PROSPECTUS. Listed on the NYSE Arca. February 16, 2017 as supplemented June 15, 2017

Transcription

1 PROSPECTUS SERENITYSHARES CORE U.S. ETF (EZUS) SERENITYSHARES CORE MULTI-ASSET ETF (EZ) SERENITYSHARES IMPACT ETF (ICAN) Listed n the NYSE Arca February 16, 2017 as supplemented June 15, 2017 The U.S. Securities and Exchange Cmmissin ( SEC ) has nt apprved r disapprved f these securities r passed upn the accuracy r adequacy f this Prspectus. Any representatin t the cntrary is a criminal ffense.

2 TABLE OF CONTENTS SerenityShares Cre U.S. ETF Summary...3 SerenityShares Cre Multi-Asset ETF Summary...7 SerenityShares Impact ETF Summary Additinal Infrmatin Abut The Funds Prtfli Hldings Infrmatin Management Hw t Buy and Sell Shares Dividends, Distributins and Taxes Distributin Premium/Discunt Infrmatin Additinal Ntices Financial Highlights... 33

3 SERENITYSHARES CORE U.S. ETF SUMMARY Investment Objective The SerenityShares Cre U.S. ETF (the Fund ) seeks t track the ttal return perfrmance, befre fees and expenses, f the SSI Cre U.S. 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 (the 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 0.50% Distributin and/r Service (12b-1) Fees 0.00% Other Expenses % Acquired Fund Fees and Expenses % Ttal Annual Fund Operating Expenses 0.77% 1 Estimated fr the current fiscal year. 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: 1 Year: $79 3 Years: $246 Prtfli Turnver The SerenityShares Cre U.S. ETF 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. Because the Fund is newly rganized, prtfli turnver infrmatin is nt yet available. Principal Investment Strategy The SerenityShares Cre U.S. ETF is a fund f funds that uses a passive management (r indexing) apprach t track the perfrmance, befre fees and expenses, f the Index. SSI Cre U.S. Index The Index is cnstructed using a rules-based methdlgy t create a diversified and investable prtfli f U.S.-listed exchange traded funds ( ETFs ) that invest principally in the cmmn stck f U.S. cmpanies in a particular sectr r industry grup (e.g., cmmunicatins, industrials, pharmaceuticals) r in dividend-paying stcks (each a Sectr ). Cnstructin f the Index begins with the universe f U.S.-listed Sectr ETFs that meet minimum trading vlume and capitalizatin requirements. If mre than fur Sectr ETFs meet the requirements fr a given Sectr, the Index will include n mre than the fur tp Sectr ETFs based n a cmbinatin f their net assets, expense ratis, investment plicies, and the structure f their underlying indices. The Index universe cnsists f the fllwing individual Sectrs: Aerspace & Defense Basic Materials Bitech Cmmunicatins Cnsumer Cyclical Cnsumer Discretinary Dividend Paying Energy Financials Health Care Hme Cnstructin Industrials Metals & Miners Natural Resurces Pharmaceuticals Reginal Banks Technlgy: Brad Technlgy: Narrw Transprtatin Utilities 3

4 The Index uses a prprietary technical analysis f metrics fr each Sectr ETF, such as the ETF s current and histric prices, bth actual and relative t ther metrics, such as mving averages r vlume f shares traded. The technical analysis is used t determine where each Sectr ETF is in the traditinal market cycle bear, early recvery, recvery, bull, r peak and the likelihd f the ETF s shares gaining r lsing value ver the next quarter. The technical analysis determines whether expsure t the Sectr ETF shuld be fully-weighted, half-weighted, r zer-weighted t preserve capital during extended perids f Sectr and/r market decline. The Index is rebalanced and recnstituted quarterly after the clse f trading n the next t last business day f each March, June, September, and December. Each Sectr ETF is assigned a Mdificatin Factr equal t the utcme f the technical analysis (i.e., 1 if fully-weighted, ½ if halfweighted, r 0 if zer-weighted), divided by the number f Sectr ETFs in the Index in the applicable ETF s Sectr. At the time f each rebalance f the Index, each Sectr ETF s weight equals its Mdificatin Factr divided by the sum f the mdificatin factrs fr all f the Sectr ETFs in the Index. Each Sectr is subject t a maximum 7.50% Sectr weight at the time f each rebalance, with excess amunts allcated t ne r mre ETFs that principally invest in shrt-term U.S. Treasuries. Frm time t time, ne r mre Sectrs may nt be represented in the Index if each Sectr ETF in the Sectr is zer-weighted. The Index was established in 2017 and is wned by SSI Indexes LLC (the Index Prvider ), an affiliate f the Fund s investment adviser. The Fund s Investment Strategy The Fund attempts t invest all, r substantially all, f its assets in the cmpnent securities 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. 