ETF Opportunities Trust
09/19/2024 | Press release | Distributed by Public on 09/19/2024 14:19
Amendment Semi Annual Report by Investment Company Form N CSRS/A
af-financials_063024
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSRCERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
| Investment Company Act file number: | 811-23439 |
| Exact name of registrant as specified in charter: | ETF Opportunities Trust |
| Address of principal executive offices: |
8730 Stony Point Parkway, Suite 205 Richmond, VA 23235 |
| Name and address of agent for service |
The Corporation Trust Co., Corporation Trust Center, 1209 Orange St., Wilmington, DE 19801 With Copy to: Practus, LLP 11300 Tomahawk Creek Parkway, Suite 310 Leawood, KS 66211 |
| Registrant's telephone number, including area code: | (804) 267-7400 |
| Date of fiscal year end: | December 31 |
| Date of reporting period: | June 30, 2024 |
| Applied Finance Valuation Large Cap ETF |
EXPLANATORY NOTE
The Registrant is filing this amendment to its Form N-CSRS for the reporting period ended June 30, 2024, originally filed with the Securities and Exchange Commission on September 9, 2024 (Accession Number 0001999371-24-011685). The sole purpose of this amendment is to correct Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract. Except as set forth above, this amendment does not amend, update or change any other items or disclosures found in the original Form N-CSR filing.
ITEM 1.(a). Reports to Stockholders.
Applied Finance Valuation Large Cap ETFTailored Shareholder Report
|
semi-annualShareholder ReportJune 30, 2024 Applied Finance Valuation Large Cap ETF ticker:VSLU(Listed on NYSE Arca) |
This semi-annual shareholder reportcontains important information about the Applied Finance Valuation Large Cap ETFfor the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at https://appliedfinancefunds.com/ETF/InvestorResources. You can also contact us at (833) 356-0909. Distributed by Foreside Fund Services, LLC.
What were the Fund costs for the period?
(based on a hypothetical $10,000 investment)
|
Fund Name |
Costs of a $10,000 investment |
Costs paid as a percentage of a $10,000 investment |
|
Applied Finance Valuation Large Cap ETF |
$ 26.15 |
0.49 %¹ |
¹ Annualized
What did the Fund invest in?
(% of Net Assets as ofJune 30, 2024)
Sector Breakdown
|
Top Ten Holdings |
|
|
Nvidia Corp. |
8.4 % |
|
Apple, Inc. |
8.0 % |
|
Alphabet, Inc. Class A |
6.3 % |
|
Microsoft Corp. |
6.0 % |
|
Mastercard, Inc. Class A |
4.7 % |
|
Meta Platforms, Inc. |
4.0 % |
|
Amazon.com, Inc. |
3.7 % |
|
Broadcom, Inc. |
3.5 % |
|
Visa, Inc. Class A |
3.0 % |
|
Merck & Company, Inc. |
2.2 % |
How has the Fund changed?
CHANGES TO ANNUAL AND SEMI-ANNUAL REPORTSThe Securities and Exchange Commission (SEC) has adopted rule and form amendments which have resulted in changes to the design and delivery of Annual and Semi-Annual Fund Reports (Reports). Reports are now streamlined to highlight key information. Certain information previously included in Reports, including financial statements, no longer appear in the Reports but will be available online within the Semi-Annual and Annual Financials and Other Information, delivered free of charge to shareholders upon request, and filed with the SEC.
For additional information about the Fund; including its prospectus, financial information, holdings and proxy information, visithttps://appliedfinancefunds.com/ETF/InvestorResources .
Key Fund Statistics
(as ofJune 30, 2024)
|
Net Assets (Millions) |
$ 167.68 |
|
Number of Holdings |
307 |
|
Portfolio Turnover Rate |
16.70 % |
ITEM 1.(b). Not applicable.
| ITEM 2. | CODE OF ETHICS. |
Not applicable when filing a semi-annual report to shareholders.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable when filing a semi-annual report to shareholders.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable when filing a semi-annual report to shareholders.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable when filing a semi-annual report to shareholders.
| ITEM 6. | INVESTMENTS. |
| (a) | The Registrant's Schedule of Investments is included as part of the Financial Statements and Financial Highlights filed under Item 7 of this Form. |
| (b) | Not applicable. |
ITEM 7. FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.
FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2024 (unaudited)
Applied Finance Valuation Large Cap ETF
1
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Schedule of InvestmentsJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
|
|
Security Description |
Shares |
Value |
|
||||
|
99.52% |
|
COMMON STOCKS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.51% |
|
COMMUNICATION SERVICES |
|
|
|
|
|
|
|
|
|
Alphabet, Inc. Class A |
|
|
58,056 |
|
$ |
10,574,900 |
|
|
|
|
AT&T, Inc. |
|
|
22,129 |
|
|
422,885 |
|
|
|
|
Charter Communications, Inc.(A) |
|
|
1,266 |
|
|
378,483 |
|
|
|
|
Comcast Corp. Class A |
|
|
9,172 |
|
|
359,176 |
|
|
|
|
Electronic Arts, Inc. |
|
|
724 |
|
|
100,875 |
|
|
|
|
Fox Corp. Class A |
|
|
3,394 |
|
|
116,652 |
|
|
|
|
Match Group, Inc.(A) |
|
|
3,270 |
|
|
99,343 |
|
|
|
|
Meta Platforms, Inc. |
|
|
13,447 |
|
|
6,780,246 |
|
|
|
|
Netflix, Inc.(A) |
|
|
611 |
|
|
412,352 |
|
|
|
|
Omnicom Group, Inc. |
|
|
2,245 |
|
|
201,377 |
|
|
|
|
The Interpublic Group |
|
|
2,201 |
|
|
64,027 |
|
|
|
|
T-Mobile US, Inc. |
|
|
4,618 |
|
|
813,599 |
|
|
|
|
Verizon Communications, Inc. |
|
|
15,918 |
|
|
656,458 |
|
|
|
|
|
|
|
|
|
|
20,980,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.49% |
|
CONSUMER DISCRETIONARY |
|
|
|
|
|
|
|
|
|
Amazon.com, Inc.(A) |
|
|
31,876 |
|
|
6,160,037 |
|
|
|
|
Autozone, Inc.(A) |
|
|
248 |
|
|
735,097 |
|
|
|
|
Bath & Body Works, Inc. |
|
|
1,386 |
|
|
54,123 |
|
|
|
|
Best Buy Co., Inc. |
|
|
1,077 |
|
|
90,780 |
|
|
|
|
Booking Holdings, Inc. |
|
|
281 |
|
|
1,113,182 |
|
|
|
|
Borg-Warner, Inc. |
|
|
1,689 |
|
|
54,453 |
|
|
|
|
Caesars Entertainment, Inc.(A) |
|
|
691 |
|
|
27,460 |
|
|
|
|
CarMax, Inc.(A) |
|
|
250 |
|
|
18,335 |
|
|
|
|
Carnival Corporation ADR(A) |
|
|
3,586 |
|
|
67,130 |
|
|
|
|
DR Horton, Inc. |
|
|
2,069 |
|
|
291,584 |
|
|
|
|
Darden Restaurants, Inc. |
|
|
248 |
|
|
37,527 |
|
|
|
|
Deckers Outdoor Corp.(A) |
|
|
50 |
|
|
48,398 |
|
|
|
|
Domino's Pizza, Inc. |
|
|
506 |
|
|
261,263 |
|
|
