||
| Net Assets | $ | 142,805,550 | ||
| NET ASSETS CONSIST OF: | ||||
| Paid-in capital | $ | 149,920,296 | ||
| Total distributable earnings (accumulated losses) | (7,114,746 | ) | ||
| Net Assets | $ | 142,805,550 | ||
| *Identified Cost: | ||||
| Investments in securities | $ | 172,323,877 | ||
| Foreign currency | 6,335 | |||
| Shares Outstanding^ | 2,550,000 | |||
| Net Asset Value, Offering and Redemption Price per Share | $ | 56.00 | ||
^ No par value, unlimited number of shares authorized
The accompanying notes are an integral part of these financial statements.
BlueStar Israel Technology ETF
For the Period Ended March 31, 2022 (Unaudited)
| BlueStar | ||||
| Israel | ||||
| Technology ETF |
||||
| INVESTMENT INCOME | ||||
| Income: | ||||
| Dividends from securities (net of foreign withholdings tax and issuance fees of $39,515) | $ | 186,080 | ||
| Interest | 94 | |||
| Securities lending income | 128,275 | |||
| Total Investment Income | 314,449 | |||
| Expenses: | ||||
| Unitary Fees | 628,153 | |||
| Miscellaneous Expense | 3,240 | |||
| Total Expenses | 631,393 | |||
| Net Investment Loss | (316,944 | ) | ||
| REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||
| Net Realized Gain (Loss) on: | ||||
| Unaffiliated investments | (9,081,473 | ) | ||
| In-Kind redemptions | 22,191,250 | |||
| Foreign currency and foreign currency translation | (10,336 | ) | ||
| Net Realized Gain on Investments and In-Kind Redemptions | 13,099,441 | |||
| Net Change in Unrealized Appreciation/Depreciation of: Unaffiliated investments | (41,523,433 | ) | ||
| Foreign currency and foreign currency translation | 7 | |||
| Net Change in Unrealized Appreciation/Depreciation of Investments | (41,523,426 | ) | ||
| Net Realized and Unrealized Loss on Investments | (28,423,985 | ) | ||
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (28,740,929 | ) | |
The accompanying notes are an integral part of these financial statements.
BlueStar Israel Technology ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended | ||||||||
| March 31, | Year Ended | |||||||
| 2022 | September 30, | |||||||
| (Unaudited) | 2021 | |||||||
| OPERATIONS | ||||||||
| Net investment loss | $ | (316,944 | ) | $ | (40,497 | ) | ||
| Net realized gain on investments and in-kind redemptions | 13,099,441 | 26,468,417 | ||||||
| Net change in unrealized appreciation/depreciation of investments | (41,523,426 | ) | (4,592,205 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | (28,740,929 | ) | 21,835,715 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | — | (1,110,500 | ) | |||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net increase (decrease) in net assets derived from net change in outstanding shares | (20,126,125 | ) | 43,145,340 | |||||
| Net increase (decrease) in net assets | (48,867,054 | ) | 63,870,555 | |||||
| NET ASSETS | ||||||||
| Beginning of Period | 191,672,604 | 127,802,049 | ||||||
| End of Period | $ | 142,805,550 | $ | 191,672,604 | ||||
Summary of share transactions is as follows:
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||
| Shares Sold | 500,000 | $ | 32,256,255 | 1,500,000 | $ | 103,500,515 | |||||||||||
| Shares Redeemed | (850,000 | ) | (52,382,380 | ) | (900,000 | ) | (60,355,175 | ) | |||||||||
| Net Transactions in Fund Shares | (350,000 | ) | $ | (20,126,125 | ) | 600,000 | $ | 43,145,340 | |||||||||
| Beginning Shares | 2,900,000 | 2,300,000 | |||||||||||||||
| Ending Shares | 2,550,000 | 2,900,000 | |||||||||||||||
The accompanying notes are an integral part of these financial statements.
BlueStar Israel Technology ETF
For a capital share outstanding throughout each period/year
| Period Ended | ||||||||||||||||||||||||
| March 31, | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
| 2022 | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
| (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
| Net Asset Value, Beginning of Period/Year | $ | 66.09 | $ | 55.57 | $ | 39.92 | $ | 36.03 | $ | 31.38 | $ | 25.58 | ||||||||||||
| Income (Loss) from Investment Operations: | ||||||||||||||||||||||||
| Net investment income (loss) 1 | (0.12 | ) | (0.01 | ) | (0.06 | ) | (0.04 | ) | 0.04 | 0.02 | ||||||||||||||
| Net realized and unrealized gain (loss) on investments | (9.97 | ) | 10.97 | 15.71 | 4.03 | 4.78 | 5.87 | |||||||||||||||||
| Total from investment operations | (10.09 | ) | 10.96 | 15.65 | 3.99 | 4.82 | 5.89 | |||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||
| Distributions from net investment income | — | (0.44 | ) | — | (0.09 | ) | (0.17 | ) | (0.09 | ) | ||||||||||||||
| Return of capital | — | — | — | (0.01 | ) | — | — | |||||||||||||||||
| Total Distributions | — | (0.44 | ) | — | (0.10 | ) | (0.17 | ) | (0.09 | ) | ||||||||||||||
| Net Asset Value, end of period/year | $ | 56.00 | $ | 66.09 | $ | 55.57 | $ | 39.92 | $ | 36.03 | $ | 31.38 | ||||||||||||
| Total Return | -15.27 | %2 | 19.76 | % | 39.20 | % | 11.17 | % | 15.41 | % | 23.16 | % | ||||||||||||
| Ratios/Supplemental Data: | ||||||||||||||||||||||||
| Net assets at end of period/year (000’s) | $ | 142,806 | $ | 191,673 | $ | 127,802 | $ | 73,847 | $ | 61,243 | $ | 23,538 | ||||||||||||
| Expenses to Average Net Assets | 0.75 | %3 | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
| Net Investment Income (Loss) to Average Net Assets | -0.38 | %3 | -0.02 | % | -0.12 | % | -0.12 | % | 0.12 | % | 0.07 | % | ||||||||||||
| Portfolio Turnover Rate | 13 | %2 | 21 | % | 19 | % | 24 | % | 11 | % | 19 | % | ||||||||||||
| 1 | Calculated based on average shares outstanding during the period/year. |
| 2 | Not annualized. |
| 3 | Annualized. |
The accompanying notes are an integral part of these financial statements.
BlueStar Israel Technology ETF
March 31, 2022 (Unaudited)
NOTE 1 – ORGANIZATION
BlueStar Israel Technology ETF (the “Fund”) is a series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Fund’s shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”). The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the BlueStar Israel Global Technology IndexTM (BIGITechTM” or the “Index”). The Fund commenced operations on November 2, 2015.
The Fund currently offers one class of shares, which has no front end sales load, no deferred sales charges, and no redemption fees. The Fund may issue an unlimited number of shares of beneficial interest, with no par value. All shares of the Fund have equal rights and privileges.
Shares of the Fund are listed and traded on the NYSE Arca, Inc. Market prices for the Shares may be different from their net asset value (“NAV”). The Fund issues and redeems Shares on a continuous basis at NAV only in blocks of 50,000 shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in the Index. Once created, Shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, Shares are not redeemable securities of the Fund. Shares of the Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the Shares directly from the Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and may be subject to customary brokerage commissions or fees.
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Transaction Fees” in the Statements of Changes in Net Assets.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Fund may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (“SEC”). For more information about the underlying fund’s operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the SEC.
BlueStar Israel Technology ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| A. | Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Fund’s Board. The use of fair value pricing by the Fund may cause the NAV of its shares to differ significantly from the NAV that would be calculated without regard to such considerations. As of March 31, 2022, the Fund did not hold any fair valued securities.
As described above, the Fund utilizes various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. |
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| Level 3 | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following is a summary of the inputs used to value the Fund’s net assets as of March 31, 2022:
BlueStar Israel Technology ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
BlueStar Israel Technology ETF
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 141,714,301 | $ | — | $ | — | $ | 141,714,301 | ||||||||
| Short-Term Investments | 356,072 | — | — | 356,702 | ||||||||||||
| Investments Purchased with Securities Lending Collateral* | — | — | — | 20,117,427 | ||||||||||||
| Total Investments in Securities | $ | 142,070,373 | $ | — | $ | — | $ | 162,187,800 | ||||||||
^ See Schedule of Investments for classifications by country and industry.
* Certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Schedule of Investments.
| B. | Federal Income Taxes. The Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
To avoid imposition of the excise tax applicable to regulated investment companies, the Fund intends to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of the Fund’s next taxable year.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The Fund has analyzed its tax position and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Fund’s 2021 tax returns. The Fund identifies its major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
As of March 31, 2022, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the Fund, and has determined that no provision for income tax is required in the Fund’s financial statements.
| C. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Fund may be subject to income, withholding or other taxes imposed by foreign countries. |
| D. | Foreign Currency Translations and Transactions. The Fund may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Fund does not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Fund does isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
BlueStar Israel Technology ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| E. | Distributions to Shareholders. Distributions to shareholders from net investment income, if any are generally declared and paid by the Fund on a quarterly basis. Net realized gains on securities of the Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
| G. | Share Valuation. The NAV per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding of the Fund, rounded to the nearest cent. The Fund’s shares will not be priced on the days on which the NYSE is closed for trading. The offering and redemption price per share for the Fund is equal to the Fund’s NAV share. |
| H. | Guarantees and Indemnifications. In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote. |
NOTE 3 – RISK FACTORS
Investing in the BlueStar Israel Technology ETF may involve certain risks, as discussed in the Fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The Fund is not actively managed. Therefore, the Fund follows the securities included in its respective index during upturns as well as downturns. Because of its indexing strategy, the Fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Fund’s expenses, the Fund’s performance may be below that of its index.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time.
BlueStar Israel Technology ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Concentration Risk. To the extent that the Fund’s or its underlying index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the Fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19), have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Fund and its investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect global, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under these circumstances, the Fund may have difficulty achieving its investment objective which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Fund’s third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. These factors can cause substantial market volatility, exchange trading suspensions and closures and can impact the ability of the Fund to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A widespread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on the Fund’s performance, resulting in losses to the Fund.
NOTE 4 – MANAGEMENT AND OTHER CONTRACTS
ETF Managers Group, LLC (the “Advisor”), serves as the investment advisor to the Fund. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Fund, and the Advisor, the Advisor provides investment advice to the Fund and oversees the day-today operations of the Fund, subject to the direction and control of the Board and the officers of the Trust.
Under the Investment Advisory Agreement with the Fund, the Advisor has overall responsibility for the general management and administration of the Fund and arranges for sub-advisory, transfer agency, custody, fund administration, securities lending, and all other non-distribution related services necessary for the Fund to operate. The Advisor bears the costs of all advisory and non-advisory services required to operate the Fund, in exchange for a single unitary fee. For services provided the Fund pays the Advisor at an annual rate of 0.75% of the Fund’s average daily net assets. Under the Investment Advisory Agreement, the Advisor has agreed to pay all expenses of the Fund, except for: the fee paid to the Advisor pursuant to the Investment Advisory Agreement, interest charges on any borrowings, 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”). The Advisor has entered into an agreement with its affiliate, ETFMG Financial, LLC, to serve as distributor to the Fund (the “Distributor”). The Distributor provides marketing support for the Fund, including distributing marketing materials related to the Fund.
BlueStar Israel Technology ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The Advisor has entered into an Agreement with BlueStar Global Investors LLC (“BlueStar”), under which BlueStar agrees to sublicense the use of the Underlying Index from BlueStar Indexes for use by the Advisor and the Fund. BlueStar also provides marketing support for the Fund, including distributing marketing materials related to the Fund. BlueStar does not make investment decisions, provide investment advice, or otherwise act in the capacity of an investment adviser to the Fund. Additionally, BlueStar is not involved in the maintenance of the Underlying Index and does not otherwise act in the capacity of an index provider.
U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (the “Administrator”), provides fund accounting, fund administration, and transfer agency services to the Fund. The Advisor compensates the Administrator for these services under an administration agreement between the two parties.
The Advisor pays each independent Trustee a quarterly fee for service to the Fund. Each Trustee is also reimbursed by the Advisor for all reasonable out-of-pocket expenses incurred in connection with his duties as Trustee, including travel and related expenses incurred in attending Board meetings.
NOTE 5 – DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to the Fund, with the amount of such compensation not to exceed an annual rate of 0.25% of each Fund’s average daily net assets. For the period ended March 31, 2022, the Fund did not incur any 12b-1 expenses.
NOTE 6 – PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, for the period ended March 31, 2022:
| Purchases | Sales | |||||||
| BlueStar Israel Technology ETF | $ | 21,841,858 | $ | 24,738,255 | ||||
The costs of purchases and sales of in-kind transactions associated with creations and redemptions for the period ended March 31, 2022:
| Purchases In- | Sales In- | |||||||
| Kind | Kind | |||||||
| BlueStar Israel Technology ETF | $ | 30,165,760 | $ | 48,043,471 | ||||
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all proceeds from in-kind sales. Net capital gains or losses resulting from in-kind redemptions are excluded from the determination of the Fund’s taxable gains and are not distributed to shareholders.
There were no purchases or sales of U.S. Government obligations for the period ended March 31, 2022.
BlueStar Israel Technology ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 7 – SECURITIES LENDING
The Fund may lend up to 33 1/3% of the value of the securities in its portfolio to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending program administered by U.S. Bank N.A. (“the Custodian”). The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the value of any loaned securities at the time of the loan, plus accrued interest. The Fund receives compensation in the form of fees and earns interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Fund continues to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss in the fair value of securities loaned that may occur during the term of the loan will be for the account of the Fund. The Fund has the right under the terms of the securities lending agreement to recall the securities from the borrower on demand. The cash collateral is invested by the Custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations, either directly on behalf of the Fund or through one or more joint accounts, money market funds, or short-term bond funds, including those advised by or affiliated with the Advisor; however, all such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. Other investment companies in which the Fund may invest cash collateral can be expected to incur fees and expenses for operations, such as investment advisory and administration fees, which would be in addition to those incurred by the Fund, and which may be received in full or in part by the Advisor. Pursuant to guidance issued by the SEC staff, fees and expenses of money market funds used for cash collateral received in connection with loans of securities are not treated as Acquired Fund Fees and Expenses, which reflect a fund’s pro rata share of the fees and expenses incurred by other investment companies in which the Fund invests (as disclosed in the Prospectus, as applicable). The Fund could also experience delays in recovering its securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Fund is indemnified from this risk by contract with the securities lending agent.