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 may invest up t 20% f its ttal assets (exclusive f any cllateral held frm securities lending) in cash and cash equivalents, ther investment cmpanies, as well as securities and ther instruments 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. Principal Investment Risks All investments carry a certain amunt f risk and the SerenityShares Cre U.S. ETF cannt guarantee that it will achieve its investment bjective. Yu may lse mney by investing in the Fund. Belw are the principal risks f investing in the Fund and the ETFs in which the Fund invests ( Underlying ETFs ). Asset Allcatin Risk. The Index, and cnsequently the Fund, may favr an asset categry r investment strategy that perfrms prly relative t ther asset categries and investment strategies fr shrt r lng perids f time. Equity Market Risk. The equity securities held in the Fund s prtfli r in the prtflis f Underlying ETFs 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, r sectrs in which the Fund invests. Cmmn stcks, such as thse held by the Underlying ETFs, are generally expsed t greater risk than ther types f securities, such as preferred stck and debt bligatins, because cmmn stckhlders generally have inferir rights t receive payment frm issuers. Fixed Incme Securities Risk. The Fund may invest in Underlying ETFs that principally invest in fixed incme securities. The value f such instruments will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value f fixed incme securities wned by the Fund. The Fund may be subject t a greater risk f rising interest rates due t the current perid f histrically lw rates and the effect f ptential gvernment fiscal plicy initiatives and resulting market reactin t thse initiatives. In general, the market price f fixed incme securities with lnger maturities will increase r decrease mre in respnse t changes in interest rates than shrter-term securities. 4

5 Gvernment Obligatins Risk. The Fund may invest in securities issued by the U.S. gvernment. There can be n guarantee that the United States will be able t meet its payment bligatins with respect t such securities. Additinally, market prices and yields f securities supprted by the full faith and credit f the U.S. gvernment may decline r be negative fr shrt r lng perids f time. Investment Cmpany Risk. The risks f investing in investment cmpanies, such as ETFs, typically reflect the risks f the types f instruments in which the investment cmpanies invest. By investing in anther investment cmpany, the Fund becmes a sharehlder f that investment cmpany and bears its prprtinate share f the fees and expenses f the ther investment cmpany. Investments in ETFs are als subject t the fllwing risks: (i) the market price f an ETF s shares may trade abve r belw their net asset value; (ii) an active trading market fr an ETF s shares may nt develp r be maintained; and (iii) trading f an ETF s shares may be halted fr a number f reasns. Mdels and Data Risk. The cmpsitin f the Index is heavily dependent n prprietary quantitative mdels as well as infrmatin and data supplied by third parties ( Mdels and Data ). When Mdels and Data prve t be incrrect r incmplete, any decisins made in reliance theren may lead t the inclusin r exclusin f securities frm the Index universe that wuld have been excluded r included had the Mdels and Data been crrect and cmplete. If the cmpsitin f the Index reflects such errrs, the Fund s prtfli can be expected t reflect the errrs, t. N Operating Histry Risk. The Fund is a recently rganized, diversified management investment cmpany with n perating histry. As a result, prspective investrs have n track recrd r histry n which t base their investment decisin. Passive Investment Risk. The Fund invests in the securities included in, r representative f, its Index regardless f their investment merit. The Fund des nt attempt t utperfrm its Index r take defensive psitins in declining markets. As a result, the Fund s perfrmance may be adversely affected by a general decline in the market segments relating t its Index. Sectr Risk. T the extent the Fund invests mre heavily in particular sectrs f the ecnmy, its perfrmance will be especially sensitive t develpments that significantly affect thse sectrs. Cnsumer Sectrs Risk. The Fund may invest in cmpanies in the cnsumer sectrs, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting these sectrs. The success f cnsumer prduct manufacturers and retailers is tied clsely t the perfrmance f dmestic and internatinal ecnmies, interest rates, exchange rates, cmpetitin, cnsumer cnfidence, changes in demgraphics and cnsumer preferences. Cmpanies in the cnsumer discretinary sectr depend heavily n dispsable husehld incme and cnsumer spending, and may be strngly affected by scial trends and marketing campaigns. These cmpanies may be subject t severe cmpetitin, which may have an adverse impact n their prfitability. Finance and Insurance Sectr Risk. The Fund may invest in cmpanies in the finance and insurance sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. This sectr can be significantly affected by changes in interest rates, gvernment regulatin, the rate f defaults n crprate, cnsumer and gvernment debt, the availability and cst f capital, and fallut frm the husing and sub-prime mrtgage crisis. Insurance cmpanies, in particular, may be significantly affected by changes in interest rates, catastrphic events, price and market cmpetitin, the impsitin f premium rate caps, r ther changes in gvernment regulatin r tax law and/r rate regulatin, which