ck0001683471-20260430

•Depositary Receipt Risk. Depositary receipts, including ADRs, EDRs and GDRs, involve risks similar to those associated with investments in foreign securities, such as changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. Depositary receipts listed on U.S. exchanges are issued by banks or trust companies, and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares (“Underlying Shares”). GDRs and EDRs are similar to ADRs in that they are certificates evidencing ownership of shares of a foreign issuer; however, GDRs and EDRs may be issued in bearer form and denominated in other currencies and are generally designed for use in specific or multiple securities markets outside the U.S. When the Fund invests in depositary receipts as a substitute for an investment directly in the Underlying Shares, the Fund is exposed to the risk that the depositary receipts may not provide a return that corresponds precisely with that of the Underlying Shares. Because the Underlying Shares trade on foreign exchanges that may be closed when the Fund’s primary listing exchange is open, the Fund may experience premiums and discounts greater than those of funds without exposure to such Underlying Shares.

•Market Risk. The trading prices of securities and other instruments fluctuate in response to a variety of factors. These factors include events impacting the entire market or specific market segments, such as political, market and economic developments, as well as events that impact specific issuers. The Fund’s NAV and market price, like security and commodity prices generally, may fluctuate significantly in response to these and other factors. As a result, an investor could lose money over short or long periods of time. In addition, government actions or interventions (including, but not limited, to the threat or imposition of tariffs, trade restrictions, currency restrictions or similar actions) as well as developments related to economic, political (including geopolitical), social, public health, market, extreme weather, natural or man-made disasters, or other conditions or events have in the past and may in the future result in volatility in financial markets and reduced liquidity in equity, credit, and/or debt markets, which could adversely impact the Fund and its investments and their value and performance. These developments as well as other events could result in further market volatility and negatively affect financial asset prices, the liquidity of certain securities and the normal operations of securities exchanges and other markets.

◦Communication Services Sector Risk. The Fund’s assets will have significant exposure to the Communication Services Sector, which means the Fund will be more affected by the performance of the Communication Services Sector than a fund that is more diversified. Market or economic factors impacting companies in the Communication Services Sector that rely heavily on technological advances could have a major effect on the value of the Fund’s investments. The value of stocks of communication services companies and companies that rely heavily on technology is particularly vulnerable to research and development costs, substantial capital requirements, product and services obsolescence, government regulation, and domestic and international competition, including competition from foreign competitors with lower production costs. Stocks of communication services companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market. Additionally, companies in the Communication Services Sector may face dramatic and often unpredictable changes in growth rates and competition for the services of qualified personnel. While all companies may be susceptible to network security breaches, certain companies in the Communication Services Sector may be particular targets of hacking and potential theft of proprietary or consumer information or disruptions in service, which could have a material adverse effect on their businesses.

◦Casinos & Gaming Industry. The Casinos & Gaming Industry includes owners and operators of casinos and gaming facilities, and companies providing lottery and betting services. The Casinos & Gaming Industry is highly competitive and companies operating in the Casinos & Gaming Industry rely heavily on consumer spending and the availability of disposable income for success. In addition, the Casinos & Gaming Industry may be negatively affected by changes in economic conditions, consumer tastes and discretionary income levels, technological developments, limited financial resources, competition from competing entertainment options, and competition for key personnel. Casinos are closely tied to the travel and tourism industry and are particularly sensitive to economic shutdowns and mitigation strategies, such as the COVID-19 pandemic. In addition, Casinos & Gaming Industry companies are highly regulated, and state and federal legislative or regulatory changes and licensing issues (as well as the laws of other countries) can significantly impact their ability to operate in certain jurisdictions. The Casinos & Gaming Industry is a sub-industry of the Hotels, Restaurants & Leisure Industry within the Consumer Discretionary Sector.

•Foreign Securities Risk. Investments in non-U.S. securities involve certain risks that may not be present with investments in U.S. securities. These include risks of adverse changes in foreign economic, political, regulatory and other conditions, or changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges). The securities of some foreign companies may be less liquid and, at times, more volatile than securities of comparable U.S. companies. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Non-U.S. issuers may be subject to different accounting, auditing, financial reporting and investor protection standards than U.S. issuers. Investments in non-U.S. securities also may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. With respect to certain countries, there is the possibility of government intervention and expropriation or nationalization of assets. Because legal systems differ, there also is the possibility that it will be difficult to obtain or enforce legal judgments in certain countries. Since foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in the Fund more volatile and potentially less liquid than other types of investments.

•Bitcoin Risk. Bitcoin is a relatively new innovation and the market for bitcoin is subject to rapid price swings, changes and uncertainty. The value of bitcoin has been and may continue to be substantially dependent on speculation. The further development of the Bitcoin Network and the acceptance and use of bitcoin are subject to a variety of factors that are difficult to evaluate. The slowing, stopping or reversing of the development of the Bitcoin Network or the acceptance of bitcoin may adversely affect the price of bitcoin. Bitcoin is subject to the risk of fraud, theft, manipulation or security failures, operational or other problems that impact bitcoin trading venues. Additionally, if one or a coordinated group of miners were to gain control of 51% of the Bitcoin Network, they would have the ability to manipulate transactions, halt payments and fraudulently obtain bitcoin. A significant portion of bitcoin is held by a small number of holders sometimes referred to as “whales.” These holders have the ability to manipulate the price of bitcoin. Unlike the exchanges for more traditional assets, such as equity securities and futures contracts, bitcoin and bitcoin trading venues are largely unregulated. As a result of the lack of regulation, individuals or groups may engage in fraud or market manipulation (including using social media to promote bitcoin in a way that artificially increases the price of bitcoin). Investors may be more exposed to the risk of theft, fraud and market manipulation than when investing in more traditional asset classes. Over the past several years, a number of bitcoin trading venues have been closed due to fraud, failure or security breaches. Investors in bitcoin may have little or no recourse should such theft, fraud or manipulation occur and could suffer significant losses. Legal or regulatory changes may negatively impact the operation of the Bitcoin Network. The realization of any of these risks could result in a decline in the acceptance of bitcoin and consequently a reduction in the value of bitcoin, bitcoin futures, and the Fund. In addition, bitcoin is a bearer asset that can be irrevocably lost or stolen to the extent that private keys are lost or stolen.

The Bitcoin Network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and validators adopt the modification. When a modification is introduced and a substantial majority of users and validators consent to the modification, the change is implemented and the network remains uninterrupted. However, if less than a substantial majority of users and validators consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “fork,” with one group running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two, non-interchangeable versions of the Bitcoin Network running in parallel with different native crypto assets and sets of participants. For example, in August 2017, bitcoin “forked” into Bitcoin and a new digital asset, Bitcoin Cash, as a result of a several-year dispute over how to increase the rate of transactions that the Bitcoin Network can process. The creation of a fork or a substantial giveaway of bitcoin (sometimes referred to as an “air drop”) may result in significant and unexpected declines in the value of bitcoin, bitcoin futures, and the Fund.

•Cryptocurrency ETF Risk. The Fund may invest in or have exposure to one or more Cryptocurrency ETFs to the extent consistent with U.S. federal securities laws and related guidance applicable to the Fund. Cryptocurrency ETFs are relatively new investment products, with the first domestic cryptocurrency ETFs having commenced trading in January 2024. As a result, the Cryptocurrency ETFs in which the Fund may invest may have limited financial and operating histories. To the extent the Fund invests directly in shares of a Cryptocurrency ETF, the Fund will hold shares representing a fractional undivided beneficial interest in the net assets of the Cryptocurrency ETF and bear its ratable share of the Cryptocurrency ETF’s expenses. As a result, Fund shareholders will indirectly pay the fees of any Cryptocurrency ETF to which the Fund has investment exposure in addition to the Fund’s total annual fund operating expenses. The Fund’s investment exposure to Cryptocurrency ETFs subjects the Fund to many of the same risks as an investment in the reference cryptocurrency itself, including those described elsewhere in this Prospectus. The value of interests in Cryptocurrency ETFs and their reference cryptocurrency is subject to a number of factors, including the capabilities and development of blockchain technologies, cryptocurrencies’ dependence on the internet, other technologies, and the role played by key service providers, users, developers and other facilitators (e.g., miners) and the potential for malicious activity at various stages in the cryptocurrency investment cycle. The Fund expects to purchase shares of any Cryptocurrency ETF in the secondary market at its market price, which may be highly volatile and may not closely correspond to either the NAV per share of the Cryptocurrency ETF or the price of the reference cryptocurrency. Shares of Cryptocurrency ETFs may trade at premiums (i.e., the market price of the shares is more than the NAV) or discounts (i.e., the market price of the shares is less than the NAV), which may be significant. The risk that share prices differ from a Cryptocurrency ETF’s NAV and/or the price of the Cryptocurrency ETF’s reference cryptocurrency is likely to increase during times of market volatility or stressed market conditions. Under such conditions, the market for shares of Cryptocurrency ETFs may become less liquid making it difficult for the Fund to either increase or decrease its investment exposure to Cryptocurrency ETFs. Extreme volatility affecting cryptocurrencies may persist for extended periods and the value of the Fund’s investment in a Cryptocurrency ETF may decline significantly without recovery. The shares of certain Cryptocurrency ETFs in which the Fund may invest or to which the Fund may have investment exposure are not registered under the 1940 Act, and therefore, do not afford the Fund the investor protections provided by the 1940 Act.

•Ether Risk. Ether is a relatively new innovation, and the ether market is subject to rapid price swings, changes and uncertainty and is a largely unregulated marketplace, which may be attributable to a possible lack of regulatory compliance. The value of ether has been and may continue to be, substantially dependent on speculation, such that trading and investing ether generally may not be based on fundamental analysis. The further development of the Ethereum Network and the acceptance and use of ether are subject to various factors that are difficult to evaluate. The slowing, stopping, or reversing of the development of the Ethereum Network or the acceptance of ether may adversely affect the price of ether. Ether is subject to the risk of fraud, theft, manipulation or security failures, operational, or other problems that impact ether trading venues. Unlike the exchanges for more traditional assets, such as equity securities and futures contracts, ether and ether trading platforms are largely unregulated. As a result of the lack of regulation, individuals or groups may engage in fraud or market manipulation, and investors may be more exposed to the risk of theft, fraud, and market manipulation than when investing in more traditional asset classes. Legal or regulatory changes may negatively impact the operation of the Ethereum Network or restrict the use of ether. Realizing any of these risks could result in a decline in the acceptance of ether and, consequently, a reduction in the value of ether, ether futures, and the Fund.

•Solana Risk. Similar to bitcoin and ether, SOL and its supporting Solana Network are relatively new innovations. The Solana Network and SOL publicly launched in 2020. SOL has increased in popularity and market value since its inception, however it is not as established or widely accepted as bitcoin or ether. Like other cryptocurrencies, SOL is subject to rapid price swings, uncertainty related to demand, and a largely unregulated but rapidly evolving ecosystem. SOL is also subject to the risks of access loss as it is dependent on the use of private keys and theft. While the Fund will seek to invest in Cryptocurrency ETFs that have adopted security procedures intended to protect its assets, there can be no assurance that those procedures will be successful in preventing such loss, theft or restriction on access. Security breaches, cyber-attacks, computer malware and computer hacking attacks have also been a prevalent concern for digital asset trading platforms on which SOL trades. The further development and acceptance of Solana is subject to a variety of factors that are difficult to evaluate, and the delayed development or a cessation of the development of the Solana Network and SOL may adversely affect the value of the Fund’s investments and its performance. A contraction in the use of SOL or its blockchain may result in increased volatility or a reduction in the price of SOL which could have a material adverse effect on the value of a Cryptocurrency ETF held by the Fund.

•United States Regulatory Risks of the Cannabis Industry. The possession and use of marijuana, even for medical purposes, is illegal under federal and certain states’ laws, which may negatively impact the value of the Fund’s investments. Use of marijuana is regulated by both the federal government and state governments, and state and federal laws regarding marijuana often conflict. Even in those states in which the use of marijuana has been legalized, its possession and use remains a violation of federal law. Federal law criminalizing the use of marijuana pre-empts state laws that legalize its use for medicinal and recreational purposes. Actions by federal agencies, such as increased enforcement of current federal marijuana laws and the prosecution of nonviolent federal drug crimes by the U.S. Department of Justice (“DOJ”), could produce a chilling effect on the industry’s growth and discourage banks from expanding their services to Cannabis Companies where such services are currently limited. Any of these outcomes would negatively affect the profitability and value of the Fund’s investments and even its ability to pursue its stated investment objective. The conflict between the regulation of marijuana under federal and state law creates volatility and risk for all Cannabis Companies.

•United States Regulatory Risks of Hemp. “Hemp,” as defined in the Agriculture Improvement Act of 2018 (the “Farm Bill”), refers to cannabis plants with a tetrahydrocannabinol (“THC”) concentration of not more than 0.3% on a dry weight basis, as well as derivatives thereof, whereas “marijuana” refers to all other cannabis plants and derivatives thereof. The Farm Bill effectively removes hemp from the list of controlled substances and allows states to regulate its production, commerce and research with approval from the United States Department of Agriculture (“USDA”). Certain portfolio holdings may sell dietary supplements and/or foods containing CBD within the United States. While the Farm Bill removes hemp and hemp-derived products from the controlled substances list under the CSA, it does not legalize CBD in every circumstance. CBD, depending on the source from which it was derived, can still be classified as a Schedule I substance under the CSA’s definition of “marihuana.” The exception for CBD from the definition of “marihuana” only applies if the CBD is derived from “hemp.” U.S. federal law also requires that: (i) the hemp is produced by a licensed producer; and (ii) in a manner consistent with the applicable federal and state regulations. CBD and other cannabinoids produced from marijuana as defined by the CSA remain an illegal Schedule I substance under federal law. In addition, many state laws include all CBD within definitions of marijuana and some states have policies or laws that otherwise prohibit or restrict CBD sales.

•Derivatives Risk. The Fund intends to invest in total return swaps, which are a type of derivative. Derivatives may pose risks in addition to and greater than those associated with investing directly in securities, currencies or other investments, including risks relating to leverage, imperfect correlations with underlying investments or the Fund’s other portfolio holdings, high price volatility, lack of availability, counterparty credit, liquidity, valuation and legal restrictions. Their use is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The Fund’s use of derivatives to obtain short exposure, if any, may result in greater volatility of the Fund's NAV per share. If the Adviser and Sub-Adviser are incorrect about their expectations of market conditions, the use of derivatives could also result in a loss, which in some cases may be unlimited. In addition, the Fund’s use of derivatives may cause the Fund to realize higher amounts of short-term capital gains (generally taxed at ordinary income tax rates) than if the Fund had not used such instruments. Some of the derivatives in which the Fund invests may be traded (and privately negotiated) in the OTC market. OTC derivatives are subject to heightened counterparty credit, liquidity and valuation risks. Certain risks also are specific to the derivatives in which the Fund invests.

◦Technology Hardware Industry Risk. The Technology Hardware Industry includes companies that manufacture and distribute computers, servers, mainframes, peripheral devices (e.g., keyboard, mouse, etc.), high-technology components (e.g., circuit boards), and electronic office equipment. In addition, companies in the Technology Hardware Industry include producers and distributors of semiconductors and other integrated chips, other products related to the semiconductor industry such as motherboards, and manufacturers of high-technology tools and/or equipment used in the creation of semiconductors, photonics, wafers, and other high-technology components. The companies in the Technology Hardware Industry can be significantly affected by competitive pressures, aggressive pricing, technological developments, changing domestic demand, the ability to attract and retain skilled employees and availability and price of components. The market for products produced by companies in the Technology Hardware Industry is characterized by rapidly changing technology, rapid product obsolescence, cyclical market patterns, evolving industry standards and frequent new product introductions. The success of these companies depends in substantial part on the timely and successful introduction of new products. In addition, many of the companies in the Technology Hardware Industry rely on a combination of patents, copyrights, trademarks and trade secret laws to establish and protect their proprietary rights in their products and technologies. The Technology Hardware Industry is a separate industry within the Technology Sector.

•Derivatives Risk. The Fund expects to use swap agreements and forward contracts to seek to achieve its investment objective. The Fund’s derivative investments have risks, including the imperfect correlation between the value of such instruments and the reference asset; the loss of principal, including the potential loss of amounts greater than the initial amount invested in the derivatives instrument; and illiquidity of the derivative investments. The Fund expects to primarily utilize derivatives instruments that are not designed to produce leverage. The Fund, however, may invest in derivatives that give rise to economic leverage, but expects any such economic leverage to be minimal. Leverage magnifies the potential for gain and may result in greater losses, which in some cases may cause the Fund to liquidate other portfolio investments at inopportune times (e.g., at a loss to comply with limits on leverage imposed by the 1940 Act or when the Adviser otherwise would have preferred to hold the investment) or to meet redemption requests. Certain of the Fund’s transactions in derivatives also could affect the amount, timing, and character of distributions to shareholders, which may result in the Fund realizing more short-term capital gain and ordinary income subject to tax at ordinary income tax rates than it would if it did not engage in such transactions, which may adversely impact the Fund’s after-tax returns. Any financing, borrowing or other costs associated with using derivatives also may have the effect of lowering the Fund’s return. To the extent the Fund invests in derivatives instruments that give rise to economic leverage, the value of the Fund’s portfolio is likely to experience greater volatility over short-term periods.

•Tax Risk. In order to qualify for the favorable tax treatment generally available to a regulated investment company (“RIC”), the Fund must satisfy certain diversification and other requirements. In particular, at each quarter end (a) at least 50% of the value of the Fund’s total assets must generally be represented by cash and cash items, U.S. government securities, securities of other RICs and other securities, with such other securities limited, in respect to any one issuer, to an amount not greater than 5% of the value of the Fund’s total assets and that does not represent more than 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of the Fund’s total assets is invested in the securities (other than U.S. government securities or the securities of other RICs) of any one issuer or the securities (other than the securities of another RIC) of two or more issuers that the Fund controls and which are engaged in the same or similar trades or businesses or related trades or businesses, or the securities of one or more qualified publicly traded partnerships (the “Diversification Requirement”). The Fund anticipates gaining exposure to seven Underlying Issuers. To satisfy the Diversification Requirement, the Fund will gain exposure to the Underlying Issuers by entering into swap agreements and/or forward contracts or by investing in equity securities of an Underlying Issuer. The determination of the value and the identity of the issuer of derivatives, such as swap agreements and forward contracts, is often unclear for purposes of the Diversification Requirement described above. Although the Fund intends to carefully monitor its investments in derivatives to ensure that it is adequately diversified under the Diversification Requirement, there are no assurances that the Internal Revenue Service (“IRS”) will agree with the Fund’s determination of the issuer and valuation of such derivatives under the Diversification Requirement with respect to such derivatives. The Adviser’s and the Sub-Adviser’s efforts to satisfy the Fund’s Diversification Requirement may compromise their ability to implement the Fund’s investment strategy as effectively as they might otherwise have been able to in the absence of such a requirement. If the Fund fails to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation subject to U.S. federal income tax on all its income at the fund level (unless certain relief provisions are available.) The resulting taxes could substantially reduce the Fund’s net assets and the amount of income available for distribution to shareholders. In addition, in order to requalify as a RIC, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make certain distributions to its shareholders. In addition, the Fund’s use of derivatives may cause the Fund to realize higher amounts of short-term capital gains or otherwise affect the Fund’s ability to pay out dividends subject to preferential rates or the dividends received deduction, thereby increasing the amount of taxes payable by some shareholders. Please see the section entitled “Federal Income Taxes – Taxation of the Funds” in the SAI for more information.

The Sports Betting ETF invests, under normal circumstances, at least 80% of its net assets (plus borrowings for investment purposes) in securities issued by Sports Betting and iGaming Companies. Sports Betting Companies are companies engaged, directly or indirectly, in analyzing sports events and wagering on the outcome. Sports Betting Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other Sports Betting Companies; providing marketing solutions and services for other Sports Betting Companies; and investing in Sports Betting Companies, such as owners of investment portfolios comprising companies exposed to sports betting activities or the underlying assets of such companies. iGaming Companies are companies engaged, directly or indirectly, in betting online in games of chance, such as poker, slots, blackjack, or the lottery. iGaming Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other iGaming Companies; providing marketing solutions and services for other iGaming Companies; investing in iGaming Companies, such as owners of investment portfolios comprising companies exposed to iGaming activities or the underlying assets of such companies; and developing and/or providing games, such as casino developers and bingo and lottery game developers.

NERD

BETZ

METV

WEED

MAGS

Software Industry Risk

Technology Hardware Industry Risk

Counterparty Risk

Cryptocurrency Risk

Cryptocurrency ETF Risk

Currency Exchange Rate Risk

Cybersecurity Risk

Depositary Receipt Risk

Derivatives Risk

Swap Agreements Risk

Forwards Contracts

Emerging and Developing Markets Risk

Equity Securities Risk

ETF Risks

Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk

Costs of Buying or Selling Shares Risk

Shares May Trade at Prices Other Than NAV Risk

Trading Risk

Ether Risk

Fixed Income Risk

Call Risk

Credit Risk

Extension Risk

Income Risk

Interest Rate Risk

Prepayment Risk

Foreign Securities Risk

Geographic Investment Risk

Risks Related to Investing in Asia

Risks Related to Investing in China.

Risks Related to Investing in Hong Kong

Risks Related to Investing in Japan

Risks of Investing in South Korea

Illiquidity Risk

Index Provider Risk

Investment Company Risk

Limited Issuer Risk

Liquidity and Valuation Risk

Management Risk

Market Capitalization Risk

Large-Capitalization Investing Risk

Mid-Capitalization Investing Risk

Small-Capitalization Investing Risk

Market Risk

Models and Data Risk

Money Market Instrument Risk

Non-Diversification Risk

•Associated Risks of iGaming and Sports Betting Companies. The iGaming and sports betting industry is characterized by an increasingly high degree of competition among a large number of participants including from participants performing illegal activities or unregulated companies. Expansion of iGaming and sports betting in other jurisdictions (both regulated and unregulated) could increase competition with traditional betting companies, which could have an adverse impact on their financial condition, operations and cash flows. In a broader sense, iGaming and sports betting companies face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts and travel. In addition, established jurisdictions could award additional licenses or permit the expansion or relocation of existing sports betting companies. These companies also may be subject to increasing regulatory constraints, particularly with respect to cybersecurity and privacy. In addition to the costs of complying with such constraints, the unintended disclosure of confidential information, whether because of an error or a cybersecurity event, could adversely affect the reputation, profitability and value of these companies.

•Associated Risks of Video Game Companies. Video game companies face intense competition, both domestically and internationally, may have limited product lines, markets, financial resources, or personnel, may have products that face rapid obsolescence, and are heavily dependent on the protection of patent and intellectual property rights. Pure-play companies may be dependent on one or a small number of product or product franchises for a significant portion of their revenue and profits. They may also be subject to shifting consumer preferences, including preferences with respect to gaming console platforms, and changes in consumer discretionary spending. Such factors may adversely affect the profitability and value of video game companies. Video game companies also may be subject to increasing regulatory constraints, particularly with respect to cybersecurity and privacy. In addition to the costs of complying with such constraints, the unintended disclosure of confidential information, whether because of an error or a cybersecurity event, could adversely affect the reputation, profitability and value of these companies. Video game companies may be subject to sophisticated intellectual property infringement schemes and piracy efforts, particularly in foreign markets, which may limit the revenue potential in such markets, and combating such infringement or piracy schemes may require significant expenses. Such anti-piracy programs may not be effective.

The slowness of transaction processing and finality, the variability of transaction fees, and volatility of bitcoin’s price could disadvantage or impede the adoption of the Bitcoin Blockchain as a payment network. The further development and use of the Bitcoin Blockchain for its intended purpose and other allowable applications are, and may continue to be, substantially dependent upon “Layer-2” solutions operating on top of the Bitcoin Blockchain, such as the Lightning Network, which is intended to expand the scale and speed of payments across the underlying Bitcoin Blockchain through the use of channels and payment networks outside of the Bitcoin Blockchain. To the extent these Layer-2 solutions have not been developed or have not been fully developed in a way that is adequate to improve scalability, transactions speed or efficiency, the use and/or value of the Bitcoin Blockchain may be limited, which could adversely affect the Fund. Further, the industry is actively researching, investing in and in some cases creating alternative blockchains that are able to support more advanced applications, such as the Ethereum Blockchain. The emergence of other public blockchains and related technologies may compete with bitcoin and result in a reduction in the use of bitcoin, which could reduce its value or increase the volatility of the price of bitcoin due to changes in the supply and demand of bitcoin relative to alternatives, thus negatively impacting investment in the Fund. The Bitcoin Blockchain may also be vulnerable to attacks to the extent a miner or group of miners possess more than 50% of its hashing power and the Bitcoin Blockchain’s protocol may contain flaws that can be exploited by attackers.

•Cash Transaction Risk. Each Fund expects to effect certain of its creations and redemptions for cash, rather than in-kind securities. Cash purchases and redemptions may increase brokerage and other transaction costs. In addition, a Fund may be required to sell or unwind portfolio investments to obtain the cash needed to distribute redemption proceeds. This may cause a Fund to recognize a capital gain that it might not have recognized if it had made a redemption in kind. As a result, a Fund may pay out higher annual capital gain distributions than if the in-kind redemption process was used. The use of cash creations and redemptions also may cause a Fund’s Shares to trade in the market at wider bid-ask spreads or greater premiums or discounts to a Fund’s NAV, particularly in times of stressed market conditions. As a practical matter, only institutions and large investors, such as market makers or other large broker dealers, create or redeem Shares directly through a Fund. Most investors will buy and sell Shares on an exchange through a broker-dealer. Furthermore, a Fund may not be able to execute cash transactions for creation and redemption purposes at the same price used to determine a Fund’s NAV. To the extent that the maximum additional charge for creation or redemption transactions is insufficient to cover the execution shortfall, a Fund’s performance could be negatively impacted.

◦Automotive Industry Risk. The automotive industry can be highly cyclical, and companies in the industry may suffer periodic operating losses. The automotive industry also can be significantly affected by labor relations and fluctuating component prices. Companies in the automotive industry, particularly those in the electric vehicles industry, may be affected by the obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants and general economic conditions. While most of the major manufacturers are large, financially strong companies, many others are small and can be non-diversified in both product line and customer base. Additionally, developments in automotive technologies (e.g., autonomous vehicle technologies) may require significant capital expenditures that may not generate profits for several years, if any. Companies in the automotive industry may be significantly subject to government policies and regulations regarding imports and exports of automotive products. Governmental policies affecting the automotive industry, such as taxes, tariffs, duties, subsidies, and import and export restrictions on automotive products can influence industry profitability. In addition, such companies must comply with environmental laws and regulations, for which there may be severe consequences for non-compliance. Legislative or regulatory changes and increased government supervision also may affect companies in the automotive industry.

◦Casinos & Gaming Industry Risk. The Casinos & Gaming Industry includes owners and operators of casinos and gaming facilities, and companies providing lottery and betting services. The Casinos & Gaming Industry is highly competitive and companies operating in the Casinos & Gaming Industry rely heavily on consumer spending and the availability of disposable income for success. In addition, the Casinos & Gaming Industry may be negatively affected by changes in economic conditions, consumer tastes and discretionary income levels, technological developments, limited financial resources, competition from competing entertainment options, and competition for key personnel. Casinos are closely tied to the travel and tourism industry and are particularly sensitive to economic shutdowns and mitigation strategies, such as the COVID-19 pandemic. In addition, Casinos & Gaming Industry companies are highly regulated, and state and federal legislative or regulatory changes and licensing issues (as well as the laws of other countries) can significantly impact their ability to operate in certain jurisdictions. The Casinos & Gaming Industry is a sub-industry of the Hotels, Restaurants & Leisure Industry within the Consumer Discretionary Sector.

◦Software Industry Risk. The Software Industry can be significantly affected by intense competition, aggressive pricing, technological innovations, and product obsolescence. Companies in the Software Industry are subject to significant competitive pressures, such as aggressive pricing, new market entrants, competition for market share, short product cycles due to an accelerated rate of technological developments and the potential for limited earnings and/or falling profit margins. These companies also face the risks that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. These factors can affect the profitability of these companies and, as a result, the value of their securities. Also, patent protection is integral to the success of many companies in this industry, and profitability can be affected materially by, among other things, the cost of obtaining (or failing to obtain) patent approvals, the cost of litigating patent infringement and the loss of patent protection for products (which significantly increases pricing pressures and can materially reduce profitability with respect to such products). In addition, many software companies have limited operating histories. Prices of these companies’ securities historically have been more volatile than other securities, especially over the short term.

◦Technology Hardware Industry Risk. The Technology Hardware Industry includes companies that manufacture and distribute computers, servers, mainframes, peripheral devices (e.g., keyboard, mouse, etc.), high-technology components (e.g., circuit boards), and electronic office equipment. In addition, companies in the Technology Hardware Industry include producers and distributors of semiconductors and other integrated chips, other products related to the semiconductor industry such as motherboards, and manufacturers of high-technology tools and/or equipment used in the creation of semiconductors, photonics, wafers, and other high-technology components. The companies in the Technology Hardware Industry can be significantly affected by competitive pressures, aggressive pricing, technological developments, changing domestic demand, the ability to attract and retain skilled employees and availability and price of components. The market for products produced by companies in the Technology Hardware Industry is characterized by rapidly changing technology, rapid product obsolescence, cyclical market patterns, evolving industry standards and frequent new product introductions. The success of these companies depends in substantial part on the timely and successful introduction of new products. An unexpected change in one or more of the technologies affecting an issuer’s products or in the market for products based on a particular technology could have a material adverse effect on a participant’s operating results.

•Counterparty Risk. Counterparty risk is the risk that a counterparty is unwilling or unable to make timely payments or deliver the reference asset contemplated by such arrangement to meet its contractual obligations with respect to the amount a Fund expects to receive from a counterparty to a financial instrument entered into by a Fund. A Fund generally enters into derivatives transactions with counterparties such that either party can terminate the contract without penalty prior to the termination date. A Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations under such a contract, or if any collateral posted by the counterparty for the benefit of a Fund is insufficient or there are delays in a Fund’s ability to access such collateral. If the counterparty becomes bankrupt or defaults on its payment, delivery or other obligations to a Fund, it may experience significant delays in obtaining any recovery, may obtain only a limited recovery or obtain no recovery, or may not be able to maintain its desired exposure to Underlying Issuers, which may result in a decline in the value of an investment held by a Fund. A Fund also may not be able to exercise remedies, such as the termination of transactions, netting of obligations and realization on collateral, if such remedies are stayed or eliminated under special resolutions adopted in the United

Cryptocurrency generally operates without central authority (such as a bank) and is not backed by any government. Cryptocurrency is not legal tender. Federal, state and/or foreign governments may restrict the use and exchange of cryptocurrency, and regulation in the U.S. is still developing. The market price of cryptocurrencies has been subject to extreme fluctuations. If cryptocurrency markets continue to be subject to sharp fluctuations, investors may experience losses. The market value of cryptocurrencies may be affected by momentum pricing of the market due to speculation about future price appreciation, which may lead to increased volatility. Similar to fiat currencies (i.e., a currency that is backed by a central bank or a national, supra-national or quasi-national organization), cryptocurrencies are susceptible to theft, loss and destruction. Furthermore, if network participants are able to gain a certain level of control over a network, they would be able to execute significant attacks, control transactions, stop payments, and fraudulently obtain such network’s cryptocurrency. Cryptocurrency exchanges and other trading venues on which cryptocurrencies trade are relatively new and, in most cases, largely unregulated and may therefore be more exposed to market manipulation, fraud and failure than established, regulated exchanges for securities, derivatives and other currencies. Investors in cryptocurrency may have little or no recourse should such theft, fraud or manipulation occur and could suffer significant losses. Additionally, holders of cryptocurrency may not be able to access their wallets due to the loss, theft, compromise or destruction of the private keys associated with the public addresses that hold the cryptocurrency. A significant portion of a cryptocurrency may be held by a small number of holders, who would have the ability to manipulate the prices of such cryptocurrencies. The Fund’s indirect investment in and exposure to cryptocurrency remains subject to volatility experienced by the cryptocurrency exchanges and other cryptocurrency trading venues. Such volatility can adversely affect an investment in the Fund. Cryptocurrency exchanges may stop operating or permanently shut down due to fraud, technical glitches, hackers or malware, which may also affect the price of cryptocurrencies and thus the Fund’s investment in cryptocurrency-related instruments or in publicly traded securities of companies engaged in cryptocurrency-related businesses and activities.

