Loncar Cancer Immunotherapy ETF (CNCR) Summary Prospectus December 31, 2018

Transcription

1 Lncar Cancer Immuntherapy ETF (CNCR) Summary Prspectus December 31, 2018 Listed n The Nasdaq Stck Market LLC Befre yu invest, yu may want t review the Fund s Prspectus and Statement f Additinal Infrmatin ( SAI ), which cntain mre infrmatin abut the Fund and its risks. The current Prspectus and SAI, each dated December 31, 2018, are incrprated by reference int this Summary Prspectus. Yu can find the Fund s Prspectus, SAI and ther infrmatin abut the Fund nline at Yu can als get this infrmatin at n cst by calling r by sending an request t ETF@usbank.cm. IMPORTANT NOTE: Beginning n January 1, 2021, paper cpies f the Fund s sharehlder reprts will n lnger be sent by mail, unless yu specifically request paper cpies f the sharehlder reprts frm yur financial intermediary, such as a brkerdealer r bank. Instead, the sharehlder reprts will be made available n a website, and yu will be ntified by mail each time a reprt is psted and prvided with a website link t access the reprt. Yu may elect t receive all future Fund sharehlder reprts in paper, free f charge. If yu already elected t receive sharehlder reprts electrnically, yu will nt be affected by this change and yu need nt take any actin. Please cntact yur financial intermediary t infrm them that yu wish t cntinue receiving paper cpies f Fund sharehlder reprts and fr details abut whether yur electin t receive reprts in paper will apply t all funds held with yur financial intermediary. Investment Objective The Lncar Cancer Immuntherapy ETF (the Fund ) seeks t track the ttal return perfrmance, befre fees and expenses, f the Lncar Cancer Immuntherapy Index (the Index ). Fees and Expenses f the Fund This table describes the fees and expenses that yu may pay if yu buy and hld shares f the Fund ( Shares ). This table and the Example belw d nt include the brkerage cmmissins that investrs may pay n their purchases and sales f Shares. Annual Fund Operating Expenses (expenses that yu pay each year as a percentage f the value f yur investment) Management Fees 0.79% Distributin and/r Service (12b-1) Fees Nne Other Expenses 0.00% Ttal Annual Fund Operating Expenses 0.79% Expense Example This Example is intended t help yu cmpare the cst f investing in the Fund with the cst f investing in ther funds. The Example assumes that yu invest $10,000 in the Fund fr the time perids indicated and then redeem all f yur shares at the end f thse perids. The Example als assumes that yur investment has a 5% return each year and that the Fund s perating expenses remain the same. Althugh yur actual csts may be higher r lwer, based n these assumptins yur csts wuld be: Prtfli Turnver 1 Year: $81 3 Years: $252 5 Years: $ Years: $978 The Fund pays transactin csts, such as cmmissins, when it buys and sells securities (r turns ver its prtfli). A higher prtfli turnver rate may indicate higher transactin csts and may result in higher taxes when Shares are held in a taxable accunt. These csts, which are nt reflected in annual fund perating expenses r in the example, affect the Fund s perfrmance. Fr the fiscal year ended August 31, 2018, the Fund s prtfli turnver rate was 78% f the average value f its prtfli. Principal Investment Strategies The Fund uses a passive management (r indexing) apprach t track the perfrmance, befre fees and expenses, f the Index. 1

2 Lncar Cancer Immuntherapy Index The Index is cmpsed f the cmmn stck f apprximately 25 pharmaceutical r bitechnlgy cmpanies identified by Lncar Investments, LLC ( Lncar r the Index Prvider ), the Fund s index prvider, as having a high strategic fcus n the develpment f drugs that harness the bdy s wn immune system t fight cancer ( immuntherapy ). Lncar identifies cmpanies with a high strategic fcus n cancer immuntherapy ( Immuntherapy Cmpanies ) based n whether they meet ne r mre f the fllwing criteria: (i) (ii) (iii) (iv) The cmpany has a cancer immuntherapy drug(s) apprved by either the U.S. Fd and Drug Administratin r the Eurpean Medicines Agency; The cmpany has a cancer immuntherapy drug(s) in the human stage f testing; The cmpany has annunced intentins t begin human stage testing f a cancer immuntherapy drug(s); r The cmpany has annunced