As of March 31, 2022, the value of the securities on loan and payable for collateral due to broker were as follows:
Value of Securities on Loan Collateral Received
| Values of Securities |
Fund Collateral |
|||||||
| Fund | on Loan | Received* | ||||||
| BlueStar Israel Technology ETF | $ | 19,424,874 | $ | 20,117,427 | ||||
* The cash collateral received was invested in the Mount Vernon Liquid Assets Portfolio, an investment with an overnight and continuous maturity, as shown on the Schedule of Investments.
NOTE 8 – FEDERAL INCOME TAXES
The components of distributable earnings (losses) and cost basis of investments for federal income tax purposes at September 30, 2021 were as follows:
| Net | ||||||||||||||||
| Gross | Gross | Unrealized | ||||||||||||||
| Unrealized | Unrealized | Appreciation | ||||||||||||||
| Cost | Appreciation | Depreciation | (Depreciation) | |||||||||||||
| BlueStar Israel Technology ETF | $ | 190,434,738 | $ | 45,823,728 | $ | (18,480,511 | ) | $ | 27,343,217 | |||||||
BlueStar Israel Technology ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| Undistributed | Undistributed | Total | Other | Total | ||||||||||||||||
| Ordinary | Long-Term | Distributable | Accumulated | Accumulated | ||||||||||||||||
| Income | Gain | Earnings | (Loss) | Gain | ||||||||||||||||
| BlueStar Israel | ||||||||||||||||||||
| Technology ETF | $ | — | $ | — | $ | — | $ | (5,717,034 | ) | $ | 21,626,183 | |||||||||
As of September 30, 2021, the Fund had accumulated capital loss carryovers of:
| Capital | Capital | |||||||||||
| Loss | Loss | |||||||||||
| Carryover | Carryover | |||||||||||
| ST | LT | Expires | ||||||||||
| BlueStar Israel Technology ETF | $ | (4,365,558 | ) | $ | (1,351,476 | ) | Indefinite | |||||
Under current tax law, capital and currency losses realized after October 31 of a fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The Fund had deferred post-October capital and currency losses, which will be treated as arising on the first business day of the year ended September 30, 2021.
| Later Year | |||
| Ordinary Loss | Post-October Loss | ||
| BlueStar Israel Technology ETF | None | None |
The tax character of distributions paid by the Fund during the fiscal periods ended March 31, 2022 and September 30, 2021 are as follows:
| Period Ended March 31, 2022 |
Year Ended September 30, 2021 |
||||||||||||
| From | From | From | From | ||||||||||
| Ordinary | Capital | Ordinary | Capital | ||||||||||
| Income | Gains | Income | Gains | ||||||||||
| BlueStar Israel Technology ETF | $ | — | $ | — | $ | 993,321 | $ | 117,179 | |||||
NOTE 9 – LEGAL MATTERS
The Adviser and its parent, ETFMG, were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled[.]”
ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.
BlueStar Israel Technology ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (together with the Adviser, the “Adviser Defendants”) have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C-152-21 (the “NJ Action”). The NJ Action asserts breach of contract, defamation and other tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action. The NJ Action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022, the Adviser, together with the other named affiliates, filed a motion for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied.
NOTE 10 – SUBSEQUENT EVENTS
In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed below, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the Financial Statements.
With respect to Note 9 – Legal Matters, on May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust as well as, all claims asserted against the Adviser Defendants, aside from the defamation claim. The Adviser Defendants intend to vigorously defend themselves against this sole remaining claim.
BlueStar Israel Technology ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on March 28-29, 2022, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the renewal of the Amended and Restated Investment Advisory Agreement (the “Advisory Agreement”) between ETF Managers Group LLC (the “Adviser”) and the Trust, on behalf of BlueStar Israel Technology ETF (the “Fund”).
Pursuant to Section 15(c) of the 1940 Act, the Board must annually review and approve the Advisory Agreement after its initial two-year term: (i) by the vote of the Trustees or by a vote of the shareholders of the Fund; and (ii) by the vote of a majority of the Trustees who are not parties to the Advisory Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. Each year, the Board calls and holds a meeting to decide whether to renew the Advisory Agreement for an additional one-year term. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services provided to the Fund by the Adviser; (ii) the investment performance of the Fund; (iii) the Adviser’s costs and profits realized in providing services to the Fund, including any fall-out benefits enjoyed by the Adviser; (iv) comparative fee and expense data for the Fund in relation to other similar investment companies; (v) the extent to which economies of scale would be realized as the Fund grows and whether the advisory fees for the Fund reflects these economies of scale for the benefit of the Fund; and (vi) other financial benefits to the Adviser and its affiliates resulting from services rendered to the Fund. The Board’s review included written and oral information furnished to the Board prior to and at the meeting held on March 28-29, 2022, and throughout the year. Among other things, the Adviser provided responses to a detailed series of questions, which included information about the Adviser’s operations, service offerings, personnel, risk assessment process and compliance program and financial condition. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentations and any other information that the Board received at the meeting, and deliberated on the renewal of the Advisory Agreement in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the renewal of the Advisory Agreement, and the weight to be given to each such factor. The conclusions reached with respect to the Advisory Agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to the Fund. The Independent Trustees conferred amongst themselves and independent legal counsel during an executive session held prior to the meeting and also conferred in executive sessions both with and without representatives of management before and during the meeting. The Independent Trustees requested, received and considered additional information arising out of these executive sessions.
Nature, Extent and Quality of Services Provided by the Adviser
The Trustees considered the scope of services provided under the Advisory Agreement, noting that the Adviser provides investment management services to the Fund. The Board discussed the responsibilities of the Adviser, including: responsibility for the general management of the day-to-day investment and reinvestment of the assets of the Fund; determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis; responsibility for daily monitoring of tracking error and quarterly reporting to the Board; and implementation of Board directives as they relate to the Fund. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel and the quality of the Adviser’s compliance and risk assessment infrastructure. The Board also considered the Adviser’s experience managing exchange-traded funds (“ETFs”), as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
BlueStar Israel Technology ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board also considered other services provided to the Fund, such as overseeing the Fund’s service providers, monitoring adherence to the Fund’s investment restrictions, and monitoring compliance with various policies and procedures and with applicable securities laws.
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Fund by the Adviser.
Historical Performance
The Board then considered the performance of the Fund over various time periods ending December 31, 2021, including the one-year, three-year, five-year and since inception periods. The Board also considered the Fund’s performance as compared to that of comparable ETFs, as determined by the Adviser (“peer group”) using data received from an independent third party. The Board additionally reviewed the performance of the Fund’s underlying index for various time periods. The Board noted management’s explanation that analysis of investment performance, in absolute terms, is less relevant for the Fund than it is for actively managed funds, given the Fund’s index-based investment objectives. The Board also noted management’s further explanation that it is more relevant to review the performance of the Fund by focusing on the extent to which the Fund tracked its underlying index. The Board reviewed information regarding the Fund’s index tracking, discussing, as applicable, factors which contributed to the Fund’s tracking error. The Board noted that the Fund had underperformed its underlying index over certain periods, but that such underperformance was, at least in part, a result of costs incurred by the Fund not incurred by its underlying index. The Board considered other factors that contributed to the Fund’s tracking error, including cash drag and the process of rebalancing the Fund’s portfolio. The Board noted management’s representations that the Fund’s performance in tracking its underlying index was within the range of expectations. The Board concluded that, after taking these factors into account, the Fund satisfactorily tracked its underlying index. The Board further noted that it had received and would continue to receive regular reports regarding the Fund’s performance, including with respect to its tracking error, at its quarterly meetings.
Cost of Services Provided, Profits and Economies of Scale
The Board reviewed the advisory fee for the Fund and compared it to the total operating expenses of comparable ETFs, as determined by the Adviser using data received from an independent third party. Among other information, the Board noted that the advisory fee for the Fund was higher than the average and median expense ratios for its peer group. The Trustees also considered the total expense ratios of other ETFs that they considered to be comparable, based on the investment objectives and strategies of the ETFs. The Board took into consideration management’s discussion of the fees, including the research involved in the construction of the underlying index.
The Board noted the importance of the fact that the advisory fee for the Fund is a “unified fee,” meaning that the shareholders of the Fund pay no expenses other than the advisory fee and certain other costs such as interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, non-standard Board-related expenses and litigation against the Board, Trustees, Fund, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses. The Board also noted that the Adviser was responsible for compensating the Trust’s other service providers and paying the Fund’s other expenses (except as noted above) out of its own fees and resources. The Board concluded that the advisory fee for the Fund is reasonable in light of the factors considered.
BlueStar Israel Technology ETF
APPROVAL OF ADVISORY AGREEMENT AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board also evaluated the compensation and other benefits received by the Adviser from its relationship with the Fund, taking into account profitability information provided by the Adviser. The Board received and reviewed profitability information with respect to the Fund and considered how profit margins could affect the Adviser’s long-term viability and ability to attract and retain high-quality personnel. The Board also considered the impact on the Adviser’s profitability of payments made to partners involved with the Fund. Based on the information provided to the Trustees, the Trustees concluded that the net revenue retained by the Adviser from providing services to the Fund was not excessive in view of the nature, extent and quality of services provided to the Fund. The Board further considered other benefits derived by the Adviser and its affiliates from the Adviser’s relationship with the Fund.
In addition, the Board considered whether economies of scale may be realized for the Fund. The Board noted that the Adviser regularly considers whether fee reductions are appropriate as the Fund grows in size. The Board noted that a unitary fee provides a level of certainty in expenses for the Fund and effectively acts as a cap on the fees and expenses (except as noted above) that are borne by the Fund. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the continued provision of high-quality services to the Funds, such as the hiring of new trading, legal and compliance personnel, and enhancements to technology and related systems. The Board concluded that no changes to the advisory fee structure of the Fund were necessary.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision.
Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Advisory Agreement are fair and reasonable; (b) concluded that the Adviser’s fees are reasonable in light of the services that the Adviser provides to the Fund; and (c) approved the renewal of the Advisory Agreement for another year.
BlueStar Israel Technology ETF
Period Ended March 31, 2022 (Unaudited)
As a shareholder of BlueStar Israel Technology ETF (the “Fund”) you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 1, 2021 to March 31, 2022).
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then, multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
BlueStar Israel Technology ETF
| Annualized | |||||||||||||
| Expense | |||||||||||||
| Ratio | |||||||||||||
| During | |||||||||||||
| Beginning | Ending | Expenses | Period | ||||||||||
| Account | Account | Paid | October 1, | ||||||||||
| Value | Value | During | 2021 to | ||||||||||
| October 1, | March 31, | the | March 31, | ||||||||||
| 2021 | 2022 | Period^ | 2022 | ||||||||||
| Actual | $ | 1,000.00 | $ | 847.30 | $ | 3.45 | 0.75 | % | |||||
| Hypothetical (5% annual) | $ | 1,000.00 | $ | 1,021.19 | $ | 3.78 | 0.75 | % | |||||
^ The dollar amounts shown as expenses paid during the period are equal to the annualized six-month expense ratio multiplied by the average account value during the period, multiplied by 182/365 (to reflect the period from October 1, 2021 to March 31, 2022).
BlueStar Israel Technology ETF
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
Period Ended March 31, 2022 (Unaudited)
ETF Managers Trust (the “Trust”) has adopted a liquidity risk management program (the “Program”). The Trust’s Board of Trustees (the “Board”) has designated ETF Managers Group LLC (the “Program Administrator”) as the administrator of the Program. The Program Administrator has designated a committee (the “Committee”), composed of personnel from multiple departments, including investment operations and compliance, that is responsible for the implementation and ongoing administration of the Program, which includes assessing the liquidity risk of the BlueStar Israel Technology ETF (the “Fund”) under both normal and reasonably foreseeable stressed conditions.
Under the Program, the Program Administrator assesses, manages and periodically reviews the Fund’s liquidity risk, based on factors specific to the circumstances of the Fund. Liquidity risk is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of the Fund’s investments and limiting the amount of the Fund’s illiquid investments, among other means. The Program Administrator’s process of determining the degree of liquidity of the Fund’s investments is supported by one or more third-party liquidity assessment vendors.
At a meeting of the Board on March 28-29, 2022, the Adviser provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, the operation of any Highly Liquid Investment Minimum, where applicable, and any material changes to the Program, for the period from March 1, 2021 through March 1, 2022 (the “Reporting Period”). No significant liquidity events impacting the Fund were noted in the report and it was represented that, as of December 31, 2021, the Fund was primarily highly liquid and, during the Reporting Period, the Fund held less than 15% in illiquid securities. In addition, the Program Administrator provided its assessment that Program implementation was effective and that the Program operated adequately and effectively to enable the Program Administrator to oversee and manage liquidity risk and ensure the Fund is able to meet requests to redeem shares without significant dilution to the remaining investors’ interest in the Fund.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
BlueStar Israel Technology ETF
March 31, 2022 (Unaudited)
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of the Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.etfmgfunds.com.
NOTE 2 – FEDERAL TAX INFORMATION
Qualified Dividend Income/Dividends Received Deduction
For the fiscal year ended September 30, 2021, certain dividends paid by the Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
| Fund Name | Qualified Dividend Income |
| Bluestar Israel Technology ETF | 41.70% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September 30, 2021 was as follows:
| Fund Name | Dividends Received Deduction |
| Bluestar Israel Technology ETF | 12.20% |
Short Term Capital Gain
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871 (k)(2)(C) for the Fund were as follows:
| Fund Name | Short-Term Capital Gain |
| Bluestar Israel Technology ETF | 0.00% |
Pursuant to Section 853 of the Internal Revenue Code, the Fund designated the following amounts as foreign taxes paid for the year ended September 30, 2021. Foreign taxes paid for purposes of Section 853 may be less than actual foreign taxes paid for financial statement purposes.
| Per Share | |||||||||||
| Gross | Gross | ||||||||||
| Foreign | Foreign | Foreign | Foreign | Shares | |||||||
| Source | Taxes | Source | Taxes | Outstanding | |||||||
| Fund | Income | Passthrough | Income | Passthrough | at 9/30/21 | ||||||
| BlueStar Israel Technology ETF | 905,107 | 128,882 | 0.31210579 | 0.04444216 | 2,900,000 | ||||||
Foreign taxes paid or withheld should be included to taxable income with an offsetting deduction from gross income or as a credit for taxes paid to foreign governments.