•Cryptocurrency ETF Risk. The Fund may invest in or have exposure to one or more Cryptocurrency ETFs that primarily hold cryptocurrency to the extent consistent with U.S. federal securities laws and related guidance applicable to the Fund. Foreign and domestic Cryptocurrency ETFs are relatively new investment products, with the first domestic cryptocurrency ETFs having commenced trading in January 2024. As a result, the Cryptocurrency ETFs in which the Fund may invest may have limited financial and operating histories. To the extent the Fund invests directly in shares of a Cryptocurrency ETF, the Fund will hold shares representing a fractional undivided beneficial interest in the net assets of the Cryptocurrency ETF and bear its ratable share of the Cryptocurrency ETF’s expenses. As a result, Fund shareholders will indirectly pay the fees of any Cryptocurrency ETF to which the Fund has investment exposure in addition to the Fund’s total annual fund operating expenses. The Fund’s investment exposure to Cryptocurrency ETFs subjects the Fund to many of the same risks as an investment in the reference cryptocurrency itself, including those described elsewhere in this Prospectus. The value of interests in Cryptocurrency ETFs and their reference cryptocurrency is subject to a number of factors, including the capabilities and development of blockchain technologies, cryptocurrencies’ dependence on the internet, other technologies, and the role played by key service providers, users, developers and other facilitators (e.g., miners) and the potential for malicious activity at various stages in the cryptocurrency investment cycle. The Fund expects to purchase shares of any Cryptocurrency ETF in the secondary market at its market price, which may be highly volatile and may not closely correspond to either the NAV per share of the Cryptocurrency ETF or the price of the reference cryptocurrency. Shares of Cryptocurrency ETFs may trade at premiums (i.e., the market price of the shares is more than the NAV) or discounts (i.e., the market price of the shares is less than the NAV), which may be significant. The risk that share prices differ from a Cryptocurrency ETF’s NAV and/or the price of the Cryptocurrency ETF’s reference cryptocurrency is likely to increase during times of market volatility or stressed market conditions. Under such conditions, the market for shares of Cryptocurrency ETFs may become less liquid making it difficult for the Fund to either increase or decrease its investment exposure to Cryptocurrency ETFs. Extreme volatility affecting cryptocurrencies may persist for extended periods and the value of the Fund’s investment in a Cryptocurrency ETF may decline significantly without recovery. The cryptocurrency markets and by extension, Cryptocurrency ETFs and the Fund’s investments in such Cryptocurrency ETFs, also may be significantly and adversely affected by alleged and actual acts of fraud carried out by cryptocurrency market participants, the bankruptcy or other failure of key cryptocurrency service providers, and regulatory actions that negatively affect or constrain the further development of cryptocurrencies and the cryptocurrency markets. Regulatory and enforcement scrutiny of cryptocurrency market participants and the cryptocurrency markets more generally by, among others, the Department of Justice, the SEC, the CFTC, the White House and Congress, as well as state regulators and authorities has continued to increase. The shares of Cryptocurrency ETFs in which the Fund may invest or to which the Fund may have investment exposure are generally not registered under the 1940 Act, and therefore, do not afford the Fund the investor protections typical of investments in U.S. registered funds.

during the time that it is staked and during which it is being unbonded. The unbonding period may be longer than anticipated based on network activity. In addition, during the unbonding period, the Cryptocurrency ETF is subject to the market price volatility of the cryptocurrency, and it may miss opportunities to sell the staked cryptocurrency during opportune times. Staking a cryptocurrency may involve the risk of slashing and concentration risk. Slashing is a penalty imposed on network validators for actions that threaten the blockchain’s integrity. For example, slashing can result from isolated validator mistakes, malicious activity, coordinated attacks, software bugs, or provider failures. Slashing serves as an enforcement mechanism to ensure network resilience, but correlated slashing events can be catastrophic. Penalties can scale aggressively, potentially leading to a significant loss of staked principal. Concentration risks associated with staking include staking activities occurring through a concentrated group of software providers and cloud infrastructure providers. There are a limited number of staking software providers, and over-allocating to validators using the same software increases the risk of a single issue impacting a large amount of staked assets. Similarly, complications in specific cloud regions (i.e., a particular geographical area where a cloud provider’s data centers are located) can create outages that impact validators. Such complications may include, but are not limited to, compliance and regulatory issues, security breaches such as ransomware threats and attacks, data breaches, and malicious actors, and cloud network and infrastructure performance issues (e.g., network latency and service outages). Staked cryptocurrencies are also subject to security breaches, network downtime or attacks, smart contract vulnerabilities, and validator or custodian failure or compromise, which can result in a complete loss of the staked cryptocurrency or a loss of any rewards. The loss of the staked cryptocurrency (either in whole or partially) during the staking period will have an adverse effect on the Cryptocurrency ETF, and in turn, the Fund.

•Currency Exchange Rate Risk. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of a Fund’s investments and the value of your Shares. Because a Fund’s NAV is determined on the basis of U.S. dollars, the U.S. dollar value of your investment in a Fund may go down if the value of the local currency of the non-U.S. markets in which a Fund invests depreciates against the U.S. dollar. This is true even if the local currency value of securities in a Fund’s holdings goes up. Conversely, the dollar value of your investment in a Fund may go up if the value of the local currency appreciates against the U.S. dollar. The value of the U.S. dollar measured against other currencies is influenced by a variety of factors. These factors include: national debt levels and trade deficits, changes in balances of payments and trade, domestic and foreign interest and inflation rates, global or regional political, economic or financial events, monetary policies of governments, actual or potential government intervention, and global energy prices. Political instability, the possibility of government intervention and restrictive or opaque business and investment policies also may reduce the value of a country’s currency. Government monetary policies and the buying or selling of currency by a country’s government also may influence exchange rates. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in a Fund may change quickly and without warning, and you may lose money.

•Cybersecurity Risk. With the increased use of technologies such as the Internet and the dependence on computer systems to perform business and operational functions, funds (such as a Fund) and their service providers may be prone to operational and information security risks resulting from cyber-attacks and/or technological malfunctions. In general, cyber-attacks are deliberate, but unintentional events may have similar effects. Cyber-attacks include, among others, stealing or corrupting data maintained online or digitally, preventing legitimate users from accessing information or services on a website, releasing confidential information without authorization, and causing operational disruption. Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets or proprietary information, or cause a Fund, the Adviser, the Sub-Adviser and/or other service providers (including custodians and financial intermediaries) to suffer data breaches or data corruption. Additionally, cybersecurity failures or breaches of the electronic systems of a Fund, the Adviser, the Sub-Adviser or a Fund’s other service providers, market makers, APs, a Fund’s primary listing exchange or the issuers of securities in which such Fund invests have the ability to disrupt and negatively affect the Fund’s business operations, including the ability to purchase and sell Shares, potentially resulting in financial losses to the Fund and its shareholders. For instance, cyber-attacks or technical malfunctions may interfere with the processing of shareholder or other transactions, affect a Fund’s ability to calculate its NAV, cause the release of private shareholder information or confidential Fund information, impede trading, cause reputational damage, and subject a Fund to regulatory fines, penalties or financial losses, reimbursement or other compensation costs, and additional compliance costs. Cyber-attacks or technical malfunctions may render records of Fund assets and transactions, shareholder ownership of Shares, and other data integral to the functioning of a Fund inaccessible or inaccurate or incomplete. A Fund also may incur substantial costs for cybersecurity risk management to prevent cyber incidents in the future. A Fund and its respective shareholders could be negatively impacted as a result.

•Derivatives Risk. Each Fund intends to invest in total return swaps, which are a type of derivative. A Fund may invest in swap agreements to pursue its investment objective and to create economic leverage in a Fund; to seek to enhance total return; to seek to hedge against fluctuations in securities prices, interest rates, currency rates, etc.; to seek to change the effective duration of a Fund’s portfolio; to seek to manage certain investment risks; as a substitute for the purchase or sale of securities or currencies; and/or to obtain or replicate market exposure. The use of such derivatives may expose a Fund to risks in addition to and greater than those associated with investing directly in the instruments underlying those derivatives, including risks relating to leverage, correlation (imperfect correlations with underlying instruments or a Fund’s other portfolio holdings), high price volatility, lack of availability, counterparty credit, liquidity, valuation and legal restrictions. The use of such derivatives also may expose a Fund to the performance of securities that a Fund does not own. The skills necessary to successfully execute derivatives strategies may be different from those for more traditional portfolio management techniques, and if the Adviser and Sub-Adviser are incorrect about their expectations of market conditions, the use of derivatives also could result in a loss, which in some cases may be unlimited. Use of derivatives also may cause a Fund to be subject to additional regulations, which may generate additional Fund expenses. These practices also entail transactional expenses and may cause a Fund to realize higher amounts of short-term capital gains than if the Fund had not engaged in such transactions. The markets for certain derivatives, including those located in certain foreign countries, are relatively new and still developing, which may expose a Fund to increased counterparty credit and liquidity risks.

Certain of the derivatives in which a Fund invests are traded (and privately negotiated) in the OTC market. OTC derivatives are complex and often valued subjectively, which exposes a Fund to heightened liquidity, mispricing and valuation risks. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to a Fund. In addition, OTC derivative instruments are often highly customized and tailored to meet the needs of a Fund and its trading counterparties. If a derivative transaction is particularly large or if the relevant market is illiquid, it may not be possible to initiate a transaction or liquidate a position at an advantageous time or price. As a result and similar to other privately negotiated contracts, a Fund is subject to counterparty credit risk with respect to such derivative contracts. Certain derivatives are subject to mandatory exchange trading and/or clearing, which exposes a Fund to the credit risk of the clearing broker or clearinghouse. While exchange trading and central clearing are intended to reduce counterparty credit risk and to increase liquidity, they do not make derivatives transactions risk-free. Certain risks also are specific to the derivatives in which a Fund invests.

◦Swap Agreements Risk. Swap agreements are contracts for periods ranging from one day to more than one year and may be negotiated bilaterally and traded OTC between two parties or, for certain standardized swaps, must be exchange-traded through a futures commission merchant or swap execution facility and/or cleared through a clearinghouse that serves as a central counterparty. In a standard swap transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. Each Fund may enter into swap agreements, including, but not limited to total return swaps, index swaps, interest rate swaps, municipal market data rate locks, and credit default swaps. Each Fund may utilize swap agreements in an attempt to gain exposure to certain securities without purchasing those securities to speculate on the movement of such securities or to hedge a position. Risks associated with the use of swap agreements are different from those associated with ordinary portfolio securities transactions, largely due to the fact they could be considered illiquid and many swaps currently trade on the OTC market. Swaps are particularly subject to counterparty credit, correlation, valuation, liquidity and leveraging risks and could result in substantial losses to a Fund.

•Equity Securities Risk. The Funds are designed for investors who can accept the risks of investing in a portfolio with significant equity holdings. Equity holdings tend to be more volatile than other investment choices such as bonds and money market instruments because common stockholders, or holders of equivalent interests, generally have inferior rights to receive payments from issuers in comparison with the rights of preferred stockholders, bondholders and other creditors of such issuers. The value of a Fund’s Shares will fluctuate as a result of the movement of the overall stock market or of the value of the individual securities held by the Fund, sometimes rapidly or unpredictably, resulting in losses. Equity securities may decline in value due to factors affecting equity securities markets generally or particular industries represented in those markets. The value of an equity security may also decline for a number of reasons, which directly relate to the issuer, such as management performance, changed investor perception financial leverage, and reduced demand for the issuer’s goods or services. Investor perceptions are based on various and unpredictable factors including: expectations regarding government, economic, monetary and fiscal policies; inflation and interest rates; economic expansion or contraction; and global or regional political, economic and banking crises.

◦Costs of Buying or Selling Shares Risk. Investors buying or selling Shares in the secondary market will pay brokerage commissions or other charges imposed by brokers, as determined by that broker. Brokerage commissions are often a fixed amount and may be a significant proportional cost for investors seeking to buy or sell relatively small amounts of Shares. In addition, secondary market investors also will incur the cost of the difference between the price at which an investor is willing to buy Shares (the “bid” price) and the price at which an investor is willing to sell Shares (the “ask” price). This difference in bid and ask prices is often referred to as the “spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares based on trading volume and market liquidity and is generally lower if Shares have more trading volume and market liquidity and higher if Shares have little trading volume and market liquidity. Further, a relatively small investor base in a Fund, asset swings in a Fund and/or increased market volatility may cause increased bid/ask spreads. Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments.

when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility or periods of steep market declines and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant. The market price of Shares during the trading day, like the price of any exchange-traded security, includes a “bid/ask” spread charged by the exchange specialist, market makers or other participants that trade Shares. In times of severe market disruption, the bid/ask spread can increase significantly. At those times, Shares are most likely to be traded at a discount to NAV, and the discount is likely to be greatest when the price of Shares is falling fastest, which may be the time that you most want to sell your Shares. The Adviser believes that, under normal market conditions, large market price discounts or premiums to NAV will not be sustained because of arbitrage opportunities. Because securities held by a Fund may trade on foreign exchanges that are closed when such Fund’s primary listing exchange is open, such Fund is likely to experience premiums or discounts greater than those of ETFs that invest in and hold only securities and other investments that are listed and trade in the U.S.

◦Interest Rate Risk. The values of debt securities usually rise and fall in response to changes in interest rates. An increase in interest rates may cause the value of fixed-income securities held by a Fund to decline. Changes in a debt instrument’s value usually will not affect the amount of interest income paid to a Fund, but will affect the value of the Fund’s shares. Interest rate risk is generally greater for investments with longer maturities. Certain securities pay interest at variable or floating rates. Variable rate securities reset at specified intervals, while floating rate securities reset whenever there is a change in a specified index rate. In most cases, these reset provisions reduce the effect of changes in market interest rates on the value of the security. However, some securities do not track the underlying index directly, but reset based on formulas that can produce an effect similar to leveraging; others also may provide for interest payments that vary inversely with market rates. The market prices of these securities may fluctuate significantly when interest rates change. Interest rate changes can be sudden and unpredictable, and are influenced by a number of factors, including government policy, monetary policy, inflation expectations, perceptions of risk, and supply and demand for bonds. Changes in government or central bank policy, including changes in tax policy or changes in a central bank’s implementation of specific policy goals, may have a substantial impact on interest rates. This could lead to heightened levels of interest rate, volatility and liquidity risks for the fixed income markets generally and could have a substantial and immediate effect on the values of a Fund's investments. There can be no guarantee that any particular government or central bank policy will be continued, discontinued or changed, nor that any such policy will have the desired effect on interest rates. A Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates and the effect of potential government fiscal policy initiatives and resulting market reaction to those initiatives.

•Foreign Securities Risk. Investments in non-U.S. securities involve certain risks that may not be present with investments in U.S. securities. These include risks of adverse changes in foreign economic, political, regulatory and other conditions, or changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges). The securities of some foreign companies may be less liquid and, at times, more volatile than securities of comparable U.S. companies. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Non-U.S. issuers may be subject to different accounting, auditing, financial reporting and investor protection standards than U.S. issuers. Investments in non-U.S. securities may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. With respect to certain countries, there is the possibility of government intervention and expropriation or nationalization of assets. Because legal systems differ, there also is the possibility that it will be difficult to obtain or enforce legal judgments in certain countries. Since foreign exchanges may be open on days when a Fund does not price its shares, the value of the securities in a Fund’s portfolio may change on days when shareholders will not be able to purchase or sell a Fund’s shares. Conversely, Shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in a Fund more volatile and potentially less liquid than other types of investments.

Governments of many Asian countries have implemented significant economic reforms in order to liberalize trade policy, promote foreign investment in their economies, reduce government control of the economy and develop market mechanisms. There can be no assurance these reforms will continue or that they will be effective. Despite recent reform and privatizations, significant regulation of investment and industry is still pervasive in many Asian countries and may restrict foreign ownership of domestic corporations and repatriation of assets, which may adversely affect Fund investments. Governments in some Asian countries are authoritarian in nature, have been installed or removed as a result of military coups or have periodically used force to suppress civil dissent. Disparities of wealth, the pace and success of democratization, and ethnic, religious and racial disaffection have led to social turmoil, violence and labor unrest in some countries. Unanticipated or sudden political or social developments may result in sudden and significant investment losses. Investing in certain Asian countries involves risk of loss due to expropriation, nationalization, or confiscation of assets and property or the imposition of restrictions on foreign investments and on repatriation of capital invested.

◦Risks Related to Investing in China. The economy of China differs, often unfavorably, from the U.S. economy in such respects as structure, general development, government involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. Under China’s political and economic system, the central government has historically exercised substantial control over virtually every sector of the Chinese economy through administrative regulation and/or state ownership. Since 1978, the Chinese government has been, and is expected to continue, reforming its economic policies, which has resulted in less direct central and local government control over the business and production activities of Chinese enterprises and companies. Notwithstanding the economic reforms instituted by the Chinese government and the Chinese Communist Party, actions of the Chinese central and local government authorities continue to have a substantial effect on economic conditions in China, which could affect the public and private sector companies in which the Fund may invest. In the past, the Chinese government has from time to time taken actions that influence the prices at which certain goods may be sold, encourage companies to invest or concentrate in particular industries, induce mergers between companies in certain industries and induce private companies to publicly offer their securities to increase or continue the rate of economic growth, and control the rate of inflation or otherwise regulate economic expansion and it may take such actions in the future as well. Such actions and a variety of other centrally planned or determined activities by the Chinese government could have a significant adverse effect on economic conditions in China and the economic prospects for, and the market prices and liquidity of, the securities of Chinese companies and the payments of dividends and interest by Chinese companies. In addition, expropriation, including nationalization, confiscatory taxation, political, economic or social instability or other developments could adversely affect and significantly diminish the values of the Chinese companies in which the Fund may invest. Additionally, from time to time, China has experienced outbreaks of infectious illnesses, including COVID-19, and the country may be subject to other public health threats, diseases or similar issues in the future. The Fund may invest in shares of Chinese companies traded on stock markets in Mainland China or Hong Kong. These stock markets have experienced high levels of volatility, which may continue in the future. The Hong Kong stock market may behave differently from the Mainland China stock market and there may be little to no correlation between the performance of the Hong Kong stock market and the Mainland China stock market. From time to time, certain of the companies in the Fund’s portfolio may operate in, or have dealings with, countries subject to sanctions or embargoes imposed by the U.S. government and the United Nations and/or in countries identified by the U.S. government as state sponsors of terrorism. One or more of these companies may be subject to constraints under U.S. law or regulations which could negatively affect the company’s performance. Additionally, one or more of these companies may suffer damage to its reputation if it is identified as a company which invests or deals with countries which are identified by the U.S. government as state sponsors of terrorism or subject to sanctions. As an investor in such companies, an investing fund will be indirectly subject to these risks.

•Index Provider Risk. There is no assurance that the Index Provider, or any agents that act on its behalf, will compile the Index accurately, or that the Index will be determined, constructed, reconstituted, rebalanced, composed, calculated or disseminated accurately. The Adviser relies upon the Index Provider and its agents to compile, determine, construct, reconstitute, rebalance, compose, calculate, and disseminate the Index accurately. Any losses or costs associated with errors made by the Index Provider or its agents generally will be borne by a Fund and its shareholders. To correct any such error, the Index Provider or its agents may carry out an unscheduled rebalance of the Index or other modification of Index constituents or weightings. When a Fund in turn rebalances its portfolio, any transaction costs and market exposure arising from such portfolio rebalancing will be borne by the Fund and its shareholders. Unscheduled rebalances also expose a Fund to additional tracking error risk. Errors in respect of the quality, accuracy, and completeness of the data used to compile the Index may occur from time to time and may not be identified and corrected by the Index Provider for a period of time or at all, particularly where the Index is less commonly used as a benchmark by funds or advisors. For example, during a period where the Index contains incorrect constituents, a Fund tracking the Index would have market exposure to such constituents and would be underexposed to the Index’s other constituents. Such errors may negatively impact a Fund and its shareholders. The Index Provider and its agents rely on various sources of information to assess the criteria of issuers included in the Index, including information that may be based on assumptions and estimates. Neither a Fund nor the Adviser can offer assurances that the Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers.

•Liquidity and Valuation Risk. It may be difficult for a Fund to purchase and sell particular investments within a reasonable time at a favorable price. As a result, a Fund may be unable to achieve its desired level of investment exposure. In addition, a Fund may be unable to pay redemption proceeds within the requisite time period because of adverse market conditions, an unusually high volume of redemption requests or other reasons, unless it sells other portfolio investments under unfavorable conditions, thereby adversely affecting the Fund. A Fund’s ability to sell an instrument under favorable conditions also may be negatively impacted by, among other things, other market participants selling the same or similar instruments at the same time. If a Fund is unable to sell an investment at its desired time, the Fund may miss other investment opportunities while it holds investments it would prefer to sell, which could adversely affect the Fund’s performance. In addition, the liquidity of any Fund investment may change significantly over time as a result of market, economic, trading, issuer-specific and other factors. Dislocations in certain parts of markets are resulting in reduced liquidity for certain investments. It is uncertain when financial markets will improve and economic conditions will stabilize. Liquidity of financial markets also may be affected by government intervention and political, social, public health, economic or market developments.

In addition, during periods of reduced market liquidity, market turmoil or in the absence of readily available market quotations for particular investments in a Fund’s portfolio, the ability of the Fund to assign an accurate daily value to these investments may be difficult and the Adviser may be required to fair value the investments. Fair value determinations are inherently subjective and reflect good faith judgments based on available information. Accordingly, there can be no assurance that the determination of an investment’s fair value in accordance with a Fund’s valuation procedures will in fact approximate the price at which the Fund could sell that investment at that time (i.e., the sale price could differ, sometimes significantly, from the Fund’s last valuation for the investment). The Adviser) relies on various sources of information to value investments and calculate NAV. The Adviser may obtain pricing information from third parties that are believed to be reliable. In certain cases, this information may be unavailable or this information may be inaccurate because of errors by the third parties, technological issues, absence of current market data, or otherwise. As a result, the Adviser’s ability to effectively value a Fund’s investments or calculate NAV may be adversely affected.

•Market Risk. Market risks, including political, regulatory, market, and economic or other developments, and developments that impact specific economic sectors, industries or segments of the market, can affect the value of a Fund’s Shares. Each Fund is subject to the risk that the prices of, and the income generated by, securities held by the Fund may decline significantly and/or rapidly in response to adverse conditions or other developments affecting (or that are perceived to affect) individual companies or issuers, particular industries, or the market generally. Such developments may include real or perceived changes in prevailing interest rates, changes in inflation rates or expectations about inflation rates, deflation, adverse investor confidence or sentiment, general outlook for corporate earnings, changing economic, political (including geopolitical), social or financial market conditions, bank failures, actual or threatened imposition of tariffs (which may be imposed by U.S. and foreign governments) and trade disruptions, recession, changes in currency and inflation rates, increased instability or general uncertainty, environmental or natural disasters, extreme weather or geological events, governmental actions, public health emergencies (such as the spread of infectious diseases, pandemics and epidemics), debt crises, terrorism, actual or threatened wars or other armed conflicts (such as

the armed conflicts across the Middle East and ongoing Russia-Ukraine war in Europe, and the risk of expansion or collateral economic and other effects thereof) or ratings downgrades, technological developments (including those related to artificial intelligence) or failures (for example, widespread system outages or disruptions or faulty updates to software applications) and other similar events, each of which may be temporary or last for extended periods. For example, the threat or actual imposition of tariffs, trade restrictions, currency restrictions or similar actions (or retaliatory measures taken in response to such actions) could adversely affect a Fund’s investments, including by leading to price volatility, overall declines in the U.S. and global investment markets, reduced liquidity and investment losses. These events have caused, and may in the future cause, significant disruptions to business operations, strained healthcare systems, disruptions to supply chains, large expansion of government deficits and debt as a result of government actions to mitigate the effects of such events, and widespread uncertainty regarding the long-term effects of such events. Such events may cause the value of securities owned by a Fund to go up or down, sometimes rapidly or unpredictably. There also is a risk that policy and legislative changes by the U.S. Government and/or Federal Reserve, or certain foreign governments and central banks, could cause increased volatility in financial markets and higher levels of Fund redemptions, which could have a negative impact on a Fund. These events may lead to periods of volatility and increased redemptions, which could cause a Fund to experience a loss when selling securities to meet redemption requests by shareholders. The risk of loss increases if the redemption requests are unusually large or frequent. Markets also tend to move in cycles, with periods of rising and falling prices. If there is a general decline in the securities and other markets, your investment in a Fund may lose value, regardless of the individual results of the securities and other instruments in which a Fund invests.

•Models and Data Risk. When models and data prove to be incorrect or incomplete, any decisions made in reliance thereon expose the Index and the Fund to potential risks. The model used to construct the Index is predictive in nature. The use of predictive models has inherent risks. For example, such models may incorrectly forecast future behavior, leading to potential losses. In addition, in unforeseen or certain low-probability scenarios (often involving a market disruption of some kind), such models may produce unexpected results, which can result in losses for the Fund. Furthermore, because predictive models are usually constructed based on historical data supplied by third parties, the success of relying on such models may depend heavily on the accuracy and reliability of the supplied historical data. In addition, data and information on non-U.S. countries may be unreliable or outdated or there may be less publicly available data or information about non-U.S. countries due to differences in registration, accounting, audit and financial record keeping standards which creates the potential for errors in Index data, Index computation and/or Index construction and could have an adverse effect on the Fund’s performance.

In addition to these risks, residential/diversified REITs and commercial equity REITs may be affected by changes in the value of the underlying property owned by the trusts, while mortgage REITs may be affected by the quality of any credit extended. Further, REITs are dependent upon management skills and generally may not be diversified. REITs are also subject to heavy cash flow dependency, defaults by borrowers or lessees and self-liquidation. In addition, U.S. REITs are subject to special U.S. federal tax requirements. A U.S. REIT that fails to comply with such tax requirements may be subject to U.S. federal income taxation, which may affect the value of the REIT and the characterization of the REIT’s distributions. The U.S. federal tax requirement that a REIT distributes substantially all of its net income to its shareholders may result in the REIT having insufficient capital for future expenditures. A REIT that successfully maintains its qualification may still become subject to U.S. federal, state and local taxes, including excise, penalty, franchise, payroll, mortgage recording, and transfer taxes, both directly and indirectly through its subsidiaries. In the event of a default by a borrower or lessee, the REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs associated with protecting investments.

◦Communications Service Sector Risk. Market or economic factors impacting communication services companies and companies that rely heavily on technological advances could have a major effect on the value of a Fund’s investments. Communication services companies are particularly vulnerable to the potential obsolescence of products and services due to technological advancement and the innovation of competitors. Companies in the Communication Services Sector may also be affected by other competitive pressures, such as pricing competition, as well as research and development costs, substantial capital requirements and government regulation. Additionally, fluctuating domestic and international demand, shifting demographics and often unpredictable changes in consumer tastes can drastically affect a communication services company’s profitability. Stocks of communication services companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market. Additionally, companies in the Communication Services Sector may face dramatic and often unpredictable changes in growth rates and competition for the services of qualified personnel. While all companies may be susceptible to network security breaches, certain companies in

◦(Ball Metaverse ETF only). The Fund may invest in certain non-U.S. entities that own cryptocurrency. Direct and indirect investments in cryptocurrencies introduce complexities beyond typical equity investments and may subject the Fund to certain tax risks. The Fund’s investment exposure to cryptocurrencies is expected to be obtained primarily through its investments in non-U.S. ETFs treated as PFICs under the Code, thereby subjecting the Fund to special tax rules applicable to PFIC holdings. If the Fund holds an equity investment in an entity treated as a PFIC, such as investments in certain non-U.S. ETFs that own cryptocurrency, the Fund may be subject to U.S. federal income tax on a portion of any “excess distribution” or gain from the disposition of shares in the PFIC even if such income is distributed as a taxable dividend by the Fund to its shareholders. Additional charges in the nature of interest may be imposed on the Fund in respect of deferred taxes arising from such distributions or gains unless the Fund makes certain elections. In addition, for the Fund to continue to qualify as a regulated investment company (“RIC”), at least 90% of the Fund’s gross income each taxable year must be derived from dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stock, securities, or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies, and net income derived from an interest in a qualified publicly traded partnership. Income from a PFIC is generally expected to be qualifying income for purposes of this requirement. If certain of the Fund’s investments were deemed to be direct investments in cryptocurrencies, such investments may not produce qualifying income. The Fund intends to seek to restrict its income from investments that do not generate qualifying income to a maximum of 10% of its gross income (when combined with its other investments that produce non-qualifying income).

◦(Magnificent Seven ETF and Cannabis ETF only). In order to qualify for the favorable tax treatment generally available to a RIC, a Fund must satisfy certain diversification and other requirements. In particular, at each quarter end (a) at least 50% of the value of a Fund’s total assets must generally be represented by cash and cash items, U.S. government securities, securities of other RICs and other securities, with such other securities limited, in respect to any one issuer, to an amount not greater than 5% of the value of a Fund’s total assets and that does not represent more than 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of a Fund’s total assets is invested in the securities (other than U.S. government securities or the securities of other RICs) of any one issuer or the securities (other than the securities of another RIC) of two or more issuers that a Fund controls and which are engaged in the same or similar trades or businesses or related trades or businesses, or the securities of one or more qualified publicly traded partnerships (i.e., the Diversification Requirement). The Funds anticipate gaining exposure to seven Underlying Issuers. To satisfy the Diversification Requirement, the Funds will gain exposure to the Underlying Issuers by entering into swap agreements and forward contracts (derivatives instruments) or by investing in equity securities of an Underlying Issuer. The determination of the value and the identity of the issuer of derivative investments is often unclear for purposes of the Diversification Requirement described above. Although the Funds intend to carefully monitor its investments to ensure that it is adequately diversified under the Diversification Requirement, there are no assurances that the Internal Revenue Service (“IRS”) will agree with a Fund’s determination of the issuer and valuation under the Diversification Requirement with respect to such derivatives instruments as the application of the Diversification Requirements to derivative investments is often unclear. A Fund’s efforts to satisfy the Diversification Requirement may affect the Fund’s execution of its investment strategy. If the Fund fails to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation subject to U.S. federal income tax on all its income at the fund level (unless certain relief provisions are available.) The resulting taxes could substantially reduce the Fund’s net assets and the amount of income available for distribution to shareholders. In addition, in order to requalify as a RIC, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make certain distributions. In addition, a Fund’s use of derivatives may cause the Fund to realize higher amounts of short-term capital gains or otherwise affect Fund’s ability to pay out dividends subject to preferential rates or the dividends received deduction, thereby increasing

•U.S. Government Securities Risk. Different types of U.S. government securities have different relative levels of credit risk depending on the nature of the particular government support for that security. U.S. government securities may be supported by: (i) the full faith and credit of the United States government; (ii) the ability of the issuer to borrow from the U.S. Treasury; (iii) the credit of the issuing agency, instrumentality or government-sponsored entity (“GSE”); (iv) pools of assets (e.g., mortgage-backed securities); or (v) the United States in some other way. The U.S. government and its agencies and instrumentalities do not guarantee the market value of their securities, which may fluctuate in value and are subject to investment risks, and certain U.S. government securities may not be backed by the full faith and credit of the United States government. The value of U.S. government obligations may be adversely affected by changes in interest rates. It is possible that the issuers of some U.S. government securities will not have the funds to timely meet their payment obligations in the future and there is a risk of default. For certain agency and GSE issued securities, there is no guarantee the U.S. government or GSE will support the agency if it is unable to meet its obligations.

produced or sold in the U.S. Cannabis Companies in the U.S. that engage in research, manufacturing, distributing, importing or exporting, or dispensing controlled substances must be registered (licensed) to perform these activities and have the security, control, recordkeeping, reporting and inventory mechanisms required by the DEA to prevent drug loss and diversion. Failure to obtain the necessary registrations or comply with necessary regulatory requirements may significantly impair the ability of certain companies in which the Fund invests to pursue medical marijuana research or to otherwise cultivate, possess or distribute marijuana. In addition, because cannabis is a Schedule I controlled substance, Section 280E of the Code applies by its terms to the purchase and sale of medical-use cannabis products and provides that no deduction or credit is allowed for expenses incurred during a taxable year “in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the CSA) which is prohibited by federal law or the law of any state in which such trade or business is conducted.” The disallowance of such tax deductions will likely affect the value of Cannabis Companies.

Unlike other digital assets such as bitcoin or ether, XRP is not and was not mined gradually over time. Instead, all 100 billion XRP tokens were created at the time of the XRP Ledger’s launch in 2012. This means that every XRP token that exists today, or will ever exist, was generated from the outset of the XRP Ledger. As a result, there is no ability for the supply of XRP to be adjusted in response to economic conditions. For instance, there is no ability for the supply of XRP to be increased to meet rising demand, which could lead to price volatility. In addition, unlike blockchains that utilize “proof-of-work” or “proof-of-stake” where miners or stakers are rewarded with newly minted coins or tokens, XRP validators are not incentivized by block rewards since there is no new issuance of XRP. Additionally, the fixed supply of XRP, combined with the burning of XRP (permanently destroyed) as transaction fees, could create deflationary pressure over time. A small amount of XRP is burned with every transaction to prevent spam on the network. While the amount of XRP burned per transaction is minuscule, over time, the total supply of XRP will slowly decrease. This could lead to a deflationary environment where the decreasing supply drives up the price of XRP, making it less practical as a medium of exchange. Additionally, as the total supply of XRP slowly shrinks due to burning, liquidity could become an issue in the distant future, potentially making it harder for businesses and users to access sufficient XRP for their transactions.

Each Fund intends to distribute, at least annually, substantially all of its net investment income and net capital gains. The distributions you receive may be subject to federal, state, and local taxation depending on your tax situation. For federal income tax purposes, distributions of investment income are generally taxable as ordinary income or qualified dividend income. Taxes on distributions of capital gains (if any) are determined by how long a Fund owned the investments that generated them, rather than how long a shareholder has owned his or her Shares. Sales of assets held by a Fund for more than one year generally result in long-term capital gains and losses, and sales of assets held by a Fund for one year or less generally result in short-term capital gains and losses. Distributions of a Fund’s net capital gain (the excess of net long-term capital gains over net short-term capital losses) that are reported by such Fund as capital gain dividends (“Capital Gain Dividends”) will be taxable as long-term capital gains, which for non-corporate shareholders are subject to tax at reduced rates of up to 20% (lower rates apply to individuals in lower tax brackets). Distributions of short-term capital gain will generally be taxable as ordinary income. Dividends and distributions are generally taxable to you whether you receive them in cash or reinvest them in additional Shares.

The Funds invest in foreign securities. Interest and other income received by a Fund with respect to foreign securities may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If as of the close of a taxable year more than 50% of the value of a Fund’s assets consists of certain foreign stock or securities, each such Fund will be eligible to elect to “pass through” to investors the amount of foreign income and similar taxes (including withholding taxes) paid by such Fund during that taxable year. This means that investors would be considered to have received as additional income their respective shares of such foreign taxes but may be entitled to either a corresponding tax deduction in calculating taxable income, or, subject to certain limitations, a credit in calculating federal income tax. If a Fund does not so elect, each such Fund will be entitled to claim a deduction for certain foreign taxes incurred by such Fund. A Fund (or a financial intermediary, such as a broker, through which a shareholder owns Shares) will notify you if it makes such an election and provide you with the information necessary to reflect foreign taxes paid on your income tax return.

The Cannabis ETF invests in U.S. REITs. “Qualified REIT dividends” (i.e., ordinary REIT dividends other than capital gain dividends and portions of REIT dividends designated as qualified dividend income eligible for capital gain tax rates) are eligible for a 20% deduction by non-corporate taxpayers. This deduction, if allowed in full, equates to a maximum effective tax rate of 29.6% (37% top rate applied to income after 20% deduction). Distributions by the Fund to its shareholders that are attributable to qualified REIT dividends received by the Fund and which the Fund properly reports as “section 199A dividends,” are treated as “qualified REIT dividends” in the hands of non-corporate shareholders. A section 199A dividend is treated as a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying RIC shares for at least 46 days of the 91-day period beginning 45 days before the shares become ex-dividend, and is not under an obligation to make related payments with respect to a position in substantially similar or related property. The Fund is permitted to report such part of its dividends as section 199A dividends as are eligible but is not required to do so.