an immuntherapy cllabratin r partnership with a majr pharmaceutical cmpany. The Index is cnstructed using an bjective, rules-based methdlgy that begins with an initial universe f all pharmaceutical and bitechnlgy cmpanies whse equity securities r American Depsitary Receipts ( ADRs ) are listed n a U.S. exchange. The initial universe is then narrwed t include nly thse cmpanies that have been determined by Lncar t be Immuntherapy Cmpanies, that are nt knwn t be under investigatin by the SEC r any ther gvernment r regulatry entity, that have a minimum market capitalizatin f $100 millin, and that meet certain liquidity threshlds. The Index may include small-, mid-, and large-capitalizatin cmpanies. Frm the remaining cmpanies, the Index Prvider then selects (i) five f the largest pharmaceutical Immuntherapy Cmpanies, including the leading pharmaceutical cmpany in each f the three mst established and recgnized categries f immuntherapy techniques (cell-based therapies, checkpint inhibitrs and targeted antibdies), plus the tw ther largest pharmaceutical Immuntherapy Cmpanies, and (ii) the twenty largest bitechnlgy Immuntherapy Cmpanies based n their market capitalizatin. The Index is equal-weighted and is rebalanced and recnstituted n the third Tuesday f June and December. The Index was created by Lncar in March 2015 in anticipatin f the cmmencement f peratins f the Fund. Additinal infrmatin abut the Index is available n the Index Prvider s website at The Fund s Investment Strategy The Fund attempts t invest all, r substantially all, f its assets in the cmpnent securities and ADRs that make up the Index. Under nrmal circumstances, at least 80% f the Fund s ttal assets (exclusive f any cllateral held frm securities lending) will be invested in the cmpnent securities f the Index. Exchange Traded Cncepts, LLC ( ETC r the Adviser ), the Fund s investment adviser, expects that, ver time, the crrelatin between the Fund s perfrmance and that f the Index, befre fees and expenses, will be 95% r better. The Fund will generally use a replicatin strategy t achieve its investment bjective, meaning it generally will invest in all f the cmpnent securities f the Index. Hwever, the Fund may use a representative sampling strategy, meaning it may invest in a sample f the securities in the Index whse risk, return and ther characteristics clsely resemble the risk, return and ther characteristics f the Index as a whle, when the Fund s sub-adviser believes it is in the best interests f the Fund (e.g., when replicating the Index invlves practical difficulties r substantial csts, an Index cnstituent becmes temprarily illiquid, unavailable r less liquid, r as a result f legal restrictins r limitatins that apply t the Fund but nt t the Index). The Fund generally may invest up t 20% f its ttal assets (exclusive f any cllateral held frm securities lending) in securities r ther investments nt included in the Index, but which the Fund s sub-adviser believes will help the Fund track the Index. Fr example, the Fund may invest in securities that are nt cmpnents f the Index t reflect varius crprate actins and ther changes t the Index (such as recnstitutins, additins and deletins). T the extent the Index cncentrates (i.e., hlds mre than 25% f its ttal assets) in the securities f a particular industry r grup f related industries, the Fund will cncentrate its investments t apprximately the same extent as the Index. The Fund is expected t cncentrate in Immuntherapy Cmpanies. 2

3 Principal Investment Risks Yu can lse mney n yur investment in the Fund. The Fund is subject t the risks described belw. Sme r all f these risks may adversely affect the Fund s net asset value per share ( NAV ), trading price, yield, ttal return, and/r ability t meet its bjective. Fr mre infrmatin abut the risks f investing in the Fund, see the sectin in the Fund s Prspectus titled Additinal Infrmatin Abut the Fund Principal Investment Risks. Depsitary Receipt Risk. Depsitary Receipts invlve risks similar t thse assciated with investments in freign securities, such as changes in plitical r ecnmic cnditins f ther cuntries and changes in the exchange rates f freign currencies. Depsitary Receipts listed n U.S. exchanges are issued by banks r trust