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DIVY – Fund Characteristics

Reality Shares DIVS ETF

Investment Objective Fund Strategy Fund Characteristics Fund Risks
The Reality Shares DIVS ETF seeks . . . More The Fund’s investment advisor, Reality Shares . . . More The Fund has embedded risks . . . More

Fund Characteristics

The Fund seeks to produce returns based primarily on increases in the expected dividend values of Large Cap Securities.

The Fund may use a variety of investment strategies to achieve this objective, including dividend swaps, listed option contracts, and futures on indexes of Large Cap Securities or exchange-traded funds (“ETFs”), but generally invests in a portfolio of dividend swap contracts on an index of U.S. Large Cap Securities. The contracts reflect current market expectations for future dividend payments on the index, and the value of the Fund’s portfolio is designed to change based primarily on changes in the expected dividend values reflected in the prices of the swap contracts. The Fund does not capture actual dividend payments, does not produce dividend income, and Fund returns may go down even when actual dividend payments rise.

How It Works

The investment return of the Fund seeks to capture the change in expected dividend values of the Fund’s instruments over time.

The following diagrams do not represent all market scenarios, but are presented to show the potential relationship between actual dividend values and expected dividend values in accordance with Reality Shares’ research. The diagrams do not represent the actual performance of the Fund.

 

 

The Fund does not generate dividend income, and is not appropriate for investors seeking dividend income.

  • The Fund operates as an open-ended investment management company;
  • The Fund does not capture actual dividend payments, and Fund returns may go down even when actual dividend payments rise. Although the Advisor’s research indicates the value of actual dividend payments has historically been highly correlated to expected dividend values, there can be no guarantee that this correlation will continue or that the Fund’s investment returns will be highly correlated to the value of actual dividends paid on the Large Cap Securities over short or even long periods;
  • The Fund generally holds dividend swaps and other instruments including cash (or cash equivalent) positions;
  • Unlike more traditional products, the Fund does not seek returns based on appreciation in the stock market price of equity securities. This means that the returns on your Fund investment are not intended to correlate to the returns of the overall stock market (for example, the value of your Fund investment may go down when overall equity markets go up, or vice versa);
  • The Fund does not produce dividend income and is not an appropriate investment if you are seeking dividend income;
  • The investment returns of the Fund are treated for tax purposes as capital gains or losses, as applicable. Please refer to the section in the Prospectus entitled “Taxes” for more information;
  • The Fund has total operating expenses of 0.85%.

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