	Year Ended December 31,												Period Ended December 31,
	2025			2024			2023			2022			2021(a)
PER SHARE DATA:
Net Asset Value, Beginning of Period	$14.43			$11.54			$7.21			$15.17			$15.07

INVESTMENT OPERATIONS:
Net investment income (loss)(b)	0.02			(0.00)		(c)	0.02			0.01			(0.01)
Net realized and unrealized gain (loss) on investments(d)	4.40			2.89			4.33			(7.96)			0.10
Total from investment operations	4.42			2.89			4.35			(7.95)			0.09

LESS DISTRIBUTIONS FROM:
Net investment income	(0.03)			—			(0.02)			(0.01)			—
Total distributions	(0.03)			—			(0.02)			(0.01)			—
ETF transaction fees per share(b)	0.00		(c)	0.00		(c)	0.00		(c)	0.00		(c)	0.01
Net Asset Value, End of Period	$18.82			$14.43			$11.54			$7.21			$15.17
Total return(e)	30.69	%		25.05	%		60.37	%		−52.44%			0.63	%

SUPPLEMENTAL DATA AND RATIOS:(f)
Net assets, end of period (in thousands)	$277,167			$330,767			$463,556			$370,242			$933,059
Ratio of expenses to average net assets:
Before expense reimbursement(g)	0.59	%		0.59	%		0.59	%		0.60	%		0.75	%
After expense reimbursement(g)	0.58	%		0.59	%		0.59	%		0.60	%		0.75	%
Ratio of tax expenses to average net assets(g)	0.00	%	(h)	0.00	%	(h)	—	%		—	%		—	%
Ratio of net investment income (loss) to average net assets(g)	0.09	%		(0.02)	%		0.19	%		0.06	%		(0.13)	%
Portfolio turnover rate(e)(i)	55	%		46	%		30	%		47	%		41	%

Each Fund offers and issues Shares at their net asset value (“NAV”) only in aggregations of a specified number of Shares (each, a “Creation Unit”). Each Fund generally offers and issues Shares in exchange for a basket of securities (“Deposit Securities”) together with the deposit of a specified cash payment (“Cash Component”). The Trust reserves the right to permit or require the substitution of a “cash in lieu” amount (“Deposit Cash”) to be added to the Cash Component to replace any Deposit Security or other instrument in a Fund’s portfolio. Shares of each Fund are listed on a national listing exchange (each, an “Exchange” and together, the “Exchanges”) and trade on the Exchanges at market prices that may differ from the Shares’ NAV. Shares also are redeemable only in Creation Unit aggregations, primarily for a basket of Deposit Securities together with a Cash Component. A Creation Unit of each Fund generally consists of 25,000 Shares for the Video Games ETF, Sports Betting ETF, Ball Metaverse ETF and Cannabis ETF and 50,000 Shares for the Magnificent Seven ETF, though this may change from time to time. As a practical matter, only institutions or large investors purchase or redeem Creation Units. Except when aggregated in Creation Units, Shares are not redeemable securities.

Cybersecurity Risk. Investment companies, such as the Funds, and their service providers may be subject to operational and information security risks resulting from cyber-attacks. Cyber-attacks include, among other behaviors, stealing or corrupting data maintained online or digitally, denial of service attacks on websites, the unauthorized release of confidential information or various other forms of cybersecurity breaches. Cyber-attacks affecting a Fund, the Adviser, the Sub-Adviser, custodian, transfer agent, intermediaries and other third-party service providers may adversely impact a Fund. For instance, cyber-attacks may interfere with the processing of shareholder transactions, impact a Fund’s ability to calculate its NAV, cause the release of private shareholder information or confidential company information, impede trading, subject a Fund to regulatory fines or financial losses, and cause reputational damage. A Fund also may incur additional costs for cybersecurity risk management purposes. Similar types of cybersecurity risks also are present for issuers of securities in which a Fund invests, which could result in material adverse consequences for such issuers and may cause a Fund’s investments in such portfolio companies to lose value.

Similarly, escalations beginning in October 2023 of the ongoing Israel-Hamas conflict present a potential risk for wider conflict that could negatively affect financial markets due to a myriad of interconnected factors. This conflict could disrupt regional trade and supply chains, potentially affecting U.S. businesses with exposure to the region. For example, attacks on commercial vessels transiting through the Red Sea, commonly referred to as the Red Sea crisis, have led to disruption of international maritime trade and the global supply chain, which has had a direct impact on countries and regions that rely on such routes for the supply of energy and/or food and companies that typically ship goods or receive components by way of the Red Sea. In addition, recent U.S. military operations in Iran could lead to significant geopolitical instability, including retaliatory attacks, disruption of critical energy infrastructure and shipping lanes such as the Strait of Hormuz, and broader regional conflict, which in turn may cause sharp volatility across global financial markets and commodity prices. Such developments may adversely affect the Funds through increased market uncertainty, reduced liquidity, higher inflation and interest rate pressures, and potential declines in asset valuations across multiple sectors and geographies. The Middle East plays a pivotal role in the global energy sector, and prolonged instability could impact oil prices, leading to increased costs for businesses and consumers.

The Fund intends to invest in securities of companies in the marijuana and hemp business (“Cannabis Companies”) and in derivatives or other instruments that have economic characteristics similar to such securities. Cannabis Companies may be categorized among a wide variety of sectors and industries, including agriculture, biotechnology, pharmaceuticals, real estate, retail, and finance. Medical cannabis refers to the use of parts of the marijuana plant, such as hemp and the plant’s chemicals, for the treatment of a variety of diseases or medical conditions. Hemp is a type of cannabis plant whose stalks and seeds may contain chemicals (such as CBD) or have other properties that researchers are exploring as potential treatments for certain health conditions. CBD is a chemical naturally found in the cannabis plant or synthetically created that gives cannabis products their primary medical properties. These medical Cannabis Companies include companies that are involved in research and development of CBD; are engaged in the production, supply chain or distribution of medical cannabis and/or medical cannabis-based consumer products; offer agricultural technologies and equipment, including hydroponics; are involved in leasing property to medical-use cannabis growers; and are involved in offering hemp and CBD products with potential medical or therapeutic benefits. The terms “marijuana” and “cannabis” are used interchangeably. Cannabinoids are the chemical compounds secreted by cannabis plants. Cannabinoids can also be synthetically produced chemical compounds and used in lawful research and development of prescription drugs or other products utilizing cannabinoids as an active ingredient. The Advisor believes that continued legislative changes and social acceptance of cannabis in its various formats could lead to significant growth in cannabis-related public corporations.

The Fund will not invest in any Cannabis Company that grows, produces, distributes, or sells cannabis or products derived from cannabis in a country, state, province, locality or other political subdivision where this activity is illegal under applicable law. Cannabis Companies do not include companies that grow, produce, distribute, or sell cannabis or products derived from cannabis inside the U.S. This is the case regardless of whether such a company is listed on a U.S. exchange or an exchange in a country where cannabis is legal. Cannabis Companies do not include companies that grow, produce, distribute, or sell cannabis or products derived from cannabis both in a country where its activities are entirely legal and in the U.S. where its activities are legal under state and local law but not under U.S. federal law. Cannabis Companies do not include those companies whose securities trade on the Canadian Stock Exchange. Cannabis Companies only supply products and/or perform activities that are legal under applicable national and local laws, including U.S. federal, state, and local laws. Cannabis Companies may, however, supply such products and perform such activities in the U.S. to companies that grow, produce, distribute, or sell cannabis or products derived from cannabis in a manner that is legal under state and local law but not under U.S. federal law. Cannabis Companies with a presence in the U.S. may engage in pharmaceutical activities and/or grow, produce, distribute, or sell hemp or products derive from hemp but only if such activities are properly licensed and legal under applicable U.S. federal, state, and local laws. If, after acquiring a Cannabis Company’s securities, the Advisor identifies or becomes aware that the company no longer meets the Fund’s definition of Cannabis Companies, the Fund will promptly sell that position.

To the extent consistent with its principal investment strategies, a Fund may invest in eligible China A-Shares (“A-shares”). Hong Kong and overseas investors may trade A-Shares issued by companies that are incorporated in mainland China, and listed and traded on the Shanghai Stock Exchange (“SSE”) or Shenzhen Stock Exchange (“SZSE”) through Northbound trading via the Shanghai-Hong Kong or Shenzhen-Hong Kong Stock Connect (“Stock Connect”) programs in Chinese renminbi. In addition to shares of listed companies, ETFs are included as eligible securities to be traded under Stock Connect. Stock Connect is a securities trading and clearing linked program between either SSE or SZSE, and the Stock Exchange of Hong Kong Limited (“SEHK”), Hong Kong Securities Clearing Company Limited (“HKSCC”), and China Securities Depository and Clearing Corporation Limited (“ChinaClear”), with an aim to achieve mutual stock market access between the PRC and Hong Kong. A Fund’s ability to invest in China A-Shares and ETFs through Stock Connect, or on such other stock exchanges in China that participate in Stock Connect from time to time or in the future, is subject to trading limits, rules and regulations by the applicable regulatory authority. These restrictions and regulations may adversely affect a Fund’s ability to achieve its investment objective.

In light of the uncertainty as to how gains or income that may be derived from a Fund’s investments in the PRC will be taxed, the Fund reserves the right to provide for withholding tax on such gains or income and withhold tax for the account of the Fund. Withholding tax may already be withheld at a broker/custodian level. If the Fund expects such withholding tax on trading in A-Shares to be imposed, it reserves the right to establish a reserve for such tax. If the Fund establishes such a reserve but is not ultimately subject to the tax, shareholders who redeemed or sold their shares while the reserve was in place will effectively bear the tax and may not benefit from the later release, if any, of the reserve. Conversely, if the Fund does not establish such a reserve but ultimately is subject to the tax, shareholders who redeemed or sold their shares prior to the tax being withheld, reserved, or paid will have effectively avoided the tax, even if they benefited from the trading that precipitated the Fund’s payment of it. Investors should note that such provision may be excessive or inadequate to meet actual withholding tax liabilities (which could include interest and penalties) on the Fund’s investments. As a result, investors may be advantaged or disadvantaged depending on the final rules of the relevant PRC tax authorities.

Any tax provision, if made, will be reflected in the NAV of such Fund at the time of debit or release of such provision and thus will impact shares which remain in the Fund at the time of debit or release of such provision. If the actual applicable tax levied by PRC tax authorities is greater than that provided for by the Fund so that there is a shortfall in the tax provision amount, investors should note that the NAV of the Fund may suffer more than the tax provision amount as the Fund will ultimately have to bear the additional tax liabilities. In this case, the then-existing and subsequent investors will be disadvantaged. On the other hand, if the actual applicable tax levied by PRC tax authorities is less than that provided for by the Fund so that there is an excess in the tax provision amount, investors who have redeemed Fund shares before the PRC tax authorities’ ruling, decision or guidance in this respect will be disadvantaged as they would have borne the loss from the Fund’s overprovision. In this case, the then-existing and subsequent investors may benefit if the difference between the tax provision and the actual taxation liability can be returned to the account of the Fund as assets thereof. In case of having excess in the tax provision amount (for example, the actual applicable tax levied by PRC tax authorities is less than the tax provision amount or due to a change in provisioning by the Fund), such excess shall be treated as property of the Fund and investors who have already transferred or redeemed their shares in the Fund will not be entitled or have any right to claim any part of the amount representing the excess.

The Fund may invest, directly or indirectly, in shares of ETFs that primarily hold bitcoin, ether, XRP, tokens related to the Solana Network (“SOL”), or any other cryptocurrency eligible to be held by U.S. registered investment companies, and that seek to generate income and capital appreciation through staking the underlying cryptocurrency (collectively, “Cryptocurrency ETFs”). Cryptocurrency ETFs are relatively new products and, therefore, have limited financial and operating histories. To the extent the Fund invests in Cryptocurrency ETFs, such investment exposure subjects the Fund to many of the same risks as an investment in the reference cryptocurrency, including those described elsewhere in the Prospectus and this SAI. As a shareholder in a Cryptocurrency ETF, the Fund will hold, either directly or indirectly, shares representing a fractional undivided beneficial interest in the net assets of the Cryptocurrency ETF. The Fund expects to purchase shares of Cryptocurrency ETFs in the secondary market at their market prices, which may be highly volatile and may not closely correspond to either the NAV per share of the Cryptocurrency ETF or the price of the reference cryptocurrency. Shares of Cryptocurrency ETFs may trade at premiums (i.e., the market price of the shares is more than the NAV) or discounts (i.e., the market price of the shares is less than the NAV), which may be significant. The risk that share prices differ from the Cryptocurrency ETF’s NAV and/or the price of the reference cryptocurrency is likely to increase during times of market volatility or stressed market conditions. Under such conditions, the market for shares of Cryptocurrency ETFs may become less liquid making it difficult for the Fund to either increase or decrease its investment exposure to Cryptocurrency ETFs.

Ether is a digital asset that is created and transmitted through the operations of the Ethereum Network, a peer-to-peer protocol that operates on principles of cryptography. The value of ether is not backed by any government, corporation, or other identified body. No single entity owns or operates the Ethereum Network, the infrastructure of which is open source and collectively maintained by a community of developers. The Ethereum Network allows individuals to make transactions which are recorded on a public ledger commonly known as a blockchain. Ether can be used to pay for goods and services, although it is not widely accepted, or it can be converted to fiat currencies, such as the U.S. dollar, at rates determined on digital asset trading platforms or in individual end-user-to-end-user transactions under a barter system. Furthermore, the Ethereum Network also allows users to write and implement smart contracts—that is, general-purpose code that executes on every computer in the network and can instruct the exchange of information and value based on a sophisticated set of logical conditions. A smart contract operates by a predefined set of rules (i.e., “if/then statements”) that allows it to automatically execute code the same way on any Ethereum node on the network. Such actions taken by the predefined set of rules are not necessarily contractual in nature but are intended to eliminate the arbitration of a third party for carrying out code execution on behalf of users, making the system decentralized, while empowering developers to create a wide range of applications layering together different smart contracts. Using smart contracts, users can create markets, store registries of debts or promises, represent the ownership of property, move funds in accordance with conditional instructions and create digital assets other than Ether on the Ethereum Network. Smart contract operations are executed on the Ethereum Blockchain in exchange for payment of ether. The Ethereum Network is one of a number of projects intended to expand blockchain use beyond just a decentralized money system.

Solana (or SOL) is a digital asset (also referred to as a “cryptocurrency”) that is created and transmitted through the operations of the peer-to-peer Solana Network, a decentralized network of computers that operates on cryptographic protocols. No single entity owns or operates the Solana Network, the infrastructure of which is collectively maintained by a decentralized user base. The Solana Network allows people to exchange tokens of value, called SOL, which are recorded on a public transaction ledger known as a blockchain. SOL can be used to pay for goods and services, including computational power on the Solana Network, or it can be converted to fiat currencies, such as the U.S. dollar, at rates determined on digital asset exchanges or in individual end-user-to-end-user transactions under a barter system. The Solana Network was designed to allow users to write and implement smart contracts, which are general-purpose codes that execute on every computer in the network and can instruct the transmission of information and value based on a sophisticated set of logical conditions. Using smart contracts, users can create markets, store registries of debts or promises, represent the ownership of property, move funds in accordance with conditional instructions and create digital assets other than SOL on the Solana Network. Smart contract operations are executed on the Solana blockchain in exchange for payment of SOL. Like the Ethereum network, the Solana Network is one of a number of projects intended to expand blockchain use beyond just a peer-to-peer money system.

•The regulatory environment relating to XRP: Depending on its characteristics, a digital asset, including XRP, may be considered a “security” under U.S. federal securities laws. The test for determining whether a particular digital asset is a “security” is complex and difficult to apply, and the outcome is difficult to predict. Any enforcement action by the SEC or a state securities regulator asserting that XRP is a security, or a court decision to that effect, would be expected to have an immediate material adverse impact on the trading price of XRP. This is because the business models behind most digital assets are incompatible with regulations applying to transactions in securities. If a digital asset is determined to be a security, it is likely to become difficult or impossible for the digital asset to be traded, cleared or custodied in the United States through the same channels used by non-security digital assets, which in addition to materially and adversely affecting the trading value of the digital asset is likely to significantly impact its liquidity and market participants’ ability to convert the digital asset into U.S. dollars. Any assertion that a digital asset is a security by the SEC or another regulatory authority may have similar effects.

Using credit ratings to evaluate debt securities can involve certain risks. For example, ratings assigned by the rating agencies are based upon an analysis completed at the time of the rating of the obligor’s ability to pay interest and repay principal. Rating agencies typically rely to a large extent on historical data which may not accurately represent present or future circumstances. Ratings do not purport to reflect the risk of fluctuations in market value of the debt security and are not absolute standards of quality and only express the rating agency’s current opinion of an obligor’s overall financial capacity to pay its financial obligations. A credit rating is not a statement of fact or a recommendation to purchase, sell, or hold a debt obligation. Also, credit quality can change suddenly and unexpectedly, and credit ratings may not reflect the issuer’s current financial condition or events since the security was last rated. Rating agencies may have a financial interest in generating business, including from the arranger or issuer of the security that normally pays for that rating, and providing a low rating might affect the rating agency’s prospects for future business. While rating agencies have policies and procedures to address this potential conflict of interest, there is a risk that these policies will fail to prevent a conflict of interest from impacting the rating.

Prepayment Risk. Debt securities, especially bonds that are subject to “calls,” such as asset-backed or mortgage-backed securities, are subject to prepayment risk if their terms allow the payment of principal and other amounts due before their stated maturity. Amounts invested in a debt security that has been “called” or “prepaid” will be returned to an investor holding that security before expected by the investor. In such circumstances, the investor, such as a Fund, may be required to re-invest the proceeds it receives from the called or prepaid security in a new security which, in periods of declining interest rates, will typically have a lower interest rate. Prepayment risk is especially prevalent in periods of declining interest rates and will result for other reasons, including unexpected developments in the markets for the underlying assets or mortgages. For example, a decline in mortgage interest rates typically initiates a period of mortgage refinancings. When homeowners refinance their mortgages, the investor in the underlying pool of mortgage-backed securities (such as a Fund) receives its principal back sooner than expected, and must reinvest at lower, prevailing rates.

Options traded on national securities exchanges are within the jurisdiction of the SEC or other appropriate national securities regulators, as are securities traded on such exchanges. As a result, many of the protections provided to traders on organized exchanges will be available with respect to such transactions. In particular, all option positions entered into on a national securities exchange in the United States are cleared and guaranteed by the Options Clearing Corporation, thereby reducing the risk of counterparty default. Furthermore, a liquid secondary market in options traded on a national securities exchange may be more readily available than in the OTC market, potentially permitting a Fund to liquidate open positions at a profit prior to exercise or expiration, or to limit losses in the event of adverse market movements. There is no assurance, however, that higher than anticipated trading activity or other unforeseen events might not temporarily render the capabilities of the Options Clearing Corporation inadequate, and thereby result in the exchange instituting special procedures which may interfere with the timely execution of the Fund’s orders to close out open options positions.

If a Fund writes a covered call option, any underlying reference instruments that are held by the Fund and are subject to the call option will be earmarked on the books of the Fund to satisfy its obligations under the option. A Fund will be unable to sell the underlying reference instruments that are subject to the written call option until it either effects a closing transaction with respect to the written call, or otherwise satisfies the conditions for release of the underlying reference instruments. As the writer of a covered call option, a Fund gives up the potential for capital appreciation above the exercise price of the option should the underlying reference instrument rise in value. If the value of the underlying reference instrument rises above the exercise price of the call option, the reference instrument will likely be “called away,” requiring a Fund to sell the underlying instrument at the exercise price. In that case, a Fund will sell the underlying reference instrument to the option buyer for less than its market value, and the Fund will experience a loss (which will be offset by the premium received by the Fund as the writer of such option). If a call option expires unexercised, a Fund will realize a gain in the amount of the premium received. If the market price of the underlying reference instrument decreases, the call option will not be exercised and the Fund will be able to use the amount of the premium received to hedge against the loss in value of the underlying reference instrument. The exercise price of a call option will be chosen based upon the expected price movement of the underlying reference instrument. The exercise price of a call option may be below, equal to (at-the-money), or above the current value of the underlying reference instrument at the time the option is written.

Closing Out Options (Exchange-Traded Options). If the writer of an option wants to terminate its obligation, the writer may effect a “closing purchase transaction” by buying an option of the same series as the option previously written. The effect of the purchase is that the clearing corporation will cancel the option writer’s position. However, a writer may not effect a closing purchase transaction after being notified of the exercise of an option. Likewise, the buyer of an option may recover all or a portion of the premium that it paid by effecting a “closing sale transaction” by selling an option of the same series as the option previously purchased and receiving a premium on the sale. There is no guarantee that either a closing purchase or a closing sale transaction may be made at a time desired by a Fund. Closing transactions allow a Fund to terminate its positions in written and purchased options. A Fund will realize a profit from a closing transaction if the price of the transaction is less than the premium received from writing the original option (in the case of written options) or is more than the premium paid by a Fund to buy the option (in the case of purchased options). For example, increases in the market price of a call option sold by a Fund will generally reflect increases in the market price of the underlying reference instrument. As a result, any loss resulting from a closing transaction on a written call option is likely to be offset in whole or in part by appreciation of the underlying instrument owned by a Fund.

Risks of Options. A Fund’s options investments involve certain risks, including general risks related to derivative instruments. There can be no assurance that a liquid secondary market on an exchange will exist for any particular option, or at any particular time, and a Fund may have difficulty effecting closing transactions in particular options. Therefore, a Fund would have to exercise the options it purchased in order to realize any profit, thus taking or making delivery of the underlying reference instrument when not desired. A Fund could then incur transaction costs upon the sale of the underlying reference instruments. Similarly, when a Fund cannot effect a closing transaction with respect to a put option it wrote, and the buyer exercises, a Fund would be required to take delivery and would incur transaction costs upon the sale of the underlying reference instruments purchased. If a Fund, as a covered call option writer, is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying reference instrument until the option expires, or it delivers the underlying instrument upon exercise. When trading options on non-U.S. exchanges or in the OTC market, many of the protections afforded to exchange participants will not be available. For example, there may be no daily price fluctuation limits, and adverse market movements could therefore continue to an unlimited extent over an indefinite period of time.

New rules and regulations could, among other things, restrict a Fund’s ability to engage in, or increase the cost to the Fund of, derivatives transactions, for example, by making some types of derivatives no longer available to the Fund, increasing margin or capital requirements, or otherwise limiting liquidity or increasing transaction costs. The costs of derivatives transactions also may increase due to regulatory requirements imposed on clearing members, which may cause clearing members to raise their fees to cover the costs of additional capital requirements and other regulatory changes applicable to the clearing members. Certain aspects of these regulations are still being implemented, so their potential impact on a Fund and the financial system are not yet known. While the regulations and central clearing of some derivatives transactions are designed to reduce systemic risk (i.e., the risk that the interdependence of large derivatives dealers could cause them to suffer liquidity, solvency or other challenges simultaneously), there is no assurance that the mechanisms imposed under the regulations will achieve that result, and in the meantime, as noted above, central clearing, minimum margin requirements and related requirements expose a Fund to new kinds of risks and costs.

Rule 18f-4 under the 1940 Act (“Rule 18f-4”) imposes limits on the amount of leverage risk to which a fund may be exposed through the use of such derivatives and requires the adoption of certain derivatives risk management measures. Under Rule 18f-4, a fund’s investment in such derivatives is limited through value-at-risk (“VaR”) testing. Specifically, the VaR of the fund’s portfolio may not exceed 200% of the VaR of a specific unleveraged designated reference portfolio using relative VaR testing (or 20% of the value of the fund’s net assets using absolute VaR testing). Generally, a fund whose derivatives exposure exceeds 10% of its net assets is required to establish and maintain a comprehensive derivatives risk management program, subject to oversight by a fund’s board of trustees, and appoint a derivatives risk manager. Funds whose derivatives exposure does not exceed 10% of their net assets may be considered limited derivatives users and are not required to comply with all of the conditions of Rule 18f-4, including the adoption of a derivatives risk management program and appointment of a derivatives risk manager, though they are required to adopt policies and procedures designed to manage derivatives risk. Compliance with Rule 18f-4 may adversely affect the Fund’s performance and/or increase costs related to the Fund’s use of derivatives.

Each Fund may invest in issuers located outside the United States directly, or in financial instruments that are indirectly linked to the performance of foreign issuers. Examples of such financial instruments include ADRs, GDRs, EDRs, IDRs, “ordinary shares,” and “New York shares” issued and traded in the United States (see “Depositary Receipts” above for more information about ADRs, GDRs, EDRs and IDRs). Such investments may include securities listed and traded in emerging markets, which are subject to additional risks that may not be present for U.S. investments or investments in more developed non-U.S. markets. Investments in non-U.S. securities involve certain risks that may not be present in investments in U.S. securities. For example, non-U.S. securities may be subject to currency risks or to foreign government taxes. There may be less information publicly available about a non-U.S. issuer than about a U.S. issuer, and a foreign issuer may or may not be subject to uniform accounting, auditing and financial reporting standards and practices comparable to those in the U.S. Other risks of investing in such securities include political or economic instability in the country involved, the difficulty of predicting international trade patterns and the possibility of imposition of exchange controls. The prices of such securities may be more volatile than those of domestic securities. With respect to certain foreign countries, there is a possibility of expropriation of assets or nationalization, imposition of withholding taxes on dividend or interest payments, difficulty in obtaining and enforcing judgments against foreign entities or diplomatic developments which could affect investment in these countries. Losses and other expenses may be incurred in converting between various currencies in connection with purchases and sales

Non-U.S. stock markets may not be as developed or efficient as, and may be more volatile than, those in the U.S. While the volume of shares traded on non-U.S. stock markets generally has been growing, such markets usually have substantially less volume than U.S. markets. Therefore, a Fund’s investment in non-U.S. equity securities may be less liquid and subject to more rapid and erratic price movements than comparable securities listed for trading on U.S. exchanges. Non-U.S. equity securities may trade at price/earnings multiples higher than comparable U.S. securities and such levels may not be sustainable. There may be less government supervision and regulation of foreign stock exchanges, brokers, banks and listed companies abroad than in the U.S. Moreover, settlement practices for transactions in foreign markets may differ from those in U.S. markets. Such differences may include delays beyond periods customary in the U.S. and practices, such as delivery of securities prior to receipt of payment, that increase the likelihood of a failed settlement, which can result in losses to a Fund. The value of non-U.S. investments and the investment income derived from them also may be affected unfavorably by changes in currency exchange control regulations. Foreign brokerage commissions, custodial expenses and other fees also are generally higher than for securities traded in the U.S. This may cause a Fund to incur higher portfolio transaction costs than domestic equity funds. Fluctuations in exchange rates also may affect the earning power and asset value of the foreign entity issuing a security, even one denominated in U.S. dollars. Dividend and interest payments may be repatriated based on the exchange rate at the time of disbursement, and restrictions on capital flows may be imposed.

The Funds may invest in short-term instruments, including money market instruments, on an ongoing basis to provide liquidity or for other reasons. Money market instruments are generally short-term investments that may include but are not limited to: (i) shares of money market funds; (ii) obligations issued or guaranteed by the U.S. government, its agencies, or instrumentalities (including government-sponsored enterprises); (iii) negotiable CDs, bankers’ acceptances, fixed time deposits and other obligations of U.S. and foreign banks (including foreign branches) and similar institutions; (iv) commercial paper rated at the date of purchase “Prime-1” by Moody’s or “A‑1” by S&P or, if unrated, of comparable quality as determined by the Sub-Adviser; (v) non-convertible corporate debt securities (e.g., bonds and debentures) with remaining maturities at the date of purchase of not more than 397 days and that satisfy the rating requirements set forth in Rule 2a-7 under the 1940 Act; and (vi) short-term U.S. dollar-denominated obligations of foreign banks (including U.S. branches) that, in the opinion of the Sub-Adviser, are of comparable quality to obligations of U.S. banks which may be purchased by a Fund. Any of these instruments may be purchased on a current or a forward-settled basis. Money market instruments also include shares of money market funds. Time deposits are non-negotiable deposits maintained in banking institutions for specified periods of time at stated interest rates. Bankers’ acceptances are time drafts drawn on commercial banks by borrowers, usually in connection with international transactions.

The SEC currently requires that the following conditions must be met whenever a Fund’s portfolio securities are loaned: (1) the Fund must receive at least 100% cash collateral from the borrower; (2) the borrower must increase such collateral whenever the market value of the securities rises above the level of such collateral; (3) the Fund must be able to terminate the loan at any time; (4) the Fund must receive reasonable interest on the loan, as well as any dividends, interest or other distributions on the loaned securities, and any increase in market value; (5) the Fund may pay only reasonable custodian fees approved by the Board in connection with the loan; (6) while voting rights on the loaned securities may pass to the borrower, the Board must terminate the loan and regain the right to vote the securities if a material event adversely affecting the investment occurs; and (7) the Fund may not loan its portfolio securities so that the value of the loaned securities is more than one-third of its total asset value, including collateral received from such loans. These conditions may be subject to future modification. Such loans will be terminable at any time upon specified notice. A Fund might experience the risk of loss if the institution with which it has engaged in a portfolio loan transaction breaches its agreement with the Fund. In addition, the Funds will not enter into any portfolio security lending arrangement having a duration of longer than one year. The principal risk of portfolio lending is potential default or insolvency of the borrower. In either of these cases, a Fund could experience delays in recovering securities or collateral or could lose all or part of the value of the loaned securities. As part of participating in a lending program, the applicable Fund may be required to invest in collateralized debt or other securities that bear the risk of loss of principal. In addition, all investments made with the collateral received are subject to the risks associated with such investments. If such investments lose value, a Fund will have to cover the loss when repaying the collateral.

Each Fund may invest in U.S. government securities. Securities issued or guaranteed by the U.S. government, or its agencies or instrumentalities, include U.S. Treasury securities, which are backed by the full faith and credit of the U.S. Treasury, and which differ only in their interest rates, maturities, and times of issuance. U.S. Treasury bills have initial maturities of one year or less; U.S. Treasury notes have initial maturities of one to ten years; and U.S. Treasury bonds generally have initial maturities of greater than ten years. Certain U.S. government securities are issued or guaranteed by agencies or instrumentalities of the U.S. government, including, but not limited to, obligations of U.S. government agencies or instrumentalities such as the Federal National Mortgage Association (“Fannie Mae”), the Government National Mortgage Association (“Ginnie Mae”), the Small Business Administration, the Federal Farm Credit Administration, the Federal Home Loan Banks, Banks for Cooperatives (including the Central Bank for Cooperatives), the Federal Land Banks, the Federal Intermediate Credit Banks, the Tennessee Valley Authority, the Export-Import Bank of the United States, the Commodity Credit Corporation, the Federal Financing Bank, the Student Loan Marketing Association, the National Credit Union Administration, and the Federal Agricultural Mortgage Corporation.

On September 7, 2008, the U.S. Treasury announced a federal takeover of Fannie Mae and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), placing the two federal instrumentalities in conservatorship. Under the takeover, the U.S. Treasury agreed to acquire $1 billion of senior preferred stock of each instrumentality and obtained warrants for the purchase of common stock of each instrumentality (the “Senior Preferred Stock Purchase Agreement” or “Agreement”). Under the Agreement, the U.S. Treasury pledged to provide up to $200 billion per instrumentality as needed, including the contribution of cash capital to the instrumentalities in the event their liabilities exceed their assets. This was intended to ensure that the instrumentalities maintain a positive net worth and meet their financial obligations, preventing mandatory triggering of receivership. On December 24, 2009, the U.S. Treasury announced that it was amending the Agreement to allow the $200 billion cap on the U.S. Treasury’s funding commitment to increase as necessary to accommodate any cumulative reduction in net worth over the next three years. As a result of this Agreement, the investments of holders, including a Fund, of mortgage-backed securities and other obligations issued by Fannie Mae and Freddie Mac are protected.

* For purposes of this policy, Sports Betting and iGaming Companies are companies that the Index Provider determines provide exposure to the sports and online betting and iGaming themes and which satisfy the Index Provider’s Index security selection criteria, as such criteria may be modified from time to time. Sports Betting Companies generally are engaged, directly or indirectly, in analyzing sports events and wagering on the outcome. Sports Betting Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other Sports Betting Companies; providing marketing solutions and services for other Sports Betting Companies; and investing in Sports Betting Companies, such as owners of investment portfolios comprising companies exposed to sports betting activities or the underlying assets of such companies. Generally, iGaming Companies are engaged, directly or indirectly, in betting online in games of chance, such as poker, slots, blackjack, or the lottery. iGaming Companies may include companies engaged in: online bookmaking; media production connected to sports betting activities, such as the producers of podcasts, videos and blogs; developing and/or providing technology solutions and services for other iGaming Companies; providing marketing solutions and services for other iGaming Companies; investing in iGaming Companies, such as owners of investment portfolios comprising companies exposed to iGaming activities or the underlying assets of such companies; and developing and/or providing games, such as casino developers and bingo and lottery game developers.

The day-to-day business of the Trust, including the management of risk, is performed by third-party service providers, such as the Adviser, the Sub-Adviser, the Distributor, and the Administrator. The Board is responsible for overseeing the Trust’s service providers and, thus, has oversight responsibility with respect to risk management performed by those service providers. Risk management seeks to identify and address risks, i.e., events or circumstances that could have material adverse effects on the business, operations, shareholder services, investment performance or reputation of a Fund. The Funds and their service providers employ a variety of processes, procedures and controls to identify various of those possible events or circumstances, to lessen the probability of their occurrence and/or to mitigate the effects of such events or circumstances if they do occur. Each service provider is responsible for one or more discrete aspects of the Trust’s business (e.g., the Adviser is responsible for the day-to-day management of each Fund’s portfolio investments) and, consequently, for managing the risks associated with that business. The Board has emphasized to the Funds’ service providers the importance of maintaining vigorous risk management.

