Powered by Artificial Intelligence SUMMARY OF CHANGES IN Oracle Corp International Business Machine FedEx Corp Goldman Sachs Group Inc/The Bristol-Myers Squibb Co Merck & Co Inc Under Armour Inc QUALCOMM Inc United Technologies Corp BlackRock Inc salesforce.com Inc Starbucks Corp Discover Financial Services Ulta Beauty Inc Citigroup Inc Kroger Co/The Philip Morris International In PepsiCo Inc Comcast Corp Abbott Laboratories Chevron Corp Constellation Brands Inc Booking Holdings Inc Walgreens Boots Alliance Inc 3M Co Honeywell International Inc First Solar Inc ORCL IBM FDX GS BMY MRK UA QCOM UTX BLK CRM SBUX DFS ULTA C KR PM PEP CMCSA ABT CVX STZ BKNG WBA MMM HON FSLR OUT Albemarle Corp Exelixis Inc Facebook Inc Mastercard Inc Arista Networks Inc Johnson & Johnson Nucor Corp Cypress Semiconductor Corp Steel Dynamics Inc Thor Industries Inc Coca-Cola Co/The Kohl s Corp Take-Two Interactive Software Splunk Inc Kraft Heinz Co/The Sirius XM Holdings Inc Tesla Inc Biogen Inc ON Semiconductor Corp Intuitive Surgical Inc Southern Co/The Macy s Inc Western Digital Corp Veeva Systems Inc Universal Display Corp VMware Inc Alcoa Corp ALB EXEL FB MA ANET JNJ NUE CY STLD THO KO KSS TTWO SPLK KHC SIRI TSLA BIIB ON ISRG SO M WDC VEEV OLED VMW AA 1/6
STOCK SPOTLIGHT Facebook The most notable change in the Z Index this month was Facebook (NASDAQ: FB), which has been mired in controversy as a result of the Cambridge Analytica scandal. Unsurprisingly, sentiment on FB took a dive when news of the data breach first came out. At the time, the extent of the scandal was not yet known, and it appeared the dip in sentiment might be short lived. As more details emerged over the following week which exposed the severity of the situation, the decline in sentiment quickly accelerated. With the scandal serious enough to warrant testimony by CEO Mark Zuckerberg in front of Congress, we saw investor sentiment on FB record new lows. Up until this month, FB had been a staple name in the Z Index with a 3% max weight each month. With the huge downturn in investor sentiment, FB dropped out of the index entirely this month. On a positive note, we noticed a recovery in sentiment at the beginning of April, indicating a possible short-term bounce could be in store. Materials Sector Just last month we highlighted the surge in investor sentiment in materials companies, specifically steel and aluminum producers in the U.S., following the announcement of tariffs by president Trump. It appears that enthusiasm was short-lived however, as new developments in the tariff plans caused investors to reconsider the positive effect on domestic producers. Numerous countries, including U.S. neighbors Canada and Mexico, were later added to an exemptions list, confirming the theory that the tariffs were mainly targeted at China. In the weeks following, back and forth threats of additional tariffs between the U.S. and China began to stoke fears of a trade war between the two superpowers. Sentiment on many materials stocks reversed completely and we saw names such as Albermale (NYSE: ALB), Nucor (NYSE: NUE), and Steel Dynamics (NASDAQ: STLD) drop out of the Buzz Index. This month, the only remaining materials company in the index is U.S Steel Corp (NYSE: X), with a weight of 0.9%. Just as stock prices have continued to be volatile, sentiment on these stocks have been fluctuating as well. With no end in sight to the uncertainties on the global trade front, we expect this volatility to continue. SECTOR COMPARISON SECTOR MARCH 2017 INDEX WEIGHT (%) APRIL 2018 INDEX WEIGHT (%) Consumer Discretionary 14.6 15.7 Consumer Staples 4.8 8.0 Energy 1.2 2.2 Financial Services 2.2 7.6 Health Care 15.8 12.7 Industrials 6.8 8.8 Information Technology 44.9 40.4 Materials 8.2 0.9 Telecommunication Services 1.2 3.7 Utilities 0.3 0.0 2/6
TOP U.S. STOCKS DISCUSSED ACROSS ONLINE PLATFORMS TOP FIVE POSITIVELY TRENDING STOCKS IN THE INDEX Micron Technology MU General Electric Co GE Oracle Corp ORCL Exxon Mobil Corp XOM Under Arbour Inc UA BOTTOM FIVE NEGATIVELY TRENDING STOCKS NOT IN THE INDEX Kinder Morgan KMI Wells Fargo & Co WFC UnitedHealth Group UNH Tesla Inc TSLA Facebook Inc FB INDEX FUNDAMENTALS 1.6% 19.2 Dividend Yield P/E Ratio $187.0B Average Market Cap $6.1B Smallest Market Cap 3/6 $876.8B Largest Market Cap
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. 4/6
INDEX HOLDINGS WEIGHT (%) Advanced Micro Devices Inc 3.00% Square Inc 3.00% Alphabet Inc 3.00% Apple Inc 3.00% Micron Technology Inc 3.00% United States Steel Corp 3.00% Microsoft Corp 3.00% Amazon.com Inc 3.00% Nutanix Inc 3.00% NVIDIA Corp 3.00% Albemarle Corp 2.89% Twitter Inc 2.83% Walt Disney Co/The 2.72% AbbVie Inc 2.50% General Electric Co 2.50% Exelixis Inc 2.49% Intel Corp 2.41% Celgene Corp 2.33% Facebook Inc 2.28% Valeant Pharmaceuticals Intern 2.15% Boeing Co/The 2.10% Gilead Sciences Inc 2.06% Walmart Inc 2.06% Ford Motor Co 1.77% United Parcel Service Inc 1.64% PayPal Holdings Inc 1.57% Bank of America Corp 1.43% Mastercard Inc 1.42% Exxon Mobil Corp 1.18% Arista Networks Inc 1.18% Applied Materials Inc 1.12% Johnson & Johnson 1.09% Netflix Inc 1.00% Nucor Corp 0.99% Wynn Resorts Ltd 0.98% Cypress Semiconductor Corp 0.94% CVS Health Corp 0.86% McDonald s Corp 0.86% Steel Dynamics Inc 0.86% WEIGHT (%) Visa Inc 0.84% Home Depot Inc/The 0.81% Lam Research Corp 0.78% Thor Industries Inc 0.78% Bluebird Bio Inc 0.76% JPMorgan Chase & Co 0.76% Altria Group Inc 0.70% Coca-Cola Co/The 0.63% Kohl s Corp 0.63% Cisco Systems Inc 0.62% NIKE Inc 0.57% Take-Two Interactive Software 0.57% Adobe Systems Inc 0.56% Caterpillar Inc 0.55% Splunk Inc 0.55% Regeneron Pharmaceuticals Inc 0.55% Kraft Heinz Co/The 0.54% Sirius XM Holdings Inc 0.51% Tesla Inc 0.51% Biogen Inc 0.51% Activision Blizzard Inc 0.50% ON Semiconductor Corp 0.49% Intuitive Surgical Inc 0.48% Southern Co/The 0.46% Macy s Inc 0.46% Western Digital Corp 0.45% Veeva Systems Inc 0.45% Universal Display Corp 0.44% VMware Inc 0.44% Verizon Communications Inc 0.44% Amgen Inc 0.43% Alcoa Corp 0.42% Pfizer Inc 0.42% Broadcom Ltd 0.42% AT&T Inc 0.40% Sprint Corp 0.38% Total: 100.00 5/6
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 1.855.215.1425. 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. 6/6 000167 7/31/2018