cmpanies, and entitle the hlder t all dividends and capital gains that are paid ut n the underlying freign shares ( Underlying Shares ). When the Fund invests in Depsitary Receipts as a substitute fr an investment directly in the Underlying Shares, the Fund is expsed t the risk that the Depsitary Receipts may nt prvide a return that crrespnds precisely with that f the Underlying Shares. Equity Market Risk. The equity securities held in the Fund s prtfli may experience sudden, unpredictable drps in value r lng perids f decline in value. This may ccur because f factrs that affect securities markets generally r factrs affecting specific issuers, industries, sectrs r cmpanies in which the Fund invests. Cmmn stcks are susceptible t general stck market fluctuatins and t vlatile increases and decreases in value as market cnfidence in and perceptins f their issuers change. ETF Risks. Authrized Participants, Market Makers, and Liquidity Prviders Cncentratin Risk. The Fund has a limited number f financial institutins that may act as APs. In additin, there may be a limited number f market makers and/r liquidity prviders in the marketplace. T the extent either f the fllwing events ccur, Shares may trade at a material discunt t NAV and pssibly face delisting: (i) APs exit the business r therwise becme unable t prcess creatin and/r redemptin rders and n ther APs step frward t perfrm these services, r (ii) market makers and/r liquidity prviders exit the business r significantly reduce their business activities and n ther entities step frward t perfrm their functins. Csts f Buying r Selling Shares. Due t the csts f buying r selling Shares, including brkerage cmmissins impsed by brkers and bid/ask spreads, frequent trading f Shares may significantly reduce investment results and an investment in Shares may nt be advisable fr investrs wh anticipate regularly making small investments. Shares f the Fund May Trade at Prices Other Than NAV. As with all exchange traded funds ( ETFs ), Fund shares may be bught and sld in the secndary market at market prices. Althugh it is expected that the market price f the shares f the Fund will apprximate the Fund s NAV, there may be times when the market price f the shares is mre than the NAV intra-day (premium) r less than the NAV intra-day (discunt) due t supply and demand f the Fund s shares r during perids f market vlatility. This risk is heightened in times f market vlatility r perids f steep market declines. Because certain securities held by the Fund trade n freign exchanges that are clsed when the Fund s primary listing exchange is pen, the Fund is likely t experience premiums and discunts greater than thse f dmestic ETFs. Trading. Althugh Shares are listed fr trading n The Nasdaq Stck Market LLC (the Exchange ) and may be traded n U.S. exchanges ther than the Exchange, there can be n assurance that Shares will trade with any vlume, r at all, n any stck exchange. In stressed market cnditins, the liquidity f Shares may begin t mirrr the liquidity f the Fund s underlying prtfli hldings, which can be significantly less liquid than Shares. Freign Cmpanies Risk. Investments in ADRs that prvide expsure t securities traded in freign markets invlve substantial risk due t limited infrmatin; different accunting, auditing and financial reprting standards; r adverse plitical r ecnmic develpments. Immuntherapy Cmpanies Risk. Immuntherapy Cmpanies are highly dependent n the develpment, prcurement and marketing f drugs and the prtectin and explitatin f intellectual prperty rights. A cmpany s valuatin can als be greatly affected if ne f its prducts is prven r alleged t be unsafe, ineffective r unprfitable. The stck prices f Immuntherapy Cmpanies have been and will likely cntinue t be very vlatile. The csts assciated with develping new drugs can be significant, and the results are unpredictable. Newly develped drugs may be susceptible t prduct bslescence due t intense cmpetitin frm new prducts and less cstly generic prducts. Mrever, the prcess fr btaining regulatry apprval by the U.S. Fd and Drug 3