Name and Year of Birth

Position Held with the Trust

Term of Office and Length of Time Served

Principal Occupation(s) During Past 5 Years

Number of Portfolios in Fund Complex* Overseen by Trustee

Other Directorships Held by Trustee During Past 5 Years

John L. Jacobs

Year of birth: 1959

Trustee and Audit Committee Chair

Indefinite term; since 2017**

Founder and CEO of Q3 Advisors, LLC (financial consulting firm) (since 2015); Chairman of VettaFi, LLC (2018-2024); Executive Director of Center for Financial Markets and Policy (2016–2022); Distinguished Policy Fellow and Executive Director, Center for Financial Markets and Policy, Georgetown University (2015–2022)

Independent Trustee, TEMA ETF Trust (since 2023) (1 portfolio); NEOS ETF Trust (since 2021) (3 portfolios); Director, tZERO Group, Inc. (since 2020); Independent Trustee, Procure ETF Trust II (since 2018) (2 portfolios)

Koji E. Felton

Year of birth: 1961

Trustee

Indefinite term; since 2019

Retired; formerly Counsel, Kohlberg Kravis Roberts & Co. L.P. (investment firm) (2013–2015)

Independent Trustee, Series Portfolios Trust (since 2015) (19 portfolios)

Pamela H. Conroy

Year of birth: 1961

Trustee, Chair, and Nominating and Governance Committee Chair

Indefinite term; since 2019

Retired; formerly Executive Vice President, Chief Operating Officer & Chief Compliance Officer, Institutional Capital Corporation (investment firm) (1994–2008)

Independent Trustee, Frontier Funds, Inc. (since 2020) (4 portfolios)


Name and Year of Birth	Position(s) Held with the Trust	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
Kacie G. Briody Year of birth: 1992	President and Principal Executive Officer	Indefinite term, March 2025	Vice President, U.S. Bancorp Fund Services, LLC (since 2025); Assistant Vice President, U.S. Bancorp Fund Services, LLC (2021-2025)
Travis G. Babich Year of birth: 1980	Treasurer and Principal Financial Officer	Indefinite term, September 2019	Vice President, U.S. Bancorp Fund Services, LLC (since 2005)
David J. Rantisi Year of birth: 1992	Assistant Treasurer	Indefinite term, March 2025	Assistant Vice President, U.S. Bancorp Fund Services, LLC (since 2014)
Chad E. Fickett Year of birth: 1973	Secretary	Indefinite term, June 2024	Vice President, U.S. Bancorp Fund Services, LLC (since 2024); Assistant General Counsel, The Northwestern Mutual Life Insurance Company (2007 to 2024)
Anjali E. Connors Year of birth: 1982	Chief Compliance Officer and Anti-Money Laundering Officer	Indefinite term, January 2026	Vice President, U.S. Bancorp Fund Services, LLC (since 2025); Associate Director, Investment Advisory Compliance, Robert W. Baird & Co. (2022 to 2025); Chief Compliance Officer, Strategas Asset Management, LLC (wholly owned by Baird Financial Corporation) (2022 to 2025); Director, Governance and Controls Advisor, CIBC Private Wealth Management (2018 to 2022)
Marissa J. Pawlinski Year of birth: 1996	Assistant Secretary	Indefinite term, June 2025	Assistant Vice President, U.S. Bancorp Fund Services, LLC (since 2023); Regulatory Administration Attorney, U.S. Bancorp Fund Services, LLC (since 2022); Judicial Law Clerk, Milwaukee County Circuit Court (2021-2022)

Under the Plan, subject to the limitations of applicable law and regulations, each Fund is authorized to compensate the Distributor up to the maximum amount to finance any activity primarily intended to result in the sale of Creation Units of the Fund or for providing or arranging for others to provide shareholder services and for the maintenance of shareholder accounts. Such activities may include, but are not limited to: (i) delivering copies of a Fund’s then current reports, prospectuses, notices, and similar materials, to prospective purchasers of Creation Units; (ii) marketing and promotional services, including advertising; (iii) paying the costs of and compensating others, including Authorized Participants with whom the Distributor has entered into written Authorized Participant Agreements, for performing shareholder servicing on behalf of a Fund; (iv) compensating certain Authorized Participants for providing assistance in distributing the Creation Units of a Fund, including the travel and communication expenses and salaries and/or commissions of sales personnel in connection with the distribution of the Creation Units of a Fund; (v) payments to financial institutions and intermediaries such as banks, savings and loan associations, insurance companies and investment counselors, broker-dealers, mutual fund supermarkets and the affiliates and subsidiaries of the Trust’s service providers as compensation for services or reimbursement of expenses incurred in connection with distribution assistance; (vi) facilitating communications with beneficial

U.S. Bank (the “Securities Lending Agent”) serves as securities lending agent to the Funds. The Securities Lending Agent is responsible for the implementation and administration of the applicable Fund’s securities lending program pursuant to an agreement between the Trust, on behalf of the applicable Fund, and the Securities Lending Agent (each, a “Securities Lending Agreement”). The Securities Lending Agent acts as agent to the applicable Fund to lend available securities with any person on its list of approved borrowers and (i) determines whether a loan shall be made and negotiates and establishes the terms and conditions of the loan with the borrower; (ii) ensures that all substitute interest, dividends, and other distributions paid with respect to loan securities is credited to the applicable Fund’s relevant account on the date such amounts are delivered by the borrower to the Securities Lending Agent; (iii) receives and holds, on the applicable Fund’s behalf, collateral from borrowers to secure obligations of borrowers with respect to any loan of available securities; (iv) marks loaned securities and collateral to their market value each business day based upon the market value of the loaned securities and collateral at the close of business employing the most recently available pricing information and receives and delivers collateral to maintain the value of the collateral at no less than 100% of the market value of the loaned securities; (v) at the termination of a loan, returns the collateral to the borrower upon the return of the loaned securities to the Securities Lending Agent; (vi) invests cash collateral in accordance with the applicable Securities Lending Agreement; and (viii) maintains such records as are reasonably necessary to account for loans that are made and the income derived therefrom and makes available to the applicable Fund a monthly statement describing the loans outstanding, including an accounting of all securities lending transactions.

The Declaration of Trust provides that a Trustee shall be liable only for his or her own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee and shall not be liable for errors of judgment or mistakes of fact or law. The Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, adviser or principal underwriter of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee. The Declaration of Trust also provides that the Trust shall indemnify each person who is, or has been, a Trustee, officer, employee or agent of the Trust, any person who is serving or has served at the Trust’s request as a Trustee, officer, trustee, employee or agent of another organization in which the Trust has any interest as a shareholder, creditor or otherwise to the extent and in the manner provided in the Amended and Restated By-laws. However, nothing in the Declaration of Trust shall protect or indemnify a Trustee against any liability for his or her willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee. Nothing contained in this section attempts to disclaim a Trustee’s individual liability in any manner inconsistent with the federal securities laws.

The policy of the Trust regarding purchases and sales of securities for a Fund is that primary consideration will be given to obtaining the most favorable prices and efficient executions of transactions. Consistent with this policy, when securities transactions are effected on a stock exchange, the Trust’s policy is to pay commissions which are considered fair and reasonable without necessarily determining that the lowest possible commissions are paid in all circumstances. The Trust believes that a requirement always to seek the lowest possible commission cost could impede effective portfolio management and preclude the Funds from obtaining a high quality of brokerage and research services. In seeking to determine the reasonableness of brokerage commissions paid in any transaction, the Sub-Adviser will rely on its experience and knowledge regarding commissions generally charged by various brokers and on its judgment in evaluating the brokerage services received from the broker effecting the transaction. Such determinations are necessarily subjective and imprecise, as in most cases, an exact dollar value for those services is not ascertainable. The Trust has adopted policies and procedures that prohibit the consideration of sales of Shares as a factor in the selection of a broker or dealer to execute its portfolio transactions.

The Sub-Adviser owes a fiduciary duty to its clients to seek to provide best execution on trades effected. In selecting a broker-dealer for each specific transaction, the Sub-Adviser chooses the broker-dealer deemed most capable of providing the services necessary to obtain the most favorable execution. “Best execution” is generally understood to mean the most favorable cost or net proceeds reasonably obtainable under the circumstances. The full range of brokerage services applicable to a particular transaction may be considered when making this judgment, which may include, but is not limited to: liquidity, price, commission, timing, aggregated trades, capable floor brokers or traders, competent block trading coverage, ability to position, capital strength and stability, reliable and accurate communications and settlement processing, use of automation, knowledge of other buyers or sellers, arbitrage skills, administrative ability, underwriting and provision of information on a particular security or market in which the transaction is to occur. The specific criteria will vary depending upon the nature of the transaction, the market in which it is executed, and the extent to which it is possible to select from among multiple broker-dealers. The Sub-Adviser also will use electronic crossing networks (“ECNs”) when appropriate.

Subject to the foregoing policies, brokers or dealers selected to execute a Fund’s portfolio transactions may include such Fund’s Authorized Participants (as discussed in “Procedures for Purchase of Creation Units” below) or their affiliates. An Authorized Participant or its affiliates may be selected to execute a Fund’s portfolio transactions in conjunction with an all-cash creation unit order or an order including “cash-in-lieu” (as described below under “Purchase and Redemption of Creation Units”), so long as such selection is in keeping with the foregoing policies. As described below under “Purchase and Redemption of Creation Units — Creation Unit Transaction Fee” and “— Redemption Transaction Fee”, each Fund may determine to not charge a variable fee on certain orders when the Adviser has determined that doing so is in the best interests of Fund shareholders, e.g., for creation orders that facilitate the rebalance of the applicable Fund’s portfolio in a more tax efficient manner than could be achieved without such order, even if the decision to not charge a variable fee could be viewed as benefiting the Authorized Participant or its affiliate selected to execute a Fund’s portfolio transactions in connection with such orders.

The Sub-Adviser may use a Fund’s assets for, or participate in, third-party soft dollar arrangements, in addition to receiving proprietary research from various full-service brokers, the cost of which is bundled with the cost of the broker’s execution services. The Sub-Adviser does not “pay up” for the value of any such proprietary research. Section 28(e) of the Exchange Act permits the Sub-Adviser, under certain circumstances, to cause a Fund to pay a broker or dealer a commission for effecting a transaction in excess of the amount of commission another broker or dealer would have charged for effecting the transaction in recognition of the value of brokerage and research services provided by the broker or dealer. The Sub-Adviser may receive a variety of research services and information on many topics, which it can use in connection with its management responsibilities with respect to the various accounts over which it exercises investment discretion or otherwise provides investment advice. The research services may include qualifying order management systems, portfolio attribution and monitoring services and computer software and access charges which are directly related to investment research. Accordingly, a Fund may pay a broker commission higher than the lowest available in recognition of the broker’s provision of such services to the Sub-Adviser, but only if the Sub-Adviser determines the total commission (including the soft dollar benefit) is comparable to the best commission rate that could be expected to be received from other brokers. The amount of

Brokerage with Fund Affiliates. A Fund may execute brokerage or other agency transactions through registered broker-dealer affiliates of the Funds, the Adviser, the Sub-Adviser, or the Distributor for a commission in conformity with the 1940 Act, the Exchange Act and rules promulgated by the SEC. These rules require that commissions paid to the affiliate by the Funds for exchange transactions not exceed “usual and customary” brokerage commissions. The rules define “usual and customary” commissions to include amounts which are “reasonable and fair compared to the commission, fee or other remuneration received or to be received by other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time.” The Trustees, including those who are not “interested persons” of the Funds, have adopted procedures for evaluating the reasonableness of commissions paid to affiliates and review these procedures periodically. During the fiscal years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Funds did not pay brokerage commissions to any registered broker-dealer affiliates of the Funds, the Adviser, the Sub-Adviser, or the Distributor.

Together, the Deposit Securities or Deposit Cash, as applicable, and the Cash Component constitute the “Fund Deposit,” which represents the minimum initial and subsequent investment amount for a Creation Unit of a Fund. The “Cash Component” is an amount equal to the difference between the NAV of Shares (per Creation Unit) and the market value of the Deposit Securities or Deposit Cash, as applicable. If the Cash Component is a positive number (i.e., the NAV per Creation Unit exceeds the value of the Deposit Securities or Deposit Cash, as applicable), the Cash Component shall be such positive amount. If the Cash Component is a negative number (i.e., the NAV per Creation Unit is less than the value of the Deposit Securities or Deposit Cash, as applicable), the Cash Component shall be such negative amount and the creator will be entitled to receive cash in an amount equal to the Cash Component. The Cash Component serves the function of compensating for any differences between the NAV per Creation Unit and the market value of the Deposit Securities or Deposit Cash, as applicable. Computation of the Cash Component excludes any stamp duty or other similar fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities, if applicable, which shall be the sole responsibility of the Authorized Participant (as defined below).

Fund Deposits must be delivered by an Authorized Participant through the Federal Reserve System (for cash) or through DTC (for corporate securities), through a sub-custody agent (for foreign securities) and/or through such other arrangements allowed by the Trust or its agents. With respect to foreign Deposit Securities, the Custodian shall cause the sub-custodian of the applicable Fund to maintain an account into which the Authorized Participant shall deliver, on behalf of itself or the party on whose behalf it is acting, such Deposit Securities (or Deposit Cash for all or a part of such securities, as permitted or required), with any appropriate adjustments as advised by the Trust. Foreign Deposit Securities must be delivered to an account maintained at the applicable local sub-custodian. A Fund Deposit transfer must be ordered by the Authorized Participant in a timely fashion to ensure the delivery of the requisite number of Deposit Securities or Deposit Cash, as applicable, to the account of the applicable Fund or its agents by no later than 12:00 p.m. Eastern Time (or such other time as specified by the Trust) on the Settlement Date. If a Fund or its agents do not receive all of the Deposit Securities, or the required Deposit Cash in lieu thereof, by such time, then the order may be deemed rejected and the Authorized Participant shall be liable to such Fund for losses, if any, resulting therefrom. The “Settlement Date” for a Fund is generally the next Business Day after the Order Placement Date. All questions as to the number of Deposit Securities or Deposit Cash to be delivered, as applicable, and the validity, form and eligibility (including time of receipt) for the deposit of any tendered securities or cash, as applicable, will be determined by the Trust, whose determination shall be final and binding. The amount of cash represented by the Cash Component must be transferred directly to the Custodian through the Federal Reserve Bank wire transfer system in a timely manner to be received by the Custodian no later than the Settlement Date. If the Cash Component and the Deposit Securities or Deposit Cash, as applicable, are not received by the Custodian in a timely manner by the Settlement Date, the creation order may be cancelled. Upon written notice to the Transfer Agent, such canceled order may be resubmitted the following Business Day using a Fund Deposit as newly constituted to reflect the then current NAV of the applicable Fund.

Issuance of a Creation Unit. Except as provided in this SAI, Creation Units will not be issued until the transfer of good title to the Trust of the Deposit Securities or payment of Deposit Cash, as applicable, and the payment of the Cash Component have been completed. When the subcustodian has confirmed to the Custodian that the required Deposit Securities (or the cash value thereof) have been delivered to the account of the relevant subcustodian or subcustodians, the Distributor and the Adviser shall be notified of such delivery, and the Trust will issue and cause the delivery of the Creation Units. The delivery of Creation Units so created generally will occur no later than the first Business Day following the day on which the purchase order is deemed received by the Transfer Agent. However, a Fund reserves the right to settle Creation Unit transactions on a basis other than the first Business Day following the day on which the purchase order is deemed received by the Transfer Agent to accommodate foreign market holiday schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and ex-dividend dates (that is the last day the holder of a security can sell the security and still receive dividends payable on the security), and in certain other circumstances.

amount of cash equal to a percentage of the value as set forth in the Participant Agreement, of the undelivered Deposit Securities (the “Additional Cash Deposit”), which shall be maintained in a separate non-interest bearing collateral account. The Authorized Participant must deposit with the Custodian the Additional Cash Deposit, as applicable, by 12:00 p.m. Eastern Time (or such other time as specified by the Trust) on the Settlement Date. If a Fund or its agents do not receive the Additional Cash Deposit in the appropriate amount, by such time, then the order may be deemed rejected and the Authorized Participant shall be liable to the applicable Fund for losses, if any, resulting therefrom. An additional amount of cash shall be required to be deposited with the Trust, pending delivery of the missing Deposit Securities to the extent necessary to maintain the Additional Cash Deposit with the Trust in an amount at least equal to the applicable percentage, as set forth in the Participant Agreement, of the daily market value of the missing Deposit Securities. The Participant Agreement will permit the Trust to buy the missing Deposit Securities at any time. Authorized Participants will be liable to the Trust for the costs incurred by the Trust in connection with any such purchases. These costs will be deemed to include the amount by which the actual purchase price of the Deposit Securities exceeds the value of such Deposit Securities on the day the purchase order was deemed received by the Transfer Agent plus the brokerage and related transaction costs associated with such purchases. The Trust will return any unused portion of the Additional Cash Deposit once all of the missing Deposit Securities have been properly received by the Custodian or purchased by the Trust and deposited into the Trust. In addition, a transaction fee, as described below under “Creation Unit Transaction Fee,” may be charged an additional variable charge also may be applied, as described below. The delivery of Creation Units so created generally will occur no later than the Settlement Date.

Acceptance of Orders of Creation Units. Provided that such action does not result in a suspension of sales of Creation Units in contravention of Rule 6c-11 under the 1940 Act and the SEC’s positions thereunder, the Trust reserves the right to reject an order for Creation Units transmitted in respect of a Fund at its discretion, including, without limitation, if (a) the order is not in proper form or the Fund Deposit delivered does not consist of the securities the Custodian specified; (b) the investor(s), upon obtaining the Shares ordered, would own 80% or more of the currently outstanding Shares of the Fund; (c) the Deposit Securities or Deposit Cash, as applicable, delivered by the Authorized Participant are not as disseminated through the facilities of the NSCC for that date by the Custodian; (d) the acceptance of the Fund Deposit would, in the opinion of counsel, be unlawful; (e) the acceptance or receipt of the order for a Creation Unit would, in the opinion of counsel, be unlawful; or (f) in the event that circumstances outside the control of the Trust, the Custodian, the Transfer Agent, the Distributor and/or the Adviser make it for all practical purposes not feasible to process orders for Creation Units. Examples of such circumstances include acts of God or public service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and computer failures; market conditions or activities causing trading halts; systems failures involving computer or other information systems affecting the Trust, the Distributor, the Custodian, the Transfer Agent, DTC, NSCC, Federal Reserve System, or any other participant in the creation process, and other extraordinary events. The Trust or its agents shall communicate to the Authorized Participant its rejection of an order. The Trust, the Transfer Agent, the Custodian and the Distributor are under no duty, however, to give notification of any defects or irregularities in the delivery of Fund Deposits nor shall either of them incur any liability for the failure to give any such notification. The Trust, the Transfer Agent, the Custodian and the Distributor shall not be liable for the rejection of any purchase order for Creation Units. Given the importance of the ongoing issuance of Creation Units to maintaining a market price that is at or close to the underlying NAV of a Fund, the Trust does not intend to suspend the acceptance of orders for Creation Units, unless it believes doing so would be in the best interests of the Fund.

Risks of Purchasing Creation Units. There are certain legal risks unique to investors purchasing Creation Units directly from a Fund. Because Shares may be issued on an ongoing basis, a “distribution” of Shares could be occurring at any time. Certain activities that a shareholder performs as a dealer could, depending on the circumstances, result in the shareholder being deemed a participant in the distribution in a manner that could render the shareholder a statutory underwriter and subject to the prospectus delivery and liability provisions of the Securities Act. For example, a shareholder could be deemed a statutory underwriter if it purchases Creation Units from a Fund, breaks them down into the constituent Shares, and sells those Shares directly to customers, or if a shareholder chooses to couple the creation of a supply of new Shares with an active selling effort involving solicitation of secondary-market demand for Shares. In such event, any commissions paid to any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Whether a person is an underwriter depends upon all of the facts and circumstances pertaining to that person’s activities, and the examples mentioned here should not be considered a complete description of all the activities that could cause you to be deemed an underwriter.

Redemptions of Shares for Fund Securities will be subject to compliance with applicable federal and state securities laws and the Funds (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Units for cash to the extent that the Trust could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities under such laws. An Authorized Participant or an investor for which it is acting subject to a legal restriction with respect to a particular security included in the Fund Securities applicable to the redemption of Creation Units may be paid an equivalent amount of cash. The Authorized Participant may request the redeeming investor of the Shares or to enter into agreements with respect to such matters as compensating cash payment. Further, an Authorized Participant that is not a “qualified institutional buyer,” (“QIB”) as such term is defined under Rule 144A of the Securities Act, will not be able to receive Fund Securities that are restricted securities eligible for resale under Rule 144A. An Authorized Participant may be required by the Trust to provide a written confirmation with respect to QIB status to receive Fund Securities.

In calculating each Fund’s NAV per Share, the Fund’s investments are generally valued using market quotations to the extent such market quotations are readily available. If market quotations are not readily available, or are deemed to be unreliable by the Adviser, a Fund will value such investments at fair value, as determined by the Adviser, for purposes of calculating such Fund’s NAV. Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Adviser to perform the fair value determinations for each Fund’s portfolio holdings subject to the Board’s oversight. The Adviser has established procedures for its fair valuation of each Fund’s portfolio investments. These procedures address, among other things, determining when market quotations are not readily available or reliable and the methodologies to be used for determining the fair value of investments, as well as the use and oversight of third-party pricing services for fair valuation. The Adviser’s fair value determinations will be carried out in compliance with Rule 2a-5 and based on fair value methodologies established and applied by the Adviser and periodically tested to ensure such methodologies are appropriate and accurate with respect to a Fund’s portfolio investments. The Adviser’s fair value methodologies may involve obtaining inputs and prices from third-party pricing services.

Taxation of the Funds. Each Fund intends to qualify each year to be treated as a separate RIC under Subchapter M of the Code. As such, the Funds should not be subject to federal income taxes on their net investment income and capital gains, if any, to the extent that they timely distribute such income and capital gains to their shareholders. To qualify for treatment as a RIC, a Fund must distribute annually to its shareholders at least the sum of 90% of its net investment income (generally including dividends, taxable interest, and the excess of net short-term capital gains over net long-term capital losses, less operating expenses) and at least 90% of its net tax-exempt interest income, if any (the “Distribution Requirement”) and must meet several additional requirements. Among these requirements are the following: (i) at least the sum of 90% of a Fund’s gross income each taxable year must be derived from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income derived with respect to its business of investing in such stock, securities or foreign currencies and net income derived from interests in qualified publicly traded partnerships (the “Qualifying Income Requirement”); and (ii) at the end of each quarter of such Fund’s taxable year, such Fund’s assets must be diversified so that (a) at least 50% of the value of the Fund’s total assets is represented by cash and cash items, U.S. government securities, securities of other RICs, and other securities, with such other securities limited, in respect to any one issuer, to an amount not greater in value than 5% of the value of the Fund’s total assets and to not more than 10% of the outstanding voting securities of such issuer, including the equity securities of a qualified publicly traded partnership, and (b) not more than 25% of the value of its total assets is invested, including through corporations in which the Fund owns a 20% or more voting stock interest, in the securities (other than U.S. government securities or securities of other RICs) of any one issuer, the securities (other than securities of other RICs) of two or more issuers which such Fund controls and which are engaged in the same, similar, or related trades or businesses, or the securities of one or more qualified publicly traded partnerships (the “Diversification Requirement”).

If a Fund fails to satisfy the Qualifying Income Requirement or the Diversification Requirement in any taxable year, such Fund may be eligible for relief provisions if the failures are due to reasonable cause and not willful neglect and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements. Additionally, relief is provided for certain de minimis failures of the Diversification Requirement where a Fund corrects the failure within a specified period of time. To be eligible for the relief provisions with respect to a failure to meet the Diversification Requirement, a Fund may be required to dispose of certain assets. If these relief provisions were not available to a Fund and it were to fail to qualify for treatment as a RIC for a taxable year, all of its taxable income would be subject to federal income tax at the regular 21% corporate rate without any deduction for distributions to shareholders, and its distributions (including capital gains distributions) generally would be taxable to the shareholders of the applicable Fund as dividends to the extent of the Fund’s current and accumulated earnings and profits, subject to the dividends received deduction for corporate shareholders and the lower tax rates on qualified dividend income received by non-corporate shareholders, subject to certain limitations. To requalify for treatment as a RIC in a subsequent taxable year, a Fund would be required to satisfy the RIC qualification requirements for that year and to distribute any earnings and profits from any year in which the applicable Fund failed to qualify for tax treatment as a RIC. If a Fund failed to qualify as a RIC for a period greater than two taxable years, it would generally be required to pay a Fund-level tax on certain net built-in gains recognized with respect to certain of its assets upon disposition of such assets within five years of qualifying as a RIC in a subsequent year. The Board reserves the right not to maintain the qualification of a Fund for treatment as a RIC if it determines such course of action to be beneficial to shareholders. If a Fund determines that it will not qualify as a RIC, the applicable Fund will establish procedures to reflect the anticipated tax liability in the Fund’s NAV.

A Fund will be subject to a nondeductible 4% federal excise tax on certain undistributed income if it does not distribute to its shareholders in each calendar year an amount at least equal to 98% of its ordinary income for the calendar year plus 98.2% of its capital gain net income for the one-year period ending on October 31 of that year, subject to an increase for any shortfall in the prior year’s distribution. For this purpose, any ordinary income or capital gain net income retained by a Fund and subject to corporate income tax will be considered to have been distributed. The Funds intend to declare and distribute dividends and distributions in the amounts and at the times necessary to avoid the application of the excise tax but can make no assurances that all such tax liability will be eliminated. For example, a Fund may receive delayed or corrected tax reporting statements from its investments that cause such Fund to accrue additional income and gains after such Fund has already made its excise tax distributions for the year. In such a situation, a Fund may incur an excise tax liability resulting from such delayed receipt of such tax information statements. In addition, a Fund may in certain circumstances be required to liquidate Fund investments to make sufficient distributions to avoid federal excise tax liability at a time when the investment adviser might not otherwise have chosen to do so, and liquidation of investments in such circumstances may affect the ability of the Fund to satisfy the requirement for qualification as a RIC.

In the case of corporate shareholders, certain dividends received by a Fund from U.S. corporations (generally, dividends received by the Fund in respect of any share of stock (1) with a tax holding period of at least 46 days during the 91-day period beginning on the date that is 45 days before the date on which the stock becomes ex-dividend as to that dividend and (2) that is held in an unleveraged position) and distributed and appropriately so reported by the Fund may be eligible for the 50% dividends received deduction. Certain preferred stock must have a holding period of at least 91 days during the 181-day period beginning on the date that is 90 days before the date on which the stock becomes ex-dividend as to that dividend to be eligible. Capital gain dividends distributed to a Fund from other RICs, and dividends distributed to a Fund from REITs are generally not eligible for the dividends received deduction. To qualify for the deduction, corporate shareholders must meet the minimum holding period requirement stated above with respect to their Shares, taking into account any holding period reductions from certain hedging or other transactions or positions that diminish their risk of loss with respect to their Shares, and, if they borrow to acquire or otherwise incur debt attributable to Shares, they may be denied a portion of the dividends received deduction with respect to those Shares. A Fund’s investment strategies may limit its ability to make distributions eligible for the dividends received deduction for corporate shareholders.

A RIC that receives business interest income may pass through its net business interest income for purposes of the tax rules applicable to the interest expense limitations under Section 163(j) of the Code. A RIC’s total “Section 163(j) Interest Dividend” for a tax year is limited to the excess of the RIC’s business interest income over the sum of its business interest expense and its other deductions properly allocable to its business interest income. A RIC may, in its discretion, designate all or a portion of ordinary dividends as Section 163(j) Interest Dividends, which would allow the recipient shareholder to treat the designated portion of such dividends as interest income for purposes of determining such shareholder’s interest expense deduction limitation under Section 163(j) of the Code. This can potentially increase the amount of a shareholder’s interest expense deductible under Section 163(j) of the Code. In general, to be eligible to treat a Section 163(j) Interest Dividend as interest income, you must have held your shares in a Fund for more than 180 days during the 361-day period beginning on the date that is 180 days before the date on which the share becomes ex-dividend with respect to such dividend. Section 163(j) Interest Dividends, if so designated by a Fund, will be reported to your financial intermediary or otherwise in accordance with the requirements specified by the Internal Revenue Service (“IRS”).

Taxation of Shareholders – Sale or Exchange of Shares. A sale or exchange of Shares may give rise to a gain or loss for federal and state income tax purposes. Assuming a shareholder holds Shares as a capital asset, any gain or loss realized upon a taxable disposition of Shares will be treated as long-term capital gain or loss if Shares have been held for more than 12 months. Otherwise, the gain or loss on the taxable disposition of Shares will generally be treated as short-term capital gain or loss. Any loss realized upon a taxable disposition of Shares held for six months or less will be treated as long-term capital loss, rather than short-term capital loss, to the extent of any amounts treated as distributions to the shareholder of long-term capital gain (including any amounts credited to the shareholder as undistributed capital gains). All or a portion of any loss realized upon a taxable disposition of Shares may be disallowed if substantially identical Shares of a Fund are acquired (through the reinvestment of dividends or otherwise) within a 61-day period beginning 30 days before and ending 30 days after the disposition. In such a case, the basis of the newly acquired Shares will be adjusted to reflect the disallowed loss.

If more than 50% of the value of a Fund’s assets at the close of any taxable year consists of stock or securities of foreign corporations, which for this purpose may include obligations of foreign governmental issuers, the Fund may elect, for U.S. federal income tax purposes, to treat any foreign income or withholding taxes paid by the Fund as paid by its shareholders. For any year that a Fund is eligible for and makes such an election, each shareholder of the Fund will be required to include in income an amount equal to his or her allocable share of qualified foreign income taxes paid by the Fund, and shareholders will be entitled, subject to certain holding period requirements and other limitations, to credit their portions of these amounts against their U.S. federal income tax due, if any, or to deduct their portions from their U.S. taxable income, if any. No deductions for foreign taxes paid by a Fund may be claimed, however, by non-corporate shareholders who do not itemize deductions. No deduction for such taxes will be permitted to individuals in computing their alternative minimum tax liability. Shareholders that are not subject to U.S. federal income tax, and those who invest in a Fund through tax-advantaged accounts (including those who invest through IRAs or other tax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction passed through by the Fund. Foreign taxes paid by a Fund will reduce the return from the Fund’s investments. If a Fund makes the election, the Fund’s shareholders will be notified annually by the Fund (or their broker) of the respective amounts per share of the Fund’s income from sources within, and taxes paid to, foreign countries and U.S. possessions. If a Fund does not hold sufficient foreign securities to meet the above threshold, then shareholders will not be entitled to claim a credit or further deduction with respect to foreign taxes paid by the Fund.

Each Fund may be eligible to treat a PFIC as a “qualified electing fund” (“QEF”) under the Code in which case, in lieu of the foregoing requirements, the Fund will be required to include in income each year a portion of the ordinary earnings and net capital gains of the QEF, even if not distributed to the Fund, and such amounts will be subject to the 90% and excise tax distribution requirements described above. In order to make this election, a Fund would be required to obtain certain annual information from the PFICs in which it invests, which may be difficult or impossible to obtain. Alternatively, a Fund may make a mark-to-market election that will result in such Fund being treated as if it had sold and repurchased its PFIC stock at the end of each year. In such case, a Fund would report any gains resulting from such deemed sales as ordinary income and would deduct any losses resulting from such deemed sales as ordinary losses to the extent of previously recognized gains. The election must be made separately for each PFIC owned by a Fund and, once made, is effective for all subsequent taxable years, unless revoked with the consent of the IRS. By making the election, a Fund could potentially ameliorate the adverse tax consequences with respect to its ownership of shares in a PFIC, but in any particular year may be required to recognize income in excess of the distributions it receives from PFICs and its proceeds from dispositions of PFIC stock. A Fund may have to distribute this excess income to satisfy the 90% distribution requirement and to avoid imposition of the 4% excise tax. In order to distribute this income and avoid a tax at the fund level, a Fund might be required to liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss. Each Fund intends to make the appropriate tax elections, if possible, and take any additional steps that are necessary to mitigate the effect of these rules. Amounts included in income each year by a Fund arising from a QEF election, will be “qualifying income” under the Qualifying Income Requirement (as described above) even if not distributed to such Fund, if such Fund derives such income from its business of investing in stock, securities or currencies.

Under Section 988 of the Code, gains or losses attributable to fluctuations in exchange rates which occur between the time a Fund accrues income or other receivables or accrues expenses or other liabilities denominated in a foreign currency and the time the Fund actually collects such income or receivables or pays such expenses or liabilities generally are treated as ordinary income or loss. Similarly, on disposition of debt securities denominated in a foreign currency and on disposition of certain other financial instruments (such as forward currency contracts and currency swaps), gains or losses attributable to fluctuations in the value of the foreign currency between the date of acquisition of the security or contract and the date of settlement or disposition also are treated as ordinary gain or loss. The gains and losses may increase or decrease the amount of a Fund’s income to be distributed to its shareholders as ordinary income. Each Fund may elect out of the application of Section 988 of the Code with respect to the tax treatment of each of its foreign currency forward contracts to the extent that (i) such contract is a capital asset in the hands of the Fund and is not part of a straddle transaction and (ii) the Fund makes an election by the close of the day the contract is entered into to treat the gain or loss attributable to such contract as capital gain or loss.

Tax Treatment of Complex Securities. Certain of a Fund’s investments may be subject to complex provisions of the Code (including provisions relating to hedging transactions, straddles, integrated transactions, foreign currency contracts, forward foreign currency contracts, and notional principal contracts) that, among other things, may affect a Fund’s ability to qualify as a RIC, may affect the character of gains and losses realized by the applicable Fund (e.g., may affect whether gains or losses are ordinary or capital), accelerate recognition of income to the applicable Fund and defer losses. These rules could therefore affect the character, amount and timing of distributions to shareholders. These provisions also may require a Fund to mark-to-market certain types of positions in its portfolio (i.e., treat them as if they were closed out) which may cause a Fund to recognize income without the applicable Fund receiving cash with which to make distributions in amounts sufficient to enable the applicable Fund to satisfy the RIC distribution requirements for avoiding income and excise taxes. A Fund intends to monitor its transactions, intends to make appropriate tax elections, and intends to make appropriate entries in its books and records to mitigate the effect of these rules and preserve the applicable Fund’s qualification for treatment as a RIC.