may have an adverse impact n their prfitability. This sectr has experienced significant lsses in the recent past, and the impact f mre stringent capital requirements and f recent r future regulatin n any individual financial cmpany r n the sectr as a whle cannt be predicted. In recent years, cyber attacks and technlgy malfunctins and failures have becme increasingly frequent in this sectr and have caused significant lsses. Health Care Sectr Risk. The Fund may invest in cmpanies in the health care sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. Cmpanies in the health care sectr are subject t extensive gvernment regulatin and their prfitability can be significantly affected by restrictins n gvernment reimbursement fr medical expenses, rising csts f medical prducts and services, pricing pressure (including price discunting), limited prduct lines and an increased emphasis n the delivery f healthcare thrugh utpatient services. Industrials Sectr Risk. The Fund may invest in cmpanies in the industrials sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. The industrials sectr may be affected by changes in the supply f and demand fr prducts and services, prduct bslescence, claims fr envirnmental damage r prduct liability and general ecnmic cnditins, amng ther factrs. Materials Sectr Risk. The Fund may invest in cmpanies in the materials sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. Many cmpanies in this sectr are significantly affected by the level and vlatility f cmmdity prices, the exchange value f the dllar, imprt cntrls, and wrldwide cmpetitin. At times, wrldwide prductin f industrial materials has exceeded demand as a result f ver-building r ecnmic dwnturns, leading t pr investment returns r lsses. This sectr may als be affected 5

6 by ecnmic cycles, interest rates, resurce availability, technical prgress, labr relatins, and gvernment regulatins. Technlgy Sectr Risk. The Fund may invest in cmpanies in the technlgy sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. Market r ecnmic factrs impacting technlgy cmpanies and cmpanies that rely heavily n technlgical advances culd have a significant effect n the value f the Fund's investments. The value f stcks f technlgy cmpanies and cmpanies that rely heavily n technlgy is particularly vulnerable t rapid changes in technlgy prduct cycles, rapid prduct bslescence, gvernment regulatin and cmpetitin, bth dmestically and internatinally, including cmpetitin frm freign cmpetitrs with lwer prductin csts. Stcks f technlgy cmpanies and cmpanies that rely heavily n technlgy, especially thse f smaller, less-seasned cmpanies, tend t be mre vlatile than the verall market. Technlgy cmpanies are heavily dependent n patent and intellectual prperty rights, the lss r impairment f which may adversely affect prfitability. Shares May Trade at Prices Other Than Net Asset Value ( NAV ). As with all ETFs, Shares may be bught and sld in the secndary market at market prices. Althugh it is expected that the market price f Shares will apprximate the Fund s NAV, there may be times when the market price f Shares is mre than the NAV intra-day (premium) r less than the NAV intra-day (discunt) due t supply and demand f Shares r during perids f market vlatility. This risk is heightened in times f market vlatility, perids f steep market declines, and perids when there is limited trading activity fr Shares in the secndary market, in which case such premiums r discunts may be significant. 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 SerenityShares Cre U.S. ETF is new and therefre des nt have a perfrmance histry fr a full calendar year. In the future, perfrmance infrmatin fr the Fund will be presented in this sectin. Perfrmance infrmatin als will be available n the Fund s website at Prtfli Management Adviser Sub-Adviser Prtfli Manager SerenityShares Investments LLC Vident Investment Advisry, LLC ( VIA ) Denise M. Krisk, CFA, President f VIA (since the Fund s inceptin) Purchase and Sale f Shares Shares are listed n a natinal securities exchange, such as the NYSE Arca, Inc. (the Exchange ), and mst investrs will buy and sell Shares thrugh brkers at market prices, rather than NAV. Because the 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, 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 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