4 Administratin r ther gvernmental regulatry authrities is lng and cstly and there can be n assurance that the necessary apprvals will be btained r maintained. Certain cmpanies in which the Fund may invest are nn-u.s. issuers whse securities r ADRs are listed n U.S. exchanges. The internatinal peratins f many Immuntherapy Cmpanies expse them t risks assciated with instability and changes in ecnmic and plitical cnditins, freign currency fluctuatins, changes in freign regulatins and ther risks inherent t internatinal business. Nn-Diversificatin Risk. The Fund is cnsidered t be nn-diversified, which means that it may invest mre f its assets in the securities f a single issuer r a smaller number f issuers than if it were a diversified fund. As a result, the Fund may be mre expsed t the risks assciated with and develpments affecting an individual issuer r a smaller number f issuers than a fund that invests mre widely. This may increase the Fund s vlatility and cause the perfrmance f a relatively smaller number f issuers t have a greater impact n the Fund s perfrmance. Passive Investment Risk. The Fund is nt actively managed and the Fund s sub-adviser wuld nt sell shares f an equity security due t current r prjected underperfrmance f a security, industry r sectr, unless that security is remved frm the Index r the selling f shares f that security is therwise required upn a recnstitutin f the Index in accrdance with the Index methdlgy. Prtfli Turnver Risk. The Fund may actively and frequently trade securities r ther instruments in its prtfli t carry ut its investment strategies. A high prtfli turnver rate increases transactin csts, which may increase the Fund s expenses. Frequent trading may als cause adverse tax cnsequences fr investrs in the Fund due t an increase in shrt-term capital gains. Smaller Cmpanies Risk. The Fund may invest in the securities f smaller-capitalizatin cmpanies. As a result, the Fund may be mre vlatile than funds that invest in larger, mre established cmpanies. The securities f smallercapitalizatin cmpanies generally trade in lwer vlumes and are subject t greater and mre unpredictable price changes than larger capitalizatin stcks r the stck market as a whle. Smaller-capitalizatin cmpanies may be particularly sensitive t changes in interest rates, gvernment regulatin, brrwing csts and earnings. Tax Risk. T qualify fr the favrable tax treatment generally available t regulated investment cmpanies ( RICs ), the Fund must satisfy certain diversificatin requirements. In particular, the Fund generally may nt acquire a security if, as a result f the acquisitin, mre than 50% f the value f the Fund s assets wuld be invested in (a) issuers in which the Fund has, in each case, invested mre than 5% f the Fund s assets r (b) issuers mre than 10% f whse utstanding vting securities are wned by the Fund. While the weighting f the Index is nt incnsistent with these rules, given the cncentratin f the Index in a relatively small number f securities, it may nt always be pssible fr the Fund t fully implement a replicatin strategy r a representative sampling strategy while satisfying these diversificatin requirements. The Fund s effrts t satisfy the diversificatin requirements may affect the Fund s executin f its investment strategy and may cause the Fund s return t deviate frm that f the Index, and the Fund s effrts t replicate r represent the Index may cause it inadvertently t fail t satisfy the diversificatin requirements. If the Fund were t fail t satisfy the diversificatin requirements, it culd incur penalty taxes and be frced t dispse f certain assets, r it culd fail t qualify as a regulated investment cmpany. If the Fund were t fail t qualify as a regulated investment cmpany, it wuld be taxed in the same manner as an rdinary crpratin, and distributins t its sharehlders wuld nt be deductible by the Fund in cmputing its taxable incme. Tracking Errr Risk. As with all index funds, the perfrmance f the Fund and its Index may differ frm each ther fr a variety f reasns. Fr example, the Fund incurs perating expenses and prtfli transactin csts nt incurred by the Index. In additin, the Fund may nt be fully invested in the securities f the Index at all times r may hld securities nt included in the Index. Perfrmance The fllwing perfrmance infrmatin indicates sme f the risks f investing in the Fund. The bar chart shws the Fund s perfrmance fr the calendar years ended December 31. The table illustrates hw the Fund s average annual returns fr the 1-year and since inceptin perids cmpare with thse f a brad measure f market perfrmance and the Index. The Fund s past perfrmance, befre and after taxes, des nt necessarily indicate hw it will perfrm in the future. Updated perfrmance infrmatin is als available n the Fund s website at r by calling the Fund tll free at