A Fund is required for federal income tax purposes to mark-to-market and recognize as income for each taxable year its net unrealized gains and losses on certain futures and options contracts subject to section 1256 of the Code (“Section 1256 Contracts”) as of the end of the year as well as those actually realized during the year. Gain or loss from Section 1256 Contracts on broad-based indexes required to be marked to market will be 60% long-term and 40% short-term capital gain or loss. Application of this rule may alter the timing and character of distributions to shareholders. A Fund may be required to defer the recognition of losses on Section 1256 Contracts to the extent of any unrecognized gains on offsetting positions held by the applicable Fund. These provisions also may require a Fund to mark-to-market certain types of positions in its portfolio (i.e., treat them as if they were closed out), which may cause the applicable Fund to recognize income without receiving cash with which to make distributions in amounts necessary to satisfy the Distribution Requirement and for avoiding the excise tax discussed above. Accordingly, to avoid certain income and excise taxes, a Fund may be required to liquidate its investments at a time when the investment adviser might not otherwise have chosen to do so.

A Fund may invest in U.S. REITs. Investments in REIT equity securities may require a Fund to accrue and distribute income not yet received. To generate sufficient cash to make the requisite distributions, a Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have continued to hold. A Fund’s investments in REIT equity securities may at other times result in the Fund’s receipt of cash in excess of the REIT’s earnings; if the Fund distributes these amounts, these distributions could constitute a return of capital to such Fund’s shareholders for federal income tax purposes. Dividends paid by a REIT, other than capital gain distributions, will be taxable as ordinary income up to the amount of the REIT’s current and accumulated earnings and profits. Capital gain dividends paid by a REIT to a Fund will be treated as long-term capital gains by the Fund and, in turn, may be distributed by the Fund to its shareholders as a capital gain distribution. Dividends received by a Fund from a REIT generally will not constitute qualified dividend income or qualify for the dividends received deduction. If a REIT is operated in a manner such that it fails to qualify as a REIT, an investment in the REIT would become subject to double taxation, meaning the taxable income of the REIT would be subject to federal income tax at the regular corporate rate without any deduction for dividends paid to shareholders and the dividends would be taxable to shareholders as ordinary income (or possibly as qualified dividend income) to the extent of the REIT’s current and accumulated earnings and profits.

Non-U.S. Shareholders. Any non-U.S. investors in a Fund may be subject to U.S. withholding and estate tax and are encouraged to consult their tax advisors prior to investing in the Fund. Foreign shareholders (i.e., nonresident alien individuals and foreign corporations, partnerships, trusts and estates) are generally subject to U.S. withholding tax at the rate of 30% (or a lower tax treaty rate) on distributions derived from taxable ordinary income. Each Fund may, under certain circumstances, report all or a portion of a dividend as an “interest-related dividend” or a “short-term capital gain dividend,” which would generally be exempt from this 30% U.S. withholding tax, provided certain other requirements are met. Short-term capital gain dividends received by a nonresident alien individual who is present in the U.S. for a period or periods aggregating 183 days or more during the taxable year are not exempt from this 30% withholding tax. Gains realized by foreign shareholders from the sale or other disposition of Shares of a Fund generally are not subject to U.S. taxation, unless the recipient is an individual who is physically present in the U.S. for 183 days or more per year. Foreign shareholders who fail to provide an applicable IRS form may be subject to backup withholding on certain payments from a Fund. Backup withholding will not be applied to payments that are subject to the 30% (or lower applicable treaty rate) withholding tax described in this paragraph. Different tax consequences may result if the foreign shareholder is engaged in a trade or business within the United States. In addition, the tax consequences to a foreign shareholder entitled to claim the benefits of a tax treaty may be different than those described above.

Under legislation generally known as “FATCA” (the Foreign Account Tax Compliance Act), a Fund is required to withhold 30% of certain ordinary dividends it pays to shareholders that fail to meet prescribed information reporting or certification requirements. In general, no such withholding will be required with respect to a U.S. person or non-U.S. person that timely provides the certifications required by a Fund or its agent on a valid IRS Form W-9 or applicable series of IRS Form W-8, respectively. Shareholders potentially subject to withholding include foreign financial institutions (“FFIs”), such as non-U.S. investment funds, and non-financial foreign entities (“NFFEs”). To avoid withholding under FATCA, an FFI generally must enter into an information sharing agreement with the IRS in which it agrees to report certain identifying information (including name, address, and taxpayer identification number) with respect to its U.S. account holders (which, in the case of an entity shareholder, may include its direct and indirect U.S. owners), and an NFFE generally must identify and provide other required information to a Fund or other withholding agent regarding its U.S. owners, if any. Such non-U.S. shareholders also may fall into certain exempt, excepted or deemed compliant categories as established by regulations and other guidance. A non-U.S. shareholder resident or doing business in a country that has entered into an intergovernmental agreement with the United States to implement FATCA will be exempt from FATCA withholding provided that the shareholder and the applicable foreign government comply with the terms of the agreement.

Tax-Exempt Shareholders. Certain tax-exempt shareholders, including qualified pension plans, IRAs, salary deferral arrangements, 401(k) plans, and other tax-exempt entities, generally are exempt from federal income taxation except with respect to their unrelated business taxable income (“UBTI”). Tax-exempt entities are not permitted to offset losses from one unrelated trade or business against the income or gain of another unrelated trade or business. Certain net losses incurred prior to January 1, 2018 are permitted to offset gain and income created by an unrelated trade or business, if otherwise available. Under current law, each Fund generally serves to block UBTI from being realized by its tax-exempt shareholders with respect to their shares of Fund income. However, notwithstanding the foregoing, tax-exempt shareholders could realize UBTI by virtue of their investment in a Fund if, for example, (i) the Fund invests in residual interests of Real Estate Mortgage Investment Conduits (“REMICs”), (ii) the Fund invests in a REIT that is a taxable mortgage pool (“TMP”) or that has a subsidiary that is a TMP or that invests in the residual interest of a REMIC, or (iii) Shares constitute debt-financed property in the hands of the tax-exempt shareholders within the meaning of section 514(b) of the Code. Charitable remainder trusts are subject to special rules and should consult their tax advisors. The IRS has issued guidance with respect to these issues and prospective shareholders, especially charitable remainder trusts, are strongly encouraged to consult with their tax advisors regarding these issues.


WWW.ISSGOVERNANCE.COM		2 of 87


UNITED STATES Proxy Voting Guidelines

TABLE OF CONTENTS

Coverage8

1.Board of Directors9

Voting on Director Nominees in Uncontested Elections9

Independence9

ISS Classification of Directors – U.S.10

Composition12

Attendance12

Overboarded Directors12

Gender Diversity12

Racial and/or Ethnic Diversity13

Responsiveness13

Accountability14

Poison Pills14

Unequal Voting Rights14

Classified Board Structure15

Removal of Shareholder Discretion on Classified Boards15

Problematic Governance Structure15

Unilateral Bylaw/Charter Amendments15

Restricting Binding Shareholder Proposals16

Director Performance Evaluation16

Management Proposals to Ratify Existing Charter or Bylaw Provisions16

Problematic Audit-Related Practices17

Problematic Compensation Practices17

Problematic Pledging of Company Stock17

Climate Accountability18

Governance Failures18

Voting on Director Nominees in Contested Elections18

Vote-No Campaigns18

Proxy Contests/Proxy Access19

Other Board-Related Proposals19

Adopt Anti-Hedging/Pledging/Speculative Investments Policy19

Board Refreshment19

Term/Tenure Limits19

Age Limits20

Board Size20

Classification/Declassification of the Board20

CEO Succession Planning20

Cumulative Voting20

Director and Officer Indemnification, Liability Protection, and Exculpation21

Establish/Amend Nominee Qualifications21

Establish Other Board Committee Proposals22

Filling Vacancies/Removal of Directors22

Independent Board Chair22

Majority of Independent Directors/Establishment of Independent Committees23

Majority Vote Standard for the Election of Directors23


WWW.ISSGOVERNANCE.COM		3 of 87


UNITED STATES Proxy Voting Guidelines

Proxy Access23

Require More Nominees than Open Seats24

Shareholder Engagement Policy (Shareholder Advisory Committee)24

2.Audit-Related25

Auditor Indemnification and Limitation of Liability25

Auditor Ratification25

Shareholder Proposals Limiting Non-Audit Services25

Shareholder Proposals on Audit Firm Rotation26

3.Shareholder Rights & Defenses27

Advance Notice Requirements for Shareholder Proposals/Nominations27

Amend Bylaws without Shareholder Consent27

Control Share Acquisition Provisions27

Control Share Cash-Out Provisions28

Disgorgement Provisions28

Fair Price Provisions28

Freeze-Out Provisions28

Greenmail28

Shareholder Litigation Rights29

Federal Forum Selection Provisions29

Exclusive Forum Provisions for State Law Matters29

Fee shifting29

Net Operating Loss (NOL) Protective Amendments30

Poison Pills (Shareholder Rights Plans)30

Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy30

Management Proposals to Ratify a Poison Pill31

Management Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs)31

Proxy Voting Disclosure, Confidentiality, and Tabulation31

Ratification Proposals: Management Proposals to Ratify Existing Charter or Bylaw Provisions32

Reimbursing Proxy Solicitation Expenses32

Reincorporation Proposals33

Shareholder Ability to Act by Written Consent33

Shareholder Ability to Call Special Meetings33

Stakeholder Provisions34

State Antitakeover Statutes34

Supermajority Vote Requirements34

Virtual Shareholder Meetings34

4.Capital/Restructuring35

Capital35

Adjustments to Par Value of Common Stock35

Common Stock Authorization35

General Authorization Requests35

Specific Authorization Requests36

Dual Class Structure36

Issue Stock for Use with Rights Plan36


WWW.ISSGOVERNANCE.COM		4 of 87


UNITED STATES Proxy Voting Guidelines

Preemptive Rights36

Preferred Stock Authorization37

General Authorization Requests37

Recapitalization Plans38

Reverse Stock Splits38

Share Issuance Mandates at U.S. Domestic Issuers Incorporated Outside the U.S.38

Share Repurchase Programs39

Share Repurchase Programs Shareholder Proposals39

Stock Distributions: Splits and Dividends39

Tracking Stock40

Restructuring40

Appraisal Rights40

Asset Purchases40

Asset Sales40

Bundled Proposals41

Conversion of Securities41

Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy Plans/Reverse Leveraged Buyouts/Wrap

Plans41

Formation of Holding Company41

Going Private and Going Dark Transactions (LBOs and Minority Squeeze-outs)42

Joint Ventures42

Liquidations43

Mergers and Acquisitions43

Private Placements/Warrants/Convertible Debentures43

Reorganization/Restructuring Plan (Bankruptcy)45

Special Purpose Acquisition Corporations (SPACs)45

Special Purpose Acquisition Corporations (SPACs) - Proposals for Extensions45

Spin-offs46

Value Maximization Shareholder Proposals46

5.Compensation47

Executive Pay Evaluation47

Advisory Votes on Executive Compensation—Management Proposals (Say-on-Pay)47

Pay-for-Performance Evaluation48

Problematic Pay Practices48

Compensation Committee Communications and Responsiveness49

Frequency of Advisory Vote on Executive Compensation ("Say When on Pay")50

Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale50

Equity-Based and Other Incentive Plans50

Shareholder Value Transfer (SVT)51

Three-Year Value-Adjusted Burn Rate52

Egregious Factors52

Liberal Change in Control Definition52

Repricing Provisions52

Problematic Pay Practices or Significant Pay-for-Performance Disconnect53

Amending Cash and Equity Plans (including Approval for Tax Deductibility (162(m))53


WWW.ISSGOVERNANCE.COM		5 of 87


UNITED STATES Proxy Voting Guidelines

Specific Treatment of Certain Award Types in Equity Plan Evaluations54

Dividend Equivalent Rights54

Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts (REITs)54

Other Compensation Plans54

401(k) Employee Benefit Plans54

Employee Stock Ownership Plans (ESOPs)54

Employee Stock Purchase Plans—Qualified Plans55

Employee Stock Purchase Plans—Non-Qualified Plans55

Option Exchange Programs/Repricing Options55

Stock Plans in Lieu of Cash56

Transfer Stock Option (TSO) Programs56

Director Compensation57

Shareholder Ratification of Director Pay Programs57

Equity Plans for Non-Employee Directors57

Non-Employee Director Retirement Plans58

Shareholder Proposals on Compensation58

Bonus Banking/Bonus Banking “Plus”58

Compensation Consultants—Disclosure of Board or Company’s Utilization58

Disclosure/Setting Levels or Types of Compensation for Executives and Directors58

Golden Coffins/Executive Death Benefits59

Hold Equity Past Retirement or for a Significant Period of Time59

Pay Disparity59

Pay for Performance/Performance-Based Awards60

Pay for Superior Performance60

Pre-Arranged Trading Plans (10b5-1 Plans)61

Prohibit Outside CEOs from Serving on Compensation Committees61

Recoupment of Incentive or Stock Compensation in Specified Circumstances61

Severance and Golden Parachute Agreements61

Share Buyback Impact on Incentive Program Metrics62

Supplemental Executive Retirement Plans (SERPs)62

Tax Gross-Up Proposals62

Termination of Employment Prior to Severance Payment/Eliminating Accelerated Vesting of Unvested Equity

.62

6.Routine/Miscellaneous64

Adjourn Meeting64

Amend Quorum Requirements64

Amend Minor Bylaws64

Change Company Name64

Change Date, Time, or Location of Annual Meeting65

Other Business65

7.Social and Environmental Issues66

Global Approach – E&S Shareholder Proposals66

Endorsement of Principles66

Animal Welfare67


WWW.ISSGOVERNANCE.COM		6 of 87


UNITED STATES Proxy Voting Guidelines

Animal Welfare Policies67

Animal Testing67

Animal Slaughter67

Consumer Issues67

Genetically Modified Ingredients67

Reports on Potentially Controversial Business/Financial Practices68

Pharmaceutical Pricing, Access to Medicines, and Prescription Drug Reimportation68

Product Safety and Toxic/Hazardous Materials69

Tobacco-Related Proposals69

Climate Change70

Say on Climate (SoC) Management Proposals70

Say on Climate (SoC) Shareholder Proposals70

Climate Change/Greenhouse Gas (GHG) Emissions70

Energy Efficiency71

Renewable Energy71

Diversity72

Board Diversity72

Equality of Opportunity72

Gender Identity, Sexual Orientation, and Domestic Partner Benefits73

Gender, Race/Ethnicity Pay Gap73

Racial Equity and/or Civil Rights Audit Guidelines73

Environment and Sustainability73

Facility and Workplace Safety74

Natural Capital- Related and/or Community Impact Assessment Proposals74

Hydraulic Fracturing74

Operations in Protected Areas74

Recycling75

Sustainability Reporting75

Water Issues75

General Corporate Issues75

Charitable Contributions75

Data Security, Privacy, and Internet Issues76

ESG Compensation-Related Proposals76

Human Rights, Human Capital Management, and International Operations76

Human Rights Proposals76

Mandatory Arbitration77

Operations in High-Risk Markets77

Outsourcing/Offshoring78

Sexual Harassment78

Weapons and Military Sales78

Political Activities78

Lobbying78

Political Contributions79


WWW.ISSGOVERNANCE.COM		8 of 87


UNITED STATES Proxy Voting Guidelines

Coverage

The U.S. research team provides proxy analyses and voting recommendations for the common shareholder

meetings of U.S. - incorporated companies that are publicly-traded on U.S. exchanges, as well as certain OTC

companies, if they are held in our institutional investor clients' portfolios. Coverage generally includes corporate

actions for common equity holders, such as written consents and bankruptcies. ISS’ U.S. coverage includes

investment companies (including open-end funds, closed-end funds, exchange-traded funds, and unit investment

trusts), limited partnerships (“LPs”), master limited partnerships (“MLPs”), limited liability companies (“LLCs”), and

business development companies. ISS reviews its universe of coverage on an annual basis, and the coverage is

subject to change based on client need and industry trends.

Foreign-incorporated companies

In addition to U.S.- incorporated, U.S.- listed companies, ISS’ U.S. policies are applied to certain foreign-

incorporated company analyses. Like the SEC, ISS distinguishes two types of companies that list but are not

incorporated in the U.S.:

U.S. Domestic Issuers – which have a majority of outstanding shares held in the U.S. and meet other criteria,

as determined by the SEC, and are subject to the same disclosure and listing standards as U.S. incorporated

companies (e.g. they are required to file DEF14A proxy statements) – are generally covered under standard

U.S. policy guidelines.

Foreign Private Issuers (FPIs) – which are allowed to take exemptions from most disclosure requirements (e.g.,

they are allowed to file 6-K for their proxy materials) and U.S. listing standards – are generally covered under a

combination of policy guidelines:

FPI Guidelines (see the Americas Regional Proxy Voting Guidelines), may apply to companies incorporated

in governance havens, and apply certain minimum independence and disclosure standards in the

evaluation of key proxy ballot items, such as the election of directors; and/or

Guidelines for the market that is responsible for, or most relevant to, the item on the ballot.

U.S. incorporated companies listed only on non-U.S. exchanges are generally covered under the ISS guidelines for

the market on which they are traded.

An FPI is generally covered under ISS’ approach to FPIs outlined above, even if such FPI voluntarily files a proxy

statement and/or other filing normally required of a U.S. Domestic Issuer, so long as the company retains its FPI

status.

In all cases – including with respect to other companies with cross-market features that may lead to ballot items

related to multiple markets – items that are on the ballot solely due to the requirements of another market (listing,

incorporation, or national code) may be evaluated under the policy of the relevant market, regardless of the

“assigned” primary market coverage.


WWW.ISSGOVERNANCE.COM		9 of 87


UNITED STATES Proxy Voting Guidelines

1.Board of Directors

Voting on Director Nominees in Uncontested Elections

Four fundamental principles apply when determining votes on director nominees:

Independence: Boards should be sufficiently independent from management (and significant shareholders) to

ensure that they are able and motivated to effectively supervise management's performance for the benefit of all

shareholders, including in setting and monitoring the execution of corporate strategy, with appropriate use of

shareholder capital, and in setting and monitoring executive compensation programs that support that strategy.

The chair of the board should ideally be an independent director, and all boards should have an independent

leadership position or a similar role in order to help provide appropriate counterbalance to executive

management, as well as having sufficiently independent committees that focus on key governance concerns such

as audit, compensation, and nomination of directors.

Composition: Companies should ensure that directors add value to the board through their specific skills and

expertise and by having sufficient time and commitment to serve effectively. Boards should be of a size

appropriate to accommodate diversity, expertise, and independence, while ensuring active and collaborative

participation by all members. Boards should be sufficiently diverse to ensure consideration of a wide range of

perspectives.

Responsiveness: Directors should respond to investor input, such as that expressed through significant opposition

to management proposals, significant support for shareholder proposals (whether binding or non-binding), and

tender offers where a majority of shares are tendered.

Accountability: Boards should be sufficiently accountable to shareholders, including through transparency of the

company's governance practices and regular board elections, by the provision of sufficient information for

shareholders to be able to assess directors and board composition, and through the ability of shareholders to

remove directors.

General Recommendation: Generally vote for director nominees, except under the following circumstances (with

new nominees1 considered on case-by-case basis):

Independence

Vote against2 or withhold from non-independent directors (Executive Directors and Non-Independent Non-

Executive Directors per ISS’ Classification of Directors) when:

•Independent directors comprise 50 percent or less of the board;

•The non-independent director serves on the audit, compensation, or nominating committee;

•The company lacks an audit, compensation, or nominating committee so that the full board functions as that

committee; or

•The company lacks a formal nominating committee, even if the board attests that the independent directors

fulfill the functions of such a committee.

___________________________________

1 A "new nominee" is a director who is being presented for election by shareholders for the first time. Recommendations on

new nominees who have served for less than one year are made on a case-by-case basis depending on the timing of their

appointment and the problematic governance issue in question.

2 In general, companies with a plurality vote standard use “Withhold” as the contrary vote option in director elections;

companies with a majority vote standard use “Against”. However, it will vary by company and the proxy must be checked to

determine the valid contrary vote option for the particular company.


WWW.ISSGOVERNANCE.COM		10 of 87


UNITED STATES Proxy Voting Guidelines

ISS Classification of Directors – U.S.

1.Executive Director

1.1.Current officer1 of the company or one of its affiliates2.

2.Non-Independent Non-Executive Director

Board Identification

2.1.Director identified as not independent by the board.

Controlling/Significant Shareholder

2.2.Beneficial owner of more than 50 percent of the company's voting power (this may be aggregated if

voting power is distributed among more than one member of a group).

Current Employment at Company or Related Company

2.3.Non-officer employee of the firm (including employee representatives).

2.4.Officer1, former officer, or general or limited partner of a joint venture or partnership with the

company.

Former Employment

2.5.Former CEO of the company. 3, 4

2.6.Former non-CEO officer1 of the company or an affiliate2 within the past five years.

2.7.Former officer1 of an acquired company within the past five years.4

2.8.Officer1 of a former parent or predecessor firm at the time the company was sold or split off within the

past five years.

2.9.Former interim officer if the service was longer than 18 months. If the service was between 12 and 18

months an assessment of the interim officer’s employment agreement will be made.5

Family Members

2.10.Immediate family member6 of a current or former officer1 of the company or its affiliates2 within the

last five years.

2.11.Immediate family member6 of a current employee of company or its affiliates2 where additional factors

raise concern (which may include, but are not limited to, the following: a director related to numerous

employees; the company or its affiliates employ relatives of numerous board members; or a non-

Section 16 officer in a key strategic role).

Professional, Transactional, and Charitable Relationships

2.12.Director who (or whose immediate family member6) currently provides professional services7 in excess

of $10,000 per year to: the company, an affiliate2, or an individual officer of the company or an affiliate;

or who is (or whose immediate family member6 is) a partner, employee, or controlling shareholder of

an organization which provides the services.

2.13.Director who (or whose immediate family member6) currently has any material transactional

relationship8 with the company or its affiliates2; or who is (or whose immediate family member6 is) a

partner in, or a controlling shareholder or an executive officer of, an organization which has the

material transactional relationship8 (excluding investments in the company through a private

placement).

2.14.Director who (or whose immediate family member6) is a trustee, director, or employee of a charitable

or non-profit organization that receives material grants or endowments8 from the company or its

affiliates2.

Other Relationships

2.15.Party to a voting agreement9 to vote in line with management on proposals being brought to

shareholder vote.

2.16.Has (or an immediate family member6 has) an interlocking relationship as defined by the SEC involving

members of the board of directors or its Compensation Committee.10

2.17.Founder11 of the company but not currently an employee.

2.18.Director with pay comparable to Named Executive Officers.

2.19.Any material12 relationship with the company.

3.Independent Director

3.1.No material12 connection to the company other than a board seat.


WWW.ISSGOVERNANCE.COM		11 of 87


UNITED STATES Proxy Voting Guidelines

Footnotes:

1.The definition of officer will generally follow that of a “Section 16 officer” (officers subject to Section 16 of the

Securities and Exchange Act of 1934) and includes the chief executive, operating, financial, legal, technology, and accounting

officers of a company (including the president, treasurer, secretary, controller, or any vice president in charge of a principal

business unit, division, or policy function). Current interim officers are included in this category. For private companies, the

equivalent positions are applicable. A non-employee director serving as an officer due to statutory requirements (e.g.

corporate secretary) will generally be classified as a Non-Independent Non-Executive Director under “Any material

relationship with the company.” However, if the company provides explicit disclosure that the director is not receiving

additional compensation exceeding $10,000 per year for serving in that capacity, then the director will be classified as an

Independent Director.

2.“Affiliate” includes a subsidiary, sibling company, or parent company. ISS uses 50 percent control ownership by the

parent company as the standard for applying its affiliate designation. The manager/advisor of an externally managed issuer

(EMI) is considered an affiliate.

3.Includes any former CEO of the company prior to the company’s initial public offering (IPO).

4.When there is a former CEO of a special purpose acquisition company (SPAC) serving on the board of an acquired

company, ISS will generally classify such directors as independent unless determined otherwise taking into account the

following factors: the applicable listing standards determination of such director’s independence; any operating ties to the

firm; and the existence of any other conflicting relationships or related party transactions.

5.ISS will look at the terms of the interim officer’s employment contract to determine if it contains severance pay, long-

term health and pension benefits, or other such standard provisions typically contained in contracts of permanent, non-

temporary CEOs. ISS will also consider if a formal search process was under way for a full-time officer at the time.

6.“Immediate family member” follows the SEC’s definition of such and covers spouses, parents, children, step-parents,

step- children, siblings, in-laws, and any person (other than a tenant or employee) sharing the household of any director,

nominee for director, executive officer, or significant shareholder of the company.

7.Professional services can be characterized as advisory in nature, generally involve access to sensitive company

information or to strategic decision-making, and typically have a commission- or fee-based payment structure. Professional

services generally include but are not limited to the following: investment banking/financial advisory services, commercial

banking (beyond deposit services), investment services, insurance services, accounting/audit services, consulting services,

marketing services, legal services, property management services, realtor services, lobbying services, executive search

services, and IT consulting services. The following would generally be considered transactional relationships and not

professional services: deposit services, IT tech support services, educational services, and construction services. The case of

participation in a banking syndicate by a non-lead bank should be considered a transactional (and hence subject to the

associated materiality test) rather than a professional relationship. “Of Counsel” relationships are only considered

immaterial if the individual does not receive any form of compensation (in excess of $10,000 per year) from, or is a retired

partner of, the firm providing the professional service. The case of a company providing a professional service to one of its

directors or to an entity with which one of its directors is affiliated, will be considered a transactional rather than a

professional relationship. Insurance services and marketing services are assumed to be professional services unless the

company explains why such services are not advisory.

8.A material transactional relationship, including grants to non-profit organizations, exists if the company makes

annual payments to, or receives annual payments from, another entity, exceeding the greater of: $200,000 or 5 percent

of the recipient’s gross revenues, for a company that follows NASDAQ listing standards; or the greater of $1,000,000 or

2 percent of the recipient’s gross revenues, for a company that follows NYSE listing standards. For a company that

follows neither of the preceding standards, ISS will apply the NASDAQ-based materiality test. (The recipient is the party

receiving the financial proceeds from the transaction).

9.Dissident directors who are parties to a voting agreement pursuant to a settlement or similar arrangement may be

classified as Independent Directors if an analysis of the following factors indicates that the voting agreement does not

compromise their alignment with all shareholders’ interests: the terms of the agreement; the duration of the standstill

provision in the agreement; the limitations and requirements of actions that are agreed upon; if the dissident director

nominee(s) is subject to the standstill; and if there any conflicting relationships or related party transactions.

10.Interlocks include: executive officers serving as directors on each other’s compensation or similar committees (or, in

the absence of such a committee, on the board); or executive officers sitting on each other’s boards and at least one serves on

the other’s compensation or similar committees (or, in the absence of such a committee, on the board).

11.The operating involvement of the founder with the company will be considered; if the founder was never employed by

the company, ISS may deem him or her an Independent Director.


WWW.ISSGOVERNANCE.COM		12 of 87


UNITED STATES Proxy Voting Guidelines

12.For purposes of ISS’s director independence classification, “material” will be defined as a standard of relationship

(financial, personal, or otherwise) that a reasonable person might conclude could potentially influence one’s objectivity in the

boardroom in a manner that would have a meaningful impact on an individual's ability to satisfy requisite fiduciary standards

on behalf of shareholders.

Composition

Attendance at Board and Committee Meetings: Generally vote against or withhold from directors (except

nominees who served only part of the fiscal year3) who attend less than 75 percent of the aggregate of their board

and committee meetings for the period for which they served, unless an acceptable reason for absences is

disclosed in the proxy or another SEC filing. Acceptable reasons for director absences are generally limited to the

following:

Medical issues/illness;

Family emergencies; and

Missing only one meeting (when the total of all meetings is three or fewer).

In cases of chronic poor attendance without reasonable justification, in addition to voting against the director(s)

with poor attendance, generally vote against or withhold from appropriate members of the nominating/

governance committees or the full board.

If the proxy disclosure is unclear and insufficient to determine whether a director attended at least 75 percent of

the aggregate of his/her board and committee meetings during his/her period of service, vote against or withhold

from the director(s) in question.

Overboarded Directors: Generally vote against or withhold from individual directors who:

Sit on more than five public company boards; or

Are CEOs of public companies who sit on the boards of more than two public companies besides their own—

withhold only at their outside boards4.

NOTE: For shareholder meeting reports published on or after February 25th, 2025, Institutional Shareholder

Services (ISS) has indefinitely halted the consideration of the gender diversity of a company’s board when making

vote recommendations with respect to the election or re-election of directors at U.S. companies covered by these

guidelines under its proprietary ISS U.S. Benchmark policy.

Gender Diversity: Generally vote against or withhold from the chair of the nominating committee (or other

directors on a case-by-case basis) at companies where there are no women on the company's board. An

exception will be made if there was at least one woman on the board at the preceding annual meeting and the

board makes a firm commitment to return to a gender-diverse status within a year.

NOTE: For shareholder meeting reports published on or after February 25th, 2025, Institutional Shareholder

Services (ISS) has indefinitely halted the consideration of the racial and/or ethnic diversity of a company’s board

___________________________________

3 Nominees who served for only part of the fiscal year are generally exempted from the attendance policy.

4 Although all of a CEO’s subsidiary boards with publicly-traded common stock will be counted as separate boards, ISS will not

recommend a withhold vote for the CEO of a parent company board or any of the controlled (>50 percent ownership) subsidiaries

of that parent but may do so at subsidiaries that are less than 50 percent controlled and boards outside the parent/subsidiary

relationships.


WWW.ISSGOVERNANCE.COM		13 of 87


UNITED STATES Proxy Voting Guidelines

when making vote recommendations with respect to the election or re-election of directors at U.S. companies

covered under these guidelines under its proprietary ISS U.S. Benchmark policy.

Racial and/or Ethnic Diversity: For companies in the Russell 3000 or S&P 1500 indices, generally vote against or

withhold from the chair of the nominating committee (or other directors on a case-by-case basis) where the

board has no apparent racially or ethnically diverse members5. An exception will be made if there was racial and/

or ethnic diversity on the board at the preceding annual meeting and the board makes a firm commitment to

appoint at least one racial and/or ethnic diverse member within a year.

Responsiveness

Vote case-by-case on individual directors, committee members, or the entire board of directors as appropriate if:

The board failed to act on a shareholder proposal that received the support of a majority of the shares cast in

the previous year or failed to act on a management proposal seeking to ratify an existing charter/bylaw

provision that received opposition of a majority of the shares cast in the previous year. Factors that will be

considered are:

Disclosed outreach efforts by the board to shareholders in the wake of the vote;

Rationale provided in the proxy statement for the level of implementation;

The subject matter of the proposal;

The level of support for and opposition to the resolution in past meetings;

Actions taken by the board in response to the majority vote and its engagement with shareholders;

The continuation of the underlying issue as a voting item on the ballot (as either shareholder

or management proposals); and

Other factors as appropriate.

The board failed to act on takeover offers where the majority of shares are tendered; or

At the previous board election, any director received more than 50 percent withhold/against votes of the

shares cast and the company has failed to address the issue(s) that caused the high withhold/against vote.

Vote case-by-case on Compensation Committee members (or, in exceptional cases, the full board) and/or the

say-on-pay proposal when the company's previous say-on-pay received support of less than 70 percent of votes

cast.

Factors that will be considered in assessing board responsiveness include:

Disclosure of engagement efforts with major institutional investors, including the frequency and timing

of engagements and the company participants (including whether independent directors participated);

Disclosure of the specific concerns voiced by dissenting shareholders that led to the say-on-pay

opposition; and

Disclosure of specific and meaningful actions taken to address shareholders' concerns;

If the company discloses meaningful engagement efforts, but in addition states that it was unable to obtain

specific feedback, ISS will assess company actions taken in response to the say-on-pay vote as well as the

company's explanation as to why such actions are beneficial for shareholders.

Additional factors that may be considered include:

Whether the issues raised are recurring or isolated;

The company's ownership structure; and

___________________________________

5 Aggregate diversity statistics provided by the board will only be considered if specific to racial and/or ethnic diversity.


WWW.ISSGOVERNANCE.COM		14 of 87


UNITED STATES Proxy Voting Guidelines

Significant corporate activity, such as a recent merger or proxy contest; and

Any other compensation action or factor considered relevant to assessing board responsiveness.

If the say-on-pay support level was less than 50 percent of votes case, this would warrant the highest degree of

responsiveness, as assessed under the factors noted above.

Vote case-by-case on Compensation Committee members (or, in exceptional cases, the full board) if the board

implements an advisory vote on executive compensation on a less frequent basis than the frequency that received the

plurality of votes cast.

Accountability

PROBLEMATIC TAKEOVER DEFENSES, CAPITAL STRUCTURE, AND GOVERNANCE STRUCTURE

Poison Pills: Generally vote against or withhold from all nominees (except new nominees1, who should be

considered case-by-case) if:

The company has a poison pill with a deadhand or slowhand feature6;

The board makes a material adverse modification to an existing pill, including, but not limited to, extension,

renewal, or lowering the trigger, without shareholder approval; or

The company has a long-term poison pill (with a term of over one year) that was not approved by the public

shareholders7.

Vote case-by-case on nominees if the board adopts an initial short-term pill6 (with a term of one year or less)

without shareholder approval, taking into consideration:

The trigger threshold and other terms of the pill;

The disclosed rationale for the adoption;

The context in which the pill was adopted, (e.g., factors such as the company's size and stage of

development, sudden changes in its market capitalization, and extraordinary industry-wide or

macroeconomic events);

A commitment to put any renewal to a shareholder vote;

The company's overall track record on corporate governance and responsiveness to shareholders; and

Other factors as relevant.

Unequal Voting Rights: Generally vote withhold or against directors individually, committee members, or the

entire board (except new nominees1, who should be considered case-by-case), if the company employs a common

stock structure with unequal voting rights8.

Exceptions to this policy will generally be limited to:

6 If a short-term pill with a deadhand or slowhand feature is enacted but expires before the next shareholder vote, ISS will

generally still recommend withhold/against nominees at the next shareholder meeting following its adoption.

7 Approval prior to, or in connection, with a company’s becoming publicly-traded, or in connection with a de-SPAC transaction,

is insufficient.

8 This generally includes classes of common stock that have additional votes per share than other shares; classes of shares that

are not entitled to vote on all the same ballot items or nominees; or stock with time-phased voting rights (“loyalty shares”).


