Reality Shares NASDAQ NexGen Economy ETF

C000198148 Fund Overview

Reality Shares NASDAQ NexGen Economy ETF is a US ETF managed by Reality Shares ETF Trust, categorised as Emerging Markets Growth Equity. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.

• Type: US ETF
• Manager: Reality Shares ETF Trust
• Category: Emerging Markets Growth Equity
• Assets under management: $128.19M
• SEC CIK: 0001573496
• SEC series ID: S000061168
• Share class ID: C000198148

C000198148 Investment Objective and Strategy

Reality Shares NASDAQ NexGen Economy ETF describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Reality Shares ETF Trust.

Investment objective

The Reality Shares Nasdaq NexGen Economy ETF (the Fund) seeks long-term growth by tracking the investment returns, before fees and expenses, of the Reality Shares Nasdaq Blockchain Economy Index (the Index).

Principal investment strategy

The Fund seeks long-term growth by tracking the investment returns, before fees and expenses, of the Index. The Index was developed through a partnership between Reality Shares, Inc. (Reality Shares), the parent company of Reality Shares Advisors, LLC (the Adviser), the Funds investment adviser, and Nasdaq, Inc. (Nasdaq and together, the Index Providers). The Index is designed to measure the returns of companies that are committing material resources to developing, researching, supporting, innovating or utilizing blockchain technology for their proprietary use or for use by others (Blockchain Companies). These Blockchain Companies are committing material resources to further the use and deployment of blockchain technology to, for example, streamline the distribution and verification of cross-border payments; more efficiently store and secure cloud-based digital data; facilitate trusted transactions based on data security and privacy; and mitigate risk in supply chain management, among other uses.

Blockchain technology is an emerging technology that is redefining how a record of value is transacted. Blockchain technology seeks to solve transactional challenges of counterparty trust and the need for a central repository or ledger by providing a transparent and secure process to transfer and digitally record information on a shared transaction database through a secure, decentralized, peer-to-peer distributed ledger. In this regard, it is designed to facilitate the transfer of information or property between users such that the transfer is guaranteed to be secure and known to all participants and shared across a distributed network where, once verified, the legitimacy of the transfer cannot be challenged. Blockchain technology may be used to support a vast array of business applications in many different industries and markets, and the extent of its versatility has not yet been fully explored.

As a result, the Index may include equity securities of operating companies that focus on or have exposure to a wide variety of industries and countries, including emerging markets. The Index universe of Blockchain Companies is identified based on research and analysis conducted by the Index Providers. The Index universe is then narrowed to include only those Blockchain Companies with market capitalizations greater than $200 million, the shares of which are exchange-traded and have a six-month average daily trading volume greater than $1,000,000 as of the Indexs reconstitution date. The remaining Blockchain Companies are then ranked to determine the leading Blockchain Companies as measured by their Blockchain Score? which is a proprietary ranking system developed by the Index Providers designed to identify those Blockchain Companies expected to benefit most (e.g., from increased economic profit, operational efficiencies or transformational business practices) from the innovation, adoption, deployment and commercialization of blockchain technology.

The 50 to 100 leading Blockchain Companies with the highest Blockchain Scores? are then selected as the Index constituents. Constituents are weighted in the Index based on their Blockchain Scores?, with Blockchain Companies having higher Blockchain Scores? weighted more heavily. The Index is reconstituted semi-annually in March and September. As of December 18, 2017, the Index included companies with a capitalization range of $390 million to $660 billion. Under normal circumstances, at least 80% of the Funds assets, other than collateral held from securities lending, if any, will be invested in component securities of the Index. The Fund may invest up to 20% of its assets in other securities that are not components of the Index that the Adviser believes will help the Fund seek to track the Index.

The Fund expects to invest in common stocks, American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs). The Fund will not invest directly or indirectly in cryptocurrency. The Fund generally uses a replication strategy to achieve its investment objective, meaning that it will invest in all of the securities included in the Index in approximately the same proportions as the Index. The Fund may, however, use a representative sampling approach to achieve its investment objective when the Adviser believes it is in the best interest of the Fund, meaning that the Fund may invest in a subset, or sample, of the securities included in the Index and whose risk, return and performance characteristics generally match the risk, return and performance characteristics of the Index as a whole.

The Adviser expects that, over time, the correlation between the Funds performance and that of the Index, before fees and expenses, will exceed 95%. A correlation percentage of 100% would indicate perfect correlation. If the Fund uses a replication strategy, it can be expected to have greater correlation to the Index than if it uses a representative sampling strategy. The Fund seeks to remain fully invested at all times in securities that provide exposure to the Index without regard to market conditions, trends or direction. The Fund is considered to be non-diversified under the Investment Company Act of 1940, as amended (the 1940 Act), and may invest in the securities of fewer issuers than a diversified fund. To the extent the Index has significant exposure to a particular sector or is concentrated in a particular industry, the Fund will necessarily have significant exposure to that sector or be concentrated in that industry.

As of the date of this Prospectus, the Fund anticipates that it will have significant exposure to the Financials Sector and Information Technology Sector, as each sector is defined by the Global Industry Classification Standard, a widely recognized industry classification methodology developed by MSCI, Inc. and Standard & Poor's Financial Services LLC. In addition, as of the date of this Prospectus, the Index components, and thus the Fund's investments, are concentrated ( i.e. , 25% or more of its assets) in securities issued by companies in the Software & Services Industry, a separate industry within the Information Technology Sector. The industries in which the Index components, and thus the Fund's investments, may be concentrated will vary as the composition of the Index changes over time.

C000198148 Costs and Fees

C000198148 costs about $68 per $10,000 invested per year in fund expenses.

• Net expense ratio: 0.68%
• Gross expense ratio: 0.68%
• Portfolio turnover: 21%
• Brokerage commissions: 3.81 bps of average net assets (SEC N-CEN)

C000198148 Cashflows

Over the 12 months to 2020-10, Reality Shares NASDAQ NexGen Economy ETF had net inflows of $96.58M, from monthly SEC N-PORT filings.

C000198148 Debt Constituents

No individual debt constituents are reported in Reality Shares NASDAQ NexGen Economy ETF's latest SEC N-PORT filing.

C000198148 Prospectus and SEC Filings

Official Reality Shares NASDAQ NexGen Economy ETF filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.

• Prospectus (485BPOS) — filed 2020-03-20
• Prospectus (485BPOS) — filed 2019-03-19
• Prospectus (485BPOS) — filed 2018-01-31
• Portfolio holdings (N-PORT) — filed 2020-12-22
• Portfolio holdings (N-PORT) — filed 2020-09-25
• Portfolio holdings (N-PORT) — filed 2020-06-24
• Annual census (N-CEN) — filed 2021-01-12
• Annual census (N-CEN) — filed 2020-01-10

Related Funds

Other Emerging Markets Growth Equity funds tracked on ABC INVEST:

• Motley Fool Global Opportunities Fund (FOOLX)
• AMG Managers Special Equity Fund (MGSEX)
• CLS Global Aggressive Equity Fund (CLACX)
• Cavalier Growth Opportunities Fund (CATEX)
• The Tocqueville Opportunity Fund (TOPPX)

Data Sources

ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.