5 Calendar Year Ttal Return 20% 10% 13.09% 0% -10% -20% -30% % Fr the year-t-date perid ended September 30, 2018, the Fund s ttal return was 4.84%. During the perid f time shwn in the bar chart, the Fund s highest quarterly return was 17.84% fr the quarter ended September 30, 2016 and the lwest quarterly return was 23.82% fr the quarter ended March 31, Average Annual Ttal Returns Fr the Perids Ended December 31, 2017 Since Inceptin 1 Year (10/13/2015) Return Befre Taxes 13.09% -1.52% Return After Taxes n Distributins 12.49% -1.82% Return After Taxes n Distributins and Sale f Fund Shares 7.52% -1.26% Lncar Cancer Immuntherapy Index (reflects n deductin fr fees, expenses, r taxes) 14.05% -0.56% Standard & Pr s 500 (S&P 500 Index) (reflects n deductin fr fees, expenses, r taxes) 21.83% 16.32% After-tax returns are calculated using the histrical highest individual federal marginal incme tax rates during the perid cvered by the table abve and d nt reflect the impact f state and lcal taxes. Actual after-tax returns depend n an investr s tax situatin and may differ frm thse shwn. In certain cases, the figure representing Return After Taxes n Distributins and Sale f Fund Shares may be higher than the ther return figures fr the same perid. A higher after-tax return results when a capital lss ccurs upn redemptin and prvides an assumed tax deductin that benefits the investr. After-tax returns shwn are nt relevant t investrs wh hld their Shares thrugh tax-deferred arrangements such as an individual retirement accunt ( IRA ) r ther tax-advantaged accunts. Prtfli Management Adviser Sub-Adviser Prtfli Managers Purchase and Sale f Shares Exchange Traded Cncepts, LLC Vident Investment Advisry, LLC ( VIA r the Sub-Adviser ) Denise M. Krisk, CFA, President f VIA, has been a prtfli manager f the Fund since its inceptin in Octber, Austin Wen, Prtfli Manager f VIA, has been a prtfli manager f the Fund since December, Shares are listed n a natinal securities exchange, such as The Nasdaq Stck Market, LLC (the Exchange ), and mst investrs will buy and sell Shares f the Fund thrugh brkers at market prices, rather than NAV. Because Shares trade at market prices rather than NAV, Shares may trade at a price greater than NAV (premium) r less than NAV (discunt). The Fund issues and redeems Shares at NAV nly in large blcks knwn as Creatin Units, which nly Authrized Participants ( APs ) (typically, brker-dealers) may purchase r redeem. Creatin Units generally cnsist f 50,000 Shares, 5

6 thugh this may change frm time t time. The Fund generally issues and redeems Creatin Units in exchange fr a prtfli f securities clsely apprximating the hldings f the Fund (the Depsit Securities ) and/r a designated amunt f U.S. cash. Tax Infrmatin Fund distributins are generally taxable as rdinary incme, qualified dividend incme, r capital gains (r a cmbinatin), unless yur investment is in an individual retirement accunt ( IRA ) r ther tax-advantaged accunt. Distributins n investments made thrugh tax-deferred arrangements may be taxed later upn withdrawal f assets frm thse accunts. Financial Intermediary Cmpensatin If yu purchase Shares f the Fund thrugh a brker-dealer r ther financial intermediary (such as a bank) (an Intermediary ), the Adviser r its affiliates may pay Intermediaries fr certain activities related t the Fund, including participatin in activities that are designed t make Intermediaries mre knwledgeable abut exchange traded prducts, including the Fund, r fr ther activities, such as marketing, educatinal training r ther initiatives related t the sale r prmtin f Shares. These payments may create a cnflict f interest by influencing the Intermediary and yur salespersn t recmmend the Fund ver anther investment. Any such arrangements d nt result in increased Fund expenses. Ask yur salespersn r visit the Intermediary s website fr mre infrmatin. 6