Above figures may differ from those cited elsewhere in this report due to difference in the calculation of income and gains under GAAP purposes and Internal Revenue Service purposes.
BlueStar Israel Technology ETF
SUPPLEMENTARY INFORMATION
March 31, 2022 (Unaudited) (Continued)
NOTE 3 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund files a complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Part F of Form N-PORT. Once filed, the Fund’s Part F of Form N-PORT is available without charge, upon request on the SEC’s website (www.sec.gov), the Fund’s website (www.iteqetf.com) and is available by calling (877) 756-7873. The Fund’s portfolio holdings are posted on the Fund’s website www.iteqetf.com daily
NOTE 4 – INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477), by accessing the SEC’s website at www.sec.gov, or by accessing the Fund’s website at www.iteqetf.com.
Information regarding how the Fund voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477) or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477) or by visiting www.iteqetf.com. Read the prospectus carefully before investing.
BlueStar Israel Technology ETF
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Interested Trustee and Officers | ||||
| Samuel Masucci, III (1962) | Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) | Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). | 20 | None |
| John A. Flanagan, (1946) | Treasurer (since 2015) | President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). | n/a | n/a |
| Reshma A. Tanczos (1978) | Chief Compliance Officer (since 2016) | Chief Compliance Officer of ETFMG Financial LLC (Since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). | n/a | n/a |
| Matthew J. Bromberg (1973) | Assistant Secretary (since 2020) | General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015-2016). | n/a | n/a |
| * Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. | ||||
BlueStar Israel Technology ETF
Board of Trustees (Continued)
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Terry Loebs (1963) | Trustee (since 2014); Lead Independent Trustee (since 2020) | Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). | 20 | None |
| Eric Wiegel (1960) | Trustee (since 2020) | Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018). | 20 | None |
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services
615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006
Semi-Annual Report
March 31, 2022
(Unaudited)
Wedbush ETFMG Video Game Tech ETF
Wedbush ETFMG Global Cloud Technology ETF
The funds are series of ETF Managers Trust.
Wedbush ETFMG TM ETF
TABLE OF CONTENTS
March 31, 2022 ((Unaudited)
Wedbush ETFMG TM ETF
On behalf of the entire team, we want to express our appreciation for the confidence you have placed in these ETFs. The following information pertains to the fiscal period from October 1, 2021 to March 31, 2022
Performance Overview
During the 6-month period ended March 31, 2022, the S&P 500 Information Technology Sector Index, a broad measure of US listed technology companies, returned 6.94%. During the same period, the S&P Global 1200 Information Technology Sector Index, a broad measure of global technology companies, returned 2.81%. Below is a performance overview for each fund for the same 6-month period.
Wedbush ETFMG Global Cloud Technology ETF (IVES)*
The Wedbush ETFMG Global Cloud Technology ETF (“IVES”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Dan Ives Global Cloud Technology Prime Index (the “Index”).
Over the period, the total return for IVES was -21.63%, while the total return for the Index was -21.35%. The best performers in IVES, on the basis of contribution to return, were Pure Storage Inc - Class A, Citrix Systems Inc, Cloudflare Inc - Class A, Cyrusone Inc and Switch Inc - A. while the worst performers were Sinch Ab, Kingsoft Cloud Holdings-Adr, Elastic Nv, Coupa Software Inc and Chinasoft International Ltd.
At the end of the reporting period, IVES saw an allocation of 96.38% to Information Technology, 2.75% to Real Estate and 0.15% to Communication Services. The portfolio securities of IVES were exposed predominately to the United Sates at 54.45%, 10.56% to Japan and 9.11% to Canada.
Wedbush ETFMG Video Game Tech ETF (GAMR)**
The Wedbush ETFMG Video Game Tech ETF (“GAMR”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the EEFund Video Game Tech Index (the “Index”).
Over the period, the total return for GAMR was -6.62%, while the total return for the Index was -6.36%. The best performers in GAMR, on the basis of contribution to return, were Wemade Co Ltd, Gree Inc, Razer Inc, Nexon Co Ltd and Zynga Inc - Cl A. while the worst performers were Skillz Inc, Stillfront Group Ab, Bilibili Inc-Sponsored Adr, Krafton Inc and Sciplay Corp-Class A.
At the end of the reporting period, GAMR saw an allocation of 74.2% to Communication Services, 19.36% to Information Technology and 5.21% to Consumer Discretionary. The portfolio securities of GAMR were exposed predominately to the United States at 30.94%, 18.28% to Korea and 16.58% to Japan.
You can find further details about IVES* and GAMR** by visiting www.etfmg.com, or by calling 1-844-383-6477.
Sincerely,
Samuel Masucci III
Chairman of the Board
Wedbush ETFMG TM ETF
Wedbush ETFMG Global Cloud Technology ETF
Growth of $10,000 (Unaudited)
| Average Annual Returns | 1 Year | 5 Year | Since Inception |
Value of $10,000 |
||||
| Period Ended March 31, 2022 | Return | Return | (3/8/2016) | (3/31/2022) | ||||
| Wedbush ETFMG Global Cloud Technology ETF (NAV) | -15.60% | 8.33% | 8.93% | $16,795 | ||||
| Wedbush ETFMG Global Cloud Technology ETF (Market) | -15.64% | 8.37% | 8.99% | $16,853 | ||||
| S&P 500 Index | 15.65% | 15.99% | 16.79% | $25,629 | ||||
| Dan Ives Global Cloud Technology Prime Index* | -15.11% | 8.38% | 8.82% | $16,699 |
* On April 7, 2020, the Fund’s investment objective and principal investment strategy were substantially revised; therefore, the performance and average annual total returns shown for periods prior to April 7, 2020 is likely to have differed had the Fund’s current investment strategy been in effect during those periods. The Fund’s prior investment objective sought to provide investment results that corresponded to the performance of the Reality Shares Drone Index. The Fund began tracking the Dan Ives Global Cloud Technology Prime Index on April 7, 2020.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on March 8, 2016, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
Wedbush ETFMG TM ETF
Wedbush ETFMG Global Cloud Technology ETF
Top Ten Holdings as of March 31, 2022 (Unaudited)*
| % of Total | |||
| Security | Investments | ||
| 1 | ETFMG Sit Ultra Short ETF** | 5.30% | |
| 2 | Elastic NV | 3.81% | |
| 3 | Open Text Corp. | 3.39% | |
| 4 | Nice, Ltd. | 3.35% | |
| 5 | GDS Holdings, Ltd. - ADR | 3.22% | |
| 6 | Itochu Techno-Solutions Corp. | 3.21% | |
| 7 | MongoDB, Inc. | 3.11% | |
| 8 | Sinch AB | 2.85% | |
| 9 | SCSK Corp. | 2.80% | |
| 10 | Cloudflare, Inc. - Class A | 2.64% |
Top Ten Holdings 33.68% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
** Affiliated security. Please refer to Note 9 of the Notes to Financial Statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
| Since | Value of | ||||||||
| Average Annual Returns | 1 Year | 5 Year | Inception | $10,000 | |||||
| Period Ended March 31, 2022 | Return | Return | (3/8/2016) | (3/31/2022) | |||||
| Wedbush ETFMG Video Game Tech ETF (NAV) | -18.71% | 19.23% | 21.98% | $ | 33,361 | ||||
| Wedbush ETFMG Video Game Tech ETF (Market) | -19.95% | 18.98% | 21.83% | $ | 33,112 | ||||
| S&P 500 Index | 15.65% | 15.99% | 16.79% | $ | 25,629 | ||||
| EEFund Video Game Tech Index | -18.57% | 19.64% | 22.33% | $ | 33,947 |
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on March 8, 2016, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
Top Ten Holdings as of March 31, 2022 (Unaudited)*
| % of Total | |||
| Security | Investments | ||
| 1 | ETFMG Sit Ultra Short ETF** | 3.83% | |
| 2 | GameStop Corp. - Class A | 2.38% | |
| 3 | Embracer Group AB | 1.99% | |
| 4 | Keyword Studios PLC | 1.97% | |
| 5 | CD Projekt SA | 1.86% | |
| 6 | Skillz, Inc. | 1.85% | |
| 7 | Konami Holdings Corp. | 1.83% | |
| 8 | Gree, Inc. | 1.82% | |
| 9 | Razer, Inc. | 1.81% | |
| 10 | Netmarble Corp. | 1.80% |
Top Ten Holdings 21.14% of Total Investments
* Current Fund holdings may not be indicative of future Fund holdings.
** Affiliated security. Please refer to Note 9 of the Notes to Financial Statements.
Wedbush ETFMG TM ETF
Important Disclosures and Key Risk Factors
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
IVES
The Wedbush ETFMG Global Cloud Technology ETF (the “Fund”) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Dan Ives Global Cloud Technology Prime Index (the “Index”).
Cloud Technology Companies may have limited product lines, markets, financial resources or personnel. These companies typically face intense competition and potentially rapid product obsolescence. In addition, many Cloud Technology Companies store sensitive consumer information and could be the target of cybersecurity attacks and other types of theft, which could have a negative impact on these companies. As a result, Cloud Technology Companies may be adversely impacted by government regulations and may be subject to additional regulatory oversight with regard to privacy concerns and cybersecurity risk. These companies are also heavily dependent on intellectual property rights and may be adversely affected by loss or impairment of those rights. Cloud computing companies could be negatively impacted by disruptions in service caused by hardware or software failure, or by interruptions or delays in service by third-party data center hosting facilities and maintenance providers. Cloud Technology Companies, especially smaller companies, tend to be more volatile than companies that do not rely heavily on technology. Companies in the technology field, including companies in the computers, telecommunications and electronics industries, face intense competition, which may have an adverse effect on profit margins.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
The Fund is distributed by ETFMG Financial LLC, which is not affiliated with Wedbush Securities, Prime Indexes, or Level ETF Ventures.
GAMR
The Wedbush ETFMG Video Game Tech ETF (the “Fund” or the “Video Game Tech ETF”) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the EEFund Video Game Tech Index™ (the “Index”).
Video Game Tech 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. Video Game Tech Companies are also subject to increasing regulatory constraints, particularly with respect to cybersecurity and privacy. Such factors may adversely affect the profitability and value of such companies. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Investments in smaller companies tend to have limited liquidity and greater price volatility than large-capitalization companies. The Fund’s return may not match or achieve a high degree of correlation with the return of the EEFund Video Game Tech Index™. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Index. Diversification does not guarantee a profit, nor does it protect against a loss in a declining market.
The EEFund Video Game Tech™ Index provides a benchmark for investors interested in tracking companies actively involved in the electronic gaming industry including the entertainment, education and simulation segments. The Index uses a market capitalization weighted allocation across the pure play and non-pure play sectors and a set weight for the conglomerate sector as well as an equal weighted allocation methodology for all components within each sector allocation. The index was created and is maintained by EEFund Management. You cannot invest directly in an index.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
The Fund is distributed by ETFMG Financial LLC, which is not affiliated with Wedbush Securities, Prime Indexes, or Level ETF Ventures.