|
|
eBay, Inc. |
|
|
2,055 |
|
|
110,395 |
|
|
|
|
Etsy, Inc.(A) |
|
|
727 |
|
|
42,878 |
|
|
|
|
Expedia Group, Inc.(A) |
|
|
651 |
|
|
82,019 |
|
|
|
|
Garmin Ltd. ADR |
|
|
613 |
|
|
99,870 |
|
|
|
|
General Motors Co. |
|
|
7,118 |
|
|
330,702 |
|
|
|
|
Genuine Parts Co. |
|
|
824 |
|
|
113,976 |
|
|
|
|
Hasbro, Inc. |
|
|
1,895 |
|
|
110,858 |
|
|
|
|
Hilton Worldwide Holdings, Inc. |
|
|
3,640 |
|
|
794,248 |
|
|
|
|
Home Depot, Inc. |
|
|
5,050 |
|
|
1,738,412 |
|
|
|
|
Lennar Corp. |
|
|
662 |
|
|
99,214 |
|
2
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Schedule of Investments - continuedJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
|
|
Security Description |
Shares |
Value |
|
||||
|
|
Lowe's Companies, Inc. |
|
|
4,401 |
|
$ |
970,244 |
|
|
|
|
Lululemon Athletica, Inc. ADR(A) |
|
|
487 |
|
|
145,467 |
|
|
|
|
Marriott International Class A |
|
|
2,284 |
|
|
552,203 |
|
|
|
|
McDonald's Corp. |
|
|
3,199 |
|
|
815,233 |
|
|
|
|
MGM Resorts International(A) |
|
|
707 |
|
|
31,419 |
|
|
|
|
Mohawk Industries, Inc.(A) |
|
|
210 |
|
|
23,854 |
|
|
|
|
NIKE, Inc. |
|
|
4,242 |
|
|
319,720 |
|
|
|
|
NVR, Inc.(A) |
|
|
29 |
|
|
220,068 |
|
|
|
|
O'Reilly Automotive, Inc.(A) |
|
|
894 |
|
|
944,118 |
|
|
|
|
Polo Ralph Lauren Corp. |
|
|
11 |
|
|
1,926 |
|
|
|
|
Pool Corp. |
|
|
77 |
|
|
23,664 |
|
|
|
|
Pulte Group, Inc. |
|
|
2,045 |
|
|
225,155 |
|
|
|
|
Royal Caribbean Cruises ADR(A) |
|
|
1,035 |
|
|
165,010 |
|
|
|
|
Tapestry, Inc. |
|
|
1,259 |
|
|
53,873 |
|
|
|
|
Tractor Supply Co. |
|
|
430 |
|
|
116,100 |
|
|
|
|
Ulta Beauty, Inc.(A) |
|
|
235 |
|
|
90,679 |
|
|
|
|
Yum! Brands, Inc. |
|
|
3,015 |
|
|
399,367 |
|
|
|
|
|
|
|
|
|
|
17,580,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.40% |
|
CONSUMER STAPLES |
|
|
|
|
|
|
|
|
|
Altria Group, Inc. |
|
|
8,510 |
|
|
387,631 |
|
|
|
|
Archer-Daniels-Midland Co. |
|
|
2,665 |
|
|
161,099 |
|
|
|
|
Bunge Global Shares ADR |
|
|
988 |
|
|
105,489 |
|
|
|
|
Campbell Soup Co. |
|
|
462 |
|
|
20,878 |
|
|
|
|
Church & Dwight Co. |
|
|
866 |
|
|
89,787 |
|
|
|
|
The Coca-Cola Co. |
|
|
15,434 |
|
|
982,374 |
|
|
|
|
Conagra Brands, Inc. |
|
|
240 |
|
|
6,821 |
|
|
|
|
Constellation Brands, Inc. |
|
|
868 |
|
|
223,319 |
|
|
|
|
Dollar General Corp. |
|
|
1,918 |
|
|
253,617 |
|
|
|
|
Dollar Tree, Inc.(A) |
|
|
1,100 |
|
|
117,447 |
|
|
|
|
General Mills, Inc. |
|
|
2,468 |
|
|
156,126 |
|
|
|
|
Hormel Foods Corp. |
|
|
466 |
|
|
14,208 |
|
|
|
|
Kellanova |
|
|
1,024 |
|
|
59,064 |
|
|
|
|
Kenvue, Inc. |
|
|
8,564 |
|
|
155,694 |
|
|
|
|
Keurig Dr Pepper, Inc. |
|
|
4,446 |
|
|
148,496 |
|
|
|
|
The Kraft Heinz Co. |
|
|
4,015 |
|
|
129,363 |
|
|
|
|
Kroger Co. |
|
|
2,898 |
|
|
144,697 |
|
|
|
|
McCormick & Co., Inc. |
|
|
436 |
|
|
30,930 |
|
|
|
|
Mondelez International Inc. Class A |
|
|
4,697 |
|
|
307,372 |
|
|
|
|
Monster Beverage Corp.(A) |
|
|
3,708 |
|
|
185,215 |
|
|
|
|
PepsiCo, Inc. |
|
|
4,286 |
|
|
706,890 |
|
|
|
|
Philip Morris International, Inc. |
|
|
10,019 |
|
|
1,015,225 |
|
3
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Schedule of Investments - continuedJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
|
|
Security Description |
Shares |
Value |
|
||||
|
|
The Procter & Gamble Co. |
|
|
7,450 |
|
$ |
1,228,654 |
|
|
|
|
Target Corp. |
|
|
1,517 |
|
|
224,577 |
|
|
|
|
The Hershey Company |
|
|
1,267 |
|
|
232,913 |
|
|
|
|
The JM Smucker Co. |
|
|
258 |
|
|
28,132 |
|
|
|
|
Walmart, Inc. |
|
|
28,687 |
|
|
1,942,397 |
|
|
|
|
|
|
|
|
|
|
9,058,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.39% |
|
ENERGY |
|
|
|
|
|
|
|
|
|
APA Corp. |
|
|
3,187 |
|
|
93,825 |
|
|
|
|
Chevron Corp. |
|
|
6,515 |
|
|
1,019,076 |
|
|
|
|
ConocoPhillips |
|
|
4,268 |
|
|
488,174 |
|
|
|
|
Coterra Energy, Inc. |
|
|
3,243 |
|
|
86,491 |
|
|
|
|
Devon Energy Corp. |
|
|
3,002 |
|
|
142,295 |
|
|
|
|
Diamondback Energy, Inc. |
|
|
920 |
|
|
184,175 |
|
|
|
|
EOG Resources, Inc. |
|
|
2,309 |
|
|
290,634 |
|
|
|
|
Exxon Mobil Corp. |
|
|
14,832 |
|
|
1,707,460 |
|
|
|
|
Halliburton Co. |
|
|
3,206 |
|
|
108,299 |
|
|
|
|
Kinder Morgan, Inc. |
|
|
3,412 |
|
|
67,796 |
|
|
|
|
Marathon Oil Corp. |
|
|
2,662 |
|
|
76,320 |
|
|
|
|
Marathon Petroleum Corp. |
|
|
2,918 |
|
|
506,215 |
|
|
|
|
Phillips 66 |
|
|
2,219 |
|
|
313,256 |
|
|
|
|
Targa Resources Corp. |
|
|
831 |
|
|
107,016 |
|
|
|
|
Valero Energy Corp. |
|
|
3,105 |
|
|
486,740 |
|
|
|
|
|
|
|
|
|
|
5,677,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.73% |
|
FINANCIALS |
|
|
|
|
|
|
|
|
|
Aflac, Inc. |
|
|
1,866 |
|
|
166,652 |
|
|
|
|
Aon plc ADR |
|
|
3,644 |
|
|
1,069,806 |
|
|
|
|
Arch Capital Group Ltd. ADR(A) |
|
|
1,300 |
|
|
131,157 |
|
|
|
|
Assurant, Inc. |
|
|
10 |
|
|
1,663 |
|
|
|
|
CBOE Global Markets, Inc. |
|
|
727 |
|
|
123,634 |
|
|
|
|
Chubb Ltd. ADR |
|
|
819 |
|
|
208,911 |
|
|
|
|
Comerica, Inc. |
|
|
516 |
|
|
26,337 |
|
|
|
|
Corpay, Inc.(A) |
|
|
1,201 |
|
|
319,958 |
|
|
|
|
FactSet Research Systems, Inc. |
|
|
241 |
|
|
98,393 |
|
|
|
|
Fidelity National Information Services, Inc. |
|
|
2,392 |
|
|
180,261 |
|
|
|
|
Fiserv, Inc.(A) |
|
|
6,644 |
|
|
990,222 |
|
|
|
|
Globe Life, Inc. |
|
|
455 |
|
|
37,437 |
|
|
|
|
Hartford Financial Services Group, Inc. |
|
|
709 |
|
|
71,283 |
|
|
|
|
Jack Henry & Associates, Inc. |
|
|
238 |
|
|
39,513 |
|
|
|
|
JPMorgan Chase & Co. |
|
|
5,218 |
|
|
1,055,393 |
|
|
|
|
Marsh & McLennan Cos, Inc. |
|
|
1,793 |
|
|
377,821 |
|
4
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Schedule of Investments - continuedJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
|
|
Security Description |
Shares |
Value |
|
||||
|
|
Mastercard, Inc. Class A |
|
|
17,770 |
|
$ |
7,839,413 |
|
|
|
|
MetLife, Inc. |
|
|
3,254 |
|
|
228,398 |
|
|
|
|
Moody's Corporation |
|
|
998 |
|
|
420,088 |
|
|
|
|
Morgan Stanley |
|
|
446 |
|
|
43,347 |
|
|
|
|
Northern Trust Corp. |
|
|
233 |
|
|
19,567 |
|
|
|
|
PayPal Holdings, Inc.(A) |
|
|
5,436 |
|
|
315,451 |
|
|
|
|
The PNC Financial Services Group, Inc. |
|
|
441 |
|
|
68,567 |
|
|
|
|
Principal Financial Group, Inc. |
|
|
399 |
|
|
31,302 |
|
|
|
|
Regions Financial Corp. |
|
|
3,165 |
|
|
63,427 |
|
|
|
|
S&P 500 Global, Inc. |
|
|
1,094 |
|
|
487,924 |
|
|
|
|
T Rowe Price Group, Inc. |
|
|
484 |
|
|
55,810 |
|
|
|
|
The Travelers Companies, Inc. |
|
|
251 |
|
|
51,038 |
