Powered by Artificial Intelligence SUMMARY OF CHANGES IN BlackBerry Ltd KeyCorp TE Connectivity Ltd Biogen Inc Oracle Corp PepsiCo Inc Citigroup Inc Walgreens Boots Alliance Inc Darden Restaurants Inc Regeneron Pharmaceuticals Inc ManpowerGroup Inc Starbucks Corp Nektar Therapeutics BlackRock Inc Accenture PLC Chevron Corp Marvell Technology Group Ltd Kinder Morgan Inc/DE United Parcel Service Inc Mastercard Inc Delta Air Lines Inc BB KEY TEL BIIB ORCL PEP C WBA DRI REGN MAN SBUX NKTR BLK ACN CVX MRVL KMI UPS MA DAL OUT Cisco Systems Inc Home Depot Inc/The Palo Alto Networks Inc Target Corp Splunk Inc Align Technology Inc Symantec Corp Broadcom Inc Chipotle Mexican Grill Inc TJX Cos Inc/The Take-Two Interactive Software Intuitive Surgical Inc Foot Locker Inc Best Buy Co Inc Lowe s Cos Inc QUALCOMM Inc Valero Energy Corp United States Steel Corp General Motors Co Analog Devices Inc Ulta Beauty Inc CSCO HD PANW TGT SPLK ALGN SYMC AVGO CMG TJX TTWO ISRG FL BBY LOW QCOM VLO X GM ADI ULTA 1/6
STOCK SPOTLIGHT Blackberry Limited A decade ago, Blackberry (NYSE: BB) was one the largest handset makers in the world and one of the most well-known technology stocks. Hubris and mismanagement eventually led to the company s decline as smartphones by Apple (NASDAQ: AAPL) and Samsung quickly dominated the market. Now a shell of its former self, the company is currently focused on software and leveraging its expertise in communications security. After years of rebuilding, the company has recently shown signs of life, posting consecutive quarters of strong results and optimistic outlooks that sent shares up from $7 to $14 during 2017. Since then, the stock has spent the majority of 2018 consolidating, retracing half of its 2017 gains as a result of some uncertainty surrounding its plan to move a subscription license model. More notable however, is the increasing level of positive online sentiment that we have observed in recent months. This month, Blackberry enters the Z Index for the first time ever, at a max weight of 3%. It appears investors may be ready to buy into Blackberry s turnaround plan and potentially help the stock break out of its multi-year consolidation. Darden Restaurants Another first-time entrant into the Z Index, Darden Restaurants (NYSE: DRI) has steadily been one of the top performing restaurant stocks over the past few years. Often overshadowed by more fast money stocks such as Chipotle (NYSE: CMG), McDonald s (NYSE: MCD), and Dominos (NYSE: DPZ), Darden actually claims the title of the world s largest full-service restaurant company, with over 1500 locations in a variety of chains such as Olive Garden and LongHorn Steakhouse. In fact, this month DRI replaced CMG in the Z Index. After a strong earnings report in April which sent CMG surging 25%, investor sentiment levels suggest the optimism may have peaked on Chipotle and is instead flowing into Darden which presents better value. DRI recently exceeded expectations on both the top and bottom line, and the company expects further double digit revenue growth. It also announced a dividend increase, further raising the appeal to shareholders. Positive online sentiment on DRI has been steadily rising as investors see more room for the stock to run. SECTOR COMPARISON SECTOR JUNE 2018 INDEX WEIGHT (%) JULY 2018 INDEX WEIGHT (%) Consumer Discretionary 22.9 17.7 Consumer Staples 3.9 4.1 Energy 1.6 2.1 Financial Services 4.8 9.3 Health Care 10.3 11.6 Industrials 4.3 6.4 Information Technology 48.0 45.0 Materials 0.6 0.0 Telecommunication Services 3.7 3.8 Utilities 0.0 0.0 2/6
TOP U.S. STOCKS DISCUSSED ACROSS ONLINE PLATFORMS TOP FIVE POSITIVELY TRENDING STOCKS IN THE INDEX BlackBerry Ltd BB Bausch Health Cos Inc BHC TE Connectivity Ltd TEL ManpowerGroup Inc MAN Nektar Therapeutics NKTR BOTTOM FIVE NEGATIVELY TRENDING STOCKS NOT IN THE INDEX Palo Alto Networks Inc PANW Target Corp TGT Splunk Inc SPLK Chipotle Mexican Grill Inc CMG Cisco Systems Inc CSCO INDEX FUNDAMENTALS 1.3% 18.5 Dividend Yield P/E Ratio $200.7B Average Market Cap $5.6B Smallest Market Cap 3/6 $943.1B 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 (%) Micron Technology Inc 3.00% Advanced Micro Devices Inc 3.00% Tesla Inc 3.00% Amazon.com Inc 3.00% Twitter Inc 3.00% Facebook Inc 3.00% BlackBerry Ltd 3.00% Netflix Inc 3.00% AT&T Inc 3.00% Apple Inc 3.00% General Electric Co 3.00% Snap Inc 2.79% Alphabet Inc 2.75% Bausch Health Cos Inc 2.55% Bank of America Corp 2.44% Microsoft Corp 2.37% Square Inc 2.23% NVIDIA Corp 2.07% NIKE Inc 1.90% Discover Financial Services 1.82% Celgene Corp 1.61% KeyCorp 1.50% Walt Disney Co/The 1.46% Visa Inc 1.45% PayPal Holdings Inc 1.42% TE Connectivity Ltd 1.16% Gilead Sciences Inc 1.12% Wynn Resorts Ltd 1.11% JPMorgan Chase & Co 1.10% Pfizer Inc 1.07% Walmart Inc 1.01% Applied Materials Inc 0.99% Biogen Inc 0.98% Oracle Corp 0.96% Exxon Mobil Corp 0.95% PepsiCo Inc 0.94% Citigroup Inc 0.90% CVS Health Corp 0.90% WEIGHT (%) Goldman Sachs Group Inc/The 0.88% Adobe Systems Inc 0.88% FedEx Corp 0.84% Kroger Co/The 0.83% AbbVie Inc 0.80% Electronic Arts Inc 0.79% First Solar Inc 0.78% Ford Motor Co 0.78% Walgreens Boots Alliance Inc 0.78% Darden Restaurants Inc 0.78% Lam Research Corp 0.78% Verizon Communications Inc 0.76% Under Armour Inc 0.75% Regeneron Pharmaceuticals Inc 0.74% ManpowerGroup Inc 0.74% Boeing Co/The 0.73% Starbucks Corp 0.73% Nutanix Inc 0.71% International Business Machine 0.70% Activision Blizzard Inc 0.69% Nektar Therapeutics 0.69% BlackRock Inc 0.67% salesforce.com Inc 0.65% Accenture PLC 0.64% Intel Corp 0.63% Comcast Corp 0.62% Bristol-Myers Squibb Co 0.60% Costco Wholesale Corp 0.58% Chevron Corp 0.57% Marvell Technology Group Ltd 0.56% Kinder Morgan Inc/DE 0.56% United Parcel Service Inc 0.56% Macy s Inc 0.54% Mastercard Inc 0.54% Delta Air Lines Inc 0.54% Merck & Co Inc 0.54% ebay Inc 0.50% 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 000178 8/31/2018