Wedbush ETFMG TM ETF
As of March 31, 2022 (Unaudited)
| Wedbush | ||||||||
| ETFMG Global | Wedbush | |||||||
| Cloud | ETFMG Video | |||||||
| Technology ETF | Game Tech ETF | |||||||
| As a percent of Net Assets: | ||||||||
| Australia | 4.1 | % | — | % | ||||
| Canada | 5.2 | 0.3 | ||||||
| Cayman Islands | 9.1 | 10.6 | ||||||
| France | — | 2.8 | ||||||
| Germany | 1.7 | 0.4 | ||||||
| Israel | 4.7 | 0.4 | ||||||
| Italy | 0.6 | 0.3 | ||||||
| Japan | 10.6 | 16.4 | ||||||
| Malta | — | 0.3 | ||||||
| Netherlands | 4.8 | — | ||||||
| Norway | — | 0.6 | ||||||
| Poland | — | 2.5 | ||||||
| Republic of Korea | 0.2 | 18.2 | ||||||
| Singapore | 2.7 | — | ||||||
| Sweden | 3.6 | 8.1 | ||||||
| Switzerland | — | 0.4 | ||||||
| Taiwan, Province of China | — | 6.4 | ||||||
| United Kingdom | 2.2 | 2.9 | ||||||
| United States | 49.7 | 29.0 | ||||||
| Exchange Traded Funds | 6.7 | 4.4 | ||||||
| Short-Term and other Net Assets (Liabilities) | (5.9 | ) | (4.0 | ) | ||||
| 100.0 | % | 100.0 | % | |||||
Wedbush ETFMG TM ETF
Wedbush ETFMG Global Cloud Technology ETF
Schedule of Investments
| Shares | Value | |||||||
| COMMON STOCKS - 99.2% | ||||||||
| Australia - 4.1% | ||||||||
| IT Services - 4.1% (d) | ||||||||
| Data#3, Ltd. | 36,948 | $ | 163,125 | |||||
| Megaport, Ltd. (a) | 37,564 | 390,999 | ||||||
| NEXTDC, Ltd. (a) | 109,149 | 952,346 | ||||||
| Total IT Services | 1,506,470 | |||||||
| Canada - 5.2% | ||||||||
| Electronic Equipment, Instruments & Components – 0.9% | ||||||||
| Softchoice Corp. | 14,317 | 323,640 | ||||||
| Software - 4.3% (d) | ||||||||
| Open Text Corp. | 36,985 | 1,568,272 | ||||||
| Total Canada | 1,891,912 | |||||||
| Cayman Islands - 9.1% | ||||||||
| IT Services - 8.9% (d) | ||||||||
| Chinasoft International, Ltd. | 741,708 | 614,516 | ||||||
| Chindata Group Holdings, Ltd. - ADR (a) | 87,577 | 553,487 | ||||||
| GDS Holdings, Ltd. - ADR (a)(b) | 37,960 | 1,489,931 | ||||||
| Kingsoft Cloud Holdings, Ltd. - ADR (a)(b) | 57,949 | 351,750 | ||||||
| Vnet Group, Inc. - ADR (a)(b) | 40,095 | 233,754 | ||||||
| Total IT Services | 3,243,438 | |||||||
| Software - 0.2% (d) | ||||||||
| Cloopen Group Holding, Ltd. - ADR (a)(b) | 39,414 | 67,792 | ||||||
| Total Cayman Islands | 3,311,230 | |||||||
| Germany - 1.7% | ||||||||
| Software - 1.7% (d) | ||||||||
| Software AG | 17,838 | 616,077 | ||||||
| Israel - 4.7% | ||||||||
| Software - 4.7% (d) | ||||||||
| Jfrog, Ltd. (a) | 6,345 | 170,998 | ||||||
| Nice, Ltd. (a) | 7,066 | 1,551,991 | ||||||
| Total Software | 1,722,989 | |||||||
| Italy - 0.6% | ||||||||
| Software - 0.6% (d) | ||||||||
| Digital Value SpA (a) | 2,403 | 233,933 | ||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Global Cloud Technology ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Japan - 10.6% | ||||||||
| IT Services - 10.2% (d) | ||||||||
| Hennge KK (a) | 7,801 | $ | 61,003 | |||||
| Itochu Techno-Solutions Corp. | 57,616 | 1,486,071 | ||||||
| NS Solutions Corp. | 21,966 | 663,996 | ||||||
| SCSK Corp. | 75,031 | 1,294,892 | ||||||
| TechMatrix Corp. | 10,687 | 187,685 | ||||||
| Total IT Services | 3,693,647 | |||||||
| Software - 0.4% (d) | ||||||||
| Cybozu, Inc. | 12,665 | 145,126 | ||||||
| Total Japan | 3,838,773 | |||||||
| Netherlands - 4.8% | ||||||||
| Software - 4.8% (d) | ||||||||
| Elastic NV (a) | 19,801 | 1,761,298 | ||||||
| Republic of Korea - 0.2% | ||||||||
| Diversified Telecommunication Services - 0.2% | ||||||||
| KINX, Inc. | 1,172 | 53,183 | ||||||
| Singapore - 2.7% | ||||||||
| Real Estate Investment Trusts (REITs) - 2.7% | ||||||||
| Digital Core REIT Management Pte, Ltd. (a) | 264,700 | 293,817 | ||||||
| Keppel DC REIT | 418,492 | 703,997 | ||||||
| Total Real Estate Investment Trusts (REITs) | 997,814 | |||||||
| Sweden - 3.6% | ||||||||
| Software - 3.6% (d) | ||||||||
| Sinch AB (a) | 192,456 | 1,319,420 | ||||||
| United Kingdom - 2.2% | ||||||||
| Software - 2.2% (d) | ||||||||
| Bytes Technology Group PLC | 57,694 | 377,280 | ||||||
| Micro Focus International PLC | 80,560 | 428,283 | ||||||
| Total Software | 805,563 | |||||||
| United States - 49.7% | ||||||||
| Communications Equipment - 0.1% | ||||||||
| Inseego Corp. (a)(b) | 6,866 | 27,807 | ||||||
| IT Services - 12.1% (d) | ||||||||
| Backblaze, Inc. - Class A (a) | 1,974 | 21,063 | ||||||
| Cloudflare, Inc. - Class A (a)(b) | 10,204 | 1,221,419 | ||||||
| DigitalOcean Holdings, Inc. (a)(b) | 7,011 | 405,586 | ||||||
| Fastly, Inc. - Class A (a)(b) | 7,838 | 136,224 | ||||||
| Grid Dynamics Holdings, Inc. (a) | 4,251 | 59,854 | ||||||
| Kyndryl Holdings, Inc. (a) | 14,603 | 191,591 | ||||||
| Limelight Networks, Inc. (a)(b) | 8,803 | 45,952 | ||||||
| MongoDB, Inc. (a)(b) | 3,243 | 1,438,562 | ||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Global Cloud Technology ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Rackspace Technology, Inc. (a)(b) | 13,684 | $ | 152,713 | |||||
| SolarWinds Corp. (b) | 10,455 | 139,156 | ||||||
| Switch, Inc. - Class A | 15,909 | 490,315 | ||||||
| Unisys Corp. (a) | 4,380 | 94,652 | ||||||
| Total IT Services | 4,397,087 | |||||||
| Software - 32.3% (d) | ||||||||
| 8x8, Inc. (a)(b) | 7,710 | 97,069 | ||||||
| Alteryx, Inc. - Class A (a)(b) | 4,407 | 315,233 | ||||||
| Anaplan, Inc. (a) | 9,524 | 619,536 | ||||||
| Appfolio, Inc. - Class A (a) | 2,270 | 256,987 | ||||||
| Appian Corp. (a) | 4,706 | 286,219 | ||||||
| Blackbaud, Inc. (a)(b) | 3,386 | 202,720 | ||||||
| Box, Inc. - Class A (a) | 9,662 | 280,778 | ||||||
| Citrix Systems, Inc. | 8,180 | 825,362 | ||||||
| CommVault Systems, Inc. (a)(b) | 2,903 | 192,614 | ||||||
| Coupa Software, Inc. (a)(b) | 4,866 | 494,532 | ||||||
| Datadog, Inc. - Class A (a) | 7,148 | 1,082,708 | ||||||
| Datto Holding Corp. (a)(b) | 10,685 | 285,503 | ||||||
| Domo, Inc. - Class B (a) | 2,125 | 107,461 | ||||||
| Dropbox, Inc. - Class A (a) | 24,866 | 578,135 | ||||||
| Everbridge, Inc. (a)(b) | 2,569 | 112,111 | ||||||
| Gitlab, Inc. - Class A (a)(b) | 9,434 | 513,681 | ||||||
| HashiCorp., Inc. - Class A (a) | 11,655 | 629,370 | ||||||
| Informatica, Inc. - Class A (a)(b) | 17,833 | 352,023 | ||||||
| Intapp, Inc. (a) | 4,002 | 96,088 | ||||||
| Jamf Holding Corp. (a)(b) | 7,791 | 271,205 | ||||||
| MicroStrategy, Inc. - Class A (a)(b) | 735 | 357,445 | ||||||
| N-able, Inc. (a)(b) | 11,661 | 106,115 | ||||||
| nCino, Inc. (a)(b) | 7,135 | 292,392 | ||||||
| New Relic, Inc. (a)(b) | 4,312 | 288,387 | ||||||
| Nutanix, Inc. - Class A (a) | 14,134 | 379,074 | ||||||
| PagerDuty, Inc. (a) | 5,602 | 191,532 | ||||||
| Samsara, Inc. - Class A (a)(b) | 32,600 | 522,252 | ||||||
| Smartsheet, Inc. - Class A (a) | 8,207 | 449,579 | ||||||
| Sumo Logic, Inc. (a)(b) | 7,298 | 85,168 | ||||||
| Teradata Corp. (a) | 6,913 | 340,742 | ||||||
| Zendesk, Inc. (a) | 7,940 | 955,103 | ||||||
| Zeta Global Holdings Corp. - Class A (a)(b) | 12,979 | 165,482 | ||||||
| Total Software | 11,732,606 | |||||||
| Technology Hardware, Storage & Peripherals - 5.2% | ||||||||
| NetApp, Inc. (b) | 13,140 | 1,090,620 | ||||||
| Pure Storage, Inc. - Class A (a) | 18,891 | 667,041 | ||||||
| Super Micro Computer, Inc. (a) | 3,360 | 127,915 | ||||||
| Total Technology Hardware, Storage & Peripherals | 1,885,576 | |||||||
| Total United States | 18,043,076 | |||||||
| TOTAL COMMON STOCKS (Cost $35,406,362) | 36,101,738 | |||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Global Cloud Technology ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| INVESTMENTS PURCHASED WITH PROCEEDS FROM | ||||||||
| SECURITIES LENDING COLLATERAL - 26.9% | ||||||||
| ETFMG Sit Ultra Short ETF (e) | 50,000 | $ | 2,453,230 | |||||
| Mount Vernon Liquid Assets Portfolio, LLC, 0.41% (c) | 7,324,007 | 7,324,007 | ||||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $9,811,957) | 9,777,237 | |||||||
| SHORT-TERM INVESTMENTS - 1.1% | ||||||||
| Money Market Funds - 1.1% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 402,007 | 402,007 | ||||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $402,007) | 402,007 | |||||||
| Total Investments (Cost $45,620,326) - 127.2% | 46,280,982 | |||||||
| Liabilities in Excess of Other Assets - (27.2)% | (9,900,535 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 36,380,447 | ||||||
Percentages are stated as a percent of net assets.
| ADR | American Depositary Receipt |
| PLC | Public Limited Company |
| (a) | Non-income producing security. |
| (b) | All or a portion of this security was out on loan at March 31, 2022. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
| (d) | As of March 31, 2022, the Fund had a significant portion of its assets invested in the Software & IT Services Industries. |
| (e) | Affiliated security. Please refer to Note 9 of the Notes to Financial Statements. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited)
| Shares | Value | |||||||
| COMMON STOCKS - 99.6% | ||||||||
| Canada - 0.3% | ||||||||
| Interactive Media & Services - 0.3% | ||||||||
| Enthusiast Gaming Holdings, Inc. (a) | 99,410 | $ | 240,146 | |||||
| Cayman Islands - 10.6% | ||||||||
| Electronic Equipment, Instruments & Components -0.4% | ||||||||
| VSTECS Holdings, Ltd. | 336,881 | 317,386 | ||||||
| Entertainment - 6.7% (d) | ||||||||
| Archosaur Games, Inc. (f) | 257,646 | 267,076 | ||||||
| Bilibili, Inc. - ADR (a)(b) | 58,516 | 1,496,839 | ||||||
| CMGE Technology Group, Ltd. | 743,597 | 216,435 | ||||||
| DouYu International Holdings, Ltd. - ADR (a) | 134,337 | 279,421 | ||||||
| HUYA, Inc. - ADR (a)(b) | 73,234 | 327,356 | ||||||
| iDreamSky Technology Holdings, Ltd. (a)(f) | 393,504 | 225,554 | ||||||
| IGG, Inc. | 463,306 | 221,205 | ||||||
| Kingsoft Corp., Ltd. | 109,829 | 356,128 | ||||||
| NetDragon Websoft Holdings, Ltd. | 429,597 | 899,415 | ||||||
| NetEase, Inc. - ADR | 6,149 | 551,504 | ||||||
| Sea, Ltd. - ADR (a) | 3,141 | 376,260 | ||||||
| XD, Inc. (a) | 116,960 | 362,826 | ||||||
| Total Entertainment | 5,580,019 | |||||||
| Interactive Media & Services - 1.5% | ||||||||
| Hello Group, Inc. - ADR | 40,571 | 234,500 | ||||||
| JOYY, Inc. - ADR (b) | 7,883 | 289,543 | ||||||
| Sohu.com, Ltd. - ADR (a)(b) | 15,155 | 254,907 | ||||||
| Tencent Holdings, Ltd. | 9,931 | 474,408 | ||||||
| Total Interactive Media & Services | 1,253,358 | |||||||
| Technology Hardware, Storage & Peripherals - 2.0% | ||||||||
| Razer, Inc. (a)(f) | 5,338,606 | 1,744,708 | ||||||
| Total Cayman Islands | 8,895,471 | |||||||
| France - 2.8% | ||||||||
| Entertainment - 2.1% (d) | ||||||||
| Focus Home Interactive SA (a) | 5,759 | 263,119 | ||||||
| Ubisoft Entertainment SA (a) | 33,288 | 1,471,161 | ||||||
| Total Entertainment | 1,734,280 | |||||||
| Media - 0.7% | ||||||||
| Vivendi SE | 43,577 | 570,774 | ||||||
| Total France | 2,305,054 | |||||||
| Germany - 0.4% | ||||||||
| Health Care Equipment & Supplies - 0.4% | ||||||||
| Carl Zeiss Meditec AG | 2,237 | 363,656 | ||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Israel - 0.4% | ||||||||
| Software - 0.4% | ||||||||
| ironSource, Ltd. - Class A (a) | 65,966 | $ | 316,637 | |||||
| Italy - 0.3% | ||||||||
| Entertainment - 0.3% (d) | ||||||||
| Digital Bros SpA | 10,202 | 291,631 | ||||||
| Japan - 16.4% | ||||||||
| Entertainment - 11.9% (d) | ||||||||
| Akatsuki, Inc. | 10,899 | 260,165 | ||||||
| Capcom Co., Ltd. | 67,684 | 1,650,124 | ||||||
| COLOPL, Inc. | 48,152 | 251,954 | ||||||
| DeNa Co., Ltd. | 22,296 | 340,649 | ||||||
| GungHo Online Entertainment, Inc. | 15,977 | 341,746 | ||||||
| Koei Tecmo Holdings Co., Ltd. | 10,078 | 332,374 | ||||||
| Konami Holdings Corp. | 27,560 | 1,754,477 | ||||||
| Marvelous, Inc. | 42,928 | 254,592 | ||||||
| Nexon Co., Ltd. | 69,617 | 1,676,664 | ||||||
| Nintendo Co., Ltd. | 3,163 | 1,602,285 | ||||||
| Square Enix Holdings Co., Ltd. | 34,001 | 1,516,555 | ||||||
| Total Entertainment | 9,981,585 | |||||||
| Household Durables - 0.6% | ||||||||
| Sony Group Corp. - ADR (a) | 5,227 | 536,865 | ||||||
| Interactive Media & Services - 2.4% | ||||||||
| Gree, Inc. | 196,120 | 1,751,128 | ||||||
| Mixi, Inc. | 17,905 | 324,008 | ||||||
| Total Interactive Media & Services | 2,075,136 | |||||||
| Leisure Products - 1.1% | ||||||||
| Bandai Namco Holdings, Inc. | 4,516 | 344,691 | ||||||
| Furyu Corp. | 29,967 | 272,248 | ||||||
| Sega Sammy Holdings, Inc. | 19,573 | 339,722 | ||||||
| Total Leisure Products | 956,661 | |||||||
| Media - 0.4% | ||||||||
| CyberAgent, Inc. | 27,831 | 348,859 | ||||||
| Total Japan | 13,899,106 | |||||||
| Malta - 0.3% | ||||||||
| Entertainment - 0.3% (d) | ||||||||
| Media & Games Invest SE (a)(b) | 69,621 | 258,783 | ||||||
| Norway - 0.6% | ||||||||
| Semiconductors & Semiconductor Equipment - 0.6% | ||||||||