|
|
|
|
US Bancorp |
|
|
1,105 |
|
|
43,869 |
|
|
|
|
Visa, Inc. Class A |
|
|
19,156 |
|
|
5,027,875 |
|
|
|
|
Willis Towers Watson plc ADR |
|
|
23 |
|
|
6,029 |
|
|
|
|
W. R. Berkley Corp. |
|
|
812 |
|
|
63,807 |
|
|
|
|
|
|
|
|
|
|
19,664,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.57% |
|
HEALTH CARE |
|
|
|
|
|
|
|
|
|
Abbott Laboratories |
|
|
5,260 |
|
|
546,567 |
|
|
|
|
Abbvie, Inc. |
|
|
19,138 |
|
|
3,282,550 |
|
|
|
|
Agilent Technologies, Inc. |
|
|
1,330 |
|
|
172,408 |
|
|
|
|
Bio-Rad Laboratories, Inc.(A) |
|
|
53 |
|
|
14,475 |
|
|
|
|
Bristol-Myers Squibb Co. |
|
|
25,829 |
|
|
1,072,678 |
|
|
|
|
Cardinal Health, Inc. |
|
|
911 |
|
|
89,569 |
|
|
|
|
Cencora, Inc. |
|
|
2,710 |
|
|
610,563 |
|
|
|
|
Centene Corp.(A) |
|
|
997 |
|
|
66,101 |
|
|
|
|
The Cigna Group |
|
|
444 |
|
|
146,773 |
|
|
|
|
Danaher Corp. |
|
|
499 |
|
|
124,675 |
|
|
|
|
DaVita, Inc.(A) |
|
|
845 |
|
|
117,092 |
|
|
|
|
Edwards Lifescience Corp.(A) |
|
|
2,455 |
|
|
226,768 |
|
|
|
|
Elevance Health, Inc. |
|
|
417 |
|
|
225,956 |
|
|
|
|
GE Healthcare Technologies |
|
|
1,454 |
|
|
113,296 |
|
|
|
|
Gilead Sciences, Inc. |
|
|
15,998 |
|
|
1,097,623 |
|
|
|
|
HCA Healthcare, Inc. |
|
|
1,642 |
|
|
527,542 |
|
|
|
|
Hologic, Inc.(A) |
|
|
701 |
|
|
52,049 |
|
|
|
|
Humana, Inc. |
|
|
239 |
|
|
89,302 |
|
|
|
|
Idexx Laboratories, Inc.(A) |
|
|
400 |
|
|
194,880 |
|
|
|
|
Incyte Corp.(A) |
|
|
1,900 |
|
|
115,178 |
|
|
|
|
Insulet Corp.(A) |
|
|
218 |
|
|
43,992 |
|
|
|
|
Iqvia Holdings, Inc.(A) |
|
|
2,422 |
|
|
512,108 |
|
|
|
|
Johnson & Johnson |
|
|
21,129 |
|
|
3,088,215 |
|
5
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Schedule of Investments - continuedJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
|
|
Security Description |
Shares |
Value |
|
||||
|
|
Labcorp Holdings, Inc. |
|
|
255 |
|
$ |
51,895 |
|
|
|
|
McKesson Corp. |
|
|
1,837 |
|
|
1,072,881 |
|
|
|
|
Medtronic plc ADR |
|
|
2,719 |
|
|
214,012 |
|
|
|
|
Merck & Company, Inc. |
|
|
30,404 |
|
|
3,764,015 |
|
|
|
|
Mettler-Toledo International, Inc.(A) |
|
|
269 |
|
|
375,952 |
|
|
|
|
Molina Healthcare, Inc.(A) |
|
|
254 |
|
|
75,514 |
|
|
|
|
Regeneron Pharmaceuticals, Inc.(A) |
|
|
437 |
|
|
459,300 |
|
|
|
|
PerkinElmer, Inc. |
|
|
246 |
|
|
25,796 |
|
|
|
|
STERIS plc ADR |
|
|
68 |
|
|
14,929 |
|
|
|
|
Stryker Corp. |
|
|
1,427 |
|
|
485,537 |
|
|
|
|
Thermo Fisher Scientific, Inc. |
|
|
1,882 |
|
|
1,040,746 |
|
|
|
|
UnitedHealth Group, Inc. |
|
|
3,100 |
|
|
1,578,706 |
|
|
|
|
Universal Health Services, Inc. |
|
|
130 |
|
|
24,041 |
|
|
|
|
Vertex Pharmaceuticals(A) |
|
|
1,217 |
|
|
570,432 |
|
|
|
|
Viatris, Inc. |
|
|
4,402 |
|
|
46,793 |
|
|
|
|
Zimmer Biomet Holdings |
|
|
234 |
|
|
25,396 |
|
|
|
|
Zoetis, Inc. |
|
|
2,305 |
|
|
399,595 |
|
|
|
|
|
|
|
|
|
|
22,755,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.37% |
|
INDUSTRIALS |
|
|
|
|
|
|
|
|
|
3M Co. |
|
|
3,206 |
|
|
327,621 |
|
|
|
|
Allegion plc ADR |
|
|
637 |
|
|
75,262 |
|
|
|
|
Automatic Data Processing, Inc. |
|
|
1,525 |
|
|
364,002 |
|
|
|
|
Broadridge Financial Solutions, Inc. |
|
|
206 |
|
|
40,582 |
|
|
|
|
Builders FirstSource, Inc.(A) |
|
|
1,425 |
|
|
197,234 |
|
|
|
|
Caterpillar, Inc. |
|
|
2,108 |
|
|
702,175 |
|
|
|
|
CH Robinson Worldwide, Inc. |
|
|
438 |
|
|
38,597 |
|
|
|
|
Cintas Corp. |
|
|
250 |
|
|
175,065 |
|
|
|
|
CSX Corp. |
|
|
10,643 |
|
|
356,008 |
|
|
|
|
Cummins, Inc. |
|
|
675 |
|
|
186,928 |
|
|
|
|
Delta Air Lines, Inc. |
|
|
3,101 |
|
|
147,111 |
|
|
|
|
Dover Corp. |
|
|
646 |
|
|
116,571 |
|
|
|
|
Eaton Corp. plc |
|
|
328 |
|
|
102,844 |
|
|
|
|
Equifax, Inc. |
|
|
439 |
|
|
106,440 |
|
|
|
|
Expeditors International of Washington, Inc. |
|
|
262 |
|
|
32,695 |
|
|
|
|
FedEx Corp. |
|
|
410 |
|
|
122,934 |
|
|
|
|
Generac Holdings, Inc.(A) |
|
|
284 |
|
|
37,550 |
|
|
|
|
General Dynamics Corp. |
|
|
699 |
|
|
202,808 |
|
|
|
|
Grainger WW, Inc. |
|
|
209 |
|
|
188,568 |
|
|
|
|
Honeywell International |
|
|
2,077 |
|
|
443,523 |
|
|
|
|
JB Hunt Transport Services, Inc. |
|
|
271 |
|
|
43,360 |
|
|
|
|
Huntington Ingalls Industries |
|
|
21 |
|
|
5,173 |
|
6
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Schedule of Investments - continuedJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
|
|
Security Description |
Shares |
Value |
|
||||
|
|
IDEX Corp. |
|
|
16 |
|
$ |
3,219 |
|
|
|
|
Illinois Tool Works, Inc. |
|
|
1,033 |
|
|
244,780 |
|
|
|
|
Ingersoll Rand, Inc. |
|
|
1,472 |
|
|
133,716 |
|
|
|
|
Jacobs Solutions, Inc. |
|
|
511 |
|
|
71,392 |
|
|
|
|
Johnson Controls International ADR |
|
|
1,482 |
|
|
98,509 |
|
|
|
|
Leidos Holdings, Inc. |
|
|
1,021 |
|
|
148,943 |
|
|
|
|
Lockheed Martin Corp. |
|
|
1,218 |
|
|
568,928 |
|
|
|
|
Masco Corp. |
|
|
2,028 |
|
|
135,207 |
|
|
|
|
Northrop Grumman Corp. |
|
|
446 |
|
|
194,434 |
|
|
|
|
Old Dominion Freight |
|
|
424 |
|
|
74,878 |
|
|
|
|
Otis Worldwide Corp. |
|
|
4,512 |
|
|
434,325 |
|
|
|
|
Parker-Hannifin Corp. |
|
|
240 |
|
|
121,394 |
|
|
|
|
Paychex, Inc. |
|
|
875 |
|
|
103,740 |
|
|
|
|
Paycom Software, Inc. |
|
|
95 |
|
|
13,589 |
|
|
|
|
Pentair plc ADR |
|
|
986 |
|
|
75,597 |
|
|
|
|
Robert Half International, Inc. |
|
|
442 |
|
|
28,279 |
|
|
|
|
Rockwell Automation, Inc. |
|
|
246 |
|
|
67,719 |
|
|
|
|
Rollins, Inc. |
|
|
708 |
|
|
34,543 |
|
|
|
|
RTX Corp. |
|
|
2,470 |
|
|
247,963 |
|
|
|
|
A O Smith Corp. |
|
|
288 |
|
|
23,553 |
|
|
|
|
Snap-on, Inc. |
|
|
242 |
|
|
63,256 |
|
|
|
|
Southwest Airlines Co. |
|
|
459 |
|
|
13,132 |
|
|
|
|
Textron, Inc. |
|
|
236 |
|
|
20,263 |
|
|
|
|
Trane Technologies plc ADR |
|
|
692 |
|
|
227,620 |
|
|
|
|
Transdigm Group, Inc. |
|
|
209 |
|
|
267,020 |
|
|
|
|
Union Pacific Corp. |
|
|
2,705 |
|
|
612,033 |
|
|
|
|
United Airlines Holdings(A) |
|
|
2,322 |
|
|
112,989 |
|
|
|
|
United Rentals, Inc. |
|
|
311 |
|
|
201,133 |
|
|
|
|
UPS, Inc. Class B |
|
|
1,107 |
|
|
151,493 |
|
|
|
|
Veralto Corp. |
|
|
2,299 |
|
|
219,486 |
|
|
|
|
Verisk Analytics, Inc. |
|
|
280 |
|
|
75,474 |
|
|
|
|
Wabtec Corp. |
|
|
1,044 |
|
|
165,004 |
|
|
|
|
Xylem, Inc. |
|
|
263 |
|
|
35,671 |
|
|
|
|
|
|
|
|
|
|
9,002,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35.01% |
|
INFORMATION TECHNOLOGY |
|
|
|
|
|
|
|
|
|
Accenture plc Class A ADR |
|
|
4,876 |
|
|
1,479,427 |
|
|
|
|
Adobe, Inc.(A) |
|
|
2,896 |
