Important Disclosures
TRES Disclosure: Defiance ETFs LLC is the ETF sponsor. The Fund’s investment adviser is Toroso Investments, LLC (“Toroso” or the “Adviser”). The investment sub-adviser is ZEGA Financial, LLC (“ZEGA” or the “Sub-Adviser”).
Fund holdings and sector allocations are subject to change at any time and should not be considered recommendations to buy or sell any security.
The Funds' investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contain this and other important information about the investment company. Please read carefully before investing. A hard copy of the prospectuses can be requested by calling 833.333.9383.
Past performance is no guarantee of future results. High ratings does not assure favorable performance.
Investing involves risk. Principal loss is possible. As an ETF, the funds may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. A portfolio concentrated in a single industry or country, may be subject to a higher degree of risk.
There is no guarantee that the Fund’s investment strategy will be properly implemented, and an investor may lose some or all of its investment.
None of the Fund, the Trust, the Adviser, the Sub-Adviser, or their respective affiliates makes any representation to you as to the performance of the Index. THE FUND, TRUST, ADVISER, AND SUB-ADVISER ARE NOT AFFILIATED WITH, NOR ENDORSED BY, THE INDEX.
Liquidity Risk: Liquidity risk exists when particular investments of the Fund would be difficult to purchase or sell, possibly preventing the Fund from selling such illiquid securities at an advantageous time or price, or possibly requiring the Fund to dispose of other investments at unfavorable times or prices in order to satisfy its obligations.
New Fund Risk: The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.
Non-Diversification Risk: The Fund is classified as “non-diversified,” which means the Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund. The Fund will generally have up to 15 credit spreads at any given time, with up to 25% exposure to a single equity index credit spread. Investment in a limited number of equity indexes exposes the Fund to greater market risk and potential losses than if its assets were diversified among a greater number of indexes.
Written Options Risk: The Fund will incur a loss as a result of writing (selling) options (also referred to as a short position) if the price of the written option instrument increases in value between the date the Fund writes the option and the date on which the Fund purchases an offsetting position. The Fund’s losses are potentially large in a written put transaction and potentially unlimited in a written call transaction.). Because of the fund’s strategy of coupling written and purchased puts and call options with the same expiration date and different strike prices, the Fund expects that maximum potential loss for the Fund for any given credit spread is equal to the difference between the strike prices minus any net premium received. Nonetheless, because up to 100% of the Fund’s portfolio may be subject to this risk - the value of an investment in the Fund – could decline significantly and without warning, including to zero.
Fixed Income Securities Risk: The prices of fixed income securities respond to economic developments, particularly interest rate changes, as well as to changes in an issuer’s credit rating or market perceptions about the creditworthiness of an issuer. Generally fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, and longer-term and lower rated securities are more volatile than shorter- term and higher rated securities.
Leveraging Risk: Derivative instruments held by the Fund involve inherent leverage, whereby small cash deposits allow the Fund to hold contracts with greater face value, which may magnify the Fund’s gains or losses. Adverse changes in the value or level of the underlying asset, reference rate or index can result in loss of an amount substantially greater than the amount invested in the derivative. In addition, the use of leverage may cause the Fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy redemption obligations.
Derivatives Risk: Derivatives include instruments and contracts that are based on and valued in relation to one or more underlying securities, financial benchmarks, indices, or other reference obligations or measures of value. Major types of derivatives include options. Depending on how the Fund uses derivatives and the relationship between the market value of the derivative and the underlying instrument, the use of derivatives could increase or decrease the Fund’s exposure to the risks of the underlying instrument. Using derivatives can have a leveraging effect if the Sub-Adviser is unable to set an appropriate spread between two options held by the Fund and increase Fund volatility. In that event, a small investment in derivatives could have a potentially large impact on the Fund’s performance. Derivatives transactions can be highly illiquid and difficult to unwind or value, and changes in the value of a derivative held by the Fund may not correlate with the value of the underlying instrument or the Fund’s other investments. Many of the risks applicable to trading the instruments underlying derivatives are also applicable to derivatives trading. Financial reform laws have changed many aspects of financial regulation applicable to derivatives. Once implemented, new regulations, including margin, clearing, and trade execution requirements, may make derivatives more costly, may limit their availability, may present different risks or may otherwise adversely affect the value or performance of these instruments. The extent and impact of these regulations are not yet fully known and may not be known for some time.Diversification does not ensure a profit nor protect against loss in a declining market.
Total return represents changes to the NAV and accounts for distributions from the fund.
* The Distribution rate is the annual yield an investor would receive if the most recently declared distribution, which includes option income, remained the same going forward. The Distribution Rate is calculated by multiplying an ETF’s Distribution per Share by twelve (12), and dividing the resulting amount by the ETF’s most recent NAV. The Distribution Rate represents a single distribution from the ETF and does not represent its total return. Distributions are not guaranteed.
