ORFN
Constrained Capital ESG Orphans ETF
Investment Strategy
The Constrained Capital ESG Orphans ETF (ORFN) seeks to track the performance of the Constrained Capital ESG Orphans’ Index, before fees and expenses. The Fund will invest all, or substantially all, of its assets in the components securities and American Depositary Receipts (ADRs) that make up the Index. The Index is comprised of US equity securities of publicly traded mid- and large-cap US-listed companies that are ESG Orphans (exclusions) as defined by the Index. The 6 industries defined by the index are: fossil fuel, nuclear energy, weapons & munitions, tobacco, alcohol and gaming.
About the Firm
Constrained Capital was created to capitalize on opportunities in the public markets where investment methodologies, in its opinion, have distorted prices of securities due to capital constraints. The Firm believes that the bubble of Environmental, Social and Governance (ESG) investing has put constraints on Fossil Fuels, Nuclear Energy, Weapons, Alcohol, Tobacco, and Gaming.
Constrained Capital approaches these opportunities from the perspective of maximizing potential economic returns with each unit of capital invested. Our research and investments seek to capitalize on risk-adjusted returns in higher expected return securities.
Why Invest in ORFN
Higher expected return potential
We believe a bubble has formed around ESG investing. Over the past decade, this movement has distorted prices as entire sectors (the “Orphans”) were excluded from portfolios. In our view, the investment constraints on the Orphan securities have created the potential opportunity for return and risk-adjusted returns over time.
Non-correlated diversification
ORFN is backed by research suggesting Orphaned securities have higher-expected return potential. Because they’re excluded and severely under-owned, the result is lower market correlation from the broader indices.
Barbell portfolio strategy
Given ORFN’s dividend yield, market beta, composition, and defensive nature, it may help provide portfolio balance (or a “barbell strategy”), for investors positioned for more risk and market beta.
Overview
Fund Data & Pricing
| Net Assets | $0.92m |
| Shares Outstanding | 50,000 |
| Net Asset Value (NAV) | $18.31 |
| Market Price (MKT) | 18.3 |
| Closing Price | $18.30 |
| Median 30-Day Spread % | 0.33% |
30-Day Median 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.
Performance
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (800) 794-1485.Short term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. Returns beyond 1 year are annualized. A fund’s NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The market price is the most recent price at which the fund was traded. The fund intends to pay out dividends and interest income, if any, monthly. There is no guarantee these distributions will be made.
Holdings
| Name | Shares Held | Market Value | % Of Net Assets | |
| EXXON MOBIL CORP | 870 | 73,549.80 | 8.03% | |
| PHILIP MORRIS INTL INC | 612 | 55,190.16 | 6.03% | |
| CHEVRON CORP NEW | 397 | 54,647.05 | 5.97% | |
| RAYTHEON TECHNOLOGIES CORP | 593 | 54,099.39 | 5.91% | |
| NEXTERA ENERGY INC | 677 | 53,286.67 | 5.82% | |
| LOCKHEED MARTIN CORP | 106 | 42,228.28 | 4.61% | |
| DIAGEO PLC | 215 | 37,566.95 | 4.10% | |
| ANHEUSER BUSCH INBEV SA/NV | 678 | 37,005.24 | 4.04% | |
| BRITISH AMERN TOB PLC | 878 | 36,235.06 | 3.96% | |
| BOEING CO | 233 | 34,423.42 | 3.76% |
Purchase Information
Buy ORFN
Constrained Capital’s ESG Orphans ETF (ORFN) is available through various channels including via phone (800) 794-1485, broker-dealers, investment advisors, and other financial services firms.
This Fund is not affiliated with these financial service firms. Their listing should not be viewed as a recommendation or endorsement.
© 2024 Constrained Capital LLC
Important Information
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. To view this and other information about the Fund, click to read the prospectus or the summary prospectus. Read the prospectus or summary prospectus carefully before investing.
Investing in ETFs involves risk and there is no guarantee of principal.
Because the Fund is an ETF (rather than a mutual fund), shares are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemable. Owners of shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in Creation Unit aggregations only. Brokerage commissions will reduce returns.
Diversification in an individual’s investment portfolio does not assure a profit.
American Depositary Receipt Risk (ADR). ADRs involve risks like those associated with investments in foreign securities, including changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. ADRs listed on U.S. exchanges are issued by banks or trust companies and entitle the holder to all dividends and capital gains paid out on the underlying foreign shares. Investing in ADRs as a substitute for an investment directly in the foreign company shares, exposes the Fund to the risk that the ADRs may not provide a return that corresponds precisely with that of the foreign company’s shares. Concentration Risk. Because the Fund’s investments will be concentrated in a group of industries, to the extent the Index is concentrated, the value of its shares may rise and fall more than the value of shares in a fund invested in a broader range of industries. ESG Orphan Risk. A strategy or emphasis on environmental, social and governance factors (“ESG”) orphaned industries, such as fossil fuel energy, nuclear power, tobacco, weapons/firearms, alcohol and/or gambling, may limit the investment opportunities available to a portfolio. Therefore, the portfolio may underperform or perform differently than other portfolios that do not have an ESG Orphaned industry focus or limitation. New Fund Risk. The Fund is recently organized with no operating history and managed by an Adviser that has not previously managed a registered fund. As such, the Fund has no track record on which to base investment decisions. Non-Diversification Risk. Because the Fund is “non-diversified,” it may invest a greater percentage of its assets in securities of a single issuer or fewer issuers than a diversified fund, which may expose the Fund to the risks associated with the developments affecting the issuers in which the Fund invests. Passive Management Risk. The Fund is passively managed and attempts to mirror the composition and performance of the ESG Orphans Index. The Fund’s returns may not match due to expenses incurred by the Fund or lack of precise correlation with the index.
The Solactive Capital ESG Orphans Index is a representation of companies that have business operations in one of the following industries: alcohol, fossil fuel energy, gaming, nuclear power, tobacco and weapons/firearms. The Index is calculated, administered, and published by Solactive AG, the Index’s administrator.
Constrained Capital, LLC is the owner of the ESG Orphans Index and the sponsor of the Fund.
Toroso Investments, LLC (Toroso) serves as investment adviser to the Fund.
Tidal ETF Services, LLC, a subsidiary of Toroso, serves as the Fund’s launch and structure partner.
The fund is distributed by Foreside Fund Services, LLC