| Nordic Semiconductor ASA (a) | 20,140 | 519,751 | ||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Poland - 2.5% | ||||||||
| Entertainment - 2.5% (d) | ||||||||
| CD Projekt SA | 43,278 | $ | 1,789,520 | |||||
| TEN Square Games SA | 5,524 | 257,942 | ||||||
| Total Entertainment | 2,047,462 | |||||||
| Republic of Korea - 18.2% | ||||||||
| Entertainment - 17.5% (d) | ||||||||
| Com2uS Corp. | 16,935 | 1,549,517 | ||||||
| Com2uS Holdings Corp. (a) | 2,303 | 237,131 | ||||||
| Gravity Co., Ltd. - ADR (a) | 5,606 | 283,776 | ||||||
| JoyCity Corp. (a) | 35,048 | 232,198 | ||||||
| Kakao Games Corp. (a) | 25,964 | 1,677,308 | ||||||
| Krafton, Inc. (a) | 6,576 | 1,494,730 | ||||||
| Nat Games Co., Ltd. (a) | 14,096 | 292,492 | ||||||
| NCSoft Corp. | 4,272 | 1,647,754 | ||||||
| Neowiz (a) | 12,391 | 254,557 | ||||||
| Netmarble Corp. (f) | 18,783 | 1,727,903 | ||||||
| NHN Corp. (a) | 52,836 | 1,606,375 | ||||||
| Pearl Abyss Corp. (a) | 19,319 | 1,585,942 | ||||||
| Webzen, Inc. (a) | 13,394 | 271,847 | ||||||
| WeMade Entertainment Co., Ltd. | 18,074 | 1,543,384 | ||||||
| Wysiwyg Studios Co., Ltd. (a) | 10,716 | 337,293 | ||||||
| Total Entertainment | 14,742,207 | |||||||
| Hotels, Restaurants & Leisure - 0.3% | ||||||||
| DoubleUGames Co., Ltd. | 6,354 | 270,506 | ||||||
| Interactive Media & Services - 0.4% | ||||||||
| AfreecaTV Co., Ltd. | 2,764 | 337,504 | ||||||
| Total Republic of Korea | 15,350,217 | |||||||
| Sweden - 8.1% | ||||||||
| Electronic Equipment, Instruments & Components - 0.3% | ||||||||
| Thunderful Group AB (a) | 60,058 | 268,915 | ||||||
| Entertainment - 6.5% (d) | ||||||||
| Embracer Group AB (a) | 227,107 | 1,917,356 | ||||||
| Enad Global 7 AB (a)(b) | 93,257 | 212,750 | ||||||
| Modern Times Group MTG - Class B (a) | 28,855 | 422,587 | ||||||
| Paradox Interactive AB | 61,206 | 1,169,778 | ||||||
| Stillfront Group AB (a) | 564,853 | 1,608,819 | ||||||
| Total Entertainment | 5,331,290 | |||||||
| Hotels, Restaurants & Leisure - 0.4% | ||||||||
| LeoVegas AB (f) | 83,063 | 334,817 | ||||||
| Media - 0.5% | ||||||||
| Nordic Entertainment Group AB - Class B (a) | 10,519 | 428,708 | ||||||
| Technology Hardware, Storage & Peripherals - 0.4% | ||||||||
| Tobii AB (a) | 91,650 | 305,682 | ||||||
| Total Sweden | 6,669,412 | |||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Switzerland - 0.4% | ||||||||
| Technology Hardware, Storage & Peripherals - 0.4% | ||||||||
| Logitech International SA (b) | 4,574 | $ | 337,470 | |||||
| Taiwan, Province of China - 6.4% | ||||||||
| Entertainment - 2.6% (d) | ||||||||
| Gamania Digital Entertainment Co., Ltd. | 117,863 | 281,375 | ||||||
| International Games System Co., Ltd. | 63,941 | 1,709,467 | ||||||
| Soft-World International Corp. | 78,616 | 250,515 | ||||||
| Total Entertainment | 2,241,357 | |||||||
| Technology Hardware, Storage & Peripherals - 3.8% | ||||||||
| Acer, Inc. | 515,331 | 538,686 | ||||||
| ASROCK, Inc. | 40,534 | 304,166 | ||||||
| Asustek Computer, Inc. | 39,328 | 512,679 | ||||||
| HTC Corp. (a) | 228,511 | 472,152 | ||||||
| Micro-Star International Co., Ltd. | 290,789 | 1,319,392 | ||||||
| Total Technology Hardware, Storage & Peripherals | 3,147,075 | |||||||
| Total Taiwan, Province of China | 5,388,432 | |||||||
| United Kingdom - 2.9% | ||||||||
| Entertainment - 0.6% (d) | ||||||||
| Frontier Developments PLC (a) | 16,023 | 262,686 | ||||||
| Team17 Group PLC (a) | 41,295 | 289,679 | ||||||
| Total Entertainment | 552,365 | |||||||
| IT Services - 2.3% | ||||||||
| Keywords Studios PLC | 55,008 | 1,893,239 | ||||||
| Total United Kingdom | 2,445,604 | |||||||
| United States - 29.0% | ||||||||
| Entertainment - 15.7% (d) | ||||||||
| Activision Blizzard, Inc. | 19,946 | 1,597,874 | ||||||
| Electronic Arts, Inc. (b) | 12,716 | 1,608,701 | ||||||
| Playtika Holding Corp. (a) | 87,632 | 1,693,927 | ||||||
| ROBLOX Corp. - Class A (a)(b) | 34,732 | 1,606,008 | ||||||
| Sciplay Corp. - Class A (a) | 125,624 | 1,623,062 | ||||||
| Skillz, Inc. (a)(b) | 593,225 | 1,779,675 | ||||||
| Take-Two Interactive Software, Inc. (a)(b) | 10,275 | 1,579,679 | ||||||
| Zynga, Inc. - Class A (a) | 177,854 | 1,643,371 | ||||||
| Total Entertainment | 13,132,297 | |||||||
| Interactive Media & Services - 1.4% | ||||||||
| Alphabet, Inc. - Class C (a)(b) | 199 | 555,805 | ||||||
| Meta Platforms, Inc. - Class A (a) | 2,524 | 561,237 | ||||||
| Total Interactive Media & Services | 1,117,042 | |||||||
| Real Estate Management & Development - 0.3% | ||||||||
| eXp World Holdings, Inc. | 13,821 | 292,591 | ||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| Semiconductors & Semiconductor Equipment - 2.6% | ||||||||
| Advanced Micro Devices, Inc. (a) | 4,752 | $ | 519,584 | |||||
| Intel Corp. | 11,102 | 550,215 | ||||||
| NVIDIA Corp. | 2,244 | 612,297 | ||||||
| Qualcomm, Inc. | 3,218 | 491,775 | ||||||
| Total Semiconductors & Semiconductor Equipment | 2,173,871 | |||||||
| Software - 3.4% | ||||||||
| AppLovin Corp. - Class A (a) | 6,269 | 345,234 | ||||||
| Microsoft Corp. | 1,798 | 554,341 | ||||||
| PTC, Inc. (a)(b) | 3,171 | 341,580 | ||||||
| Unity Software, Inc. (a) | 16,662 | 1,653,037 | ||||||
| Total Software | 2,894,192 | |||||||
| Specialty Retail - 2.8% | ||||||||
| GameStop Corp. - Class A (a)(b) | 13,728 | 2,286,811 | ||||||
| Technology Hardware, Storage & Peripherals - 2.8% | ||||||||
| Apple, Inc. (b) | 3,201 | 558,927 | ||||||
| Corsair Gaming, Inc. (a)(b) | 69,618 | 1,473,117 | ||||||
| Turtle Beach Corp. (a) | 13,440 | 286,138 | ||||||
| Total Technology Hardware, Storage & Peripherals | 2,318,182 | |||||||
| Total United States | 24,214,986 | |||||||
| Virgin Islands (UK) - 0.0% | ||||||||
| Interactive Media & Services - 0.0% | ||||||||
| VK Co., Ltd. - ADR (a)(g) | 21,975 | — | ||||||
| TOTAL COMMON STOCKS (Cost $94,738,400) | 83,543,818 | |||||||
| INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL - 14.7% | ||||||||
| ETFMG Sit Ultra Short ETF (e) | 75,000 | 3,679,845 | ||||||
| Mount Vernon Liquid Assets Portfolio, LLC, 0.41% (c) | 8,697,539 | 8,697,539 | ||||||
| TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM SECURITIES LENDING COLLATERAL (Cost $12,445,387) | 12,377,384 | |||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
Schedule of Investments
March 31, 2022 (Unaudited) (Continued)
| Shares | Value | |||||||
| SHORT-TERM INVESTMENTS - 0.2% | ||||||||
| Money Market Funds - 0.2% | ||||||||
| First American Government Obligations Fund - Class X, 0.18% (c) | 209,476 | $ | 209,476 | |||||
| TOTAL SHORT-TERM INVESTMENTS (Cost $209,476) | 209,476 | |||||||
| Total Investments (Cost $107,393,263) - 114.5% | 96,130,678 | |||||||
| Liabilities in Excess of Other Assets - (14.5)% | (12,206,166 | ) | ||||||
| TOTAL NET ASSETS - 100.0% | $ | 83,924,512 | ||||||
Percentages are stated as a percent of net assets.
| ADR | American Depositary Receipt |
| PLC | Public Limited Company |
| (a) | Non-income producing security. |
| (b) | All or a portion of this security was out on loan at March 31, 2022. |
| (c) | The rate shown is the annualized seven-day yield at period end. |
| (d) | As of March 31, 2022, the Fund had a significant portion of its assets in the Entertainment Industry. |
| (e) | Affiliated security. Please refer to Note 9 of the Notes to Financial Statements. |
| (f) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. This security may be resold in transactions exempt from registration to qualified insitutional investors. At March 31, 2022, the market value of these securities total $4,300,058, which represents 5.1% of total net assets. |
| (g) | Value determined using significant unobservable inputs. The value of this security totals $0, which represents 0.0% of total net assets. Classified as Level 3 in the fair value hierarchy. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
STATEMENTS OF ASSETS AND LIABILITIES
As of March 31, 2022 (Unaudited)
| Wedbush ETFMG Global Cloud Technology ETF |
Wedbush ETFMG Video Game Tech ETF |
|||||||
| ASSETS | ||||||||
| Investments in unaffiliated securities, at value* | $ | 43,827,752 | $ | 92,450,833 | ||||
| Investments in affiliated securities, at value* | 2,453,230 | 3,679,845 | ||||||
| Total Investments in securities, at value | 46,280,982 | 96,130,678 | ||||||
| Receivables: | — | |||||||
| Dividends and interest receivable | 68,162 | 279,563 | ||||||
| Securities lending income receivable | 2,464 | 12,191 | ||||||
| Total Assets | 46,351,608 | 96,422,432 | ||||||
| LIABILITIES | ||||||||
| Collateral received for securities loaned (Note 7) | 9,811,957 | 12,445,387 | ||||||
| Foreign currency payable to custodian, at value | 11 | 16 | ||||||
| Payables: | ||||||||
| Payable for investments purchased | 138,193 | — | ||||||
| Management fees payable | 21,000 | 52,517 | ||||||
| Total Liabilities | 9,971,161 | 12,497,920 | ||||||
| Net Assets | $ | 36,380,447 | $ | 83,924,512 | ||||
| NET ASSETS CONSIST OF: | ||||||||
| Paid-in Capital | $ | 41,803,754 | $ | 117,760,090 | ||||
| Total Distributable Earnings (Accumulated Losses) | (5,423,307 | ) | (33,835,578 | ) | ||||
| Net Assets | $ | 36,380,447 | $ | 83,924,512 | ||||
| *Identified Cost: | ||||||||
| Investments in unaffiliated securities | $ | 43,132,376 | $ | 103,645,415 | ||||
| Investments in affiliated securities | 2,487,950 | 3,747,848 | ||||||
| Foreign currency | 4 | 13 | ||||||
| Shares Outstanding^ | 900,000 | 1,100,000 | ||||||
| Net Asset Value, Offering and Redemption Price per Share | $ | 40.42 | $ | 76.30 |
|
|||
| ^ No par value, unlimited number of shares authorized | ||||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
For the Period Ended March 31, 2022 (Unaudited)
| Wedbush ETFMG Global Cloud Technology ETF |
Wedbush ETFMG Video Game Tech ETF |
|||||||
| INVESTMENT INCOME | ||||||||
| Income: | ||||||||
| Dividends from unaffiliated securities (net of foreign withholdings tax and issuance fees of $13,856 and $30,753, respectively) | $ | 109,386 | $ | 292,143 | ||||
| Interest | 83 | 97 | ||||||
| Securities lending income | 12,545 | 70,288 | ||||||
| Total Investment Income | 122,014 | 362,528 | ||||||
| Expenses: | ||||||||
| Management fees | 155,184 | 363,459 | ||||||
| Interest fees | — | 87 | ||||||
| Total Expenses | 155,184 | 363,546 | ||||||
| Net Investment Loss | (33,170 | ) | (1,018 | ) | ||||
| REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||
| Net Realized Gain (Loss) on: | ||||||||
| Unaffiliated Investments | (874,706 | ) | (3,164,915 | ) | ||||
| In-Kind redemptions | 5,108,706 | 1,173,811 | ||||||
| Foreign currency and foreign currency translation | (4,030 | ) | (113,395 | ) | ||||
| Net Realized Gain (Loss) on Investments | 4,229,970 | (2,104,499 | ) | |||||
| Net Change in Unrealized Appreciation/Depreciation of: | ||||||||
| Unaffiliated Investments | (15,160,291 | ) | (3,216,076 | ) | ||||
| Affiliated Investments | (34,520 | ) | (51,780 | ) | ||||
| Foreign currency and foreign currency translation | (653 | ) | (247 | ) | ||||
| Net Change in Unrealized Appreciation/Depreciation of Investments | (15,195,464 | ) | (3,268,103 | ) | ||||
| Net Realized and Unrealized Loss on Investments | (10,965,494 | ) | (5,372,602 | ) | ||||
| NET DECREASE IN NET ASSETS RESULTING FROM | ||||||||
| OPERATIONS | $ | (10,998,664 | ) | $ | (5,373,620 | ) | ||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Global Cloud Technology ETF
STATEMENTS OF CHANGES IN NET ASSETS
|
Period Ended March 31, 2022 (Unaudited) |
|
Year Ended September 30, 2021 |
|
|||||
| OPERATIONS | ||||||||
| Net investment loss | $ | (33,170 | ) | $ | (61,969 | ) | ||
| Net realized gain on investments and In-Kind Redemptions | 4,229,970 | 6,795,041 | ||||||
| Net change in unrealized appreciation/depreciation of investments and foreign currency and foreign currency translation | (15,195,464 | ) | 3,808,116 | |||||
| Net increase (decrease) in net assets resulting from operations | (10,998,664 | ) | 10,541,188 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | — | (138,689 | ) | |||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net decrease in net assets derived from net change in | ||||||||
| outstanding shares | (6,776,125 | ) | (2,762,775 | ) | ||||
| Transaction Fees (See Note 1) | 21 | — | ||||||
| Net decrease in net assets from capital share transactions | (6,776,104 | ) | (2,762,775 | ) | ||||
| Total increase (decrease) in net assets | (17,774,768 | ) | 7,639,724 | |||||
| NET ASSETS | ||||||||
| Beginning of Period | 54,155,215 | 46,515,491 | ||||||
| End of Period | $ | 36,380,447 | $ | 54,155,215 | ||||
Summary of share transactions is as follows:
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares Sold | 150,000 | $ | 6,614,280 | 250,000 | $ | 13,029,895 | ||||||||||
| Transaction Fees (See Note 1) | — | 21 | — | — | ||||||||||||
| Shares Redeemed | (300,000 | ) | (13,390,405 | ) | (300,000 | ) | (15,792,670 | ) | ||||||||
| Net Transactions in Fund Shares | (150,000 | ) | $ | (6,776,104 | ) | (50,000 | ) | $ | (2,762,775 | ) | ||||||
| Beginning Shares | 1,050,000 | 1,100,000 | ||||||||||||||
| Ending Shares | 900,000 | 1,050,000 | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
STATEMENTS OF CHANGES IN NET ASSETS
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||
| OPERATIONS | ||||||||
| Net investment income (loss) | $ | (1,018 | ) | $ | 952,021 | |||
| Net realized gain (loss) on investments and In-Kind Redemptions | (2,104,499 | ) | 72,924,518 | |||||
| Net change in unrealized appreciation/depreciation of investments and foreign currency and foreign currency translation | (3,268,103 | ) | (35,254,072 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | (5,373,620 | ) | 38,622,467 | |||||
| DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
| Total distributions from distributable earnings | (2,457,762 | ) | (1,207,000 | ) | ||||
| CAPITAL SHARE TRANSACTIONS | ||||||||
| Net decrease in net assets derived from net change in outstanding shares | (8,679,060 | ) | (58,836,885 | ) | ||||
| Transaction Fees (See Note 1) | 7,612 | 150,154 | ||||||
| Net decrease in net assets from capital share transactions | (8,671,448 | ) | (58,686,731 | ) | ||||
| Total decrease in net assets | (16,502,830 | ) | (21,271,264 | ) | ||||
| NET ASSETS | ||||||||
| Beginning of Period | 100,427,342 | 121,698,606 | ||||||
| End of Period | $ | 83,924,512 | $ | 100,427,342 | ||||
Summary of share transactions is as follows:
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares Sold | 50,000 | $ | 4,398,985 | 1,800,000 | $ | 164,928,820 | ||||||||||
| Transaction Fees (See Note 1) | — | 7,612 | — | 150,154 | ||||||||||||
| Shares Redeemed | (150,000 | ) | (13,078,045 | ) | (2,400,000 | ) | (223,765,705 | ) | ||||||||
| Net Transactions in Fund Shares | (100,000 | ) | $ | (8,671,448 | ) | (600,000 | ) | $ | (58,686,731 | ) | ||||||
| Beginning Shares | 1,200,000 | 1,800,000 | ||||||||||||||
| Ending Shares | 1,100,000 | 1,200,000 | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Global Cloud Technology ETF
For a capital share outstanding throughout each period/year
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
Year Ended September 30, 2020 |
Year Ended September 30, 2019 |
Year Ended September 30, 2018 |
Year Ended September 30, 2017 |
|||||||||||||||||||
| Net Asset Value, Beginning of Period/Year | $ | 51.58 | $ | 42.29 | $ | 35.92 | $ | 39.05 | $ | 36.14 | $ | 26.75 | ||||||||||||
| Income (Loss) from Investment Operations: | ||||||||||||||||||||||||
| Net investment income (loss) 1 | (0.03 | ) | (0.03 | ) | 0.26 | 0.28 | 0.15 | 0.27 | ||||||||||||||||
| Net realized and unrealized gain (loss) on investments | (11.13 | ) | 9.45 | 6.34 | (3.11 | ) | 3.08 | 9.26 | ||||||||||||||||
| Total from investment operations | (11.16 | ) | 9.42 | 6.60 | (2.83 | ) | 3.23 | 9.53 | ||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||
| Distributions from net investment income | — | (0.13 | ) | (0.23 | ) | (0.30 | ) | (0.13 | ) | (0.04 | ) | |||||||||||||
| Net realized gains | — | — | — | — | (0.19 | ) | (0.10 | ) | ||||||||||||||||
| Total distributions | — | (0.13 | ) | (0.23 | ) | (0.30 | ) | (0.32 | ) | (0.14 | ) | |||||||||||||
| Net asset value, end of period/year | $ | 40.42 | $ | 51.58 | $ | 42.29 | $ | 35.92 | $ | 39.05 | $ | 36.14 | ||||||||||||
| Total Return | -21.63 | %2 | 22.28 | %3 | 18.58 | % | -7.23 | % | 9.03 | % | 36.39 | % | ||||||||||||
| Ratios/Supplemental Data: | ||||||||||||||||||||||||
| Net assets at end of period/year (000’s) | $ | 36,380 | $ | 54,155 | $ | 46,515 | $ | 37,720 | $ | 50,771 | $ | 37,948 | ||||||||||||
| Expenses to Average Net Assets before legal expense | 0.68 | %3 | 0.68 | % | 0.71 | %4 | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
| Gross Expenses to Average Net Assets | 0.68 | %3 | 0.68 | % | 0.71 | %4 | 0.75 | % | 0.75 | % | 0.79 | %5 | ||||||||||||
| Net Investment Income (Loss) to Average Net Assets | -0.15 | %3 | -0.06 | % | 0.70 | % | 0.83 | % | 0.42 | % | 0.87 | % | ||||||||||||
| Portfolio Turnover Rate | 17 | %2 | 14 | % | 104 | % | 38 | % | 42 | % | 21 | % | ||||||||||||
| 1 | Calculated based on average shares outstanding during the period/year. |
| 2 | Not annualized. |
| 3 | Annualized. |
| 4 | Effective April 7, 2020, the Fund’s expense ratio was reduced to 0.68%. |
| 5 | The ratio of expenses to average net assets includes legal expense. |
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
Wedbush ETFMG Video Game Tech ETF
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period/year
| Period Ended March 31, 2022 (Unaudited) |
Year Ended September 30, 2021 |
Year Ended September 30, 2020 |
Year Ended September 30, 2019 |
Year Ended September 30, 2018 |
Year Ended September 30, 2017 |
|||||||||||||||||||
| Net Asset Value, Beginning of Period/Year | $ | 83.69 | $ | 67.61 | $ | 41.50 | $ | 47.49 | 44.37 | $ | 32.90 | |||||||||||||
| Income (Loss) from Investment Operations: | ||||||||||||||||||||||||
| Net investment income (loss) 1 | (0.00 | )5 | 0.74 | 0.25 | 0.52 | 0.74 | 0.33 | |||||||||||||||||
| Net realized and unrealized gain (loss) on investments | (5.25 | ) | 15.96 | 26.26 | (5.87 | ) | 2.98 | 11.71 | ||||||||||||||||
| Total from investment operations | (5.25 | ) | 16.70 | 26.51 | (5.35 | ) | 3.72 | 12.04 | ||||||||||||||||
| Less Distributions: | ||||||||||||||||||||||||
| Distributions from net investment income | (2.14 | ) | (0.72 | ) | (0.41 | ) | (0.65 | ) | (0.59 | ) | (0.18 | ) | ||||||||||||
| Net realized gains | — | — | — | — | (0.03 | ) | (0.39 | ) | ||||||||||||||||
| Total distributions | (2.14 | ) | (0.72 | ) | (0.41 | ) | (0.65 | ) | (0.62 | ) | (0.57 | ) | ||||||||||||
| Capital Share Transactions: | ||||||||||||||||||||||||
| Transaction fees added to paid-in capital | 0.00 | 5 | 0.10 | 0.01 | 0.01 | 0.02 | — | |||||||||||||||||
| Net asset at end of period/year | $ | 76.30 | $ | 83.69 | $ | 67.61 | $ | 41.50 | 47.49 | $ | 44.37 | |||||||||||||
| Total Return | -6.62 | %2 | 24.91 | % | 64.12 | % | -11.26 | % | 8.38 | % | 37.67 | % | ||||||||||||
| Ratios/Supplemental Data: | ||||||||||||||||||||||||
| Net assets at end of period/year (000’s) | $ | 83,925 | $ | 100,427 | $ | 121,699 | $ | 83,000 | $ | 130,609 | $ | 39,934 | ||||||||||||
| Expenses to Average Net Assets before legal expense | 0.75 | %3 | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
| Gross Expenses to Average Net Assets | 0.75 | %3 | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.82 | %4 | ||||||||||||
| Net Investment Income (Loss) to Average Net Assets | (0.00 | )%3 5 | 0.87 | % | 0.51 | % | 1.22 | % | 1.48 | % | 0.86 | % | ||||||||||||
| Portfolio Turnover Rate | 26 | %2 | 89 | % | 53 | % | 38 | % | 42 | % | 49 | % | ||||||||||||
| 1 | Calculated based on average shares outstanding during the period/year. |
| 2 | Not annualized. |
| 3 | Annualized. |
| 4 | The ratio of expenses to average net assets includes legal expense. |
| 5 | Amount is less than $0.005. |
The accompanying notes are an integral part of these financial statements.
Wedbush ETFMG TM ETF
March 31, 2022 (Unaudited)
NOTE 1 – ORGANIZATION
Wedbush ETFMG Global Cloud Technology ETF (“IVES”) and Wedbush ETFMG Video Game Tech ETF (“GAMR”) (each a “Fund”, or collectively the “Funds”) are a series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the U.S. Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Fund’s shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”).
The Wedbush ETFMG Global Cloud Technology ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Dan Ives Global Cloud Technology Prime Index (the “Index”). The Index is designed to include the securities of companies across the globe that are: i) engaged in providing infrastructure, equipment, connectivity, data back-up and storage services, and data center management for enterprise-based software applications, or ii) engaged in providing cloud-based software platforms that enable businesses to move data and software applications onto the cloud - cloud-enabling Software as a Service (SaaS) technologies. These companies are known collectively as “Cloud Technology Companies.” The Cloud Technology Companies will have a minimum market capitalization of $200 million and a maximum market capitalization of $10 billion.
The following table is a summary of the Strategy Commencement Date and Strategy of the Funds:
| Fund Ticker | Strategy Commencement Date |
Strategy |
| Wedbush ETFMG Global Cloud Technology ETF |
4/7/2020 | Seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Dan Ives Global Cloud Technology Prime™ Index NTR. |
| Wedbush ETFMG Video Game Tech ETF |
3/8/2016 | Seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the EEFund Video Game Tech™ Index. |
The Funds currently offer one class of shares, which has no front end sales load, no deferred sales charges, and no redemption fees. The Funds may issue an unlimited number of shares of beneficial interest, with no par value. All shares of the Funds have equal rights and privileges.
Shares of the Funds are listed and traded on the NASDAQ Stock Market, LLC. Market prices for the Shares may be different from their net asset value (“NAV”). The Funds issue and redeem Shares on a continuous basis at NAV only in blocks of 50,000 shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in the Index. Once created, Shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, Shares are not redeemable securities of the Funds. Shares of the Funds may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the Shares directly from the Funds. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and may be subject to customary brokerage commissions or fees.
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Transaction Fees” in the Statements of Changes in Net Assets.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Funds may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the SEC. For more information about the underlying fund’s operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the SEC.
| A. | Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Funds’ Board. The use of fair value pricing by the Funds may cause the NAV of its shares to differ significantly from the NAV that would be calculated without regard to such considerations. As of March 31, 2022, the Wedbush Video Game Tech ETF held one security that was fair valued by the Board.
As described above, the Funds utilize various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| Level 3 | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following is a summary of the inputs used to value the Funds’ net assets as of March 31, 2022:
Wedbush ETFMG Global Cloud Technology ETF
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 36,101,738 | $ | — | $ | — | $ | 36,101,738 | ||||||||
| Short Term Investments | 402,007 | — | — | 402,007 | ||||||||||||
| ETFMG Sit Ultra Short ETF** | 2,453,230 | — | — | 2,453,230 | ||||||||||||
| Investments Purchased with Securities Lending Collateral* | — | — | — | 7,324,007 | ||||||||||||
| Total Investments in Securities | $ | 38,956,975 | $ | — | $ | — | $ | 46,280,982 | ||||||||
| Wedbush ETFMG Video Game Tech ETF | ||||||||||||||||
| Assets^ | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 83,543,818 | $ | — | $ | — | $ | 83,543,818 | ||||||||
| Short Term Investments | 209,476 | — | — | 209,476 | ||||||||||||
| ETFMG Sit Ultra Short ETF** | 3,679,845 | — | — | 3,679,845 | ||||||||||||
| Investments Purchased with Securities Lending Collateral* | — | — | — | 8,697,539 | ||||||||||||
| Total Investments in Securities | $ | 87,433,139 | $ | — | $ | — | $ | 96,130,678 | ||||||||
^ See Schedule of Investments for classifications by country and industry
* Certain investments that are measured at fair value used the net asset value per share (or its equivalent) practical expediant have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Schedules of Investments.
** Investment was purchased with collateral.
| B. | Federal Income Taxes. The Funds have elected to be taxed as a “regulated investment company” and intend to distribute substantially all taxable income to their shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
To avoid imposition of the excise tax applicable to regulated investment companies, the Funds intend to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of the Funds’ next taxable year.