|
|
1,608,844 |
|
|
|
|
Amphenol Corp. Class A |
|
|
3,184 |
|
|
214,506 |
|
|
|
|
Analog Devices, Inc. |
|
|
1,414 |
|
|
322,760 |
|
|
|
|
Apple, Inc. |
|
|
63,676 |
|
|
13,411,438 |
|
|
|
|
Applied Materials, Inc. |
|
|
5,980 |
|
|
1,411,220 |
|
7
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Schedule of Investments - continuedJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
|
|
Security Description |
Shares |
Value |
|
||||
|
|
Arista Networks, Inc.(A) |
|
|
730 |
|
$ |
255,850 |
|
|
|
|
Autodesk, Inc.(A) |
|
|
639 |
|
|
158,120 |
|
|
|
|
Broadcom, Inc. |
|
|
3,661 |
|
|
5,877,845 |
|
|
|
|
Cadence Design Systems(A) |
|
|
428 |
|
|
131,717 |
|
|
|
|
CDW Corp. |
|
|
1,513 |
|
|
338,670 |
|
|
|
|
Cisco Systems, Inc. |
|
|
22,985 |
|
|
1,092,017 |
|
|
|
|
Cognizant Tech Solutions |
|
|
1,795 |
|
|
122,060 |
|
|
|
|
Corning, Inc. |
|
|
2,855 |
|
|
110,917 |
|
|
|
|
Enphase Energy, Inc.(A) |
|
|
230 |
|
|
22,933 |
|
|
|
|
EPAM Systems, Inc.(A) |
|
|
14 |
|
|
2,634 |
|
|
|
|
F5, Inc.(A) |
|
|
23 |
|
|
3,961 |
|
|
|
|
Fair Isaac Corp.(A) |
|
|
227 |
|
|
337,926 |
|
|
|
|
Fortinet, Inc.(A) |
|
|
2,060 |
|
|
124,156 |
|
|
|
|
Gartner Group, Inc.(A) |
|
|
834 |
|
|
374,516 |
|
|
|
|
Hewlett-Packard Enterprise |
|
|
4,601 |
|
|
97,403 |
|
|
|
|
HP, Inc. |
|
|
11,946 |
|
|
418,348 |
|
|
|
|
International Business Machines Corp. |
|
|
2,215 |
|
|
383,084 |
|
|
|
|
Jabil, Inc. |
|
|
256 |
|
|
27,850 |
|
|
|
|
Juniper Networks, Inc. |
|
|
696 |
|
|
25,376 |
|
|
|
|
Keysight Technologies, Inc.(A) |
|
|
640 |
|
|
87,520 |
|
|
|
|
KLA Corp. |
|
|
1,416 |
|
|
1,167,506 |
|
|
|
|
Lam Research Corp. |
|
|
901 |
|
|
959,430 |
|
|
|
|
Microchip Technology, Inc. |
|
|
4,660 |
|
|
426,390 |
|
|
|
|
Microsoft Corp. |
|
|
22,502 |
|
|
10,057,268 |
|
|
|
|
Motorola Solutions, Inc. |
|
|
618 |
|
|
238,579 |
|
|
|
|
NetApp, Inc. |
|
|
790 |
|
|
101,752 |
|
|
|
|
Nvidia Corp. |
|
|
114,104 |
|
|
14,096,408 |
|
|
|
|
NXP Semiconductors NV ADR |
|
|
1,052 |
|
|
283,083 |
|
|
|
|
ON Semiconductor Corp.(A) |
|
|
2,485 |
|
|
170,347 |
|
|
|
|
Qorvo, Inc.(A) |
|
|
107 |
|
|
12,416 |
|
|
|
|
Qualcomm, Inc. |
|
|
3,455 |
|
|
688,167 |
|
|
|
|
Roper Technologies, Inc. |
|
|
492 |
|
|
277,321 |
|
|
|
|
Salesforce, Inc. |
|
|
1,297 |
|
|
333,459 |
|
|
|
|
Skyworks Solutions, Inc. |
|
|
714 |
|
|
76,098 |
|
|
|
|
Synopsys, Inc.(A) |
|
|
227 |
|
|
135,079 |
|
|
|
|
TE Connectivity Ltd. ADR |
|
|
496 |
|
|
74,613 |
|
|
|
|
Teledyne Technologies, Inc.(A) |
|
|
13 |
|
|
5,044 |
|
|
|
|
Teradyne, Inc. |
|
|
296 |
|
|
43,894 |
|
|
|
|
Texas Instruments, Inc. |
|
|
4,496 |
|
|
874,607 |
|
|
|
|
Tyler Technologies, Inc.(A) |
|
|
57 |
|
|
28,658 |
|
|
|
|
Verisign, Inc.(A) |
|
|
1,209 |
|
|
214,960 |
|
|
|
|
|
|
|
|
|
|
58,706,177 |
|
8
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Schedule of Investments - continuedJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
|
|
Security Description |
Shares |
Value |
|
||||
|
1.10% |
|
MATERIALS |
|
|
|
|
|
|
|
|
|
Amcor plc ADR |
|
|
6,786 |
|
$ |
66,367 |
|
|
|
|
Avery Dennison Corp. |
|
|
222 |
|
|
48,540 |
|
|
|
|
Ball Corporation |
|
|
893 |
|
|
53,598 |
|
|
|
|
Celanese Corp. Class A |
|
|
223 |
|
|
30,080 |
|
|
|
|
CF Industries Holdings, Inc. |
|
|
1,043 |
|
|
77,307 |
|
|
|
|
Corteva, Inc. |
|
|
598 |
|
|
32,256 |
|
|
|
|
Dow, Inc. |
|
|
670 |
|
|
35,544 |
|
|
|
|
Eastman Chemical Co. |
|
|
114 |
|
|
11,169 |
|
|
|
|
Freeport-McMoran, Inc. |
|
|
5,057 |
|
|
245,770 |
|
|
|
|
International Paper Co. |
|
|
1,997 |
|
|
86,171 |
|
|
|
|
LyondellBasell Industries NV ADR |
|
|
1,267 |
|
|
121,201 |
|
|
|
|
Martin Marietta Materials, Inc. |
|
|
100 |
|
|
54,180 |
|
|
|
|
The Mosaic Co. |
|
|
2,420 |
|
|
69,938 |
|
|
|
|
Nucor Corp. |
|
|
1,089 |
|
|
172,149 |
|
|
|
|
Packaging Corp. of America |
|
|
211 |
|
|
38,520 |
|
|
|
|
PPG Industries, Inc. |
|
|
489 |
|
|
61,560 |
|
|
|
|
The Sherwin-Williams Co. |
|
|
1,676 |
|
|
500,169 |
|
|
|
|
Steel Dynamics, Inc. |
|
|
1,089 |
|
|
141,026 |
|
|
|
|
|
|
|
|
|
|
1,845,545 |
|
|
|
0.82% |
|
REAL ESTATE |
|
|
|
|
|
|
|
|
|
American Tower Corp. (C) |
|
|
2,515 |
|
|
488,866 |
|
|
|
|
AvalonBay Communities, Inc. (C) |
|
|
6 |
|
|
1,241 |
|
|
|
|
Camden Property Trust (C) |
|
|
225 |
|
|
24,550 |
|
|
|
|
Crown Castle, Inc. |
|
|
1,396 |
|
|
136,389 |
|
|
|
|
Equity Residential (C) |
|
|
447 |
|
|
30,995 |
|
|
|
|
Essex Property Trust, Inc. (C) |
|
|
27 |
|
|
7,349 |
|
|
|
|
Federal Realty Investment Trust (C) |
|
|
330 |
|
|
33,320 |
|
|
|
|
Healthpeak Properties, Inc. |
|
|
3,415 |
|
|
66,934 |
|
|
|
|
Host Hotels & Resorts, Inc. (C) |
|
|
2,295 |
|
|
41,264 |
|
|
|
|
Kimco Realty Corp. (C) |
|
|
475 |
|
|
9,244 |
|
|
|
|
Mid-America Apartment Communities (C) |
|
|
232 |
|
|
33,086 |
|
|
|
|
Public Storage (C) |
|
|
421 |
|
|
121,101 |
|
|
|
|
Simon Property Group, Inc. (C) |
|
|
1,814 |
|
|
275,365 |
|
|
|
|
UDR, Inc. (C) |
|
|
628 |
|
|
25,842 |
|
|
|
|
Ventas, Inc. (C) |
|
|
1,036 |
|
|
53,105 |
|
|
|
|
Weyerhaeuser Co. (C) |
|
|
914 |
|
|
25,948 |
|
|
|
|
|
|
|
|
|
|
1,374,599 |
|
|
|
|
|
|
|
|
|
|
|
|
9
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Schedule of Investments - continuedJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
|
|
Security Description |
Shares |
Value |
|
||||
|
0.13% |
|
UTILITIES |
|
|
|
|
|
|
|
|
|
Atmos Energy Corp. |
|
|
247 |
|
$ |
28,812 |
|
|
|
|
Consolidated Edison, Inc. |
|
|
528 |
|
|
47,214 |
|
|
|
|
NRG Energy, Inc. |
|
|
1,274 |
|
|
99,194 |
|
|
|
|
Public Service Enterprise Group, Inc. |
|
|
628 |
|
|
46,284 |
|
|
|
|
|
|
|
|
|
|
221,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.52% |
|
TOTAL COMMON STOCKS |
|
|
|
|
|
|
|
|
|
(Cost:$152,060,172) |
|
|
166,867,012 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
0.00% |
|
WARRANTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.00% |
|
HEALTH CARE |
|
|
|
|
|
|
|
|
|
Abiomed, Inc. - CVR (A)(B) |
|
|
2 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.00% |
|
TOTAL WARRANTS |
|
|
|
|
|
|
|
|
|
(Cost: $ - ) |
|
|
- |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
99.52% |
|
TOTAL INVESTMENTS |
|
|
|
|
|
|
|
|
|
(Cost:$152,060,172) |
|
|
166,867,012 |
|
||||
|
0.48% |
|
Other assets, net of liabilities |
|
|
812,196 |
|
|||
|
100.00% |
|
NET ASSETS |
|
$ |
167,679,208 |
|
(A)Non-income producing
(B)The warrant is a Level 3 security. See Note 1.