WWW.ISSGOVERNANCE.COM		15 of 87


UNITED STATES Proxy Voting Guidelines

Newly-public companies9 with a sunset provision of no more than seven years from the date of going public;

Limited Partnerships and the Operating Partnership (OP) unit structure of REITs;

Convertible preferred shares that vote on an "as-converted" basis;

Situations where the enhanced voting rights are limited in duration and applicability, such as where

they are intended to overcome low voting turnout and ensure approval of a specific non-

controversial agenda item and "mirror voting" applies;

Situations where the super-voting shares represent less than 5% of total voting power and therefore

considered to be de minimis; or

The company provides sufficient protections for minority shareholders, such as allowing minority

shareholders a regular binding vote on whether the capital structure should be maintained.

Classified Board Structure: The board is classified, and a continuing director responsible for a problematic

governance issue at the board/committee level that would warrant a withhold/against vote recommendation is

not up for election. All appropriate nominees (except new) may be held accountable.

Removal of Shareholder Discretion on Classified Boards: The company has opted into, or failed to opt out of,

state laws requiring a classified board structure.

Problematic Governance Structure: For companies that hold or held their first annual meeting9 of public

shareholders after Feb. 1, 2015, generally vote against or withhold from directors individually, committee

members, or the entire board (except new nominees1, who should be considered case-by-case) if, prior to or in

connection with the company's public offering, the company or its board adopted the following bylaw or charter

provisions that are considered to be materially adverse to shareholder rights:

Supermajority vote requirements to amend the bylaws or charter;

A classified board structure; or

Other egregious provisions.

A provision which specifies that the problematic structure(s) will be sunset within seven years of the date of going

public will be considered a mitigating factor.

Unless the adverse provision is reversed or removed, vote case-by-case on director nominees in subsequent years.

Unilateral Bylaw/Charter Amendments: Generally vote against or withhold from directors individually, committee

members, or the entire board (except new nominees1, who should be considered case-by-case) if the board

amends the company's bylaws or charter without shareholder approval in a manner that materially diminishes

shareholders' rights or that could adversely impact shareholders, considering the following factors:

The board's rationale for adopting the bylaw/charter amendment without shareholder ratification;

Disclosure by the company of any significant engagement with shareholders regarding the amendment;

The level of impairment of shareholders' rights caused by the board's unilateral amendment to the

bylaws/charter;

The board's track record with regard to unilateral board action on bylaw/charter amendments or other

entrenchment provisions;

The company's ownership structure;

The company's existing governance provisions;

The timing of the board's amendment to the bylaws/charter in connection with a significant business

development; and

9 Includes companies that emerge from bankruptcy, SPAC transactions, spin-offs, direct listings, and those who complete a

traditional initial public offering.


WWW.ISSGOVERNANCE.COM		16 of 87


UNITED STATES Proxy Voting Guidelines

Other factors, as deemed appropriate, that may be relevant to determine the impact of the amendment on

shareholders.

Unless the adverse amendment is reversed or submitted to a binding shareholder vote, in subsequent years vote

case-by-case on director nominees. Generally vote against (except new nominees1, who should be considered

case-by-case) if the directors:

Classified the board;

Adopted supermajority vote requirements to amend the bylaws or charter;

Eliminated shareholders' ability to amend bylaws;

Adopted a fee-shifting provision; or

Adopted another provision deemed egregious.

Restricting Binding Shareholder Proposals: Generally vote against or withhold from the members of the governance

committee if:

The company’s governing documents impose undue restrictions on shareholders’ ability to amend the bylaws.

Such restrictions include but are not limited to: outright prohibition on the submission of binding shareholder

proposals or share ownership requirements, subject matter restrictions, or time holding requirements in

excess of SEC Rule 14a-8. Vote against or withhold on an ongoing basis.

Submission of management proposals to approve or ratify requirements in excess of SEC Rule 14a-8 for the

submission of binding bylaw amendments will generally be viewed as an insufficient restoration of shareholders'

rights. Generally continue to vote against or withhold on an ongoing basis until shareholders are provided with an

unfettered ability to amend the bylaws or a proposal providing for such unfettered right is submitted for

shareholder approval.

Director Performance Evaluation: The board lacks mechanisms to promote accountability and oversight,

coupled with sustained poor performance relative to peers. Sustained poor performance is measured by one-,

three-, and five-year total shareholder returns in the bottom half of a company’s four-digit GICS industry group

(Russell 3000 companies only). Take into consideration the company’s operational metrics and other factors as

warranted. Problematic provisions include but are not limited to:

A classified board structure;

A supermajority vote requirement;

Either a plurality vote standard in uncontested director elections, or a majority vote standard in contested

elections;

The inability of shareholders to call special meetings;

The inability of shareholders to act by written consent;

A multi-class capital structure; and/or

A non-shareholder-approved poison pill.

Management Proposals to Ratify Existing Charter or Bylaw Provisions: Vote against/withhold from individual

directors, members of the governance committee, or the full board, where boards ask shareholders to ratify

existing charter or bylaw provisions considering the following factors:

The presence of a shareholder proposal addressing the same issue on the same ballot;

The board's rationale for seeking ratification;

Disclosure of actions to be taken by the board should the ratification proposal fail;

Disclosure of shareholder engagement regarding the board’s ratification request;

The level of impairment to shareholders' rights caused by the existing provision;

The history of management and shareholder proposals on the provision at the company’s past meetings;

Whether the current provision was adopted in response to the shareholder proposal;

The company's ownership structure; and


WWW.ISSGOVERNANCE.COM		17 of 87


UNITED STATES Proxy Voting Guidelines

Previous use of ratification proposals to exclude shareholder proposals.

Problematic Audit-Related Practices

Generally vote against or withhold from the members of the Audit Committee if:

The non-audit fees paid to the auditor are excessive;

The company receives an adverse opinion on the company’s financial statements from its auditor; or

There is persuasive evidence that the Audit Committee entered into an inappropriate indemnification

agreement with its auditor that limits the ability of the company, or its shareholders, to pursue legitimate legal

recourse against the audit firm.

Vote case-by-case on members of the Audit Committee and potentially the full board if:

Poor accounting practices are identified that rise to a level of serious concern, such as: fraud; misapplication of

GAAP; and material weaknesses identified in Section 404 disclosures. Examine the severity, breadth,

chronological sequence, and duration, as well as the company’s efforts at remediation or corrective actions, in

determining whether withhold/against votes are warranted.

Problematic Compensation Practices

In the absence of an Advisory Vote on Executive Compensation (Say on Pay) ballot item or in egregious situations,

vote against or withhold from the members of the Compensation Committee and potentially the full board if:

There is an unmitigated misalignment between CEO pay and company performance (pay for performance);

The company maintains significant problematic pay practices; or

The board exhibits a significant level of poor communication and responsiveness to shareholders.

Generally vote against or withhold from the Compensation Committee chair, other committee members, or

potentially the full board if:

The company fails to include a Say on Pay ballot item when required under SEC provisions, or under the

company’s declared frequency of say on pay; or

The company fails to include a Frequency of Say on Pay ballot item when required under SEC provisions.

Generally vote against members of the board committee responsible for approving/setting non-employee director

compensation if there is a pattern (i.e. two or more consecutive or non-consecutive years/across multiple years) of

awarding excessive or otherwise problematic10 non-employee director compensation without disclosing a

compelling rationale or other mitigating factors.

Adverse recommendations may be warranted in the first year for particularly egregious director compensation

issues/instances/cases10.

Problematic Pledging of Company Stock : Vote against the members of the committee that oversees risks related

to pledging, or the full board, where a significant level of pledged company stock by executives or directors raises

concerns. The following factors will be considered:

The presence of an anti-pledging policy, disclosed in the proxy statement, that prohibits future pledging

activity;

The magnitude of aggregate pledged shares in terms of total common shares outstanding, market value, and

trading volume;

Disclosure of progress or lack thereof in reducing the magnitude of aggregate pledged shares over time;

___________________________________

10 May include excessive magnitude, problematic perquisites, performance awards, stock options, or retirement benefits.


WWW.ISSGOVERNANCE.COM		18 of 87


UNITED STATES Proxy Voting Guidelines

Disclosure in the proxy statement that shares subject to stock ownership and holding requirements do not

include pledged company stock; and

Any other relevant factors.

Climate Accountability

For companies that are significant greenhouse gas (GHG) emitters, through their operations or value chain11,

generally vote against or withhold from the incumbent chair of the responsible committee (or other directors on

a case-by-case basis) in cases where ISS determines that the company is not taking the minimum steps needed to

understand, assess, and mitigate risks related to climate change to the company and the larger economy.

Minimum steps to understand and mitigate those risks are considered to be the following. Both minimum criteria

will be required to be in alignment with the policy :

Detailed disclosure of climate-related risks, such as according to the framework established by the Task Force

on Climate-related Financial Disclosures (TCFD), including:

Board governance measures;

Corporate strategy;

Risk management analyses; and

Metrics and targets.

Appropriate GHG emissions reduction targets.

At this time, “appropriate GHG emissions reductions targets” will be medium-term GHG reduction targets or Net

Zero-by-2050 GHG reduction targets for a company's operations (Scope 1) and electricity use (Scope 2). Targets

should cover the vast majority of the company’s direct emissions.

Governance Failures

Under extraordinary circumstances, vote against or withhold from directors individually, committee members, or

the entire board, due to:

Material failures of governance, stewardship, risk oversight12, or fiduciary responsibilities at the company;

Failure to replace management as appropriate; or

Egregious actions related to a director’s service on other boards that raise substantial doubt about his or her

ability to effectively oversee management and serve the best interests of shareholders at any company.

Voting on Director Nominees in Contested Elections

Vote-No Campaigns

General Recommendation: In cases where companies are targeted in connection with public “vote-no” campaigns,

evaluate director nominees under the existing governance policies for voting on director nominees in uncontested

___________________________________

11 Companies defined as “significant GHG emitters” will be those on the current Climate Action 100+ Focus Group list.

12 Examples of failure of risk oversight include but are not limited to: bribery; large or serial fines or sanctions from regulatory

bodies; demonstrably poor risk oversight of environmental and social issues, including climate change; significant adverse legal

judgments or settlement; or hedging of company stock.


WWW.ISSGOVERNANCE.COM		19 of 87


UNITED STATES Proxy Voting Guidelines

elections. Take into consideration the arguments submitted by shareholders and other publicly available

information.

Proxy Contests/Proxy Access

General Recommendation: Vote case-by-case on the election of directors in contested elections, considering the

following factors:

Long-term financial performance of the company relative to its industry;

Management’s track record;

Background to the contested election;

Nominee qualifications and any compensatory arrangements;

Strategic plan of dissident slate and quality of the critique against management;

Likelihood that the proposed goals and objectives can be achieved (both slates); and

Stock ownership positions.

In the case of candidates nominated pursuant to proxy access, vote case-by-case considering any applicable factors

listed above or additional factors which may be relevant, including those that are specific to the company, to the

nominee(s) and/or to the nature of the election (such as whether there are more candidates than board seats).

Other Board-Related Proposals

Adopt Anti-Hedging/Pledging/Speculative Investments Policy

General Recommendation: Generally vote for proposals seeking a policy that prohibits named executive officers

from engaging in derivative or speculative transactions involving company stock, including hedging, holding stock

in a margin account, or pledging stock as collateral for a loan. However, the company’s existing policies regarding

responsible use of company stock will be considered.

Board Refreshment

Board refreshment is best implemented through an ongoing program of individual director evaluations, conducted

annually, to ensure the evolving needs of the board are met and to bring in fresh perspectives, skills, and diversity

as needed.

Term/Tenure Limits

General Recommendation: Vote case-by-case on management proposals regarding director term/tenure limits,

considering:

The rationale provided for adoption of the term/tenure limit;

The robustness of the company’s board evaluation process;

Whether the limit is of sufficient length to allow for a broad range of director tenures;

Whether the limit would disadvantage independent directors compared to non-independent directors; and


WWW.ISSGOVERNANCE.COM		20 of 87


UNITED STATES Proxy Voting Guidelines

Whether the board will impose the limit evenly, and not have the ability to waive it in a discriminatory

manner.

Vote case-by-case on shareholder proposals asking for the company to adopt director term/tenure limits,

considering:

The scope of the shareholder proposal; and

Evidence of problematic issues at the company combined with, or exacerbated by, a lack of board

refreshment.

Age Limits

General Recommendation: Generally vote against management and shareholder proposals to limit the tenure of

independent directors through mandatory retirement ages. Vote for proposals to remove mandatory age limits.

Board Size

General Recommendation: Vote for proposals seeking to fix the board size or designate a range for the board size.

Vote against proposals that give management the ability to alter the size of the board outside of a specified range

without shareholder approval.

Classification/Declassification of the Board

General Recommendation: Vote against proposals to classify (stagger) the board.

Vote for proposals to repeal classified boards and to elect all directors annually.

CEO Succession Planning

General Recommendation: Generally vote for proposals seeking disclosure on a CEO succession planning policy,

considering, at a minimum, the following factors:

The reasonableness/scope of the request; and

The company’s existing disclosure on its current CEO succession planning process.

Cumulative Voting

General Recommendation: Generally vote against management proposals to eliminate cumulate voting, and for

shareholder proposals to restore or provide for cumulative voting, unless:


WWW.ISSGOVERNANCE.COM		21 of 87


UNITED STATES Proxy Voting Guidelines

The company has proxy access13, thereby allowing shareholders to nominate directors to the company’s

ballot; and

The company has adopted a majority vote standard, with a carve-out for plurality voting in situations where

there are more nominees than seats, and a director resignation policy to address failed elections.

Vote for proposals for cumulative voting at controlled companies (insider voting power > 50%).

Director and Officer Indemnification, Liability Protection, and Exculpation

General Recommendation: Vote case-by-case on proposals on director and officer indemnification, liability

protection, and exculpation14.

Consider the stated rationale for the proposed change. Also consider, among other factors, the extent to which the

proposal would:

Eliminate directors' and officers' liability for monetary damages for violating the duty of care;

Eliminate directors’ and officers’ liability for monetary damages for violating the duty of loyalt;

Expand coverage beyond just legal expenses to liability for acts that are more serious violations of fiduciary

obligation than mere carelessness; and

Expand the scope of indemnification to provide for mandatory indemnification of company officials in

connection with acts that previously the company was permitted to provide indemnification for, at the

discretion of the company's board (i.e., "permissive indemnification"), but that previously the company was

not required to indemnify.

Vote for those proposals providing such expanded coverage in cases when a director’s or officer’s legal defense

was unsuccessful if both of the following apply:

If the individual was found to have acted in good faith and in a manner that the individual reasonably

believed was in the best interests of the company; and

If only the individual’s legal expenses would be covered.

Establish/Amend Nominee Qualifications

General Recommendation: Vote case-by-case on proposals that establish or amend director qualifications. Votes

should be based on the reasonableness of the criteria and the degree to which they may preclude dissident

nominees from joining the board.

Vote case-by-case on shareholder resolutions seeking a director nominee who possesses a particular subject

matter expertise, considering:

___________________________________

13 A proxy access right that meets the recommended guidelines.

14 Indemnification: the condition of being secured against loss or damage.

Limited liability: a person's financial liability is limited to a fixed sum, or personal financial assets are not at risk if the individual

loses a lawsuit that results in financial award/damages to the plaintiff.

Exculpation: to eliminate or limit the personal liability of a director or officer to the corporation or its shareholders for

monetary damages for breach of fiduciary duty as a director or officer.


WWW.ISSGOVERNANCE.COM		22 of 87


UNITED STATES Proxy Voting Guidelines

The company’s board committee structure, existing subject matter expertise, and board nomination

provisions relative to that of its peers;

The company’s existing board and management oversight mechanisms regarding the issue for which board

oversight is sought;

The company’s disclosure and performance relating to the issue for which board oversight is sought and any

significant related controversies; and

The scope and structure of the proposal.

Establish Other Board Committee Proposals

General Recommendation: Generally vote against shareholder proposals to establish a new board committee, as

such proposals seek a specific oversight mechanism/structure that potentially limits a company’s flexibility to

determine an appropriate oversight mechanism for itself. However, the following factors will be considered:

Existing oversight mechanisms (including current committee structure) regarding the issue for which board

oversight is sought;

Level of disclosure regarding the issue for which board oversight is sought;

Company performance related to the issue for which board oversight is sought;

Board committee structure compared to that of other companies in its industry sector; and

The scope and structure of the proposal.

Filling Vacancies/Removal of Directors

General Recommendation: Vote against proposals that provide that directors may be removed only for cause.

Vote for proposals to restore shareholders’ ability to remove directors with or without cause.

Vote against proposals that provide that only continuing directors may elect replacements to fill board vacancies.

Vote for proposals that permit shareholders to elect directors to fill board vacancies.

Independent Board Chair

General Recommendation: Generally vote for shareholder proposals requiring that the board chair position be

filled by an independent director, taking into consideration the following:

The scope and rationale of the proposal;

The company's current board leadership structure;

The company's governance structure and practices;

Company performance; and

Any other relevant factors that may be applicable.

The following factors will increase the likelihood of a “for” recommendation:

A majority non-independent board and/or the presence of non-independent directors on key board

committees;

A weak or poorly-defined lead independent director role that fails to serve as an appropriate counterbalance

to a combined CEO/chair role;

The presence of an executive or non-independent chair in addition to the CEO, a recent recombination of the

role of CEO and chair, and/or departure from a structure with an independent chair;


WWW.ISSGOVERNANCE.COM		23 of 87


UNITED STATES Proxy Voting Guidelines

Evidence that the board has failed to oversee and address material risks facing the company;

A material governance failure, particularly if the board has failed to adequately respond to shareholder

concerns or if the board has materially diminished shareholder rights; or

Evidence that the board has failed to intervene when management’s interests are contrary to shareholders'

interests.

Majority of Independent Directors/Establishment of Independent

Committees

General Recommendation: Vote for shareholder proposals asking that a majority or more of directors be

independent unless the board composition already meets the proposed threshold by ISS’ definition of Independent

Director (See ISS' Classification of Directors.)

Vote for shareholder proposals asking that board audit, compensation, and/or nominating committees be

composed exclusively of independent directors unless they currently meet that standard.

Majority Vote Standard for the Election of Directors

General Recommendation: Generally vote for management proposals to adopt a majority of votes cast standard

for directors in uncontested elections. Vote against if no carve-out for a plurality vote standard in contested

elections is included.

Generally vote for precatory and binding shareholder resolutions requesting that the board change the company’s

bylaws to stipulate that directors need to be elected with an affirmative majority of votes cast, provided it does

not conflict with the state law where the company is incorporated. Binding resolutions need to allow for a carve-

out for a plurality vote standard when there are more nominees than board seats.

Companies are strongly encouraged to also adopt a post-election policy (also known as a director resignation

policy) that will provide guidelines so that the company will promptly address the situation of a holdover director.

Proxy Access

General Recommendation: Generally vote for management and shareholder proposals for proxy access with the

following provisions:

Ownership threshold: maximum requirement not more than three percent (3%) of the voting power;

Ownership duration: maximum requirement not longer than three (3) years of continuous ownership for each

member of the nominating group;

Aggregation: minimal or no limits on the number of shareholders permitted to form a nominating group; and

Cap: cap on nominees of generally twenty-five percent (25%) of the board.

Review for reasonableness any other restrictions on the right of proxy access. Generally vote against proposals

that are more restrictive than these guidelines.


WWW.ISSGOVERNANCE.COM		25 of 87


UNITED STATES Proxy Voting Guidelines

2.Audit-Related

Auditor Indemnification and Limitation of Liability

General Recommendation: Vote case-by-case on the issue of auditor indemnification and limitation of liability.

Factors to be assessed include, but are not limited to:

The terms of the auditor agreement—the degree to which these agreements impact shareholders' rights;

The motivation and rationale for establishing the agreements;

The quality of the company’s disclosure; and

The company’s historical practices in the audit area.

Vote against or withhold from members of an audit committee in situations where there is persuasive evidence

that the audit committee entered into an inappropriate indemnification agreement with its auditor that limits the

ability of the company, or its shareholders, to pursue legitimate legal recourse against the audit firm.

Auditor Ratification

General Recommendation: Vote for proposals to ratify auditors unless any of the following apply:

An auditor has a financial interest in or association with the company, and is therefore not independent;

There is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor

indicative of the company’s financial position;

Poor accounting practices are identified that rise to a serious level of concern, such as fraud or misapplication

of GAAP; or

Fees for non-audit services (“Other” fees) are excessive.

Non-audit fees are excessive if:

Non-audit (“other”) fees > audit fees + audit-related fees + tax compliance/preparation fees

Tax compliance and preparation include the preparation of original and amended tax returns and refund claims,

and tax payment planning. All other services in the tax category, such as tax advice, planning, or consulting, should

be added to “Other” fees. If the breakout of tax fees cannot be determined, add all tax fees to “Other” fees.

In circumstances where "Other" fees include fees related to significant one-time capital structure events (such as

initial public offerings, bankruptcy emergence, and spin-offs) and the company makes public disclosure of the

amount and nature of those fees that are an exception to the standard "non-audit fee" category, then such fees

may be excluded from the non-audit fees considered in determining the ratio of non-audit to audit/audit-related

fees/tax compliance and preparation for purposes of determining whether non-audit fees are excessive.

Shareholder Proposals Limiting Non-Audit Services

General Recommendation: Vote case-by-case on shareholder proposals asking companies to prohibit or limit their

auditors from engaging in non-audit services.


WWW.ISSGOVERNANCE.COM		27 of 87


UNITED STATES Proxy Voting Guidelines

3.Shareholder Rights & Defenses

Advance Notice Requirements for Shareholder Proposals/Nominations

General Recommendation: Vote case-by-case on advance notice proposals, giving support to those proposals

which allow shareholders to submit proposals/nominations as close to the meeting date as reasonably possible

and within the broadest window possible, recognizing the need to allow sufficient notice for company, regulatory,

and shareholder review.

To be reasonable, the company’s deadline for shareholder notice of a proposal/nominations must be no earlier

than 120 days prior to the anniversary of the previous year’s meeting and have a submittal window of no shorter

than 30 days from the beginning of the notice period (also known as a 90-120-day window). The submittal window

is the period under which shareholders must file their proposals/nominations prior to the deadline.

In general, support additional efforts by companies to ensure full disclosure in regard to a proponent’s economic

and voting position in the company so long as the informational requirements are reasonable and aimed at

providing shareholders with the necessary information to review such proposals.

Amend Bylaws without Shareholder Consent

General Recommendation: Vote against proposals giving the board exclusive authority to amend the bylaws.

Vote case-by-case on proposals giving the board the ability to amend the bylaws in addition to shareholders, taking

into account the following:

Any impediments to shareholders' ability to amend the bylaws (i.e. supermajority voting requirements);

The company's ownership structure and historical voting turnout;

Whether the board could amend bylaws adopted by shareholders; and

Whether shareholders would retain the ability to ratify any board-initiated amendments.

Control Share Acquisition Provisions

General Recommendation: Vote for proposals to opt out of control share acquisition statutes unless doing so

would enable the completion of a takeover that would be detrimental to shareholders.

Vote against proposals to amend the charter to include control share acquisition provisions.

Vote for proposals to restore voting rights to the control shares.

Control share acquisition statutes function by denying shares their voting rights when they contribute to

ownership in excess of certain thresholds. Voting rights for those shares exceeding ownership limits may only be

restored by approval of either a majority or supermajority of disinterested shares. Thus, control share acquisition

statutes effectively require a hostile bidder to put its offer to a shareholder vote or risk voting disenfranchisement

if the bidder continues buying up a large block of shares.


WWW.ISSGOVERNANCE.COM		28 of 87


UNITED STATES Proxy Voting Guidelines

Control Share Cash-Out Provisions

General Recommendation: Vote for proposals to opt out of control share cash-out statutes.

Control share cash-out statutes give dissident shareholders the right to "cash-out" of their position in a company

at the expense of the shareholder who has taken a control position. In other words, when an investor crosses a

preset threshold level, remaining shareholders are given the right to sell their shares to the acquirer, who must

buy them at the highest acquiring price.

Disgorgement Provisions

General Recommendation: Vote for proposals to opt out of state disgorgement provisions.

Disgorgement provisions require an acquirer or potential acquirer of more than a certain percentage of a

company's stock to disgorge, or pay back, to the company any profits realized from the sale of that company's

stock purchased 24 months before achieving control status. All sales of company stock by the acquirer occurring

within a certain period of time (between 18 months and 24 months) prior to the investor's gaining control status

are subject to these recapture-of-profits provisions.

Fair Price Provisions

General Recommendation: Vote case-by-case on proposals to adopt fair price provisions (provisions that stipulate

that an acquirer must pay the same price to acquire all shares as it paid to acquire the control shares), evaluating

factors such as the vote required to approve the proposed acquisition, the vote required to repeal the fair price

provision, and the mechanism for determining the fair price.

Generally vote against fair price provisions with shareholder vote requirements greater than a majority of

disinterested shares.

Freeze-Out Provisions

General Recommendation: Vote for proposals to opt out of state freeze-out provisions. Freeze-out provisions

force an investor who surpasses a certain ownership threshold in a company to wait a specified period of

time before gaining control of the company.

Greenmail

General Recommendation: Vote for proposals to adopt anti-greenmail charter or bylaw amendments or otherwise

restrict a company’s ability to make greenmail payments.

Vote case-by-case on anti-greenmail proposals when they are bundled with other charter or bylaw amendments.


WWW.ISSGOVERNANCE.COM		29 of 87


UNITED STATES Proxy Voting Guidelines

Greenmail payments are targeted share repurchases by management of company stock from individuals or groups

seeking control of the company. Since only the hostile party receives payment, usually at a substantial premium

over the market value of its shares, the practice discriminates against all other shareholders.

Shareholder Litigation Rights

Federal Forum Selection Provisions

Federal forum selection provisions require that U.S. federal courts be the sole forum for shareholders to litigate

claims arising under federal securities law.

General Recommendation: Generally vote for federal forum selection provisions in the charter or bylaws that

specify "the district courts of the United States" as the exclusive forum for federal securities law matters, in the

absence of serious concerns about corporate governance or board responsiveness to shareholders.

Vote against provisions that restrict the forum to a particular federal district court; unilateral adoption (without a

shareholder vote) of such a provision will generally be considered a one-time failure under the Unilateral Bylaw/

Charter Amendments policy.

Exclusive Forum Provisions for State Law Matters

Exclusive forum provisions in the charter or bylaws restrict shareholders’ ability to bring derivative lawsuits against

the company, for claims arising out of state corporate law, to the courts of a particular state (generally the state of

incorporation).

General Recommendation: Generally vote for charter or bylaw provisions that specify courts located within the

state of Delaware as the exclusive forum for corporate law matters for Delaware corporations, in the absence of

serious concerns about corporate governance or board responsiveness to shareholders.

For states other than Delaware, vote case-by-case on exclusive forum provisions, taking into consideration:

The company's stated rationale for adopting such a provision;

Disclosure of past harm from duplicative shareholder lawsuits in more than one forum;

The breadth of application of the charter or bylaw provision, including the types of lawsuits to which it

would apply and the definition of key terms; and

Governance features such as shareholders' ability to repeal the provision at a later date (including the vote

standard applied when shareholders attempt to amend the charter or bylaws) and their ability to hold

directors accountable through annual director elections and a majority vote standard in uncontested

elections.

Generally vote against provisions that specify a state other than the state of incorporation as the exclusive forum

for corporate law matters, or that specify a particular local court within the state; unilateral adoption of such a

provision will generally be considered a one-time failure under the Unilateral Bylaw/Charter Amendments policy.

Fee shifting

Fee-shifting provisions in the charter or bylaws require that a shareholder who sues a company unsuccessfully pay

all litigation expenses of the defendant corporation and its directors and officers.


WWW.ISSGOVERNANCE.COM		30 of 87


UNITED STATES Proxy Voting Guidelines

General Recommendation: Generally vote against provisions that mandate fee-shifting whenever plaintiffs are not

completely successful on the merits (i.e., including cases where the plaintiffs are partially successful).

Unilateral adoption of a fee-shifting provision will generally be considered an ongoing failure under the Unilateral

Bylaw/Charter Amendments policy.

Net Operating Loss (NOL) Protective Amendments

General Recommendation: Vote against proposals to adopt a protective amendment for the stated purpose of

protecting a company's net operating losses (NOL) if the effective term of the protective amendment would

exceed the shorter of three years and the exhaustion of the NOL.

Vote case-by-case, considering the following factors, for management proposals to adopt an NOL protective

amendment that would remain in effect for the shorter of three years (or less) and the exhaustion of the NOL:

The ownership threshold (NOL protective amendments generally prohibit stock ownership transfers that

would result in a new 5-percent holder or increase the stock ownership percentage of an existing 5-percent

holder);

The value of the NOLs;

Shareholder protection mechanisms (sunset provision or commitment to cause expiration of the protective

amendment upon exhaustion or expiration of the NOL);

The company's existing governance structure including: board independence, existing takeover defenses, track

record of responsiveness to shareholders, and any other problematic governance concerns; and

Any other factors that may be applicable.

Poison Pills (Shareholder Rights Plans)

Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy

General Recommendation: Vote for shareholder proposals requesting that the company submit its poison pill to a

shareholder vote or redeem it unless the company has: (1) A shareholder-approved poison pill in place; or (2) The

company has adopted a policy concerning the adoption of a pill in the future specifying that the board will only

adopt a shareholder rights plan if either:

Shareholders have approved the adoption of the plan; or

The board, in its exercise of its fiduciary responsibilities, determines that it is in the best interest of

shareholders under the circumstances to adopt a pill without the delay in adoption that would result from

seeking stockholder approval (i.e., the “fiduciary out” provision). A poison pill adopted under this fiduciary out

will be put to a shareholder ratification vote within 12 months of adoption or expire. If the pill is not approved

by a majority of the votes cast on this issue, the plan will immediately terminate.

If the shareholder proposal calls for a time period of less than 12 months for shareholder ratification after

adoption, vote for the proposal, but add the caveat that a vote within 12 months would be considered sufficient

implementation.


WWW.ISSGOVERNANCE.COM		31 of 87


UNITED STATES Proxy Voting Guidelines

Management Proposals to Ratify a Poison Pill

General Recommendation: Vote case-by-case on management proposals on poison pill ratification, focusing on

the features of the shareholder rights plan. Rights plans should contain the following attributes:

No lower than a 20 percent trigger, flip-in or flip-over;

A term of no more than three years;

No deadhand, slowhand, no-hand, or similar feature that limits the ability of a future board to redeem the pill;

and

Shareholder redemption feature (qualifying offer clause); if the board refuses to redeem the pill 90 days after

a qualifying offer is announced, 10 percent of the shares may call a special meeting or seek a written consent

to vote on rescinding the pill.

In addition, the rationale for adopting the pill should be thoroughly explained by the company. In examining the

request for the pill, take into consideration the company’s existing governance structure, including: board

independence, existing takeover defenses, and any problematic governance concerns.

Management Proposals to Ratify a Pill to Preserve Net Operating Losses

(NOLs)

General Recommendation: Vote against proposals to adopt a poison pill for the stated purpose of protecting a

company's net operating losses (NOL) if the term of the pill would exceed the shorter of three years and the

exhaustion of the NOL.

Vote case-by-case on management proposals for poison pill ratification, considering the following factors, if the

term of the pill would be the shorter of three years (or less) and the exhaustion of the NOL:

The ownership threshold to transfer (NOL pills generally have a trigger slightly below 5 percent);

The value of the NOLs;

Shareholder protection mechanisms (sunset provision, or commitment to cause expiration of the pill upon

exhaustion or expiration of NOLs);

The company's existing governance structure, including: board independence, existing takeover defenses,

track record of responsiveness to shareholders, and any other problematic governance concerns; and

Any other factors that may be applicable.

Proxy Voting Disclosure, Confidentiality, and Tabulation

General Recommendation: Vote case-by-case on proposals regarding proxy voting mechanics, taking into

consideration whether implementation of the proposal is likely to enhance or protect shareholder rights. Specific

issues covered under the policy include, but are not limited to, confidential voting of individual proxies and ballots,

confidentiality of running vote tallies, and the treatment of abstentions and/or broker non-votes in the company's

vote-counting methodology.

While a variety of factors may be considered in each analysis, the guiding principles are: transparency, consistency,

and fairness in the proxy voting process. The factors considered, as applicable to the proposal, may include:

The scope and structure of the proposal;


WWW.ISSGOVERNANCE.COM		32 of 87


UNITED STATES Proxy Voting Guidelines

The company's stated confidential voting policy (or other relevant policies) and whether it ensures a "level

playing field" by providing shareholder proponents with equal access to vote information prior to the annual

meeting;

The company's vote standard for management and shareholder proposals and whether it ensures consistency

and fairness in the proxy voting process and maintains the integrity of vote results;

Whether the company's disclosure regarding its vote counting method and other relevant voting policies with

respect to management and shareholder proposals are consistent and clear;

Any recent controversies or concerns related to the company's proxy voting mechanics;

Any unintended consequences resulting from implementation of the proposal; and

Any other factors that may be relevant.

Ratification Proposals: Management Proposals to Ratify Existing Charter or

Bylaw Provisions

General Recommendation: Generally vote against management proposals to ratify provisions of the company’s

existing charter or bylaws, unless these governance provisions align with best practice.

In addition, voting against/withhold from individual directors, members of the governance committee, or the full

board may be warranted, considering:

The presence of a shareholder proposal addressing the same issue on the same ballot;

The board's rationale for seeking ratification;

Disclosure of actions to be taken by the board should the ratification proposal fail;

Disclosure of shareholder engagement regarding the board’s ratification request;

The level of impairment to shareholders' rights caused by the existing provision;

The history of management and shareholder proposals on the provision at the company’s past meetings;

Whether the current provision was adopted in response to the shareholder proposal;

The company's ownership structure; and

Previous use of ratification proposals to exclude shareholder proposals.

Reimbursing Proxy Solicitation Expenses

General Recommendation: Vote case-by-case on proposals to reimburse proxy solicitation expenses.

When voting in conjunction with support of a dissident slate, vote for the reimbursement of all appropriate proxy

solicitation expenses associated with the election.

Generally vote for shareholder proposals calling for the reimbursement of reasonable costs incurred in connection

with nominating one or more candidates in a contested election where the following apply:

The election of fewer than 50 percent of the directors to be elected is contested in the election;

One or more of the dissident’s candidates is elected;

Shareholders are not permitted to cumulate their votes for directors; and

The election occurred, and the expenses were incurred, after the adoption of this bylaw.