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The Funds have analyzed their tax position and have concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Funds’ 2021 tax returns. The Funds identify its major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
As of March 31, 2022, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the Funds, and has determined that no provision for income tax is required in the Funds’ financial statements.
| C. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Funds may be subject to income, withholding or other taxes imposed by foreign countries. |
| D. | Foreign Currency Translations and Transactions. The Funds may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Funds do not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Funds do isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
| E. | Distributions to Shareholders. Distributions to shareholders from net investment income, if any are generally declared and paid by the Funds on a quarterly basis. Net realized gains on securities of the Funds normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
| G. | Share Valuation. The NAV per share of each Fund is calculated by dividing the sum of the value of the securities held by each Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding of each Fund, rounded to the nearest cent. Each Fund’s shares will not be priced on the days on which the NYSE is closed for trading. The offering and redemption price per share for each Fund is equal to each Fund’s NAV per share. |
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
| H. | Guarantees and Indemnifications. In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. |
NOTE 3 – RISK FACTORS
Investing in Wedbush ETFMG Global Cloud Technology ETF and the Wedbush ETFMG Video Game Tech ETF may involve certain risks, as discussed in each Fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The Funds are not actively managed. Therefore, the Funds follow the securities included in its respective index during upturns as well as downturns. Because of its indexing strategy, the Funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Funds’ expenses, the Funds’ performance may be below that of its index.
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Concentration Risk. To the extent that the Funds’ or its underlying index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the Funds may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19), have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Funds and their investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect lobal, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under the circumstances, the Funds may have difficulty achieving their investment objectives which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Funds’ Sponsor and third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Funds’ investments. These factors can cause substantial market volatility, exchange trading suspensions and closures and can impact the ability of the Funds to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A wide spread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on a Fund’s performance, resulting in losses to the Funds.
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
NOTE 4 – MANAGEMENT AND OTHER CONTRACTS
Under the Investment Advisory Agreement, the Adviser has agreed to pay all expenses of the Funds, except for: the fee paid to the Adviser pursuant to the Investment Advisory Agreement, interest charges on any borrowings, 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”).
Wedbush Securities, Inc. (“Wedbush”) has entered into a licensing and marketing support agreement with Exchange Traded Managers Group LLC (“Parent”), the parent company of the Adviser (the “Wedbush Agreement”) . Pursuant to the Wedbush Agreement, Wedbush has agreed to (i) license the name Wedbush for the use of the Adviser; (ii) consult with the Adviser and prepare educational materials, research materials, and updates on regulation of the global video gaming technology and global cloud computing ecosystem; and (iii) provide support in connection with phone calls, appearances, and written content relating to the marketing of IVES and GAMR. Wedbush will also assumes the obligation of the Adviser to pay certain expenses of IVES and GAMR. Although Wedbush has agreed to be responsible for the payment of certain expenses of IVES and GAMR, the Adviser retains the ultimate obligation to the Funds to pay such expenses.
| Advisory Fees: | |
| Wedbush ETFMG Global Cloud Technology ETF | 0.68% |
| Wedbush ETFMG Video Game Tech ETF | 0.75% |
The Adviser has entered into an agreement with its affiliate, ETFMG Financial LLC to serve as distributor to the Funds (the “Distributor”) . The Distributor provides marketing support for the Funds, including distributing marketing materials related to the Funds.
In May, 2020, Wedbush acquired a minority, non-voting, equity interest in Parent. Wedbush is not however, an affiliate of the Funds, the Adviser, the Funds’ distributor or any of their respective affiliates. Wedbush does not make investment decisions, provide investment advice, or otherwise act in the capacity of an investment adviser to the Funds. Additionally, Wedbush is not involved in the maintenance of the Index and does not otherwise act in the capacity of an index provider.
Level ETF Ventures, LLC serves as the index provider for GAMR and IVES.
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services (the “Administrator”) provides fund accounting, fund administration, and transfer agency services to the Funds. The Advisor compensates the Administrator for these services under an administration agreement between the two parties.
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The Advisor pays each independent Trustee a quarterly fee for service to the Funds. Each Trustee is also reimbursed by the Advisor for all reasonable out-of-pocket expenses incurred in connection with his duties as Trustee, including travel and related expenses incurred in attending Board meetings.
NOTE 5 – DISTRIBUTION PLAN
Each Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Funds may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to the Funds, with the amount of such compensation not to exceed an annual rate of 0.25% of each Fund’s average daily net assets. For the period ended March 31, 2022, the Funds did not incur any 12b-1 expenses.
NOTE 6 – PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, during the six months ended March 31, 2022:
| Purchases | Sales | |||||||
| Wedbush ETFMG Global Cloud Technology ETF | $ | 7,970,057 | $ | 8,810,246 | ||||
| Wedbush ETFMG Video Game Tech ETF | $ | 25,906,552 | $ | 30,966,212 | ||||
The costs of purchases and sales of in-kind transactions associated with creations and redemptions during the period ended March 31, 2022:
| Purchases In- Kind |
Sales In- Kind |
|||||||
| Wedbush ETFMG Global Cloud Technology ETF | $ | 6,542,720 | $ | 12,306,513 | ||||
| Wedbush ETFMG Video Game Tech ETF | $ | 3,014,096 | $ | 9,187,384 | ||||
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all in-kind sales. Net capital gains or losses resulting from in-kind redemptions are excluded from the Funds’ determination of taxable gains and are not distributed to shareholders.
There were no purchases or sales of U.S. Government obligations during the period ended March 31, 2022.
NOTE 7 – SECURITIES LENDING
The Funds may lend up to 33 1/3% of the value of the securities in their portfolio to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending program administered by U.S. Bank N.A. (“the Custodian”) . The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the value of any loaned securities at the time of the loan, plus accrued interest. The Funds receive compensation in the form of fees and earns interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Funds continue to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss in the fair value of securities loaned that may occur during the term of the loan will be for the account of the Funds. The Funds have the right under the terms of the securities lending agreement to recall the securities from the borrower on demand. The cash collateral is invested by the Custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations, either directly on behalf of each Fund or through one or more joint accounts, money market funds, or short-term bond funds, including those advised by or affiliated with the Advisor; however, all such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. Other investment companies in which a Fund may invest cash collateral can be expected to incur fees and expenses for operations, such as investment advisory and administration fees, which would be in addition to those incurred by the Fund, and which may be received in full or in part by the Advisor. Pursuant to guidance issued by the SEC staff, fees and expenses of money market funds used for cash collateral received in connection with loans of securities are not treated as Acquired Fund Fees and Expenses, which reflect a Fund’s pro rata share of the fees and expenses incurred by other investment companies in which the Fund invests (as disclosed in the Prospectus, as applicable). The Fund could also experience delays in recovering its securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Fund is indemnified from this risk by contract with the securities lending agent.
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
As of March 31, 2022, the value of the securities on loan and payable for collateral due to broker were as follows:
Value of Securities on Loan Collateral Received
| Fund | Values of Securities on Loan |
Fund Collateral Received* |
||||||
| Wedbush ETFMG Global Cloud Technology ETF | $ | 9,299,600 | $ | 9,811,957 | ||||
| Wedbush ETFMG Video Game Tech ETF | 11,541,149 | 12,445,387 | ||||||
* The cash collateral received was invested in the Mount Vernon Liquid Assets Portfolio, an investment with an overnight and continuous maturity, and ETFMG Sit Ultra Short ETF, as shown on the Schedule of Investments.
NOTE 8 – FEDERAL INCOME TAXES
The components of distributable earnings (losses) and cost basis of investments for federal income tax purposes at September 30, 2021 were as follows:
| Cost | Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Unrealized Appreciation (Depreciation) |
|||||||||||||
| Wedbush ETFMG | ||||||||||||||||
| Global Cloud Technology ETF | $ | 52,150,078 | $ | 18,041,841 | $ | (2,509,458 | ) | $ | 15,532,383 | |||||||
| Wedbush ETFMG | ||||||||||||||||
| Video Game Tech ETF | 124,904,168 | 6,296,179 | (19,775,368 | ) | (13,479,189 | ) | ||||||||||
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
As of September 30, 2021, the components of distributable earnings (loss) on a tax basis were as follows:
| Undistributed Ordinary Income |
Undistributed Long-Term Gain |
Total Distributable Earnings |
Other Accumulated Loss |
Total Accumulated Gain (Loss) |
||||||||||||||||
| Wedbush ETFMG Global | ||||||||||||||||||||
| Cloud Technology ETF | $ | — | $ | — | $ | — | $ | (9,957,026 | ) | $ | 5,575,357 | |||||||||
| Wedbush ETFMG Video | ||||||||||||||||||||
| Game Tech ETF | 1,198,325 | — | 1,198,325 | (13,723,332 | ) | (26,004,196 | ) | |||||||||||||
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
The difference between the tax cost of investments and the cost of investments for GAAP purposes is primarily due to the tax treatment of wash sale losses.
As of September 30, 2021, the Funds had accumulated capital loss carryovers of:
| Capital Loss Carryforward ST |
Capital Loss Carryforward LT |
Expires | |||||||||
| Wedbush ETFMG Global Cloud Technology ETF | $ | (1,119,912 | ) | $ | (8,708,611 | ) | Indefinite | ||||
| Wedbush ETFMG Video Game Tech ETF | (5,283,736 | ) | (8,439,596 | ) | Indefinite | ||||||
Under current tax law, capital and currency losses realized after October 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The following Funds had deferred post-October capital and currency losses, which will be treated as arising on the first business day of the year ending September 30, 2021.
| Late Year Ordinary Loss |
Post- October Capital Loss |
|||||||
| Wedbush ETFMG Global Cloud Technology ETF | $ | (128,503 | ) | $ | — | |||
| Wedbush ETFMG Video Game Tech ETF | — | — | ||||||
The tax charter of distributions paid during the period ended March 31, 2022, and the year ended September 30, 2021 were as follows:
| Period Ended March 31, 2022 |
Year Ended September 30, 2021 |
|||||||||||||||
| From Ordinary Income |
From Capital Gains |
From Ordinary Income |
From Capital Gains |
|||||||||||||
| Wedbush ETFMG Global Cloud Technology ETF | $ | — | $ | — | $ | 138,689 | $ | — | ||||||||
| Wedbush ETFMG Video Game Tech ETF | 2,457,762 | — | 1,207,000 | — | ||||||||||||
NOTE 9 – INVESTMENTS IN AFFILIATES
Wedbush ETFMG Global Cloud Technology ETF
Wedbush ETFMG Global Cloud Technology ETF owned the following company during the period ended March 31, 2022. ETFMG Sit Ultra Short ETF is deemed to be an affiliate of the Fund as defined by the 1940 Act as of the period ended March 31, 2022. Transactions during the period in the security were as follows:
| Security Name | Value, at September 30, 2021 |
Purchases | Sales | Realized Gain (Loss) |
Change in Unrealized Appreciation (Depreciation) |
Dividend Income |
Value, at March 31, 2022 |
Ending Shares |
||||||||||||||||||||||||
| ETFMG Sit Ultra Short | ||||||||||||||||||||||||||||||||
| ETF | $ | 2,487,750 | $ | — | $ | — | $ | — | $ | (34,520 | ) | $ | — | $ | 2,453,230 | 50,000 | ||||||||||||||||
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
Wedbush ETFMG Video Game Tech ETF
Wedbush ETFMG Video Game Tech ETF owned the following company during the period ended March 31, 2022. ETFMG Sit Ultra Short ETF is deemed to be an affiliate of the Fund as defined by the 1940 Act as of the period ended March 31, 2022. Transactions during the period in the security were as follows:
| Security Name | Value, at September 30, 2021 |
Purchases | Sales | Realized Gain (Loss) |
Change in Unrealized Appreciation (Depreciation) |
Dividend Income |
Value, at March 31, 2022 |
Ending Shares |
||||||||||||||||||||||||
| ETFMG Sit Ultra Short | ||||||||||||||||||||||||||||||||
| ETF | $ | 3,731,625 | $ | — | $ | — | $ | — | $ | (51,780 | ) | $ | — | $ | 3,679,845 | 75,000 | ||||||||||||||||
NOTE 10 – LEGAL MATTERS
The Adviser and its parent, ETFMG, were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv-08252 (the “New York Action”). This action asserted claims for breach of contract, conversion and certain other claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). In its decision, the Court in the New York Action stated that its damages award, which gave rise to the Judgment, “includes the share of profits to which Nasdaq’s venture partner PureShares was entitled[.]”
ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2020, Docket No. 20-300. On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which settled the matter and satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit.
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (together with the Adviser, the “Adviser Defendants”) have been named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C-152-21 (the “NJ Action”). The NJ Action asserts breach of contract, defamation and other tort claims arising from the same facts and circumstances, and relates to the same series of the Trust, that gave rise to the New York Action. The NJ Action seeks damages in unspecified amounts and injunctive relief. On February 19, 2022, the Adviser, together with the other named affiliates, filed a motion for an Order dismissing the complaint filed by the Plaintiffs, in part, on the basis that Plaintiffs’ claims overlap with, and are barred by, those claims previously asserted by Nasdaq (and resolved on PureShares’ behalf) in the New York Action that resulted in the judgment against the defendants, which has been satisfied.
NOTE 11 – SUBSEQUENT EVENTS
In preparing these financial statements, the Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed below, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the financial statements.
Wedbush ETFMG TM ETF
NOTES TO FINANCIAL STATEMENTS
March 31, 2022 (Unaudited) (Continued)
With respect to Note 10 – Legal Matters, on May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust as well as, all claims asserted against the Adviser Defendants, aside from the defamation claim. The Adviser Defendants intend to vigorously defend themselves against this sole remaining claim.
Wedbush ETFMG TM ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on March 28-29, 2022, the Board of Trustees (the “Board”) of ETF Managers Trust (the “Trust”) considered the renewal of the Amended and Restated Investment Advisory Agreement (the “Advisory Agreement”) between ETF Managers Group LLC (the “Adviser”) and the Trust, on behalf of each of Wedbush ETFMG Global Cloud Technology ETF (formerly, the ETFMG Drone Economy Strategy ETF) (“IVES”) and Wedbush ETFMG Video Game Tech ETF (formerly, the ETFMG Video Game Tech ETF) (“GAMR”) (each a “Fund” and collectively, the “Funds”).
Pursuant to Section 15(c) of the 1940 Act, the Board must annually review and approve the Advisory Agreement after its initial two-year term: (i) by the vote of the Trustees or by a vote of the shareholders of the Fund; and (ii) by the vote of a majority of the Trustees who are not parties to the Advisory Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. Each year, the Board calls and holds a meeting to decide whether to renew the Advisory Agreement for an additional one-year term. In preparation for such meeting, the Board requests and reviews a wide variety of information from the Adviser.