(C)Real Estate Investment Trust ("REIT").
ADR - Security represented is held by the custodian in the form of American Depositary Receipts.
CVR - Contingent Value Right
10
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Statement of Assets and LiablitiesJune 30, 2024 (unaudited)
See Notes to Financial Statements
|
ASSETS |
|
|
|
|
|
Investments at value (cost of $152,060,172) (Note 1) |
|
$ |
166,867,012 |
|
|
Cash |
|
|
790,909 |
|
|
Dividends and interest receivable |
|
86,587 |
|
|
|
TOTAL ASSETS |
|
167,744,508 |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Accrued advisory fees |
|
65,300 |
|
|
|
TOTAL LIABILITIES |
|
65,300 |
|
|
|
NET ASSETS |
|
$ |
167,679,208 |
|
|
|
|
|
|
|
|
Net Assets Consist of: |
|
|
|
|
|
Paid-in capital |
|
$ |
146,224,427 |
|
|
Distributable earnings (accumulated deficit) |
|
21,454,781 |
|
|
|
Net Assets |
|
$ |
167,679,208 |
|
|
|
|
|
|
|
|
NET ASSET VALUE PER SHARE |
|
|
|
|
|
Net Assets |
|
$ |
167,679,208 |
|
|
Shares Outstanding (unlimited number of shares of beneficial interest authorized without par value) |
|
|
4,925,000 |
|
|
Net Asset Value and Offering Price Per Share |
|
$ |
34.05 |
|
11
FINANCIAL STATEMENTS | JUNE 30, 2024
See Notes to Financial Statements
Applied Finance Valuation Large Cap ETF
Statement of OperationsFor the Six Months Ended June 30, 2024 (unaudited)
|
INVESTMENT INCOME |
|
|
|
|
|
Dividends (net of foreign tax withheld of $379) |
|
$ |
817,467 |
|
|
Total investment income |
|
817,467 |
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
Investment advisory fees (Note 2) |
|
276,330 |
|
|
|
Total expenses |
|
276,330 |
|
|
|
Net investment income (loss) |
|
541,137 |
|
|
|
|
|
|
|
|
|
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS |
|
|
|
|
|
Net realized gain (loss) on investments(1) |
|
|
7,472,321 |
|
|
Net increase (decrease) in unrealized appreciation (depreciation) |
|
7,350,679 |
|
|
|
Net realized and unrealized gain (loss) on investments |
|
14,823,000 |
|
|
|
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS |
|
$ |
15,364,137 |
|
(1)Includes realized gains (losses) as a result of in-kind transactions (Note 3).
12
FINANCIAL STATEMENTS | JUNE 30, 2024
See Notes to Financial Statements
Applied Finance Valuation Large Cap ETF
Statements of Changes in Net Assets
|
|
|
For the Six Months |
For the Year |
|
|||
|
INCREASE (DECREASE) IN NET ASSETS FROM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATIONS |
|
|
|
|
|
|
|
|
Net investment income (loss) |
|
$ |
541,137 |
|
$ |
449,620 |
|
|
Net realized gain (loss) on investments |
|
|
7,472,321 |
|
|
165,881 |
|
|
Net increase (decrease) in unrealized appreciation (depreciation) of investments |
|
7,350,679 |
8,870,727 |
|
|||
|
Increase (decrease) in net assets from operations |
|
15,364,137 |
9,486,228 |
|
|||
|
|
|
|
|
|
|
|
|
|
DISTRIBUTIONS TO SHAREHOLDERS |
|
|
|
|
|
|
|
|
Distributions to shareholders |
|
|
- |
|
|
(454,193 |
) |
|
Decrease in net assets from distributions |
|
- |
(454,193 |
) |
|||
|
|
|
|
|
|
|
|
|
|
CAPITAL STOCK TRANSACTIONS (NOTE 5) |
|
|
|
|
|
|
|
|
Shares sold |
|
|
100,750,431 |
|
|
54,626,033 |
|
|
Shares redeemed |
|
(24,207,554 |
) |
(3,234,417 |
) |
||
|
Increase (decrease) in net assets from capital stock transactions |
|
76,542,877 |
51,391,616 |
|
|||
|
|
|
|
|
|
|
|
|
|
NET ASSETS |
|
|
|
|
|
|
|
|
Increase (decrease) during period |
|
|
91,907,014 |
|
|
60,423,651 |
|
|
Beginning of period |
|
75,772,194 |
15,348,543 |
|
|||
|
End of period |
|
$ |
167,679,208 |
$ |
75,772,194 |
|
13
FINANCIAL STATEMENTS | JUNE 30, 2024
See Notes to Financial Statements
Applied Finance Valuation Large Cap ETF
Financial HighlightsSelected Per Share Data Throughout Each Period
|
|
|
For the Six |
For the Years Ended |
April 29, 2021(1) |
|
||||||||
|
2023 |
2022 |
||||||||||||
|
Net asset value, beginning |
|
$ |
29.71 |
$ |
23.61 |
$ |
28.33 |
$ |
25.00 |
|
|||
|
Investment activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment |
|
|
0.15 |
|
|
0.32 |
|
|
0.29 |
|
|
0.18 |
|
|
Net realized and unrealized gain (loss) |
|
4.19 |
5.96 |
(4.79 |
) |
3.31 |
|
||||||
|
Total from investment activities |
|
4.34 |
6.28 |
(4.50 |
) |
3.49 |
|
||||||
|
Distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
- |
|
|
(0.18 |
) |
|
(0.22 |
) |
|
(0.16 |
) |
|
Return of Capital |
|
- |
- |
- |
(3) |
- |
|
||||||
|
Total distributions |
|
- |
(0.18 |
) |
(0.22 |
) |
(0.16 |
) |
|||||
|
Net asset value, end of period |
|
$ |
34.05 |
$ |
29.71 |
$ |
23.61 |
$ |
28.33 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return(4) |
|
|
14.57 |
% |
|
26.59 |
% |
|
(15.82 |
%) |
|
13.95 |
% |
|
Ratios/Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to average net assets(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses, gross |
|
|
0.49 |
% |
|
0.49 |
% |
|
0.49 |
% |
|
0.49 |
% |
|
Net investment |
|
|
0.96 |
% |
|
1.18 |
% |
|
1.19 |
% |
|
1.01 |
% |
|
Portfolio turnover rate(6) |
|
|
16.70 |
% |
|
23.01 |
% |
|
24.94 |
% |
|
30.04 |
% |
|
Net assets, end of |
|
$ |
167,679 |
|
$ |
75,772 |
|
$ |
15,349 |
|
$ |
9,915 |
|
(1)Commencement of Operations.