7 SERENITYSHARES CORE MULTI-ASSET ETF SUMMARY Investment Objective The SerenityShares Cre Multi-Asset ETF (the Fund ) seeks t track the ttal return perfrmance, befre fees and expenses, f the SSI Cre Multi-Asset 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 (the 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 0.50% Distributin and/r Service (12b-1) Fees 0.00% Other Expenses % Acquired Fund Fees and Expenses % Ttal Annual Fund Operating Expenses 0.79% 1 Estimated fr the current fiscal year. 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: 1 Year: $81 3 Years: $252 Prtfli Turnver The SerenityShares Cre Multi-Asset ETF 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. Because the Fund is newly rganized, prtfli turnver infrmatin is nt yet available. Principal Investment Strategy The SerenityShares Cre Multi-Asset ETF is a fund f funds that uses a passive management (r indexing) apprach t track the perfrmance, befre fees and expenses, f the Index. SSI Cre Multi-Asset Index The Index is cnstructed using a rules-based methdlgy t create a diversified and investable prtfli f U.S.-listed exchange traded funds ( ETFs ) that principally invest in ne r mre f the fllwing asset classes: U.S. Equity Sectrs (defined belw) Other Equity Asset Classes U.S. Preferred Stcks Master Limited Partnerships ( MLPs ) Emerging Markets Equity Internatinal Equity - Asia Pacific ex-japan Internatinal Equity - Canada Internatinal Equity - China Internatinal Equity - Develped Markets Internatinal Equity - Eurpe Internatinal Equity - Japan Debt Asset Classes Develped Markets (ex U.S.) Debt Emerging Markets Debt U.S. Senir Lans U.S. Crprate Investment Grade U.S. High Yield Securities (Junk Bnds) U.S. Mrtgage Backed Securities U.S. Municipal Securities U.S. Ttal Bnd Market U.S. Treasury Inflatin Prtected Securities U.S. Treasury: Intermediate U.S. Treasury: Lng-Term Other Asset Classes Cmmdities Precius Metals U.S. Real Estate Internatinal Real Estate 7

8 The Index is cmprised f tw elements: (1) U.S. Equity Sectr ETFs cnsisting f ETFs that invest principally in the cmmn stck f U.S. cmpanies in a particular sectr r industry grup (e.g., cmmunicatins, industrials, pharmaceuticals) r in dividendpaying stcks (each a U.S. Equity Sectr ) and (2) ETFs representing asset classes ther than U.S. Equity Sectrs. At the time f each rebalance f the Index, 70% f the Index will be allcated t U.S. Equity Sectr ETFs and 30% will be allcated t ETFs principally investing in ther asset classes. Cnstructin f the Index begins with the universe f all U.S.-listed ETFs that principally invest in a U.S. Equity Sectr r ther particular asset class and that meet minimum trading vlume and capitalizatin requirements. If mre than fur ETFs meet the trading vlume and capitalizatin requirements fr a given U.S. Equity Sectr r ther asset class, the Index will include n mre than the fur tp ETFs based n a cmbinatin f their net assets, expense ratis, investment plicies, and the structure f their underlying indices. The Index universe f U.S. Equity Sectr ETFs cnsists f the fllwing individual Sectrs: Aerspace & Defense Basic Materials Bitech Cmmunicatins Cnsumer Cyclical Cnsumer Discretinary Dividend Paying Energy Financials Health Care Hme Cnstructin Industrials Metals & Miners Natural Resurces Pharmaceuticals Reginal Banks Technlgy: Brad Technlgy: Narrw Transprtatin Utilities The Index uses a prprietary technical analysis f metrics fr each ETF, such as the ETF s current and histric prices, bth actual and relative t ther metrics, such as mving averages r vlume f shares traded. The technical analysis is used t determine where each ETF is in the traditinal market cycle bear, early recvery, recvery, bull, r peak and the likelihd f the ETF s shares gaining r lsing value ver the next quarter. The technical analysis determines whether expsure t the ETF shuld be fully-weighted, halfweighted, r zer-weighted t preserve capital during extended perids f market decline and/r decline in a Sectr r ther asset class. The Index is rebalanced and recnstituted quarterly after the clse f trading n the next t last business day f each March, June, September, and December. Each U.S. Equity Sectr ETF is assigned a Mdificatin Factr equal t the utcme f the technical analysis (i.e., 1 if fullyweighted, ½ if half-weighted, r 0 if zer-weighted), divided by the number f U.S. Equity Sectr ETFs in the Index in the applicable ETF s U.S. Equity Sectr. At the time f each rebalance f the Index, each U.S. Equity Sectr ETF s weight equals its Mdificatin Factr divided by the sum f the mdificatin factrs fr all f the Sectr ETFs in the Index, multiplied by 70%. Each U.S. Equity Sectr is subject t a maximum 7.50% weight at the time f each rebalance, with excess amunts allcated t ne r mre ETFs that principally invest in shrt-term U.S. Treasuries. Similarly, each nn-u.s. Equity Sectr ETF is assigned a Mdificatin Factr equal t the utcme f the technical analysis (i.e., 1 if fully-weighted, ½ if half-weighted, r 0 if zer-weighted), divided by the number f ETFs in the Index in the applicable ETF s asset class. At the time f each rebalance f the Index, each nn-u.s. Equity Sectr ETF s weight equals its Mdificatin Factr divided by the sum f the mdificatin factrs fr all f the nn-u.s. Equity Sectr ETFs in the Index, multiplied by 30%. Each asset class is subject t a maximum 7.50% asset class weight at the time f each rebalance, with excess amunts allcated t ne r mre ETFs that principally invest in shrt-term U.S. Treasuries. The Index was established in 2017 and is wned by SSI Indexes LLC (the Index Prvider ), an affiliate f the Fund s investment adviser. The Fund s Investment Strategy The Fund attempts t invest all, r substantially all, f its assets in the cmpnent securities 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. 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 may invest up t 20% f its ttal assets (exclusive f any cllateral held frm securities lending) in cash and cash equivalents, ther investment cmpanies, as well as securities and ther instruments 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). 8