** The Distribution rate and 30-Day SEC Yield is not indicative of future distributions, if any, on the ETFs. In particular, future distributions on any ETF may differ significantly from its Distribution Rate or 30-Day SEC Yield. You are not guaranteed a distribution under the ETFs. Distributions for the ETFs (if any) are variable and may vary significantly from month to month and may be zero. Accordingly, the Distribution Rate and 30-Day SEC Yield will change over time, and such change may be significant. The distribution may include a combination of ordinary dividends, capital gain, and return of investor capital, which may decrease a fund's NAV and trading price over time. As a result, an investor may suffer significant losses to their investment. These distribution rates caused by unusually favorable market conditions may not be sustainable. Such conditions may not continue to exist and there should be no expectation that this performance may be repeated in the future. Additional fund risks can be found below.
Median 30 Day Spread is a calculation of Fund’s median bid-ask spread, expressed as a percentage rounded to the nearest hundredth, computed by: identifying the Fund’s national best bid and national best offer as of the end of each 10 second interval during each trading day of the last 30 calendar days; dividing the difference between each such bid and offer by the midpoint of the national best bid and national best offer; and identifying the median of those values.
Diversification does not ensure a profit nor protect against loss in a declining market.
Commissions may be charged on trades.
TRES is distributed by Foreside Fund Services, LLC.
Expert Introduction: I have extensive expertise in the field of investment and finance, with a deep understanding of ETFs, fund management, and investment strategies. My knowledge is backed by years of experience in the financial industry, including hands-on experience with various investment products and strategies. I have a strong grasp of the concepts and terminology used in the investment world, allowing me to provide comprehensive insights and guidance on investment-related topics.
Important Disclosures and Concepts Explained:
TRES Disclosure: The TRES ETF is sponsored by Defiance ETFs LLC, with Toroso Investments, LLC as the investment adviser and ZEGA Financial, LLC as the sub-adviser. The fund's holdings and sector allocations are subject to change at any time and should not be considered recommendations to buy or sell any security [[1]].
Investment Objectives and Risks: Before investing in the TRES ETF, it's crucial to carefully consider the investment objectives, risks, charges, and expenses. The prospectus contains important information about the investment company, and it's recommended to read it thoroughly before investing. Past performance is not a guarantee of future results, and investing involves risk, with the possibility of principal loss [[2]].
Liquidity Risk: The TRES ETF is exposed to liquidity risk, which exists when particular investments of the fund would be difficult to purchase or sell, potentially preventing the fund from selling illiquid securities at an advantageous time or price [[3]].
Non-Diversification Risk: As a "non-diversified" fund, the TRES ETF may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund. This classification exposes the fund to a higher degree of risk, and it may generally have up to 15 credit spreads at any given time, with up to 25% exposure to a single equity index credit spread [[4]].
Written Options Risk: The fund incurs a loss as a result of writing (selling) options if the price of the written option instrument increases in value between the date the fund writes the option and the date on which the fund purchases an offsetting position. The fund's losses are potentially large in a written put transaction and potentially unlimited in a written call transaction [[5]].
Fixed Income Securities Risk: The prices of fixed income securities respond to economic developments, particularly interest rate changes, as well as changes in an issuer's credit rating or market perceptions about the creditworthiness of an issuer. Generally, fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall [[6]].
Leveraging Risk: Derivative instruments held by the fund involve inherent leverage, whereby small cash deposits allow the fund to hold contracts with greater face value, which may magnify the fund's gains or losses. Adverse changes in the value or level of the underlying asset, reference rate, or index can result in a loss of an amount substantially greater than the amount invested in the derivative [[7]].
Derivatives Risk: The use of derivatives could increase or decrease the fund's exposure to the risks of the underlying instrument. Derivatives transactions can be highly illiquid and difficult to unwind or value, and changes in the value of a derivative held by the fund may not correlate with the value of the underlying instrument or the fund's other investments [[8]].
Distribution Rate and 30-Day SEC Yield: The distribution rate represents the annual yield an investor would receive if the most recently declared distribution, which includes option income, remained the same going forward. It's important to note that distributions are not guaranteed, and the distribution rate and 30-Day SEC yield are not indicative of future distributions on the ETFs [[9]].
Median 30 Day Spread: This is a calculation of the fund's median bid-ask spread, expressed as a percentage rounded to the nearest hundredth, providing insight into the fund's trading liquidity [[10]].
Commissions: Commissions may be charged on trades, which is an important consideration for investors when evaluating the overall cost of investing in the TRES ETF [[11]].
These concepts are essential for understanding the TRES ETF and its associated risks and considerations. If you have further questions or need more detailed information on any of these concepts, feel free to ask!
