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1 Powered by Artificial Intelligence SUMMARY OF CHANGES IN OUT Square Inc Valeant Pharmaceuticals Intern Kite Pharma Inc Target Corp Oracle Corp Ionis Pharmaceuticals Inc Blackstone Group LP/The Lam Research Corp Exxon Mobil Corp United Parcel Service Inc Foot Locker Inc Intuitive Surgical Inc Nucor Corp Wells Fargo & Co Raytheon Co Walgreens Boots Alliance Inc Take-Two Interactive Software SQ VRX KITE TGT ORCL IONS BX LRCX XOM UPS FL ISRG NUE WFC RTN WBA TTWO Mastercard Inc Ulta Beauty Inc salesforce.com Inc T-Mobile US Inc Electronic Arts Inc Nordstrom Inc Coca-Cola Co/The Cisco Systems Inc Merck & Co Inc JetBlue Airways Corp Macy s Inc McDonald s Corp Chipotle Mexican Grill Inc Colgate-Palmolive Co American Airlines Group Inc CVS Health Corp UnitedHealth Group Inc MA ULTA CRM TMUS EA JWN KO CSCO MRK JBLU M MCD CMG CL AAL CVS UNH SECTOR COMPARISON SECTOR JUNE 2017 INDEX WEIGHT (%) JULY 2017 INDEX WEIGHT (%) Consumer Discretionary Consumer Staples Energy Financial Services Health Care Industrials Information Technology Materials Telecommunication Services Utilities /6

2 STOCK SPOTLIGHT Biotech Earlier this month we highlighted the recent strength of biotech stocks, evident in the breakout in shares of IBB, the major biotech ETF, after a year and a half of consolidation. This month we saw that positive sentiment follow through to several stocks in the sector. Valeant Pharmaceuticals (NYSE: VRX) jumped back into the index with a 3% weight, and Kite Pharma (NASDAQ: KITE) was a first time addition to the Z Index along with Ionis Pharmaceuticals (NASDAQ: IONS). Health care s weight in the index jumped from 15% to 21% this month, one of the larger increases in a sector weight that we ve seen over the past year. The fact that the strong price action has been accompanied by increasing bullish online sentiment is a further positive, as it suggests the broader community is providing support to the rally. Given the amount of time that IBB has spent trading range-bound, it s not surprising that investors are looking for the breakout to continue longer term and are now eyeing a return to the 2015 highs. Volume of Online Data Shifting to a broader perspective, this month we highlight an interesting move in the overall amount of stock related discussion across online platforms. Over the past three months, there has been a steady increase in the number of stocks that now meet the volume threshold consideration utilized to generate the universe of stocks eligible for inclusion in the Z NextGen AI US Sentiment Leaders Index. The volume or mentions criterion is a key feature of the Index construction process as the measure provides for greater confidence in the predictive nature of sentiment measurements. As a result of the increase in the size of the eligible universe, turnover this month in the Index was above average at 17 names. The growing amount of conversation is a great sign. More conversation means more data, and more data allows the Z artificial intelligence engines to provide insights with even greater conviction. Furthermore, a broader universe provides more stock-specific opportunities from which to extract sentiment insights. We expect this trend to continue as more people adopt and engage in financial related discussions across the numerous and growing investment focused online platforms. INDEX FUNDAMENTALS 1.2% 22.9 Dividend Yield P/E Ratio $159.9B Average Market Cap $6.0B Smallest Market Cap $783.8B Largest Market Cap 2/6

3 INDEX HOLDINGS WEIGHT (%) Advanced Micro Devices Inc 3.00% Apple Inc 3.00% Amazon.com Inc 3.00% Micron Technology Inc 3.00% Square Inc 3.00% Valeant Pharmaceuticals Intl 3.00% Alphabet Inc 3.00% Tesla Inc 3.00% Facebook Inc 3.00% Microsoft Corp 3.00% Twitter Inc 2.95% Gilead Sciences Inc 2.90% Bank of America Corp 2.65% NVIDIA Corp 2.54% Kroger Co/The 2.52% Walt Disney Co/The 2.24% Celgene Corp 2.05% NIKE Inc 2.04% Kite Pharma Inc 2.00% Costco Wholesale Corp 1.98% Exelixis Inc 1.88% Intel Corp 1.83% Applied Materials Inc 1.64% Activision Blizzard Inc 1.58% Ford Motor Co 1.44% AbbVie Inc 1.43% Western Digital Corp 1.39% Adobe Systems Inc 1.39% Sprint Corp 1.37% Target Corp 1.36% Wal-Mart Stores Inc 1.34% Alexion Pharmaceuticals Inc 1.28% Oracle Corp 1.18% JPMorgan Chase & Co 1.09% Citigroup Inc 1.03% PayPal Holdings Inc 0.96% Goldman Sachs Group Inc/The 0.96% Ionis Pharmaceuticals Inc 0.94% Blackstone Group LP/The 0.87% WEIGHT (%) Wynn Resorts Ltd 0.85% Boeing Co/The 0.85% Freeport-McMoRan Inc 0.84% Starbucks Corp 0.81% Amgen Inc 0.79% Bristol-Myers Squibb Co 0.78% General Electric Co 0.73% Home Depot Inc/The 0.70% Lam Research Corp 0.68% Exxon Mobil Corp 0.67% TESARO Inc 0.66% Regeneron Pharmaceuticals Inc 0.65% Broadcom Ltd 0.64% United Parcel Service Inc 0.63% Johnson & Johnson 0.63% Netflix Inc 0.60% Pfizer Inc 0.56% Foot Locker Inc 0.54% Altria Group Inc 0.54% Priceline Group Inc/The 0.53% Intuitive Surgical Inc 0.52% Palo Alto Networks Inc 0.52% ebay Inc 0.51% Sirius XM Holdings Inc 0.50% QUALCOMM Inc 0.49% Nucor Corp 0.48% Wells Fargo & Co 0.47% Biogen Inc 0.46% AT&T Inc 0.46% Raytheon Co 0.45% Walgreens Boots Alliance Inc 0.45% Take-Two Interactive Software 0.44% Marathon Oil Corp 0.44% Incyte Corp 0.44% Lockheed Martin Corp 0.43% Verizon Communications Inc 0.43% Total: /6