9 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. Principal Investment Risks All investments carry a certain amunt f risk and the SerenityShares Cre Multi-Asset ETF cannt guarantee that it will achieve its investment bjective. Yu may lse mney by investing in the Fund. Belw are the principal risks f investing in the Fund and the ETFs in which the Fund invests ( Underlying ETFs ). Asset Allcatin Risk. The Index, and cnsequently the Fund, may favr an asset categry r investment strategy that perfrms prly relative t ther asset categries and investment strategies fr shrt r lng perids f time. Cmmdities Risk. The Fund may invest in Underlying ETFs that principally invest in cmmdities and related investments, the value f which may be affected by changes in verall market mvements, cmmdity index vlatility, changes in interest rates, r factrs affecting a particular industry r cmmdity, such as drught, flds, weather, livestck disease, embarges, and tariffs. The prices f industrial metals, precius metals, agriculture, and livestck cmmdities may fluctuate widely due t factrs such as changes in value, supply and demand, and gvernmental regulatry plicies. Currency Exchange Rate Risk. The equity securities held in the prtflis f Underlying ETFs may be denminated in nn- U.S. currencies. Changes in currency exchange rates and the relative value f nn-u.s. currencies may affect the value f such Underlying ETFs and the value f yur Shares. Currency exchange rates can be very vlatile and can change quickly and unpredictably. As a result, the value f an investment in the Fund may change quickly and withut warning and yu may lse mney. Emerging Markets Risk. The Fund s investments in Underlying ETFs that prvide expsure t securities traded in develping r emerging markets may invlve substantial risk with respect t such securities due t limited infrmatin; different accunting, auditing, and financial reprting standards; a cuntry s dependence n revenue frm particular cmmdities r internatinal aid; and exprpriatin, natinalizatin r ther adverse plitical r ecnmic develpments. Plitical and ecnmic structures in many emerging market cuntries may be underging significant evlutin and rapid develpment, and such cuntries may lack the scial, plitical and ecnmic stability characteristics f mre develped cuntries. Sme f these cuntries may have in the past failed t recgnize private prperty rights and have at times natinalized r exprpriated the assets f private cmpanies. Equity Market Risk. The equity securities held in the Fund s prtfli r in the Underlying ETFs 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, r sectrs in which the Fund invests. Cmmn stcks, such as thse held by the Underlying ETFs, are generally expsed t greater risk than ther types f securities, such as preferred stck and debt bligatins, because cmmn stckhlders generally have inferir rights t receive payment frm issuers. Fixed Incme Securities Risk. The Fund may invest in Underlying ETFs that principally invest in fixed incme securities, such as bnds and certain asset-backed securities. Such instruments invlve certain risks, which include: Credit Risk. Credit risk refers t the pssibility that the issuer f a security will nt be able t make payments f interest and principal when due. Changes in an issuer s credit rating r the market s perceptin f an issuer s creditwrthiness may als affect the value f the Fund s investment in that issuer. Event Risk. Event risk is the risk that crprate issuers may underg restructurings, such as mergers, leveraged buyuts, takevers, r similar events financed by increased debt. As a result f the added debt, the credit quality and market value f a cmpany s bnds and/r ther debt securities may decline significantly. Extensin Risk. When interest rates rise, certain bligatins will be paid ff by the bligr mre slwly than anticipated, causing the value f these securities t fall. Interest Rate Risk. Generally, the value f fixed incme securities will change inversely with changes in interest rates. As interest rates rise, the market value f fixed incme securities tends t decrease. Cnversely, as interest rates fall, the market value f fixed incme securities tends t increase. This risk will be greater fr lng-term securities than fr shrt-term securities. In recent perids, gvernmental financial regulatrs, including the U.S. Federal Reserve, have taken steps t maintain histrically lw interest rates. Changes in gvernment interventin may have adverse effects n investments, vlatility, and illiquidity in debt markets. Prepayment Risk. When interest rates fall, certain bligatins will be paid ff by the bligr mre quickly than riginally anticipated, and the prceeds may have t be invested in securities with lwer yields. Variable and Flating Rate Instrument Risk. The absence f an active market fr these securities culd make it difficult t dispse f them if the issuer defaults. 9