(2)Per share amounts calculated using the average number of shares outstanding during the period.
(3)Less than $0.005 per share.
(4)Total return is for the period indicated and has not been annualized for periods less than one year.
(5)Ratios to average net assets have been annualized for the periods less than one year.
(6)Portfolio turnover rate is for the period indicated, excludes the effect of securities received or delivered from processing in-kind creations or redemptions, and has not been annualized for periods less than one year.
14
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial StatementsJune 30, 2024 (unaudited)
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Applied Finance Valuation Large Cap ETF (the "Fund") is a non-diversified series of ETF Opportunities Trust (the "Trust"), a Delaware statutory trust which was organized on March 18, 2019 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act") as an open-end management investment company. The offering of the Fund's shares is registered under the Securities Act of 1933, as amended. The Fund commenced operations on April 29, 2021.
The Fund's objective is to seek to achieve long-term capital appreciation.
The following is a summary of significant accounting policies consistently followed by the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946 "Financial Services - Investment Companies".
Security Valuation
Generally, the Fund's domestic securities (including underlying ETFs which hold portfolio securities primarily listed on foreign (non-U.S.) exchanges) are valued each day at the last quoted sales price on each security's primary exchange. Securities traded or dealt in upon one or more securities exchanges for which market quotations are readily available and not subject to restrictions against resale shall be valued at the last quoted sales price on the primary exchange or, in the absence of a sale on the primary exchange, at the mean between the current bid and ask prices on such exchange. Securities primarily traded in the NASDAQ National Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price. Warrants which are traded on an exchange are valued at their last quoted price as of the valuation date. If market quotations are not readily available, securities will be valued at their fair market value as determined in good faith under procedures set by the Board of Trustees of the Trust (the "Board"). Although the Board is ultimately responsible for fair value determinations under Rule 2a-5 of the 1940 Act, the Board has delegated day-to-day responsibility for oversight of the valuation of the Fund's assets to Applied Finance Advisors, LLC (the "Advisor") as the Valuation Designee pursuant to the Fund's policies and procedures. Securities that are not traded or dealt in any securities exchange (whether domestic or foreign) and for which over-the-counter market quotations
15
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
are readily available generally shall be valued at the last sale price or, in the absence of a sale, at the mean between the current bid and ask price on such over-the-counter market.
The Fund has a policy that contemplates the use of fair value pricing to determine the net asset value ("NAV") per share of the Fund when market prices are unavailable as well as under special circumstances, such as: (i) if the primary market for a portfolio security suspends or limits trading or price movements of the security; and (ii) when an event occurs after the close of the exchange on which a portfolio security is principally traded that is likely to have changed the value of the security. Since most of the Fund's investments are traded on U.S. securities exchanges, it is anticipated that the use of fair value pricing will be limited.
When the Fund uses fair value pricing to determine the NAV per share of the Fund, securities will not be priced on the basis of quotations from the primary market in which they are traded, but rather may be priced by another method that the Board believes accurately reflects fair value. Any method used will be approved by the Board and results will be monitored to evaluate accuracy. The Fund's policy is intended to result in a calculation of the Fund's NAV that fairly reflects security values as of the time of pricing.
The Fund has adopted fair valuation accounting standards that establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs used to develop the measurements of fair value. These inputs are summarized in the three broad levels listed below.
Various inputs are used in determining the value of the Fund's investments. GAAP established a three-tier hierarchy of inputs to establish a classification of fair value measurements for disclosure purposes. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
16
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
The following is a summary of the level of inputs used to value the Fund's investments as of June 30, 2024:
|
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
|||||||
|
Common Stocks |
|
$ |
166,867,012 |
|
$ |
- |
|
$ |
- |
|
$ |
166,867,012 |
|
|
Warrants |
|
- |
- |
- |
* |
- |
|
||||||
|
|
$ |
166,867,012 |
$ |
- |
$ |
- |
$ |
166,867,012 |
|
*The Level 3 security has zero value.
Refer to the Fund's Schedule of Investments for a listing of the securities by type and sector.
There were no transfers into or out of any levels during the six months ended June 30, 2024. On June 30, 2024, the Fund held assets in which significant unobservable inputs were used determining fair value (Level 3). These assets were valued at $ - (0.00% of net assets). As the value of the Level 3 security is not material to the financial statements, no additional Level 3 disclosures are presented.
Security Transactions and Income
Security transactions are accounted for on the trade date. The cost of securities sold is determined generally on specific identification basis. Realized gains and losses from security transactions are determined on the basis of identified cost for book and tax purposes. Dividends are recorded on the ex-dividend date. Interest income is recorded on an accrual basis.
Warrants
The Fund may invest in warrants. Warrants are options to purchase equity securities at a specific price, or receive contingent payments, for a specific period of time. They do not represent ownership of the securities, but only the right to buy them. Hence, warrants have no voting rights, pay no dividends and have no rights with respect to the assets of the corporation issuing them. The value of warrants is derived solely from capital appreciation of the underlying equity securities. Warrants differ from call options in that the underlying corporation issues warrants, whereas call options may be written by anyone.
17
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
Accounting Estimates
In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of increase (decrease) in net assets from operations during the reporting period. Actual results could differ from those estimates.
Federal Income Taxes
The Fund has complied and intends to continue to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. The Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. Therefore, no federal income tax or excise provision is required.
Management has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken in the Fund's tax returns. The Fund has no examinations in progress and management is not aware of any tax positions for which it is reasonable possible thatthe total amounts of unrecognized tax benefits will significantly change in the next twelve months. Interest and penalties, if any, associated with any federal or state income tax obligations are recorded as income tax expense as incurred.
Reclassification of Capital Accounts
GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. For the six months ended June 30, 2024, there were no such reclassifications.
Dividends and Distributions
Dividends from net investment income, if any, are declared and paid at least annually by the Fund. The Fund distributes its net realized capital gains, if any, to shareholders annually. The Fund may also pay a special distribution at the end of a calendar year to comply with federal tax requirements. All distributions are recorded on the ex-dividend date.
18
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
Creation Units
The Fund issues and redeems shares to certain institutional investors (typically market makers or other broker-dealers) only in large blocks of at least 25,000 shares known as "Creation Units." Purchasers of Creation Units ("Authorized Participants") will be required to pay Citibank, N.A. (the "Custodian") a fixed transaction fee ("Creation Transaction Fee") in connection with creation orders that is intended to offset the transfer and other transaction costs associated with the issuance of Creation Units. The standard Creation Transaction Fee will be the same regardless of the number of Creation Units purchased by an investor on the applicable Business Day. The Creation Transaction Fee charged by the Custodian for each creation order is $750. Authorized Participants wishing to redeem shares will be required to pay to the Custodian a fixed transaction fee ("Redemption Transaction Fee") to offset the transfer and other transaction costs associated with the redemption of Creation Units. The standard Redemption Transaction Fee will be the same regardless of the number of Creation Units redeemed by an investor on the applicable Business Day. The Redemption Transaction Fee charged by the Custodian for each redemption order is $750.
Except when aggregated in Creation Units, shares are not redeemable securities. Shares of the Fund may only be purchased or redeemed by Authorized Participants. An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a Depository Trust Company ("DTC") participant and, in each case, must have executed an agreement with the Fund's principal underwriter (the "Distributor") with respect to creations and redemptions of Creation Units ("Participant Agreement"). Most retail investors will not qualify as Authorized Participants or have the resources to buy and sell whole Creation Units. Therefore, they will be unable to purchase or redeem the shares directly from the Fund. Rather, most retail investors will purchase shares in the secondary market with the assistance of a broker and will be subject to customary brokerage commissions or fees. The following table discloses the Creation Unit breakdown based on the NAV as of June 30, 2024:
|
|
|
Creation |
Creation |
Value |
|
||
|
Applied Finance Valuation |
|
25,000 |
|
$750 |
|
$851,250 |
|
To the extent contemplated by a Participant Agreement, in the event an Authorized Participant has submitted a redemption request in proper form but is unable to transfer all or part of the shares comprising a Creation Unit to be
19
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
redeemed to the Distributor, on behalf of the Fund, by the time as set forth in the Participant Agreement, the Distributor may nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing shares as soon as possible, which undertaking shall be secured by the Authorized Participant's delivery and maintenance of collateral equal to a percentage of the value of the missing shares as specified in the participant agreement. A Participant Agreement may permit the Fund to use such collateral to purchase the missing shares, and could subject an Authorized Participant to liability for any shortfall between the cost of the Fund acquiring such shares and the value of the collateral. Amounts are disclosed as Segregated Cash Balance from Authorized Participants for Deposit Securities and Collateral Payable upon Return of Deposit Securities on the Statement of Assets and Liabilities, when applicable.