4 TOP U.S. STOCKS DISCUSSED ACROSS ONLINE PLATFORMS TOP FIVE POSITIVELY TRENDING STOCKS IN THE INDEX Advanced Micro Devices Inc AMD Micron Technology Inc MU Kroger Co/The KR Gilead Sciences Inc GILD Costco Wholesale Corp COST BOTTOM FIVE NEGATIVELY TRENDING STOCKS NOT IN THE INDEX Caterpillar Inc CAT salesforce.com Inc CRM Ulta Beauty Inc ULTA Mastercard Inc MA Snap Inc SNAP 4/6

5 The Z NextGen AI US Sentiment Leaders Index identifies the 75 most bullish U.S. stocks based on investment insights derived from the vast content generated across online platforms. Millions of unique stock-specific data points aggregated from online sources including social media, news articles and blog posts are processed on a monthly basis. The data is filtered through an analytics model which utilizes Natural Language Processing Algorithms and Artificial Intelligence applications. HOW IT WORKS: 1. Where s the Z? First, from a defined investment universe of U.S. stocks, the Z Index targets the most mentioned stocks discussed across online platforms. 2. What s the Z? The Z Index looks at what the online community is saying about these most-mentioned stocks and whether the Z is positive, negative or neutral on a collective basis. 3. Who is creating the Z? The Z Index pinpoints influencers within the online community and identifies whose tweets and posts are most likely to impact collective opinion. It also identifies and scores which members of the online community have historically been the most successful in their forecasting accuracy. 5/6

6 IMPORTANT DISCLOSURES & DEFINITIONS An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contain this and other information please contact your financial professional or call Read the prospectus carefully before investing. Z US Sentiment Leaders ETF shares are not individually redeemable. Investors buy and sell shares of the Z US Sentiment Leaders ETF on a secondary market. Only market makers or authorized participants may trade directly with the Fund, typically in blocks of 50,000 shares. The ability to invest based on artificial intelligence analytics is relatively new and untested. The Fund may invest a significant portion of its assets in securities issued by companies in the information technology sector in order to track the Underlying index s allocation to that sector. These types of funds typically have a high portfolio turnover that could increase transaction costs and cause short-term capital gains to be realized. The Fund is not suitable for all investors. There are risks involved with investing in ETFs including the loss of money. The Fund is considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund. Funds that emphasize investment in small/mid cap companies will generally experience grater price volatility. Diversification does not eliminate the risk of experiencing investment losses. ETFs are considered to have continuous liquidity because they allow for an individual to trade throughout the day. Defined investment universe of US stocks in order to be eligible for inclusion in the Underlying Index, a company s stock must be traded on one or more major U.S. exchanges, have a minimum market capitalization of at least $5 billion, and have a 3 month minimum average daily trading volume of $1 million. Investing in companies based on artificial intelligence analytics involves the potential for market manipulation because online posts may be made with an intent to inflate, or otherwise manipulate, the public perception of a stock or other investment. Text and sentiment analysis of online postings may prove inaccurate; that is, high positive sentiment may not correlate with positive change in the value of a company s stock. Natural language processing (NLP) deals with the application of computational models to text or speech data. NLP algorithms can be used in Sentiment analysis to identify and extract subjective information in source materials. Sentiment analysis is widely applied to reviews and other online content for a variety of applications, ranging from marketing to customer service. Artificial intelligence (AI) is the intelligence exhibited by machines or software. One of the central problems (or goals) of AI research include natural language processing (communication). Online Platforms, as it relates to the ETF, refers to social media, news articles and blog posts. Some examples of social media sites may include, but are not limited to, the following: Facebook, Twitter, LinkedIn, StockTwits, blogs, Investopedia, stock forums, etc. Online community refers to the users of the online sites. Fundamental Analysis is a method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors ALPS Portfolio Solutions Distributor, Inc. is the Distributor for the Z US Sentiment Leaders ETF.. 6/ /30/2018