10 Freign Securities Risk. The Fund may invest in Underlying ETFs that principally invest in freign securities. Investments in freign securities invlve certain risks that may nt be present with investments in U.S. securities. Fr example, investments in freign securities may be subject t risk f lss due t freign currency fluctuatins r t plitical r ecnmic instability. Investments in freign securities als may be subject t withhlding r ther taxes and may be subject t additinal trading, settlement, custdial, and peratinal risks. These and ther factrs can make investments in the Fund mre vlatile and ptentially less liquid than ther types f investments. These risks may be enhanced fr securities f cmpanies rganized in emerging market natins. Gvernment Obligatins Risk. The Fund may invest in securities issued by the U.S. r ther gvernments. There can be n guarantee that the United States r anther cuntry will be able t meet its payment bligatins with respect t such securities. Additinally, market prices and yields f securities supprted by the full faith and credit f the U.S. gvernment r ther cuntries may decline r be negative fr shrt r lng perids f time. High-Yield Securities Risk. The Fund may invest in Underlying ETFs that principally invest in high-yield securities (als knwn as junk bnds ), which carry a greater degree f risk and are cnsidered speculative by the majr credit rating agencies. High-yield securities may be issued by cmpanies that are restructuring, are smaller and less creditwrthy, r are mre highly indebted than ther cmpanies. This means that they may have mre difficulty making scheduled payments f principal and interest. Changes in the value f high-yield securities are influenced mre by changes in the financial and business psitin f the issuing cmpany than by changes in interest rates when cmpared t investment grade securities. High-yield securities have greater vlatility because there is less certainty that principal and interest payments will be made as scheduled. The Fund's investments in high-yield securities expse it t a substantial degree f credit risk. These investments are cnsidered speculative under traditinal investment standards. Prices f high-yield securities will rise and fall primarily in respnse t actual r perceived changes in the issuer's financial health, althugh changes in market interest rates als will affect prices. High-yield securities may experience reduced liquidity and sudden and substantial decreases in price. Investment Cmpany Risk. The risks f investing in investment cmpanies, such as ETFs, typically reflect the risks f the types f instruments in which the investment cmpanies invest. By investing in anther investment cmpany, the Fund becmes a sharehlder f that investment cmpany and bears its prprtinate share f the fees and expenses f the ther investment cmpany. Investments in ETFs are als subject t the fllwing risks: (i) the market price f an ETF s shares may trade abve r belw their net asset value; (ii) an active trading market fr an ETF s shares may nt develp r be maintained; and (iii) trading f an ETF s shares may be halted fr a number f reasns. MLP Risk. The Fund may invest in Underlying ETFs that principally invest in MLPs. MLP investment returns are enhanced during perids f declining r lw interest rates and tend t be negatively influenced when interest rates are rising. In additin, mst MLPs are fairly leveraged and typically carry a prtin f a flating rate debt. As such, a significant upward swing in interest rates wuld als drive interest expense higher. Furthermre, mst MLPs grw by acquisitins partly financed by debt, and higher interest rates culd make it mre difficult t make acquisitins. MLP investments als entail many f the general tax risks f investing in a partnership. Limited partners in an MLP typically have limited cntrl and limited rights t vte n matters affecting the partnership. Additinally, there is always the risk that an MLP will fail t qualify fr favrable tax treatment. Mdels and Data Risk. The cmpsitin f the Index is heavily dependent n prprietary quantitative mdels as well as infrmatin and data supplied by third parties ( Mdels and Data ). When Mdels and Data prve t be incrrect r incmplete, any decisins made in reliance theren may lead t the inclusin r exclusin f securities frm the Index universe that wuld have been excluded r included had the Mdels and Data been crrect and cmplete. If the cmpsitin f the Index reflects such errrs, the Fund s prtfli can be expected t reflect the errrs, t. Mrtgage- and Asset-Backed Securities Risk. The Fund may invest in Underlying ETFs that principally invest in mrtgageand asset-backed securities. Such securities are subject t credit, interest rate, prepayment, and extensin risks (see "Fixed Incme Securities Risk" abve). These securities als are subject t risk f default n the underlying mrtgage r asset, particularly during perids f ecnmic dwnturn. Small mvements in interest rates may quickly and significantly reduce the value f certain mrtgage-backed securities. Municipal Securities Risk. The