Officers and Trustees Indemnification
Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
NOTE 2 - INVESTMENT ADVISORY AND DISTRIBUTION AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Advisor currently provides investment advisory services pursuant to an investment advisory agreement (the "Advisory Agreement"). Under the terms of the Advisory Agreement, the Advisor manages the investment portfolio of the Fund, subject to the policies adopted by the Board. In addition, the Advisor: (i) furnishes office space and all necessary office facilities, equipment and executive personnel necessary for managing the assets of the Fund; (ii) provides guidance and policy direction in connection with its daily management of the Fund's assets, subject to the authority of the Board; and (iii) is responsible for oversight of the Fund's sub-advisor. Under the Advisory Agreement, the Advisor, at its own expense and without reimbursement from the Trust, assumes and pays all ordinary expenses of the Fund, except the fee paid to the Advisor pursuant to the Advisory Agreement, distribution fees or expenses under the Fund's 12b-1 plan (if any), interest expenses, taxes, acquired fund fees and expenses, brokerage commissions and any other portfolio transaction related
20
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
expenses and fees arising out of transactions effected on behalf of the Fund, credit facility fees and expenses, including interest expenses, and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund's business.
For its services with respect to the Fund, the Advisor is entitled to receive an annual management fee, calculated daily and payable monthly as a percentage of the Fund's daily net assets, at the rate of 0.49%.
The Advisor has retained Tidal Investments LLC to serve as sub-advisor for the Fund. Pursuant to an Investment Sub-Advisory Agreement between the Advisor and the Sub-Advisor (the "Sub-Advisory Agreement"), the Sub-Advisor is responsible for the day-to-day management of the Fund's trading process, which includes Creation and/or Redemption basket processing. The Sub-Advisor does not select investments for the Fund's portfolio.
For its services, the Sub-Advisor is paid a fee by the Advisor, which fee is calculated daily and paid monthly, at an annual rate based on the daily net assets of the Fund at the following rate: 0.0350% on the first $500 million in net assets; 0.0325% on the next $500 million in net assets; and 0.0300% on any net assets in excess of $1 billion (subject to a minimum of $25,000 per year).
Commonwealth Fund Services, Inc. ("CFS") acts as the Fund's administrator. As administrator, CFS supervises all aspects of the operations of the Fund except those performed by the Advisor and the Sub-Advisor. For its services, fees to CFS are computed daily and paid monthly. The Advisor pays these fees.
Certain officers of the Trust are also officers and/or directors of CFS. Additionally, Practus, LLP serves as legal counsel to the Trust. John H. Lively, Secretary of the Trust, is Managing Partner of Practus, LLP. J. Stephen King, Jr., Assistant Secretary of the Trust, is a Partner of Practus, LLP. Gino E. Malaspina, Assistant Secretary of the Trust, serves as Counsel of Practus, LLP. Neither the officers and/or directors of CFS, Mr. Lively, Mr. King or Mr. Malaspina receive any special compensation from the Trust or the Fund for serving as officers of the Trust.
Custodian and Transfer Agent
Citibank, N.A. serves as the Fund's Custodian and Transfer Agent pursuant to a Global Custodial and Agency Services Agreement. For its services, Citibank, N.A. is entitled to a fee. The Advisor pays these fees monthly.
21
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
Fund Accountant
Citi Fund Services, Ohio, Inc. serves as the Fund's Fund Accountant pursuant to a Services Agreement. The Advisor pays the fees for these services monthly.
Distributor
Foreside Fund Services, LLC, serves as the Fund's principal underwriter pursuant to an ETF Distribution Agreement. The Advisor pays these fees monthly.
NOTE 3 - INVESTMENTS
The costs of purchases and proceeds from the sales of securities other than in-kind transactions and short-term notes for the six months ended June 30, 2024 were as follows:
|
Purchases |
Sales |
|
|
$22,224,545 |
|
$19,149,676 |
The costs of purchases and proceeds from the sales of in-kind transactions associated with creations and redemptions for the six months ended June 30, 2024 were as follows:
|
Purchases |
Sales |
Realized Gain |
||
|
$96,993,612 |
|
$23,678,657 |
|
$7,935,453 |
NOTE 4 - DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL
Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.
22
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
The tax character of the distributions during the six months ended June 30, 2024 and the year ended December 31, 2023, were as follows:
|
|
|
Six Months |
Year ended |
|
|||
|
Distributions paid from: |
|
|
|
|
|
|
|
|
Ordinary income |
|
$ |
- |
$ |
454,193 |
|
|
|
|
$ |
- |
$ |
454,193 |
|
As of June 30, 2024, the components of distributable earnings (accumulated deficits) on a tax basis were as follows:
|
Accumulated undistributed net investment income (loss) |
|
|
541,137 |
|
|
Accumulated net realized gain (loss) on investments |
|
|
6,106,804 |
|
|
Net unrealized appreciation (depreciation) on investments |
|
14,806,840 |
|
|
|
|
$ |
21,454,781 |
|
Cost of securities for Federal Income tax purpose and the related tax-based net unrealized appreciation (depreciation) consists of:
|
Cost |
Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Total Unrealized Appreciation (Depreciation) |
|||
|
$152,060,172 |
|
$18,027,721 |
|
$(3,220,881) |
|
$14,806,840 |
NOTE 5 - TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Shares of the Fund are listed for trading on NYSE Arca, Inc. (the "Exchange") and trade at market prices rather than at NAV. Shares of the Fund may trade at a price that is greater than, at, or less than NAV. The Fund will issue and redeem its shares at NAV only in large blocks of 25,000 shares (each block of shares is called a "Creation Unit"). Creation Units are issued and redeemed for cash and/or in-kind for securities. Individual shares may only be purchased and sold in secondary market transactions through brokers. Except when aggregated in Creation Units, the Fund's shares are not redeemable securities of the Fund.
All orders to create Creation Units must be placed with the Distributor either (1) through Continuous Net Settlement System of the NSCC ("Clearing Process"), a clearing agency that is registered with the Securities and Exchange Commission, by a "Participating Party," i.e., a broker-dealer or other participant in the Clearing Process; or (2) outside the Clearing Process by a DTC Participant. In each case, the Participating Party or the DTC Participant must have executed a Participant Agreement; such parties are collectively referred to as "APs" or
23
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
"Authorized Participants." Investors should contact the Distributor for the names of Authorized Participants. All Fund shares, whether created through or outside the Clearing Process, will be entered on the records of DTC for the account of a DTC Participant.
Shares of beneficial interest transactions for the Fund were:
|
|
|
Six Months |
Year ended |
|
|||
|
Shares sold |
|
|
3,125,000 |
|
|
2,025,000 |
|
|
Shares redeemed |
|
(750,000 |
) |
(125,000 |
) |
||
|
Net increase (decrease) |
|
2,375,000 |
1,900,000 |
|
NOTE 6 - SECTOR RISK
If a Fund has significant investments in the securities of issuers in industries within a particular sector, any development affecting that sector will have a greater impact on the value of the net assets of that Fund than would be the case if the Fund did not have significant investments in that sector. In addition, this may increase the risk of loss of an investment in the Funds and increase the volatility of the Funds' NAV per share. From time to time, circumstances may affect a particular sector and the companies within such sector. For instance, economic or market factors, regulation or deregulation, and technological or other developments may negatively impact all companies in a particular sector and therefore the value of a Fund's portfolio will be adversely affected. As of June 30, 2024, 35.01% of the value of the net assets of the Fund were invested in securities within the Information Technology sector.
NOTE 7 - RISKS OF INVESTING IN THE FUND
It is important that you closely review and understand the risks of investing in the Funds. The Funds' NAV and investment return will fluctuate based upon changes in the value of their portfolio securities. You could lose money on your investment in the Funds, and the Funds could underperform other investments. There is no guarantee that the Funds will meet their investment objective. An investment in the Funds is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. A complete description of the principal risks is included in the Funds' prospectus under the heading "Principal Risks."
24
FINANCIAL STATEMENTS | JUNE 30, 2024
Applied Finance Valuation Large Cap ETF
Notes to Financial Statements - continuedJune 30, 2024 (unaudited)
NOTE 8 - SUBSEQUENT EVENTS
Management has evaluated all transactions and events subsequent to the date of the statement of assets and liabilities through the date on which these financial statements were issued. Except as already included in the notes to these financial statements, no additional items require disclosure.
| ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
ITEM 9. PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 10. REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES.
(1) The amount of regular compensation paid for all trustees for the period covered by the report was $4,095.
(2) Not applicable.
(3) The registrant's Chief Compliance Officer and Assistant Chief Compliance Officer are not compensated directly by the registrant for their service. However, the Assistant Chief Compliance Officer is the Managing Member of Watermark Solutions, LLC ("Watermark"), which provides certain compliance services to the registrant, including the provision of the Chief Compliance Officer and the Assistant Chief Compliance Officer. The Assistant Chief Compliance Officer is the Managing Member of Watermark, and the Chief Compliance Officer is the Managing Member of Fit Compliance, LLC, which has been retained by Watermark to provide the Chief Compliance Officer's services. Payments for Watermark's services were made by the investment adviser to each fund included in this report.
(4) During the period covered by this report, registrant paid Watermark $5,167 for the services described in Item 10 (3) above.ITEM 11. STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT.