In reaching its decision, the Board, including the Independent Trustees, considered all factors it believed relevant, including: (i) the nature, extent and quality of the services provided to the Funds by the Adviser; (ii) the investment performance of the Funds; (iii) the Adviser’s costs and profits realized in providing services to the Funds, including any fall-out benefits enjoyed by the Adviser; (iv) comparative fee and expense data for the Funds in relation to other similar investment companies; (v) the extent to which economies of scale would be realized as the Funds grow and whether the advisory fees for the Funds reflect these economies of scale for the benefit of the Funds; and (vi) other financial benefits to the Adviser and its affiliates resulting from services rendered to the Funds. The Board’s review included written and oral information furnished to the Board prior to and at the meeting held on March 28-29, 2022, and throughout the year. Among other things, the Adviser provided responses to a detailed series of questions, which included information about the Adviser’s operations, service offerings, personnel, risk assessment process and compliance programs and financial condition. The Board then discussed the written and oral information that it received before the meeting and throughout the year, and the Adviser’s oral presentations and any other information that the Board received at the meeting, and deliberated on the renewal of the Advisory Agreement in light of this information.
The Independent Trustees were assisted throughout the contract review process by independent legal counsel. The Independent Trustees relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating the renewal of the Advisory Agreement, and the weight to be given to each such factor. The conclusions reached with respect to the Advisory Agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each Trustee may have placed varying emphasis on particular factors in reaching conclusions with respect to each Fund. The Independent Trustees conferred amongst themselves and independent legal counsel during an executive session held prior to the meeting and also conferred in executive sessions both with and without representatives of management before and during the meeting. The Independent Trustees requested, received and considered additional information arising out of these executive sessions.
Nature, Extent and Quality of Services Provided by the Adviser
The Trustees considered the scope of services provided under the Advisory Agreement, noting that the Adviser provides investment management services to the Funds. The Board discussed the responsibilities of the Adviser, including: responsibility for the general management of the day-to-day investment and reinvestment of the assets of the Funds; determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis; responsibility for daily monitoring of tracking error and quarterly reporting to the Board; and implementation of Board directives as they relate to the Funds. In considering the nature, extent and quality of the services provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel and the quality of the Adviser’s compliance and risk assessment infrastructure. The Board also considered the Adviser’s experience managing exchange-traded funds (“ETFs”), as well as the Adviser’s response to the market volatility and uncertainty during the recent pandemic.
Wedbush ETFMG TM ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board also considered other services provided to the Funds, such as overseeing the Funds’ service providers, monitoring adherence to the Funds’ investment restrictions, and monitoring compliance with various policies and procedures and with applicable securities laws.
Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Funds by the Adviser.
Historical Performance
The Board then considered the past performance of the Funds over various time periods ending December 31, 2021, including the one-year, three-year, five-year and since inception periods. The Board also considered each Fund’s performance as compared to that of comparable ETFs, as determined by the Adviser (“peer group”) using data received from an independent third party. The Board additionally reviewed the performance of each Fund as compared to its respective underlying index for various time periods. The Board noted management’s explanation that analysis of investment performance, in absolute terms, is less relevant for the Funds than it is for actively managed funds, given the Funds’ index-based investment objectives. The Board also noted management’s further explanation that it is more relevant to review the performance of the Funds by focusing on the extent to which each Fund tracked its underlying index. The Board reviewed information regarding each Fund’s index tracking, discussing, as applicable, factors which contributed to each Fund’s tracking error. The Board noted that the Funds had underperformed their underlying indexes over certain periods, but that such underperformance was, at least in part, a result of costs incurred by the Funds not incurred by their underlying indexes. The Board considered other factors that contributed to the Funds’ tracking error, including cash drag and the process of rebalancing the Funds’ portfolios. The Board also considered that the underlying index for IVES was changed two years ago. The Board noted management’s representations that the Funds’ performance in tracking their underlying indexes was within the range of expectations. The Board concluded that, after taking these factors into account, each of the Funds satisfactorily tracked its underlying index. The Board further noted that it had received and would continue to receive regular reports regarding each Fund’s performance, including with respect to its tracking error, at its quarterly meetings.
Cost of Services Provided, Profits and Economies of Scale
The Board reviewed the advisory fees for the Funds and compared them to the total operating expenses of comparable ETFs, as determined by the Adviser using data received from an independent third party. Among other information, the Board noted that the advisory fee for each of the Funds was higher than the average and median expense ratios for its respective peer group. The Board took into consideration management’s discussion of the fees, including that the Funds have niche investment strategies that are substantially different than the strategies of many of the peer ETFs and, therefore, the information provided about the comparable ETFs may not provide meaningful direct comparisons to the Funds.
The Board noted the importance of the fact that the advisory fee for each Fund is a “unified fee,” meaning that the shareholders of the Funds pay no expenses other than the advisory fee and certain other costs such as interest charges on any borrowings, 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 (such as, among other things and subject to Board approval, non-standard Board-related expenses and litigation against the Board, Trustees, Funds, Adviser, and officers of the Adviser), and distribution (12b-1) fees and expenses. The Board also noted that the Adviser was responsible for compensating the Trust’s other service providers and paying the Funds’ other expenses (except as noted above) out of its own fees and resources. The Board concluded that the advisory fee for each of the Funds is reasonable in light of the factors considered.
Wedbush ETFMG TM ETF
APPROVAL OF ADVISORY AGREEMENTS AND BOARD CONSIDERATIONS
For the Period Ended March 31, 2022 (Unaudited) (Continued)
The Board also evaluated the compensation and other benefits received by the Adviser from its relationship with the Funds, taking into account profitability information provided by the Adviser. The Board received and reviewed profitability information on a fund by fund basis and considered how profit margins could affect the Adviser’s long-term viability and ability to attract and retain high-quality personnel. The Board also considered the impact on the Adviser’s profitability of payments made to, or received from, partners involved with the Funds. Based on the information provided to the Trustees, the Trustees concluded that the net revenue retained by the Adviser from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund. The Board further considered other benefits derived by the Adviser and its affiliates from the Adviser’s relationship with the Funds.
In addition, the Board considered whether economies of scale may be realized for the Funds. The Board noted that the Adviser regularly considers whether fee reductions are appropriate as the Funds grow in size. The Board noted that a unitary fee provides a level of certainty in expenses for the Funds and effectively acts as a cap on the fees and expenses (except as noted above) that are borne by the Funds. The Board also took into account the significant investments that the Adviser has made in its business to help ensure the continued provision of high-quality services to the Funds, such as the hiring of new trading, legal and compliance personnel, and enhancements to technology and related systems. The Board concluded that no changes to the advisory fee structure of the Funds were necessary.
In its deliberations, the Board did not identify any single piece of information discussed above that was all-important, controlling or determinative of its decision.
Based on the Board’s deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously: (a) concluded that the terms of the Advisory Agreement are fair and reasonable; (b) concluded that the Adviser’s fees are reasonable in light of the services that the Adviser provides to the Funds; and (c) approved the renewal of the Advisory Agreement for another year.
Wedbush ETFMG TM ETF
Period Ended March 31, 2022 (Unaudited)
As a shareholder of the Funds you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The examples are based on an investment of $1,000 for the period of time as indicated in the table below.
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then, multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
| Fund Name | Beginning Account Value October 1, 2021 |
Ending Account Value March 31, 2022 |
Expenses Paid During the Period ^ |
Annualized Expense Ratio During the Period October 1, 2021 to March 31, 2022 |
||||||||||||
| Wedbush ETFMG Global Cloud Technology ETF | ||||||||||||||||
| Actual | 1,000.00 | 783.70 | 3.02 | 0.68 | % | |||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,021.54 | 3.43 | 0.68 | % | |||||||||||
| Wedbush ETFMG Video Game Tech ETF | ||||||||||||||||
| Actual | 1,000.00 | 933.80 | 3.62 | 0.75 | % | |||||||||||
| Hypothetical (5% annual) | 1,000.00 | 1,021.19 | 3.78 | 0.75 | % | |||||||||||
^ The dollar amounts shown as expenses paid during the period are equal to the annualized six-month expense ratio multiplied by the average account value during the period, multiplied by 182/365 (to reflect the period from October 1, 2021 to March 31, 2022).
Wedbush ETFMG TM ETF
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
March 31, 2022 (Unaudited)
ETF Managers Trust (the “Trust”) has adopted a liquidity risk management program (the “Program”). The Trust’s Board of Trustees (the “Board”) has designated ETF Managers Group LLC (the “Program Administrator”) as the administrator of the Program. The Program Administrator has designated a committee (the “Committee”), composed of personnel from multiple departments, including investment operations and compliance, that is responsible for the implementation and ongoing administration of the Program, which includes assessing the liquidity risk of Wedbush ETFMG Global Cloud Technology ETF and Wedbush ETFMG Video Game Tech ETF (each a “Fund” and, collectively, the “Funds”) under both normal and reasonably foreseeable stressed conditions.
Under the Program, the Program Administrator assesses, manages and periodically reviews each Fund’s liquidity risk, based on factors specific to the circumstances of the Fund. Liquidity risk is the risk that a Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in that Fund. This risk is managed by monitoring the degree of liquidity of each Fund’s investments and limiting the amount of the Fund’s illiquid investments, among other means. The Program Administrator’s process of determining the degree of liquidity of each Fund’s investments is supported by one or more third-party liquidity assessment vendors.
At a meeting of the Board on March 28-29, 2022, the Adviser provided a written report to the Board addressing the operation, and the adequacy and effectiveness of the implementation, of the Program, including, the operation of any Highly Liquid Investment Minimum, where applicable, and any material changes to the Program, for the period from March 1, 2021 through March 1, 2022 (the “Reporting Period”). No significant liquidity events impacting any Fund were noted in the report and it was represented that, as of December 31, 2021, each Fund was primarily highly liquid and, during the Reporting Period, each Fund held less than 15% in illiquid securities. In addition, the Program Administrator provided its assessment that Program implementation was effective and that the Program operated adequately and effectively to enable the Program Administrator to oversee and manage liquidity risk and ensure each Fund is able to meet requests to redeem shares without significant dilution to the remaining investors’ interest in the Fund.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to your Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
Wedbush ETFMG TM ETF
March 31, 2022 (Unaudited)
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of each Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.etfmgfunds.com.
NOTE 2 – FEDERAL TAX INFORMATION
Qualified Dividend Income/Dividends Received Deduction
For the fiscal year ended September 30, 2021, certain dividends paid by the Funds may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
| Fund Name | Qualified Dividend Income |
| Wedbush ETFMG Global Cloud Technology | 78.45% |
| Wedbush ETFMG Video Game Tech ETF | 51.29% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September 30, 2021 was as follows:
| Fund Name | Dividends Received Deduction |
| Wedbush ETFMG Global Cloud Technology | 44.52% |
| Wedbush ETFMG Video Game Tech ETF | 5.93% |
Short Term Capital Gain
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871 (k)(2)(C) for each Fund were as follows:
| Fund Name | Short-Term Capital Gain |
| Wedbush ETFMG Global Cloud Technology | 0.00% |
| Wedbush ETFMG Video Game Tech ETF | 0.00% |
Pursuant to Section 853 of the Internal Revenue Code, the Fund designated the following amounts as foreign taxes paid for the year ended September 30, 2021. Foreign taxes paid for purposes of Section 853 may be less than actual foreign taxes paid for financial statement purposes.
| Per Share | ||||||||||||||||||||
| Fund | Gross Foreign Source Income |
Foreign Taxes Passthrough |
Gross Foreign Source Income |
Foreign Taxes Passthrough |
Shares Outstanding at 9/30/21 |
|||||||||||||||
| Wedbush ETFMG Video Game Tech ETF | 1,800,463 | 237,492 | 1.50038583 | 0.19790967 | 1,200,000 | |||||||||||||||
Foreign taxes paid or withheld should be included to taxable income with an offsetting deduction from gross income or as a credit for taxes paid to foreign governments.
Above figures may differ from those cited elsewhere in this report due to difference in the calculation of income and gains under GAAP purposes and Internal Revenue Service purposes.
Shareholders are strongly advised to consult their own tax advisors with respect to their investments in the Funds.
Wedbush ETFMG TM ETF
SUPPLEMENTARY INFORMATION
March 31, 2022 (Unaudited) (Continued)
NOTE 3 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Funds file their complete schedule of portfolio holdings for their first and third fiscal quarters with the Securities and Exchange Commission (“SEC”) on Part F of Form N-PORT. The Funds’ Part F of Form N-PORT is available on the website of the SEC at www.sec.gov and the Funds’ website at www.etfmgfunds.com. Each Fund’s portfolio holdings are posted on their website at www.etfmgfunds.com daily.
NOTE 4 – INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at (877) 756-7873, by accessing the SEC’s website at www.sec.gov, or by accessing the Funds’ website at www.etfmgfunds.com.
Information regarding how the Funds voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at (877) 756-7873 or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477) or by visiting www.etfmgfunds.com. Read the prospectus carefully before investing.
Wedbush ETFMG TM ETF
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Interested Trustee and Officers | ||||
| Samuel Masucci, III (1962) | Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) | Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). | 20 | None |
| John A. Flanagan, (1946) | Treasurer (since 2015) | President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). | n/a | n/a |
| Reshma A. Tanczos (1978) | Chief Compliance Officer (since 2016) | Chief Compliance Officer of ETFMG Financial LLC (Since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). | n/a | n/a |
| Matthew J. Bromberg (1973) | Assistant Secretary (since 2020) | General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015-2016). | n/a | n/a |
| * Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. | ||||
Wedbush ETFMG TM ETF
Board of Trustees (Continued)
| 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 | Number of Portfolios in Fund Complex Overseen By Trustee | Other Directorships Held by Trustee During Past 5 Years |
| Terry Loebs (1963) | Trustee (since 2014); Lead Independent Trustee (since 2020) | Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). | 20 | None |
| Eric Wiegel (1960) | Trustee (since 2020) | Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018). | 20 | None |
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund
Services 615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006
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(b)
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Not applicable.
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a)
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Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
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b)
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Not Applicable.
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(a)
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The Registrant’s Principal Executive Officer and Principal Financial Officer/Treasurer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”))
as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d 15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the
disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and
by the Registrant’s service provider.
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(b)
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There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably
likely to materially affect, the Registrant's internal control over financial reporting.
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(a)
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(1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an
exhibit. Incorporated by reference to previous Form N-CSR filing.
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