Fund may invest in Underlying ETFs that principally invest in municipal securities. Municipal securities are debt bligatins issued by states r by plitical subdivisins r authrities f states. Municipal securities are typically designated as general bligatin bnds, which are general bligatins f a gvernmental entity that are backed by the taxing pwer f such entity, r revenue bnds, which are payable frm the incme f a specific prject r authrity and are nt supprted by the issuer s pwer t levy taxes. Lwer-quality revenue bnds and ther credit-sensitive municipal securities carry higher risks f default than general bligatin bnds. Litigatin, legislatin r ther plitical events, lcal business r ecnmic cnditins r the bankruptcy f the issuer culd have a significant effect n the ability f an issuer f municipal securities t make payments f principal and/r interest. Plitical changes and uncertainties in the municipal market related t taxatin, legislative changes r the rights f municipal security hlders can significantly affect municipal securities. Because many municipal securities are issued t finance similar prjects, especially thse related t educatin, health care, transprtatin and 10

11 utilities, cnditins in thse sectrs can affect the verall municipal market. In additin, changes in the financial cnditin f an individual municipal issuer can affect the verall municipal market. If the Internal Revenue Service (the IRS ) determines that an issuer f a municipal security has nt cmplied with applicable tax requirements, interest frm the security culd becme taxable and the security culd significantly decline in value. N Operating Histry Risk. The Fund is a recently rganized, diversified management investment cmpany with n perating histry. As a result, prspective investrs have n track recrd r histry n which t base their investment decisin. Passive Investment Risk. The Fund invests in the securities included in, r representative f, its Index regardless f their investment merit. The Fund des nt attempt t utperfrm its Index r take defensive psitins in declining markets. As a result, the Fund s perfrmance may be adversely affected by a general decline in the market segments relating t its Index. Preferred Securities Risk. Preferred securities are subrdinated t bnds and ther debt instruments in a cmpany s capital structure and therefre will be subject t greater credit risk than thse debt instruments. In additin, preferred securities are subject t ther risks, such as having n r limited vting rights, being subject t special redemptin rights, having distributins deferred r skipped, having limited liquidity, changing tax treatments and pssibly being in heavily regulated industries. REIT Investment Risk. Investments in REITs invlve unique risks. REITs may have limited financial resurces, may trade less frequently and in limited vlume, and may be mre vlatile than ther securities. The risks f investing in REITs include certain risks assciated with the direct wnership f real estate and the real estate industry in general. Securities in the real estate sectr are subject t the risk that the value f their underlying real estate may g dwn. Many factrs may affect real estate values, including the general and lcal ecnmies, the amunt f new cnstructin in a particular area, the laws and regulatins (including zning and tax laws) affecting real estate, and the csts f wning, maintaining and imprving real estate. The availability f mrtgages and changes in interest rates may als affect real estate values. REITs are als subject t heavy cash flw dependency, defaults by brrwers, and self-liquidatin. Sectr Risk. T the extent the Fund invests mre heavily in particular sectrs f the ecnmy, its perfrmance will be especially sensitive t develpments that significantly affect thse sectrs. Cnsumer Sectrs Risk. The Fund may invest in cmpanies in the cnsumer sectrs, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting these sectrs. The success f cnsumer prduct manufacturers and retailers is tied clsely t the perfrmance f dmestic and internatinal ecnmies, interest rates, exchange rates, cmpetitin, cnsumer cnfidence, changes in demgraphics and cnsumer preferences. Cmpanies in the cnsumer discretinary sectr depend heavily n dispsable husehld incme and cnsumer spending, and may be strngly affected by scial trends and marketing campaigns. These cmpanies may be subject t severe cmpetitin, which may have an adverse impact n their prfitability. Finance and Insurance Sectr Risk. The Fund may invest in cmpanies in the finance and insurance sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. This sectr can be significantly affected by changes in interest rates, gvernment regulatin, the rate f defaults n crprate, cnsumer and gvernment debt, the availability and cst f capital, and fallut frm the husing and sub-prime mrtgage crisis. Insurance cmpanies, in particular, may be significantly affected by changes in interest rates, catastrphic events, price and market cmpetitin, the impsitin f premium rate caps, r ther changes in gvernment regulatin r tax law and/r rate regulatin, which may have an