ORFN
Constrained Capital ESG Orphans ETF
Glossary
30-Day SEC Yield
The 30-Day Yield represents net investment income earned by the Fund over the 30-Day period ended on the date indicated by the Yield, expressed as an annual percentage rate based on the Fund’s share price at the end of the 30-Day period. The 30-Day unsubsidized SEC Yield does not reflect any fee waivers/reimbursements/limits in effect.
Barbell Strategy
The barbell strategy is an investment theory suggesting that the best way to stabilize reward and risk is to invest in the two extremes, high-risk and no-risk assets while avoiding conservative choices.
Capital Constraints
Constrained Capital refers to the phenomenon discussed by market practitioners such as Cliff Asness when he talks about the expected return being higher as, “…the virtuous don’t hold the sinful stocks and the sinful investors make more going forward than otherwise.”
Constrained Capital ESG Orphans Index
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.
ESG
ESG investing is defined as utilizing environmental, social, and governance (ESG) criteria as a set of standards for a company’s operations that socially conscious investors use to screen potential investments.
ESG Orphans
ESG Orphans are industry sectors or sub-sectors that is commonly orphaned, discarded, or excluded by ESG investment strategies. These sectors include, but may not be limited to, fossil fuel energy, nuclear power, tobacco, weapons/firearms, alcohol, and/or gaming. These sectors may change from time-to-time. In the case that a sector becomes an “ESG Inclusion” Constrained Capital will reassess and maintain the sectors detailed under the methodology.
NASDAQ
Nasdaq is a global electronic marketplace for buying and selling securities. The first electronic stock market listing over 5000 companies.
Net Asset Value (NAV)
The “market value” of all a company’s assets, including but not limited to its properties, after subtracting the “market value” of all its liabilities and obligations.
Orphan Investing
“Orphan stocks” are stocks investors and analysts tend to ignore. It’s a colloquial term for stocks that analysts seem to disregard. The ESG Investing community has created their own set of Orphans in the 6 sectors that they are excluding from their investment club.
© 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