WWW.ISSGOVERNANCE.COM		33 of 87


UNITED STATES Proxy Voting Guidelines

Reincorporation Proposals

General Recommendation: Management or shareholder proposals to change a company's state of incorporation

should be evaluated case-by-case, giving consideration to both financial and corporate governance concerns

including the following:

Reasons for reincorporation;

Comparison of company's governance practices and provisions prior to and following the reincorporation; and

Comparison of corporation laws of original state and destination state.

Vote for reincorporation when the economic factors outweigh any neutral or negative governance changes.

Shareholder Ability to Act by Written Consent

General Recommendation: Generally vote against management and shareholder proposals to restrict or prohibit

shareholders' ability to act by written consent.

Generally vote for management and shareholder proposals that provide shareholders with the ability to act by

written consent, taking into account the following factors:

Shareholders' current right to act by written consent;

The consent threshold;

The inclusion of exclusionary or prohibitive language;

Investor ownership structure; and

Shareholder support of, and management's response to, previous shareholder proposals.

Vote case-by-case on shareholder proposals if, in addition to the considerations above, the company has the

following governance and antitakeover provisions:

An unfettered15 right for shareholders to call special meetings at a 10 percent threshold;

A majority vote standard in uncontested director elections;

No non-shareholder-approved pill; and

An annually elected board.

Shareholder Ability to Call Special Meetings

General Recommendation: Vote against management or shareholder proposals to restrict or prohibit

shareholders’ ability to call special meetings.

Generally vote for management or shareholder proposals that provide shareholders with the ability to call special

meetings taking into account the following factors:

Shareholders’ current right to call special meetings;

___________________________________

15 "Unfettered" means no restrictions on agenda items, no restrictions on the number of shareholders who can group together

to reach the 10 percent threshold, and only reasonable limits on when a meeting can be called: no greater than 30 days after

the last annual meeting and no greater than 90 prior to the next annual meeting.


WWW.ISSGOVERNANCE.COM		34 of 87


UNITED STATES Proxy Voting Guidelines

Minimum ownership threshold necessary to call special meetings (10 percent preferred);

The inclusion of exclusionary or prohibitive language;

Investor ownership structure; and

Shareholder support of, and management’s response to, previous shareholder proposals.

Stakeholder Provisions

General Recommendation: Vote against proposals that ask the board to consider non-shareholder constituencies

or other non-financial effects when evaluating a merger or business combination.

State Antitakeover Statutes

General Recommendation: Vote case-by-case on proposals to opt in or out of state takeover statutes (including

fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, and

anti-greenmail provisions).

Supermajority Vote Requirements

General Recommendation: Vote against proposals to require a supermajority shareholder vote.

Vote for management or shareholder proposals to reduce supermajority vote requirements. However, for

companies with shareholder(s) who have significant ownership levels, vote case-by-case, taking into account:

Ownership structure;

Quorum requirements; and

Vote requirements.

Virtual Shareholder Meetings

General Recommendation: Generally vote for management proposals allowing for the convening of shareholder

meetings by electronic means, so long as they do not preclude in-person meetings. Companies are encouraged to

disclose the circumstances under which virtual-only16 meetings would be held, and to allow for comparable rights

and opportunities for shareholders to participate electronically as they would have during an in-person meeting.

Vote case-by-case on shareholder proposals concerning virtual-only meetings, considering:

Scope and rationale of the proposal; and

Concerns identified with the company’s prior meeting practices.

___________________________________

16 Virtual-only shareholder meeting” refers to a meeting of shareholders that is held exclusively using technology without a

corresponding in-person meeting.


WWW.ISSGOVERNANCE.COM		35 of 87


UNITED STATES Proxy Voting Guidelines

4.Capital/Restructuring

Capital

Adjustments to Par Value of Common Stock

General Recommendation: Vote for management proposals to reduce the par value of common stock unless the

action is being taken to facilitate an anti-takeover device or some other negative corporate governance action.

Vote for management proposals to eliminate par value.

Common Stock Authorization

General Authorization Requests

General Recommendation: Vote case-by-case on proposals to increase the number of authorized shares of

common stock that are to be used for general corporate purposes:

If share usage (outstanding plus reserved) is less than 50% of the current authorized shares, vote for an

increase of up to 50% of current authorized share;

If share usage is 50% to 100% of the current authorized, vote for an increase of up to 100% of current

authorized shares;

If share usage is greater than current authorized shares, vote for an increase of up to the current share usage;

In the case of a stock split, the allowable increase is calculated (per above) based on the post-split adjusted

authorization.

Generally vote against proposed increases, even if within the above ratios, if the proposal or the company’s prior

or ongoing use of authorized shares is problematic, including, but not limited to:

The proposal seeks to increase the number of authorized shares of the class of common stock that

has superior voting rights to other share classes;

On the same ballot is a proposal for a reverse split for which support is warranted despite the fact that it

would result in an excessive increase in the share authorization;

The company has a non-shareholder approved poison pill (including an NOL pill); or

The company has previous sizeable placements (within the past 3 years) of stock with insiders at prices

substantially below market value, or with problematic voting rights, without shareholder approval.

However, generally vote for proposed increases beyond the above ratios or problematic situations when there is

disclosure of specific and severe risks to shareholders of not approving the request, such as:

In, or subsequent to, the company's most recent 10-K filing, the company discloses that there is substantial

doubt about its ability to continue as a going concern;

The company states that there is a risk of imminent bankruptcy or imminent liquidation if shareholders do not

approve the increase in authorized capital; or

A government body has in the past year required the company to increase its capital ratios.


WWW.ISSGOVERNANCE.COM		36 of 87


UNITED STATES Proxy Voting Guidelines

For companies incorporated in states that allow increases in authorized capital without shareholder approval,

generally vote withhold or against all nominees if a unilateral capital authorization increase does not conform to

the above policies.

Specific Authorization Requests

General Recommendation: Generally vote for proposals to increase the number of authorized common shares

where the primary purpose of the increase is to issue shares in connection with transaction(s) (such as

acquisitions, SPAC transactions, private placements, or similar transactions) on the same ballot, or disclosed in the

proxy statement, that warrant support. For such transactions, the allowable increase will be the greater of:

twice the amount needed to support the transactions on the ballot, and

the allowable increase as calculated for general issuances above.

Dual Class Structure

General Recommendation: Generally vote against proposals to create a new class of common stock unless:

The company discloses a compelling rationale for the dual-class capital structure, such as:

The company's auditor has concluded that there is substantial doubt about the company's ability to continue

as a going concern; or

The new class of shares will be transitory;

The new class is intended for financing purposes with minimal or no dilution to current shareholders in both

the short term and long term; and

The new class is not designed to preserve or increase the voting power of an insider or significant shareholder.

Issue Stock for Use with Rights Plan

General Recommendation: Vote against proposals that increase authorized common stock for the explicit purpose

of implementing a non-shareholder-approved shareholder rights plan (poison pill).

Preemptive Rights

General Recommendation: Vote case-by-case on shareholder proposals that seek preemptive rights, taking into

consideration:

The size of the company;

The shareholder base; and

The liquidity of the stock.


WWW.ISSGOVERNANCE.COM		37 of 87


UNITED STATES Proxy Voting Guidelines

Preferred Stock Authorization

General Authorization Requests

General Recommendation: Vote case-by-case on proposals to increase the number of authorized shares of

preferred stock that are to be used for general corporate purposes:

If share usage (outstanding plus reserved) is less than 50% of the current authorized shares, vote for an

increase of up to 50% of current authorized shares;

If share usage is 50% to 100% of the current authorized, vote for an increase of up to 100% of current

authorized shares;

If share usage is greater than current authorized shares, vote for an increase of up to the current share usage.

In the case of a stock split, the allowable increase is calculated (per above) based on the post-split adjusted

authorization; or

If no preferred shares are currently issued and outstanding, vote against the request, unless the company

discloses a specific use for the shares.

Generally vote against proposed increases, even if within the above ratios, if the proposal or the company’s prior

or ongoing use of authorized shares is problematic, including, but not limited to:

If the shares requested are blank check preferred shares that can be used for antitakeover purposes;17

The company seeks to increase a class of non-convertible preferred shares entitled to more than one vote per

share on matters that do not solely affect the rights of preferred stockholders "supervoting shares");

The company seeks to increase a class of convertible preferred shares entitled to a number of votes greater

than the number of common shares into which they are convertible ("supervoting shares") on matters that do

not solely affect the rights of preferred stockholders;

The stated intent of the increase in the general authorization is to allow the company to increase an existing

designated class of supervoting preferred shares;

On the same ballot is a proposal for a reverse split for which support is warranted despite the fact that it

would result in an excessive increase in the share authorization;

The company has a non-shareholder approved poison pill (including an NOL pill); and

The company has previous sizeable placements (within the past 3 years) of stock with insiders at prices

substantially below market value, or with problematic voting rights, without shareholder approval.

However, generally vote for proposed increases beyond the above ratios or problematic situations when there is

disclosure of specific and severe risks to shareholders of not approving the request, such as:

In, or subsequent to, the company's most recent 10-K filing, the company discloses that there is substantial

doubt about its ability to continue as a going concern;

The company states that there is a risk of imminent bankruptcy or imminent liquidation if shareholders do not

approve the increase in authorized capital; or

A government body has in the past year required the company to increase its capital ratios.

For companies incorporated in states that allow increases in authorized capital without shareholder approval,

generally vote withhold or against all nominees if a unilateral capital authorization increase does not conform to

the above policies.

___________________________________

17 To be acceptable, appropriate disclosure would be needed that the shares are “declawed”: i.e., representation by the board

that it will not, without prior stockholder approval, issue or use the preferred stock for any defensive or anti-takeover purpose

or for the purpose of implementing any stockholder rights plan.


WWW.ISSGOVERNANCE.COM		38 of 87


UNITED STATES Proxy Voting Guidelines

Specific Authorization Requests

General Recommendation: Generally vote for proposals to increase the number of authorized preferred shares

where the primary purpose of the increase is to issue shares in connection with transaction(s) (such as

acquisitions, SPAC transactions, private placements, or similar transactions) on the same ballot, or disclosed in the

proxy statement, that warrant support. For such transactions, the allowable increase will be the greater of:

twice the amount needed to support the transactions on the ballot, and

the allowable increase as calculated for general issuances above.

Recapitalization Plans

General Recommendation: Vote case-by-case on recapitalizations (reclassifications of securities), taking into

account the following:

More simplified capital structure;

Enhanced liquidity;

Fairness of conversion terms;

Impact on voting power and dividends;

Reasons for the reclassification;

Conflicts of interest; and

Other alternatives considered.

Reverse Stock Splits

General Recommendation: Vote for management proposals to implement a reverse stock split if:

The number of authorized shares will be proportionately reduced; or

The effective increase in authorized shares is equal to or less than the allowable increase calculated

in accordance with ISS' Common Stock Authorization policy.

Vote case-by-case on proposals that do not meet either of the above conditions, taking into consideration the

following factors:

Stock exchange notification to the company of a potential delisting;

Disclosure of substantial doubt about the company's ability to continue as a going concern without additional

financing;

The company's rationale; or

Other factors as applicable.

Share Issuance Mandates at U.S. Domestic Issuers Incorporated Outside the

U.S.

General Recommendation: For U.S. domestic issuers incorporated outside the U.S. and listed solely on a U.S.

exchange, generally vote for resolutions to authorize the issuance of common shares up to 20 percent of currently

issued common share capital, where not tied to a specific transaction or financing proposal.


WWW.ISSGOVERNANCE.COM		39 of 87


UNITED STATES Proxy Voting Guidelines

For pre-revenue or other early-stage companies that are heavily reliant on periodic equity financing, generally vote

for resolutions to authorize the issuance of common shares up to 50 percent of currently issued common share

capital. The burden of proof will be on the company to establish that it has a need for the higher limit.

Renewal of such mandates should be sought at each year’s annual meeting.

Vote case-by-case on share issuances for a specific transaction or financing proposal.

Share Repurchase Programs

General Recommendation: For U.S.-incorporated companies, and foreign-incorporated U.S. Domestic Issuers that

are traded solely on U.S. exchanges, vote for management proposals to institute open-market share repurchase

plans in which all shareholders may participate on equal terms, or to grant the board authority to conduct open-

market repurchases, in the absence of company-specific concerns regarding:

Greenmail;

The use of buybacks to inappropriately manipulate incentive compensation metrics;

Threats to the company's long-term viability; or

Other company-specific factors as warranted.

Vote case-by-case on proposals to repurchase shares directly from specified shareholders, balancing the stated

rationale against the possibility for the repurchase authority to be misused, such as to repurchase shares from

insiders at a premium to market price.

Share Repurchase Programs Shareholder Proposals

General Recommendation: Generally vote against shareholder proposals prohibiting executives from selling

shares of company stock during periods in which the company has announced that it may or will be repurchasing

shares of its stock. Vote for the proposal when there is a pattern of abuse by executives exercising options or

selling shares during periods of share buybacks.

Stock Distributions: Splits and Dividends

General Recommendation: Generally vote for management proposals to increase the common share

authorization for stock split or stock dividend, provided that the effective increase in authorized shares is equal to

or is less than the allowable increase calculated in accordance with ISS' Common Stock Authorization policy.


WWW.ISSGOVERNANCE.COM		40 of 87


UNITED STATES Proxy Voting Guidelines

Tracking Stock

General Recommendation: Vote case-by-case on the creation of tracking stock, weighing the strategic value of the

transaction against such factors as:

Adverse governance changes;

Excessive increases in authorized capital stock;

Unfair method of distribution;

Diminution of voting rights;

Adverse conversion features;

Negative impact on stock option plans; and

Alternatives such as spin-off.

Restructuring

Appraisal Rights

General Recommendation: Vote for proposals to restore or provide shareholders with rights of appraisal.

Asset Purchases

General Recommendation: Vote case-by-case on asset purchase proposals, considering the following factors:

Purchase price;

Fairness opinion;

Financial and strategic benefits;

How the deal was negotiated;

Conflicts of interest;

Other alternatives for the business; and

Non-completion risk.

Asset Sales

General Recommendation: Vote case-by-case on asset sales, considering the following factors:

Impact on the balance sheet/working capital;

Potential elimination of diseconomies;

Anticipated financial and operating benefits;

Anticipated use of funds;

Value received for the asset;

Fairness opinion;

How the deal was negotiated; and

Conflicts of interest.


WWW.ISSGOVERNANCE.COM		41 of 87


UNITED STATES Proxy Voting Guidelines

Bundled Proposals

General Recommendation: Vote case-by-case on bundled or “conditional” proxy proposals. In the case of items

that are conditioned upon each other, examine the benefits and costs of the packaged items. In instances when

the joint effect of the conditioned items is not in shareholders’ best interests, vote against the proposals. If the

combined effect is positive, support such proposals.

Conversion of Securities

General Recommendation: Vote case-by-case on proposals regarding conversion of securities. When evaluating

these proposals, the investor should review the dilution to existing shareholders, the conversion price relative

to market value, financial issues, control issues, termination penalties, and conflicts of interest.

Vote for the conversion if it is expected that the company will be subject to onerous penalties or will be forced to

file for bankruptcy if the transaction is not approved.

Corporate Reorganization/Debt Restructuring/Prepackaged Bankruptcy

Plans/Reverse Leveraged Buyouts/Wrap Plans

General Recommendation: Vote case-by-case on proposals to increase common and/or preferred shares and to

issue shares as part of a debt restructuring plan, after evaluating:

Dilution to existing shareholders' positions;

Terms of the offer - discount/premium in purchase price to investor, including any fairness opinion;

termination penalties; exit strategy;

Financial issues - company's financial situation; degree of need for capital; use of proceeds; effect of the

financing on the company's cost of capital;

Management's efforts to pursue other alternatives;

Control issues - change in management; change in control, guaranteed board and committee seats; standstill

provisions; voting agreements; veto power over certain corporate actions; and

Conflict of interest - arm's length transaction, managerial incentives.

Vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not

approved.

Formation of Holding Company

General Recommendation: Vote case-by-case on proposals regarding the formation of a holding company, taking

into consideration the following:

The reasons for the change;

Any financial or tax benefits;

Regulatory benefits;

Increases in capital structure; and


WWW.ISSGOVERNANCE.COM		42 of 87


UNITED STATES Proxy Voting Guidelines

Changes to the articles of incorporation or bylaws of the company.

Absent compelling financial reasons to recommend for the transaction, vote against the formation of a holding

company if the transaction would include either of the following:

Increases in common or preferred stock in excess of the allowable maximum (see discussion under “Capital”);

Adverse changes in shareholder rights.

Going Private and Going Dark Transactions (LBOs and Minority Squeeze-

outs)

General Recommendation: Vote case-by-case on going private transactions, taking into account the following:

Offer price/premium;

Fairness opinion;

How the deal was negotiated;

Conflicts of interest;

Other alternatives/offers considered; and

Non-completion risk.

Vote case-by-case on going dark transactions, determining whether the transaction enhances shareholder value by

taking into consideration:

Whether the company has attained benefits from being publicly-traded (examination of trading volume,

liquidity, and market research of the stock); and

Balanced interests of continuing vs. cashed-out shareholders, taking into account the following:

Are all shareholders able to participate in the transaction?

Will there be a liquid market for remaining shareholders following the transaction?

Does the company have strong corporate governance?

Will insiders reap the gains of control following the proposed transaction? and

Does the state of incorporation have laws requiring continued reporting that may benefit shareholders?

Joint Ventures

General Recommendation: Vote case-by-case on proposals to form joint ventures, taking into account the

following:

Percentage of assets/business contributed;

Percentage ownership;

Financial and strategic benefits;

Governance structure;

Conflicts of interest;

Other alternatives; and

Non-completion risk.


WWW.ISSGOVERNANCE.COM		43 of 87


UNITED STATES Proxy Voting Guidelines

Liquidations

General Recommendation: Vote case-by-case on liquidations, taking into account the following:

Management’s efforts to pursue other alternatives;

Appraisal value of assets; and

The compensation plan for executives managing the liquidation.

Vote for the liquidation if the company will file for bankruptcy if the proposal is not approved.

Mergers and Acquisitions

General Recommendation: Vote case-by-case on mergers and acquisitions. Review and evaluate the merits and

drawbacks of the proposed transaction, balancing various and sometimes countervailing factors including:

Valuation - Is the value to be received by the target shareholders (or paid by the acquirer) reasonable? While

the fairness opinion may provide an initial starting point for assessing valuation reasonableness, emphasis is

placed on the offer premium, market reaction, and strategic rationale.

Market reaction - How has the market responded to the proposed deal? A negative market reaction should

cause closer scrutiny of a deal.

Strategic rationale - Does the deal make sense strategically? From where is the value derived? Cost and

revenue synergies should not be overly aggressive or optimistic, but reasonably achievable. Management

should also have a favorable track record of successful integration of historical acquisitions.

Negotiations and process - Were the terms of the transaction negotiated at arm's-length? Was the process fair

and equitable? A fair process helps to ensure the best price for shareholders. Significant negotiation "wins"

can also signify the deal makers' competency. The comprehensiveness of the sales process (e.g., full auction,

partial auction, no auction) can also affect shareholder value.

Conflicts of interest - Are insiders benefiting from the transaction disproportionately and inappropriately as

compared to non-insider shareholders? As the result of potential conflicts, the directors and officers of the

company may be more likely to vote to approve a merger than if they did not hold these interests. Consider

whether these interests may have influenced these directors and officers to support or recommend the

merger. The CIC figure presented in the "ISS Transaction Summary" section of this report is an aggregate figure

that can in certain cases be a misleading indicator of the true value transfer from shareholders to insiders.

Where such figure appears to be excessive, analyze the underlying assumptions to determine whether a

potential conflict exists.

Governance - Will the combined company have a better or worse governance profile than the current

governance profiles of the respective parties to the transaction? If the governance profile is to change for the

worse, the burden is on the company to prove that other issues (such as valuation) outweigh any deterioration

in governance.

Private Placements/Warrants/Convertible Debentures

General Recommendation: Vote case-by-case on proposals regarding private placements, warrants, and

convertible debentures taking into consideration:

Dilution to existing shareholders' position: The amount and timing of shareholder ownership dilution should

be weighed against the needs and proposed shareholder benefits of the capital infusion. Although newly

issued common stock, absent preemptive rights, is typically dilutive to existing shareholders, share price


WWW.ISSGOVERNANCE.COM		44 of 87


UNITED STATES Proxy Voting Guidelines

appreciation is often the necessary event to trigger the exercise of "out of the money" warrants and

convertible debt. In these instances from a value standpoint, the negative impact of dilution is mitigated by

the increase in the company's stock price that must occur to trigger the dilutive event.

Terms of the offer (discount/premium in purchase price to investor, including any fairness opinion, conversion

features, termination penalties, exit strategy):

The terms of the offer should be weighed against the alternatives of the company and in light of

company's financial condition. Ideally, the conversion price for convertible debt and the exercise price for

warrants should be at a premium to the then prevailing stock price at the time of private placement.

When evaluating the magnitude of a private placement discount or premium, consider factors that

influence the discount or premium, such as, liquidity, due diligence costs, control and monitoring costs,

capital scarcity, information asymmetry, and anticipation of future performance.

Financial issues:

The company's financial condition;

Degree of need for capital;

Use of proceeds;

Effect of the financing on the company's cost of capital;

Current and proposed cash burn rate; and

Going concern viability and the state of the capital and credit markets.

Management's efforts to pursue alternatives and whether the company engaged in a process to evaluate

alternatives: A fair, unconstrained process helps to ensure the best price for shareholders. Financing

alternatives can include joint ventures, partnership, merger, or sale of part or all of the company.

Control issues:

Change in management;

Change in control;

Guaranteed board and committee seats;

Standstill provisions;

Voting agreements;

Veto power over certain corporate actions; and

Minority versus majority ownership and corresponding minority discount or majority control premium.

Conflicts of interest:

Conflicts of interest should be viewed from the perspective of the company and the investor; and

Were the terms of the transaction negotiated at arm's length? Are managerial incentives aligned with

shareholder interests?

Market reaction:

The market's response to the proposed deal. A negative market reaction is a cause for concern. Market

reaction may be addressed by analyzing the one-day impact on the unaffected stock price.

Vote for the private placement, or for the issuance of warrants and/or convertible debentures in a private

placement, if it is expected that the company will file for bankruptcy if the transaction is not approved.


WWW.ISSGOVERNANCE.COM		45 of 87


UNITED STATES Proxy Voting Guidelines

Reorganization/Restructuring Plan (Bankruptcy)

General Recommendation: Vote case-by-case on proposals to common shareholders on bankruptcy plans of

reorganization, considering the following factors including, but not limited to:

Estimated value and financial prospects of the reorganized company;

Percentage ownership of current shareholders in the reorganized company;

Whether shareholders are adequately represented in the reorganization process (particularly through the

existence of an Official Equity Committee);

The cause(s) of the bankruptcy filing, and the extent to which the plan of reorganization addresses the

cause(s);

Existence of a superior alternative to the plan of reorganization; and

Governance of the reorganized company.

Special Purpose Acquisition Corporations (SPACs)

General Recommendation: Vote case-by-case on SPAC mergers and acquisitions taking into account the following:

Valuation - Is the value being paid by the SPAC reasonable? SPACs generally lack an independent fairness

opinion and the financials on the target may be limited. Compare the conversion price with the intrinsic value

of the target company provided in the fairness opinion. Also, evaluate the proportionate value of the

combined entity attributable to the SPAC IPO shareholders versus the pre-merger value of SPAC. Additionally,

a private company discount may be applied to the target if it is a private entity.

Market reaction - How has the market responded to the proposed deal? A negative market reaction may be a

cause for concern. Market reaction may be addressed by analyzing the one-day impact on the unaffected

stock price.

Deal timing - A main driver for most transactions is that the SPAC charter typically requires the deal to be

complete within 18 to 24 months, or the SPAC is to be liquidated. Evaluate the valuation, market reaction,

and potential conflicts of interest for deals that are announced close to the liquidation date.

Negotiations and process - What was the process undertaken to identify potential target companies within

specified industry or location specified in charter? Consider the background of the sponsors.

Conflicts of interest - How are sponsors benefiting from the transaction compared to IPO shareholders?

Potential conflicts could arise if a fairness opinion is issued by the insiders to qualify the deal rather than a

third party or if management is encouraged to pay a higher price for the target because of an 80 percent rule

(the charter requires that the fair market value of the target is at least equal to 80 percent of net assets of the

SPAC). Also, there may be sense of urgency by the management team of the SPAC to close the deal since its

charter typically requires a transaction to be completed within the 18-24-month timeframe.

Voting agreements - Are the sponsors entering into enter into any voting agreements/tender offers with

shareholders who are likely to vote against the proposed merger or exercise conversion rights?

Governance - What is the impact of having the SPAC CEO or founder on key committees following the

proposed merger?

Special Purpose Acquisition Corporations (SPACs) - Proposals for Extensions

The main purpose of SPACs is to identify and acquire a viable target within a specified timeframe, and failure to

achieve this objective within the allotted time calls into question management's ability to execute its primary

objective. The end of that timeframe is generally referred to as the termination date.


WWW.ISSGOVERNANCE.COM		46 of 87


UNITED STATES Proxy Voting Guidelines

General Recommendation: Generally support requests to extend the termination date by up to one year from the

SPAC's original termination date (inclusive of any built-in extension options, and accounting for prior extension

requests).

Other factors that may be considered include: any added incentives, business combination status, other

amendment terms, and, if applicable, use of money in the trust fund to pay excise taxes on redeemed shares.

Spin-offs

General Recommendation: Vote case-by-case on spin-offs, considering:

Tax and regulatory advantages;

Planned use of the sale proceeds;

Valuation of spinoff;

Fairness opinion;

Benefits to the parent company;

Conflicts of interest;

Managerial incentives;

Corporate governance changes; and

Changes in the capital structure.

Value Maximization Shareholder Proposals

General Recommendation: Vote case-by-case on shareholder proposals seeking to maximize shareholder value by:

Hiring a financial advisor to explore strategic alternatives;

Selling the company; or

Liquidating the company and distributing the proceeds to shareholders.

These proposals should be evaluated based on the following factors:

Prolonged poor performance with no turnaround in sight;

Signs of entrenched board and management (such as the adoption of takeover defenses);

Strategic plan in place for improving value;

Likelihood of receiving reasonable value in a sale or dissolution; and

The company actively exploring its strategic options, including retaining a financial advisor.


WWW.ISSGOVERNANCE.COM		47 of 87


UNITED STATES Proxy Voting Guidelines

5.Compensation

Executive Pay Evaluation

Underlying all evaluations are five global principles that most investors expect corporations to adhere to in

designing and administering executive and director compensation programs:

1.Maintain appropriate pay-for-performance alignment, with emphasis on long-term shareholder value: This

principle encompasses overall executive pay practices, which must be designed to attract, retain, and

appropriately motivate the key employees who drive shareholder value creation over the long term. It will

take into consideration, among other factors, the link between pay and performance; the mix between fixed

and variable pay; performance goals; and equity-based plan costs;

2.Avoid arrangements that risk “pay for failure”: This principle addresses the appropriateness of long or

indefinite contracts, excessive severance packages, and guaranteed compensation;

3.Maintain an independent and effective compensation committee: This principle promotes oversight of

executive pay programs by directors with appropriate skills, knowledge, experience, and a sound process for

compensation decision-making (e.g., including access to independent expertise and advice when needed);

4.Provide shareholders with clear, comprehensive compensation disclosures: This principle underscores the

importance of informative and timely disclosures that enable shareholders to evaluate executive pay practices

fully and fairly; and

5.Avoid inappropriate pay to non-executive directors: This principle recognizes the interests of shareholders in

ensuring that compensation to outside directors is reasonable and does not compromise their independence

and ability to make appropriate judgments in overseeing managers’ pay and performance. At the market level,

it may incorporate a variety of generally accepted best practices.

Advisory Votes on Executive Compensation—Management Proposals (Say-

on-Pay)

General Recommendation: Vote case-by-case on ballot items related to executive pay and practices, as well as

certain aspects of outside director compensation.

Vote against Advisory Votes on Executive Compensation (Say-on-Pay or “SOP”) if:

There is an unmitigated misalignment between CEO pay and company performance (pay for performance);

The company maintains significant problematic pay practices; or

The board exhibits a significant level of poor communication and responsiveness to shareholders.

Vote against or withhold from the members of the Compensation Committee and potentially the full board if:

There is no SOP on the ballot, and an against vote on an SOP would otherwise be warranted due to pay-for-

performance misalignment, problematic pay practices, or the lack of adequate responsiveness on

compensation issues raised previously, or a combination thereof;

The board fails to respond adequately to a previous SOP proposal that received less than 70 percent support

of votes cast;

The company has recently practiced or approved problematic pay practices, such as option repricing or option

backdating; or

The situation is egregious.


WWW.ISSGOVERNANCE.COM		48 of 87


UNITED STATES Proxy Voting Guidelines

Primary Evaluation Factors for Executive Pay

Pay-for-Performance Evaluation

ISS annually conducts a pay-for-performance analysis to identify strong or satisfactory alignment between pay

and performance over a sustained period. With respect to companies in the S&P1500, Russell 3000, or Russell

3000E Indices, this analysis considers the following:

1.Peer Group18 Alignment:

The degree of alignment between the company's annualized TSR rank and the CEO's annualized total pay

rank within a peer group, each measured over a five-year period.

The rankings of CEO total pay and company financial performance within a peer group, each measured over a

five-year period.

The multiple of the CEO's total pay relative to the peer group median over one- and three-year periods.

2.Absolute Alignment19 – the absolute alignment between the trend in CEO pay and company TSR over the

prior five fiscal years – i.e., the difference between the trend in annual pay changes and the trend in

annualized TSR during the period.

If the above analysis demonstrates significant unsatisfactory long-term pay-for-performance alignment or, in the

case of companies outside the Russell indices, a misalignment between pay and performance is otherwise

suggested, our analysis may include any of the following qualitative factors, as relevant to an evaluation of how

various pay elements may work to encourage or to undermine long-term value creation and alignment with

shareholder interests:

The overall ratio of performance-based compensation to fixed or discretionary pay;

The ratio of performance- to time-based long-term incentive awards;

Vesting and/or retention requirements for equity awards that demonstrate a long-term focus;

The rigor of performance goals;

The complexity and risks around pay program design;

The transparency and clarity of disclosure;

The company's peer group benchmarking practices;

Financial/operational results, both absolute and relative to peers;

Special circumstances related to, for example, a new CEO in the prior FY or anomalous equity grant practices

(e.g., bi-annual awards);

Realizable and/or realized pay compared to grant pay; and

Any other factors deemed relevant.

Problematic Pay Practices

Problematic pay elements are generally evaluated case-by-case considering the context of a company's overall pay

program and demonstrated pay-for-performance philosophy. The focus is on executive compensation practices

that contravene the global pay principles, including:

Problematic practices related to non-performance-based compensation elements;

Incentives that may motivate excessive risk-taking or present a windfall risk; and

___________________________________

18 The ISS peer group is generally comprised of 14-24 companies that are selected using market cap, revenue, assets, GICS

industry group, and company's selected peers' GICS industry group. ISS' peer selection methodology is detailed in the U.S. Peer

Group FAQ..

19 Russell 3000E Index companies (excluding S&P1500 and Russell 3000 companies) are not subject to the Absolute Alignment

analysis.


WWW.ISSGOVERNANCE.COM		49 of 87


UNITED STATES Proxy Voting Guidelines

Pay decisions that circumvent pay-for-performance, such as options backdating or waiving performance

requirements.

The list of examples below highlights certain problematic practices that carry significant weight in this overall

consideration and may result in adverse vote recommendations:

Repricing or replacing of underwater stock options/SARs without prior shareholder approval (including cash

buyouts and voluntary surrender of underwater options);

Extraordinary perquisites or tax gross-ups;

New or materially amended agreements that provide for:

Excessive termination or CIC severance payments (generally exceeding 3 times base salary and

average/target/most recent bonus);

CIC severance payments without involuntary job loss or substantial diminution of duties ("single" or

"modified single" triggers) or in connection with a problematic Good Reason definition;

CIC excise tax gross-up entitlements (including "modified" gross-ups); and/or

Multi-year guaranteed awards that are not at risk due to rigorous performance conditions;

Liberal CIC definition combined with any single-trigger CIC benefits;

Insufficient executive compensation disclosure by externally-managed issuers (EMIs) such that a reasonable

assessment of pay programs and practices applicable to the EMI's executives is not possible;

Severance payments made when the termination is not clearly disclosed as involuntary (for example, a

termination without cause or resignation for good reason); and/or

Any other provision or practice deemed to be egregious and present a significant risk to investors.

The above examples are not an exhaustive list. Please refer to ISS' U.S. Compensation Policies FAQ document for

additional detail on specific pay practices that have been identified as problematic and may lead to negative vote

recommendations.

Options Backdating

The following factors should be examined case-by-case to allow for distinctions to be made between “sloppy” plan

administration versus deliberate action or fraud:

Reason and motive for the options backdating issue, such as inadvertent vs. deliberate grant date changes;

Duration of options backdating;

Size of restatement due to options backdating;

Corrective actions taken by the board or compensation committee, such as canceling or re-pricing backdated

options, the recouping of option gains on backdated grants; and

Adoption of a grant policy that prohibits backdating and creates a fixed grant schedule or window period for

equity grants in the future.

Compensation Committee Communications and Responsiveness

Consider the following factors case-by-case when evaluating ballot items related to executive pay on the board’s

responsiveness to investor input and engagement on compensation issues:

Failure to respond to majority-supported shareholder proposals on executive pay topics; or

Failure to adequately respond to the company's previous say-on-pay proposal that received low support taking

into account the factors identified under the Responsiveness section in the Board of Directors policy with

respect to say-on-pay.


WWW.ISSGOVERNANCE.COM		50 of 87


UNITED STATES Proxy Voting Guidelines

Frequency of Advisory Vote on Executive Compensation ("Say When on Pay")

General Recommendation: Vote for annual advisory votes on compensation, which provide the most consistent

and clear communication channel for shareholder concerns about companies' executive pay programs.

Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or

Proposed Sale

General Recommendation: Vote case-by-case on say on Golden Parachute proposals, including consideration of

existing change-in-control arrangements maintained with named executive officers but also considering new or

extended arrangements.