adverse impact n their prfitability. This sectr has experienced significant lsses in the recent past, and the impact f mre stringent capital requirements and f recent r future regulatin n any individual financial cmpany r n the sectr as a whle cannt be predicted. In recent years, cyber attacks and technlgy malfunctins and failures have becme increasingly frequent in this sectr and have caused significant lsses. Health Care Sectr Risk. The Fund may invest in cmpanies in the health care sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. Cmpanies in the health care sectr are subject t extensive gvernment regulatin and their prfitability can be significantly affected by restrictins n gvernment reimbursement fr medical expenses, rising csts f medical prducts and services, pricing pressure (including price discunting), limited prduct lines and an increased emphasis n the delivery f healthcare thrugh utpatient services. Industrials Sectr Risk. The Fund may invest in cmpanies in the industrials sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. The industrials sectr may be affected by changes in the supply f and demand fr prducts and services, prduct bslescence, claims fr envirnmental damage r prduct liability and general ecnmic cnditins, amng ther factrs. Materials Sectr Risk. The Fund may invest in cmpanies in the materials sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. Many cmpanies in this sectr are significantly affected by the level and vlatility f cmmdity prices, the exchange value f the dllar, imprt cntrls, and wrldwide cmpetitin. At times, wrldwide prductin f industrial materials has exceeded demand as a result f 11

12 ver-building r ecnmic dwnturns, leading t pr investment returns r lsses. This sectr may als be affected by ecnmic cycles, interest rates, resurce availability, technical prgress, labr relatins, and gvernment regulatins. Technlgy Sectr Risk. The Fund may invest in cmpanies in the technlgy sectr, and therefre the perfrmance f the Fund culd be negatively impacted by events affecting this sectr. Market r ecnmic factrs impacting technlgy cmpanies and cmpanies that rely heavily n technlgical advances culd have a significant effect n the value f the Fund's investments. The value f stcks f technlgy cmpanies and cmpanies that rely heavily n technlgy is particularly vulnerable t rapid changes in technlgy prduct cycles, rapid prduct bslescence, gvernment regulatin and cmpetitin, bth dmestically and internatinally, including cmpetitin frm freign cmpetitrs with lwer prductin csts. Stcks f technlgy cmpanies and cmpanies that rely heavily n technlgy, especially thse f smaller, less-seasned cmpanies, tend t be mre vlatile than the verall market. Technlgy cmpanies are heavily dependent n patent and intellectual prperty rights, the lss r impairment f which may adversely affect prfitability. Senir Lans Risk. The Fund may invest in Underlying ETFs that principally invest in senir lans. Investments in senir lans typically are belw investment grade and are cnsidered speculative because f the credit risk f their issuers. Such cmpanies are mre likely t default n their payments f interest and principal wed, and such defaults culd reduce an Underlying ETF s NAV and incme distributins. In additin, an Underlying ETF may have t sell securities at lwer prices than it therwise wuld t meet cash needs r it may have t maintain a greater prtin f its assets in cash equivalents than it therwise wuld because f impairments and limited liquidity f the cllateral supprting a senir lan, which culd negatively affect the Underlying Fund s perfrmance. Shares May Trade at Prices Other Than Net Asset Value ( NAV ). As with all ETFs, Shares may be bught and sld in the secndary market at market prices. Althugh it is expected that the market price f Shares will apprximate the Fund s net asset value per share ( NAV ), there may be times when the market price f Shares is mre than the NAV intra-day (premium) r less than the NAV intra-day (discunt) due t supply and demand f the Shares r during perids f market vlatility. This risk is heightened in times f market vlatility r perids f steep market declines. 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 SerenityShares Cre Multi-Asset ETF is new and therefre des nt have a perfrmance histry fr a full calendar year. In the future, perfrmance infrmatin fr the Fund will be presented in this sectin. Perfrmance infrmatin als will be available n the Fund s website at Prtfli Management Adviser Sub-Adviser Prtfli Manager SerenityShares Investments LLC Vident Investment Advisry, LLC ( VIA ) Denise M. Krisk, CFA, President f VIA (since the Fund s inceptin) Purchase and Sale f Shares Shares are listed n a natinal securities exchange, such as the NYSE Arca, Inc. (the Exchange ), and mst investrs will buy and sell Shares thrugh brkers at market prices, rather than NAV. Because the 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, 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. 12

13 Financial Intermediary Cmpensatin If yu purchase Shares 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. 13