Approval of Investment Advisory Agreement
At a meeting held on February 21-22, 2024 (the "Meeting"), the Board of Trustees (the "Board") of the ETF Opportunities Trust (the "Trust") considered the approval of the continuation of the Investment Advisory Agreement (the "Applied Finance Advisory Agreement") between the Trust and Applied Finance Advisors, LLC ("Applied Finance"), with respect to the Applied Finance Valuation Large Cap ETF ("Applied Finance ETF"). The Board reflected on its discussions with the representatives from Applied Finance at the Meeting regarding the manner in which the Applied Finance Valuation Large Cap ETF is to be managed and the roles and responsibilities of Applied Finance under the Applied Finance Advisory Agreement.
The Trustees reviewed the responses of Applied Finance to a request for information from counsel to the Trust ("Counsel") on behalf of the Board. The Trustees observed Applied Finance's representation that their responses to the information requested are identical to the responses provided in its response letter of November 27, 2023, except that financial information has been updated and the firm is providing its most recently updated Code of Ethics. The Trustees noted that the responses included financial information for Applied Finance, an expense comparison analysis for the Applied Finance ETF and comparable ETFs, and the Applied Finance Advisory Agreement. The Trustees discussed the types of information and factors that should be considered by the Board in order to make an informed decision regarding the approval of the Applied Finance Advisory Agreement, including the following material factors: (i) the nature, extent, and quality of the services provided by Applied Finance; (ii) the investment performance of the Applied Finance ETF and Applied Finance; (iii) the costs of the services to be provided and profits to be realized by Applied Finance from the relationship with the Applied Finance ETF; (iv) the extent to which economies of scale would be realized if the Applied Finance ETF grows and whether advisory fee levels reflect those economies of scale for the benefit of their investors; and (v) possible conflicts of interest and other benefits.
In assessing these factors and reaching its decisions, the Board took into consideration information specifically prepared or presented at this Meeting, and at previous Board meetings. The Board requested or was provided with information and reports relevant to the approval of the Applied Finance Advisory Agreement, including: (i) information regarding the services and support provided by Applied Finance to the Applied Finance ETF and its shareholders; (ii) reports by management of Applied Finance addressing the investment strategy, personnel and operations utilized in managing the Applied Finance ETF; (iii) information pertaining to the compliance structure of Applied Finance; and (iv) a memorandum from Trust Counsel that summarized the fiduciary duties and responsibilities of the Board in reviewing and approving the Applied Finance Advisory Agreement, including the material factors set forth above and the types of information included in each factor that should be considered by the Board in order to make an informed decision.
The Board considered that it also requested and received various informational materials including, without limitation: (i) documents containing information about Applied Finance, including financial information, information on personnel and the services to be provided by Applied Finance to the Applied Finance ETF, the firm's compliance program, information on any current legal matters, and other general information; (ii) expenses of the Applied Finance ETF and comparative expense and performance information for other ETFs with investment strategies similar to the Applied Finance ETF prepared by an independent third party; (iii) the anticipated effect of size on the Applied Finance ETF's performance and expenses; and (iv) benefits anticipated to be realized by Applied Finance from its relationship with the Applied Finance ETF. The Board did not identify any particular information that was most relevant to its consideration to approve the Applied Finance Advisory Agreement and each Trustee may have afforded different weight to the various factors. In deciding whether to approve the Applied Finance Advisory Agreement, the Trustees considered numerous factors, including:
(1) The nature, extent, and quality of the services provided by Applied Finance.
In this regard, the Board considered the responsibilities of Applied Finance under the Applied Finance Advisory Agreement. The Board reviewed the services provided by Applied Finance to the Applied Finance ETF, including, without limitation, Applied Finance's process for formulating investment recommendations and the processes for assuring compliance with the Applied Finance ETF's investment objective and limitations; and the efforts of Applied Finance to promote the Applied Finance ETF and grow its assets. The Board considered the staffing, personnel, and methods of operating of Applied Finance; the education and experience of their personnel; and information provided on their compliance programs, policies and procedures. The Board considered the services provided by Tidal Investments, LLC as sub-adviser to the Applied Finance ETF and the relationship between services provided by Applied Finance. After considering the foregoing, the Board concluded that the nature, extent and quality of the services provided by Applied Finance was satisfactory and adequate for the Applied Finance ETF.
(2) The investment performance of the Applied Finance ETF and Applied Finance.
The Board reviewed the Applied Finance ETF's performance. The Trustees considered that Applied Finance does not have any clients other than the Applied Finance ETF and three Applied Finance Funds, the Applied Finance Dividend Fund, Applied Finance Select Fund, and Applied Finance Explorer Fund, for which the Trust's independent trustees also serve as independent trustees. In considering the investment performance of the Applied Finance ETF, the Trustees compared the performance of the Applied Finance ETF with the performance of its benchmark index, the Russell 1000 TR Index, funds in its Morningstar category, Large Blend Funds ("Category"), and a peer group selected from its Category ("Peer Group"). The Trustees noted that the Applied Finance ETF outperformed the Russell 1000 TR Index, the median of funds in its Category and the median of Fund's in its Peer Group for the one-year period ended October 31, 2023. The Trustees also considered the experience of the portfolio management team.
After a detailed discussion of the Applied Finance ETF's performance, the Board concluded, in light of all the facts and circumstances, that the investment performance of the Applied Finance ETF was satisfactory.
(3) The costs of services to be provided and profits to be realized by Applied Finance from the relationship with the Applied Finance ETF.
In this regard, the Board considered the financial condition of Applied Finance and the level of commitment to the Applied Finance ETF by Applied Finance. The Board also considered the assets and expenses of the Applied Finance ETF, including the nature and frequency of advisory payments. The Board noted the information on profitability provided by Applied Finance. The Trustees considered the Applied Finance ETF's unitary fee structure, and compared the unitary fee of the Applied Finance ETF to the fees of the Category and the Peer Group. The Trustees noted that the Applied Finance ETF's gross and net expense ratio and gross and net advisory fee were each less than the Category median and equal to the Peer Group median. The Board also considered the fees paid to Tidal by Applied Finance for sub-advising the Applied Finance ETF. After further consideration, the Board concluded that the profitability and fees to be paid to Applied Finance (who in turn would pay Tidal) were within an acceptable range in light of the services to be rendered by Applied Finance.
(4) The extent to which economies of scale would be realized as the Applied Finance ETF grows and whether advisory fee levels reflect these economies of scale for the benefit of the Applied Finance ETF's investors.
The Trustees considered that the Applied Finance ETF is not of sufficient size to achieve economies of scale and that there are no break points in the Applied Finance Advisory Agreement. However, they noted that the unitary fee structure limits the shareholders' exposure to fee increases.
(5) Possible conflicts of interest and other benefits.
In evaluating the possibility for conflicts of interest, the Board considered such matters as: the experience and ability of the advisory personnel assigned to the Applied Finance ETF; the basis of decisions to buy or sell securities for the Applied Finance ETF; the substance and administration of the Code of Ethics and other relevant policies of Applied Finance. The Board noted that Applied Finance has represented that it has not and does not anticipate utilizing soft dollars or commission recapture with regard to the Applied Finance ETF. The Board also considered the affiliations of Applied Finance, including its affiliate that produces and sells investment research, and that it manages the Applied Finance Funds. It was noted that Applied Finance represented that the Applied Finance Funds may invest in the Applied Finance ETF from time to time for the same reasons they would invest in other non-affiliated mutual funds or ETFs and that Applied Finance does not believe such investments will raise issues of conflict or duplicative services. The Board also considered potential benefits for Applied Finance in managing the Applied Finance ETF. Following further consideration and discussion, the Board indicated that the standards and practices of Applied Finance relating to the identification and mitigation of potential conflicts of interest, as well as the benefits to be derived by Applied Finance from managing the Applied Finance ETF were satisfactory.
After additional consideration of the factors delineated in the memorandum provided by Counsel and further discussion and careful review by the Trustees, the Board determined that the compensation payable under the Applied Finance Advisory Agreement was fair, reasonable and within a range of what could have been negotiated at arms-length in light of all the surrounding circumstances, and they approved the Applied Finance Advisory Agreement.
| ITEM 12. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 13. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 14. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| ITEM 15. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of trustees.
ITEM 16. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d- 15(b)).
(b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
| ITEM 17. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 18. | RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION. |
Not applicable.
| ITEM 19. | EXHIBITS. |
| (a)(1) | Code of Ethics in response to Item 2 of this Form N-CSR: Not applicable. |
| (a)(2) | Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act of 1934: Not applicable. |
| (a)(3) | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3)(1) Any written solicitation to purchase securities under Rule 23c-1 under the Investment Company Act of 1940 - Not applicable.
(a)(3)(2) Change in the registrant's independent public accountant - Not applicable.
| (b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: ETF Opportunities Trust
| By (Signature and Title)*: | /s/ Karen Shupe |
|
Karen Shupe Principal Executive Officer |
|
| Date: September 19, 2024 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title)*: | /s/ Karen Shupe |
|
Karen Shupe Principal Executive Officer |
|
| Date: September 19, 2024 | |
| By (Signature and Title)*: | /s/ Ann MacDonald |
|
Ann MacDonald Principal Financial Officer |
|
| Date: September 19, 2024 |
* Print the name and title of each signing officer under his or her signature.