Features that may result in an “against” recommendation include one or more of the following, depending on the

number, magnitude, and/or timing of issue(s):

Single- or modified-single-trigger cash severance;

Single-trigger acceleration of unvested equity awards;

Full acceleration of equity awards granted shortly before the change in control;

Acceleration of performance awards above the target level of performance without compelling rationale;

Excessive cash severance (generally >3x base salary and bonus);

Excise tax gross-ups triggered and payable;

Excessive golden parachute payments (on an absolute basis or as a percentage of transaction equity value); or

Recent amendments that incorporate any problematic features (such as those above) or recent actions (such

as extraordinary equity grants) that may make packages so attractive as to influence merger agreements that

may not be in the best interests of shareholders; or

The company's assertion that a proposed transaction is conditioned on shareholder approval of the

golden parachute advisory vote.

Recent amendment(s) that incorporate problematic features will tend to carry more weight on the overall analysis.

However, the presence of multiple legacy problematic features will also be closely scrutinized.

In cases where the golden parachute vote is incorporated into a company's advisory vote on compensation

(management say-on-pay), ISS will evaluate the say-on-pay proposal in accordance with these guidelines, which

may give higher weight to that component of the overall evaluation.

Equity-Based and Other Incentive Plans

Please refer to ISS' U.S. Equity Compensation Plans FAQ document for additional details on the Equity Plan

Scorecard policy.

General Recommendation: Vote case-by-case on equity plan proposals subject to the Equity Plan Scorecard

framework, where positive factors may counterbalance negative factors under three pillars:


WWW.ISSGOVERNANCE.COM		51 of 87


UNITED STATES Proxy Voting Guidelines

Plan Cost: The total estimated cost of the company’s equity plans relative to industry/market cap peers,

measured by the company's estimated Shareholder Value Transfer (SVT) in relation to peers and considering

both:

SVT based on new shares requested plus shares remaining for future grants, plus outstanding

unvested/unexercised grants; and

SVT based only on new shares requested plus shares remaining for future grants.

Plan Features:

Quality of disclosure around vesting upon a change in control (CIC);

Discretionary vesting authority;

Liberal share recycling on various award types;

Lack of minimum vesting period for grants made under the plan;

Dividends payable prior to award vesting; and

Cash-denominated awards limits for non-employee directors.

Grant Practices:

The company’s three-year burn rate relative to its industry/market cap peers;

Vesting requirements in CEO's recent equity grants;

The estimated duration of the plan;

The proportion of the CEO's most recent equity grants/awards classified by ISS as performance-based;

Whether the company maintains a sufficient claw-back policy; and

Whether the company maintains sufficient post-exercise/vesting share-holding requirements.

Generally vote against the plan proposal if the combination of above factors indicates that the plan is not, overall,

in shareholders' interests, or if any of the following egregious factors ("overriding factors") apply:

Awards may vest in connection with a liberal change-of-control definition;

The plan would permit repricing or cash buyout of underwater options without shareholder approval (either

by expressly permitting it – for NYSE and Nasdaq listed companies – or by not prohibiting it when the company

has a history of repricing – for non-listed companies);

The plan is a vehicle for problematic pay practices or a significant pay-for-performance disconnect under

certain circumstances;

The plan is excessively dilutive to shareholders' holdings;

The plan contains an evergreen (automatic share replenishment) feature;

The plan lacks sufficient positive features under the Plan Features pillar;or

Any other factors that are determined to have a significant negative impact on shareholder interests.

Further Information on certain EPSC Factors:

Shareholder Value Transfer (SVT)

The cost of the equity plans is expressed as Shareholder Value Transfer (SVT), which is measured using a binomial

option pricing model that assesses the amount of shareholders’ equity flowing out of the company to employees

and directors. SVT is expressed as both a dollar amount and as a percentage of market value, and includes the new

shares proposed, shares available under existing plans, and shares granted but unexercised (using two measures,

in the case of plans subject to the Equity Plan Scorecard evaluation, as noted above). All award types are valued.

For omnibus plans, unless limitations are placed on the most expensive types of awards (for example, full-value

awards), the assumption is made that all awards to be granted will be the most expensive types.


WWW.ISSGOVERNANCE.COM		52 of 87


UNITED STATES Proxy Voting Guidelines

For proposals that are not subject to the Equity Plan Scorecard evaluation, Shareholder Value Transfer is

reasonable if it falls below a company-specific benchmark. The benchmark is determined as follows: The top

quartile performers in each industry group (using the Global Industry Classification Standard: GICS) are identified.

Benchmark SVT levels for each industry are established based on these top performers’ historic SVT. Regression

analyses are run on each industry group to identify the variables most strongly correlated to SVT. The benchmark

industry SVT level is then adjusted upwards or downwards for the specific company by plugging the company-

specific performance measures, size, and cash compensation into the industry cap equations to arrive at the

company’s benchmark.22

Three-Year Value-Adjusted Burn Rate

A "Value-Adjusted Burn Rate" is used for stock plan evaluations. Value-Adjusted Burn Rate benchmarks are

calculated as the greater of: (1) an industry-specific threshold based on three-year burn rates within the company's

GICS group segmented by S&P 500, Russell 3000 index (less the S&P 500) and non-Russell 3000 index; and (2) a de

minimis threshold established separately for each of the S&P 500, the Russell 3000 index less the S&P 500, and the

non-Russell 3000 index. Year-over-year burn-rate benchmark changes will be limited to a predetermined range

above or below the prior year's burn-rate benchmark.

The Value-Adjusted Burn Rate is calculated as follows:

Value-Adjusted Burn Rate = ((# of options * option’s dollar value using a Black-Scholes model) + (# of full-value

awards * stock price)) / (Weighted average common shares * stock price).

Egregious Factors

Liberal Change in Control Definition

Generally vote against equity plans if the plan has a liberal definition of change in control and the equity awards

could vest upon such liberal definition of change in control, even though an actual change in control may not

occur. Examples of such a definition include, but are not limited to, announcement or commencement of a tender

offer, provisions for acceleration upon a “potential” takeover, shareholder approval of a merger or other

transactions, or similar language.

Repricing Provisions

Vote against plans that expressly permit the repricing or exchange of underwater stock options/stock appreciate

rights (SARs) without prior shareholder approval. "Repricing" typically includes the ability to do any of the

following:

Amend the terms of outstanding options or SARs to reduce the exercise price of such outstanding options or

SARs;

Cancel outstanding options or SARs in exchange for options or SARs with an exercise price that is less than the

exercise price of the original options or SARs;

Cancel underwater options in exchange for stock awards; or

Provide cash buyouts of underwater options.

___________________________________

20 For plans evaluated under the Equity Plan Scorecard policy, the company's SVT benchmark is considered along with other

factors.


WWW.ISSGOVERNANCE.COM		53 of 87


UNITED STATES Proxy Voting Guidelines

While the above cover most types of repricing, ISS may view other provisions as akin to repricing depending on the

facts and circumstances.

Also, vote against or withhold from members of the Compensation Committee who approved repricing (as defined

above or otherwise determined by ISS), without prior shareholder approval, even if such repricings are allowed in

their equity plan.

Vote against plans that do not expressly prohibit repricing or cash buyout of underwater options without

shareholder approval if the company has a history of repricing/buyouts without shareholder approval, and the

applicable listing standards would not preclude them from doing so.

Problematic Pay Practices or Significant Pay-for-Performance Disconnect

If the equity plan on the ballot is a vehicle for problematic pay practices, vote against the plan.

ISS may recommend a vote against the equity plan if the plan is determined to be a vehicle for pay-for-

performance misalignment. Considerations in voting against the equity plan may include, but are not limited to:

Severity of the pay-for-performance misalignment;

Whether problematic equity grant practices are driving the misalignment; and/or

Whether equity plan awards have been heavily concentrated to the CEO and/or the other NEOs.

Amending Cash and Equity Plans (including Approval for Tax Deductibility

(162(m))

General Recommendation: Vote case-by-case on amendments to cash and equity incentive plans.

Generally vote for proposals to amend executive cash, stock, or cash and stock incentive plans if the proposal:

Addresses administrative features only; or

Seeks approval for Section 162(m) purposes only, and the plan administering committee consists entirely of

independent directors, per ISS’ Classification of Directors. Note that if the company is presenting the plan to

shareholders for the first time for any reason (including after the company’s initial public offering), or if the

proposal is bundled with other material plan amendments, then the recommendation will be case-by-case

(see below).

Vote against proposals to amend executive cash, stock, or cash and stock incentive plans if the proposal:

Seeks approval for Section 162(m) purposes only, and the plan administering committee does not consist

entirely of independent directors, per ISS’ Classification of Directors.

Vote case-by-case on all other proposals to amend cash incentive plans. This includes plans presented to

shareholders for the first time after the company's IPO and/or proposals that bundle material amendment(s) other

than those for Section 162(m) purposes.

Vote case-by-case on all other proposals to amend equity incentive plans, considering the following:

If the proposal requests additional shares and/or the amendments include a term extension or addition of full

value awards as an award type, the recommendation will be based on the Equity Plan Scorecard evaluation as

well as an analysis of the overall impact of the amendments;


WWW.ISSGOVERNANCE.COM		54 of 87


UNITED STATES Proxy Voting Guidelines

If the plan is being presented to shareholders for the first time (including after the company's IPO), whether or

not additional shares are being requested, the recommendation will be based on the Equity Plan Scorecard

evaluation as well as an analysis of the overall impact of any amendments; and

If there is no request for additional shares and the amendments do not include a term extension or addition of

full value awards as an award type, then the recommendation will be based entirely on an analysis of the

overall impact of the amendments, and the EPSC evaluation will be shown only for informational purposes.

In the first two case-by-case evaluation scenarios, the EPSC evaluation/score is the more heavily weighted

consideration.

Specific Treatment of Certain Award Types in Equity Plan Evaluations

Dividend Equivalent Rights

Options that have Dividend Equivalent Rights (DERs) associated with them will have a higher calculated award

value than those without DERs under the binomial model, based on the value of these dividend streams. The

higher value will be applied to new shares, shares available under existing plans, and shares awarded but not

exercised per the plan specifications. DERS transfer more shareholder equity to employees and non-employee

directors and this cost should be captured.

Operating Partnership (OP) Units in Equity Plan Analysis of Real Estate Investment Trusts

(REITs)

For Real Estate Investment Trusts (REITS), include the common shares issuable upon conversion of outstanding

Operating Partnership (OP) units in the share count for the purposes of determining: (1) market capitalization in

the Shareholder Value Transfer (SVT) analysis and (2) shares outstanding in the burn rate analysis.

Other Compensation Plans

401(k) Employee Benefit Plans

General Recommendation: Vote for proposals to implement a 401(k) savings plan for employees.

Employee Stock Ownership Plans (ESOPs)

General Recommendation: Vote for proposals to implement an ESOP or increase authorized shares for existing

ESOPs, unless the number of shares allocated to the ESOP is excessive (more than five percent of outstanding

shares).


WWW.ISSGOVERNANCE.COM		55 of 87


UNITED STATES Proxy Voting Guidelines

Employee Stock Purchase Plans—Qualified Plans

General Recommendation: Vote case-by-case on qualified employee stock purchase plans. Vote for employee

stock purchase plans where all of the following apply:

Purchase price is at least 85 percent of fair market value;

Offering period is 27 months or less; and

The number of shares allocated to the plan is 10 percent or less of the outstanding shares.

Vote against qualified employee stock purchase plans where when the plan features do not meet all of the above

criteria.

Employee Stock Purchase Plans—Non-Qualified Plans

General Recommendation: Vote case-by-case on nonqualified employee stock purchase plans. Vote for

nonqualified employee stock purchase plans with all the following features:

Broad-based participation;

Limits on employee contribution, which may be a fixed dollar amount or expressed as a percent of base salary;

Company matching contribution up to 25 percent of employee’s contribution, which is effectively a discount

of 20 percent from market value; and

No discount on the stock price on the date of purchase when there is a company matching contribution.

Vote against nonqualified employee stock purchase plans when the plan features do not meet all of the above criteria.

If the matching contribution or effective discount exceeds the above, ISS may evaluate the SVT cost of the plan as part

of the assessment.

Option Exchange Programs/Repricing Options

General Recommendation: Vote case-by-case on management proposals seeking approval to exchange/reprice

options taking into consideration:

Historic trading patterns--the stock price should not be so volatile that the options are likely to be back “in-

the-money” over the near term;

Rationale for the re-pricing--was the stock price decline beyond management's control?;

Is this a value-for-value exchange?;

Are surrendered stock options added back to the plan reserve?;

Timing--repricing should occur at least one year out from any precipitous drop in company's stock price;

Option vesting--does the new option vest immediately or is there a black-out period?;

Term of the option--the term should remain the same as that of the replaced option;

Exercise price--should be set at fair market or a premium to market; and

Participants--executive officers and directors must be excluded.

If the surrendered options are added back to the equity plans for re-issuance, then also take into consideration the

company’s total cost of equity plans and its three-year average burn rate.


WWW.ISSGOVERNANCE.COM		56 of 87


UNITED STATES Proxy Voting Guidelines

In addition to the above considerations, evaluate the intent, rationale, and timing of the repricing proposal. The

proposal should clearly articulate why the board is choosing to conduct an exchange program at this point in time.

Repricing underwater options after a recent precipitous drop in the company’s stock price demonstrates poor

timing and warrants additional scrutiny. Also, consider the terms of the surrendered options, such as the grant

date, exercise price and vesting schedule. Grant dates of surrendered options should be far enough back (two to

three years) so as not to suggest that repricings are being done to take advantage of short-term downward price

movements. Similarly, the exercise price of surrendered options should be above the 52-week high for the stock

price.

Vote for shareholder proposals to put option repricings to a shareholder vote.

Stock Plans in Lieu of Cash

General Recommendation: Vote case-by-case on plans that provide participants with the option of taking all or a

portion of their cash compensation in the form of stock.

Vote for non-employee director-only equity plans that provide a dollar-for-dollar cash-for-stock exchange.

Vote case-by-case on plans which do not provide a dollar-for-dollar cash for stock exchange. In cases where the

exchange is not dollar-for-dollar, the request for new or additional shares for such equity program will be

considered using the binomial option pricing model. In an effort to capture the total cost of total compensation,

ISS will not make any adjustments to carve out the in-lieu-of cash compensation.

Transfer Stock Option (TSO) Programs

General Recommendation: One-time Transfers: Vote against or withhold from compensation committee members

if they fail to submit one-time transfers to shareholders for approval.

Vote case-by-case on one-time transfers. Vote for if:

Executive officers and non-employee directors are excluded from participating;

Stock options are purchased by third-party financial institutions at a discount to their fair value using option

pricing models such as Black-Scholes or a Binomial Option Valuation or other appropriate financial models;

and

There is a two-year minimum holding period for sale proceeds (cash or stock) for all participants.

Additionally, management should provide a clear explanation of why options are being transferred to a third-party

institution and whether the events leading up to a decline in stock price were beyond management's control. A

review of the company's historic stock price volatility should indicate if the options are likely to be back “in-the-

money” over the near term.

Ongoing TSO program: Vote against equity plan proposals if the details of ongoing TSO programs are not provided

to shareholders. Since TSOs will be one of the award types under a stock plan, the ongoing TSO program, structure,

and mechanics must be disclosed to shareholders. The specific criteria to be considered in evaluating these

proposals include, but not limited, to the following:

Eligibility;

Vesting;

Bid-price;


WWW.ISSGOVERNANCE.COM		57 of 87


UNITED STATES Proxy Voting Guidelines

Term of options;

Cost of the program and impact of the TSOs on company’s total option expense; and

Option repricing policy.

Amendments to existing plans that allow for introduction of transferability of stock options should make clear that

only options granted post-amendment shall be transferable.

Director Compensation

Shareholder Ratification of Director Pay Programs

General Recommendation: Vote case-by-case on management proposals seeking ratification of non-employee

director compensation, based on the following factors:

If the equity plan under which non-employee director grants are made is on the ballot, whether or not it

warrants support; and

An assessment of the following qualitative factors:

The relative magnitude of director compensation as compared to companies of a similar profile;

The presence of problematic pay practices relating to director compensation;

Director stock ownership guidelines and holding requirements;

Equity award vesting schedules;

The mix of cash and equity-based compensation;

Meaningful limits on director compensation;

The availability of retirement benefits or perquisites; and

The quality of disclosure surrounding director compensation.

Equity Plans for Non-Employee Directors

General Recommendation: Vote case-by-case on compensation plans for non-employee directors, based on:

The total estimated cost of the company’s equity plans relative to industry/market cap peers, measured by the

company’s estimated Shareholder Value Transfer (SVT) based on new shares requested plus shares remaining

for future grants, plus outstanding unvested/unexercised grants;

The company’s three-year burn rate relative to its industry/market cap peers (in certain circumstances); and

The presence of any egregious plan features (such as an option repricing provision or liberal CIC vesting risk).

On occasion, non-employee director stock plans will exceed the plan cost or burn-rate benchmarks when

combined with employee or executive stock plans. In such cases, vote case-by-case on the plan taking into

consideration the following qualitative factors:

The relative magnitude of director compensation as compared to companies of a similar profile;

The presence of problematic pay practices relating to director compensation;

Director stock ownership guidelines and holding requirements;

Equity award vesting schedules;

The mix of cash and equity-based compensation;

Meaningful limits on director compensation;

The availability of retirement benefits or perquisites; and


WWW.ISSGOVERNANCE.COM		58 of 87


UNITED STATES Proxy Voting Guidelines

The quality of disclosure surrounding director compensation.

Non-Employee Director Retirement Plans

General Recommendation: Vote against retirement plans for non-employee directors. Vote for shareholder

proposals to eliminate retirement plans for non-employee directors.

Shareholder Proposals on Compensation

Bonus Banking/Bonus Banking “Plus”

General Recommendation: Vote case-by-case on proposals seeking deferral of a portion of annual bonus pay, with

ultimate payout linked to sustained results for the performance metrics on which the bonus was earned (whether

for the named executive officers or a wider group of employees), taking into account the following factors:

The company’s past practices regarding equity and cash compensation;

Whether the company has a holding period or stock ownership requirements in place, such as a meaningful

retention ratio (at least 50 percent for full tenure); and

Whether the company has a rigorous claw-back policy in place.

Compensation Consultants—Disclosure of Board or Company’s Utilization

General Recommendation: Generally vote for shareholder proposals seeking disclosure regarding the company,

board, or compensation committee’s use of compensation consultants, such as company name, business

relationship(s), and fees paid.

Disclosure/Setting Levels or Types of Compensation for Executives and Directors

General Recommendation: Generally vote for shareholder proposals seeking additional disclosure of executive

and director pay information, provided the information requested is relevant to shareholders' needs, would not

put the company at a competitive disadvantage relative to its industry, and is not unduly burdensome to the

company.

Generally vote against shareholder proposals seeking to set absolute levels on compensation or otherwise

dictate the amount or form of compensation (such as types of compensation elements or specific metrics) to be

used for executive or directors.

Generally vote against shareholder proposals that mandate a minimum amount of stock that directors must own in

order to qualify as a director or to remain on the board.

Vote case-by-case on all other shareholder proposals regarding executive and director pay, taking into account

relevant factors, including but not limited to: company performance, pay level and design versus peers, history of


WWW.ISSGOVERNANCE.COM		59 of 87


UNITED STATES Proxy Voting Guidelines

compensation concerns or pay-for-performance disconnect, and/or the scope and prescriptive nature of the

proposal.

Golden Coffins/Executive Death Benefits

General Recommendation: Generally vote for proposals calling for companies to adopt a policy of obtaining

shareholder approval for any future agreements and corporate policies that could oblige the company to make

payments or awards following the death of a senior executive in the form of unearned salary or bonuses,

accelerated vesting or the continuation in force of unvested equity grants, perquisites and other payments or

awards made in lieu of compensation. This would not apply to any benefit programs or equity plan proposals for

which the broad-based employee population is eligible.

Hold Equity Past Retirement or for a Significant Period of Time

General Recommendation: Vote case-by-case on shareholder proposals asking companies to adopt policies

requiring senior executive officers to retain a portion of net shares acquired through compensation plans. The

following factors will be taken into account:

The percentage/ratio of net shares required to be retained;

The time period required to retain the shares;

Whether the company has equity retention, holding period, and/or stock ownership requirements in place

and the robustness of such requirements;

Whether the company has any other policies aimed at mitigating risk taking by executives;

Executives' actual stock ownership and the degree to which it meets or exceeds the proponent’s suggested

holding period/retention ratio or the company’s existing requirements; and

Problematic pay practices, current and past, which may demonstrate a short-term versus long-term focus.

Pay Disparity

General Recommendation: Vote case-by-case on proposals calling for an analysis of the pay disparity between

corporate executives and other non-executive employees. The following factors will be considered:

The company’s current level of disclosure of its executive compensation setting process, including how the

company considers pay disparity;

If any problematic pay practices or pay-for-performance concerns have been identified at the company; and

The level of shareholder support for the company's pay programs.

Generally vote against proposals calling for the company to use the pay disparity analysis or pay ratio in a specific

way to set or limit executive pay.


WWW.ISSGOVERNANCE.COM		60 of 87


UNITED STATES Proxy Voting Guidelines

Pay for Performance/Performance-Based Awards

General Recommendation: Vote case-by-case on shareholder proposals requesting that a significant amount of

future long-term incentive compensation awarded to senior executives shall be performance-based and requesting

that the board adopt and disclose challenging performance metrics to shareholders, based on the following

analytical steps:

First, vote for shareholder proposals advocating the use of performance-based equity awards, such as

performance contingent options or restricted stock, indexed options, or premium-priced options, unless the

proposal is overly restrictive or if the company has demonstrated that it is using a “substantial” portion of

performance-based awards for its top executives. Standard stock options and performance-accelerated

awards do not meet the criteria to be considered as performance-based awards. Further, premium-priced

options should have a meaningful premium to be considered performance-based awards; and

Second, assess the rigor of the company’s performance-based equity program. If the bar set for the

performance-based program is too low based on the company’s historical or peer group comparison, generally

vote for the proposal. Furthermore, if target performance results in an above target payout, vote for the

shareholder proposal due to program’s poor design. If the company does not disclose the performance metric

of the performance-based equity program, vote for the shareholder proposal regardless of the outcome of the

first step to the test.

In general, vote for the shareholder proposal if the company does not meet both of the above two steps.

Pay for Superior Performance

General Recommendation: Vote case-by-case on shareholder proposals that request the board establish a pay-for-

superior performance standard in the company's executive compensation plan for senior executives. These

proposals generally include the following principles:

Set compensation targets for the plan’s annual and long-term incentive pay components at or below the peer

group median;

Deliver a majority of the plan’s target long-term compensation through performance-vested, not simply time-

vested, equity awards;

Provide the strategic rationale and relative weightings of the financial and non-financial performance metrics

or criteria used in the annual and performance-vested long-term incentive components of the plan;

Establish performance targets for each plan financial metric relative to the performance of the company’s

peer companies; and

Limit payment under the annual and performance-vested long-term incentive components of the plan to

when the company’s performance on its selected financial performance metrics exceeds peer group

median performance.

Consider the following factors in evaluating this proposal:

What aspects of the company’s annual and long-term equity incentive programs are performance driven?

If the annual and long-term equity incentive programs are performance driven, are the performance criteria

and hurdle rates disclosed to shareholders or are they benchmarked against a disclosed peer group?

Can shareholders assess the correlation between pay and performance based on the current disclosure? and

What type of industry and stage of business cycle does the company belong to?


WWW.ISSGOVERNANCE.COM		61 of 87


UNITED STATES Proxy Voting Guidelines

Pre-Arranged Trading Plans (10b5-1 Plans)

General Recommendation: Generally vote for shareholder proposals calling for the addition of certain safeguards

in prearranged trading plans (10b5-1 plans) for executives. Safeguards may include:

Adoption, amendment, or termination of a 10b5-1 Plan must be disclosed in a Form 8-K;

Amendment or early termination of a 10b5-1 Plan allowed only under extraordinary circumstances, as

determined by the board;

Request that a certain number of days that must elapse between adoption or amendment of a 10b5-1 Plan

and initial trading under the plan;

Reports on Form 4 must identify transactions made pursuant to a 10b5-1 Plan;

An executive may not trade in company stock outside the 10b5-1 Plan; and

Trades under a 10b5-1 Plan must be handled by a broker who does not handle other securities transactions

for the executive.

Prohibit Outside CEOs from Serving on Compensation Committees

General Recommendation: Generally vote against proposals seeking a policy to prohibit any outside CEO from

serving on a company’s compensation committee, unless the company has demonstrated problematic pay

practices that raise concerns about the performance and composition of the committee.

Recoupment of Incentive or Stock Compensation in Specified Circumstances

General Recommendation: Vote case-by-case on proposals to recoup incentive cash or stock compensation made

to senior executives if it is later determined that the figures upon which incentive compensation is earned turn out

to have been in error, or if the senior executive has breached company policy or has engaged in misconduct that

may be significantly detrimental to the company's financial position or reputation, or if the senior executive failed

to manage or monitor risks that subsequently led to significant financial or reputational harm to the company.

Many companies have adopted policies that permit recoupment in cases where an executive's fraud, misconduct,

or negligence significantly contributed to a restatement of financial results that led to the awarding of unearned

incentive compensation. However, such policies may be narrow given that not all misconduct or negligence may

result in significant financial restatements. Misconduct, negligence, or lack of sufficient oversight by senior

executives may lead to significant financial loss or reputational damage that may have long-lasting impact.

In considering whether to support such shareholder proposals, ISS will take into consideration the following

factors:

If the company has adopted a formal recoupment policy;

The rigor of the recoupment policy focusing on how and under what circumstances the company may recoup

incentive or stock compensation;

Whether the company has chronic restatement history or material financial problems;

Whether the company’s policy substantially addresses the concerns raised by the proponent;

Disclosure of recoupment of incentive or stock compensation from senior executives or lack thereof; and

Any other relevant factors.

Severance and Golden Parachute Agreements

General Recommendation: Vote case-by-case on shareholder proposals requiring that executive severance

(including change-in-control related) arrangements or payments be submitted for shareholder ratification.


WWW.ISSGOVERNANCE.COM		62 of 87


UNITED STATES Proxy Voting Guidelines

Factors that will be considered include, but are not limited to:

The company’s severance or change-in-control agreements in place, and the presence of problematic features

(such as excessive severance entitlements, single triggers, excise tax gross-ups, etc.);

Any existing limits on cash severance payouts or policies which require shareholder ratification of severance

payments exceeding a certain level;

Any recent severance-related controversies; and

Whether the proposal is overly prescriptive, such as requiring shareholder approval of severance that does

not exceed market norms.

Share Buyback Impact on Incentive Program Metrics

General Recommendation: Vote case-by-case on proposals requesting the company exclude the impact of share

buybacks from the calculation of incentive program metrics, considering the following factors:

The frequency and timing of the company's share buybacks;

The use of per-share metrics in incentive plans;

The effect of recent buybacks on incentive metric results and payouts; and

Whether there is any indication of metric result manipulation.

Supplemental Executive Retirement Plans (SERPs)

General Recommendation: Generally vote for shareholder proposals requesting to put extraordinary benefits

contained in SERP agreements to a shareholder vote unless the company’s executive pension plans do not contain

excessive benefits beyond what is offered under employee-wide plans.

Generally vote for shareholder proposals requesting to limit the executive benefits provided under the company’s

supplemental executive retirement plan (SERP) by limiting covered compensation to a senior executive’s annual

salary or those pay elements covered for the general employee population.

Tax Gross-Up Proposals

General Recommendation: Generally vote for proposals calling for companies to adopt a policy of not providing

tax gross-up payments to executives, except in situations where gross-ups are provided pursuant to a plan, policy,

or arrangement applicable to management employees of the company, such as a relocation or expatriate tax

equalization policy.

Termination of Employment Prior to Severance Payment/Eliminating

Accelerated Vesting of Unvested Equity

General Recommendation: Vote case-by-case on shareholder proposals seeking a policy requiring termination of

employment prior to severance payment and/or eliminating accelerated vesting of unvested equity.

The following factors will be considered:


WWW.ISSGOVERNANCE.COM		64 of 87


UNITED STATES Proxy Voting Guidelines

6.Routine/Miscellaneous

Adjourn Meeting

General Recommendation: Generally vote against proposals to provide management with the authority to adjourn

an annual or special meeting absent compelling reasons to support the proposal.

Vote for proposals that relate specifically to soliciting votes for a merger or transaction if supporting that merger

or transaction. Vote against proposals if the wording is too vague or if the proposal includes "other business."

Amend Quorum Requirements

General Recommendation: Vote case-by-case on proposals to reduce quorum requirements for shareholder

meetings below a majority of the shares outstanding, taking into consideration:

The new quorum threshold requested;

The rationale presented for the reduction;

The market capitalization of the company (size, inclusion in indices);

The company's ownership structure;

Previous voter turnout or attempts to achieve quorum;

Any provisions or commitments to restore quorum to a majority of shares outstanding, should voter turnout

improve sufficiently; and

Other factors as appropriate.

In general, a quorum threshold kept as close to a majority of shares outstanding as is achievable is preferred.

Vote case-by-case on directors who unilaterally lower the quorum requirements below a majority of the shares

outstanding, taking into consideration the factors listed above.

Amend Minor Bylaws

General Recommendation: Vote for bylaw or charter changes that are of a housekeeping nature (updates or

corrections).

Change Company Name

General Recommendation: Vote for proposals to change the corporate name unless there is compelling evidence

that the change would adversely impact shareholder value.


WWW.ISSGOVERNANCE.COM		66 of 87


UNITED STATES Proxy Voting Guidelines

7.Social and Environmental Issues

Global Approach – E&S Shareholder Proposals

ISS applies a common approach globally to evaluating social and environmental shareholder proposals which

cover a wide range of topics, including consumer and product safety, environment and energy, labor standards

and human rights, workplace and board diversity, and corporate political issues. While a variety of factors goes

into each analysis, the overall principle guiding all vote recommendations focuses on how the proposal may

enhance or protect shareholder value in either the short or long term.

General Recommendation: Generally vote case-by-case, examining primarily whether implementation of the

proposal is likely to enhance or protect shareholder value. The following factors will be considered:

If the issues presented in the proposal are being appropriately or effectively dealt with through legislation or

regulation;

If the company has already responded in an appropriate and sufficient manner to the issue(s) raised in the

proposal;

Whether the proposal's request is unduly burdensome (scope or timeframe) or overly prescriptive;

The company's relevant practices compared with any industry standard practices for addressing the issue(s)

raised by the proposal;

Whether there are significant controversies, fines, penalties, or litigation associated with the

company's practices related to the issue(s) raised in the proposal;

If the proposal requests increased disclosure or greater transparency, whether reasonable and sufficient

information is currently available to shareholders from the company or from other publicly available sources;

If the proposal requests increased disclosure or greater transparency, whether implementation would reveal

proprietary or confidential information that could place the company at a competitive disadvantage; and

Whether the proposal addresses substantive matters that may impact shareholders' interests, including how

the proposal may impact shareholders' rights.

Endorsement of Principles

General Recommendation: Generally vote against proposals seeking a company's endorsement of principles that

support a particular public policy position. Endorsing a set of principles may require a company to take a stand on

an issue that is beyond its own control and may limit its flexibility with respect to future developments.

Management and the board should be afforded the flexibility to make decisions on specific public policy positions

based on their own assessment of the most beneficial strategies for the company.


WWW.ISSGOVERNANCE.COM		67 of 87


UNITED STATES Proxy Voting Guidelines

Animal Welfare

Animal Welfare Policies

General Recommendation: Generally vote for proposals seeking a report on a company’s animal welfare

standards, or animal welfare-related risks, unless:

The company has already published a set of animal welfare standards and monitors compliance;

The company’s standards are comparable to industry peers; and

There are no recent significant fines, litigation, or controversies related to the company’s and/or its suppliers'

treatment of animals.

Animal Testing

General Recommendation: Generally vote against proposals to phase out the use of animals in product testing,

unless:

The company is conducting animal testing programs that are unnecessary or not required by regulation;

The company is conducting animal testing when suitable alternatives are commonly accepted and used by

industry peers; or

There are recent, significant fines or litigation related to the company’s treatment of animals.

Animal Slaughter

General Recommendation: Generally vote against proposals requesting the implementation of Controlled

Atmosphere Killing (CAK) methods at company and/or supplier operations unless such methods are required by

legislation or generally accepted as the industry standard.

Vote case-by-case on proposals requesting a report on the feasibility of implementing CAK methods at company

and/or supplier operations considering the availability of existing research conducted by the company or industry

groups on this topic and any fines or litigation related to current animal processing procedures at the company.

Consumer Issues

Genetically Modified Ingredients

General Recommendation: Generally vote against proposals requesting that a company voluntarily label

genetically engineered (GE) ingredients in its products. The labeling of products with GE ingredients is best left to

the appropriate regulatory authorities.

Vote case-by-case on proposals asking for a report on the feasibility of labeling products containing GE ingredients,

taking into account:

The potential impact of such labeling on the company's business;


WWW.ISSGOVERNANCE.COM		68 of 87


UNITED STATES Proxy Voting Guidelines

The quality of the company’s disclosure on GE product labeling, related voluntary initiatives, and how this

disclosure compares with industry peer disclosure; and

Company’s current disclosure on the feasibility of GE product labeling.

Generally vote against proposals seeking a report on the social, health, and environmental effects of genetically

modified organisms (GMOs). Studies of this sort are better undertaken by regulators and the scientific community.

Generally vote against proposals to eliminate GE ingredients from the company's products, or proposals asking for

reports outlining the steps necessary to eliminate GE ingredients from the company’s products. Such decisions are

more appropriately made by management with consideration of current regulations.

Reports on Potentially Controversial Business/Financial Practices

General Recommendation: Vote case-by-case on requests for reports on a company’s potentially controversial

business or financial practices or products, taking into account:

Whether the company has adequately disclosed mechanisms in place to prevent abuses;

Whether the company has adequately disclosed the financial risks of the products/practices in question;

Whether the company has been subject to violations of related laws or serious controversies; and

Peer companies’ policies/practices in this area.

Pharmaceutical Pricing, Access to Medicines, and Prescription Drug

Reimportation

General Recommendation: Generally vote against proposals requesting that companies implement specific price

restraints on pharmaceutical products unless the company fails to adhere to legislative guidelines or industry

norms in its product pricing practices.

Vote case-by-case on proposals requesting that a company report on its product pricing or access to medicine

policies, considering:

The potential for reputational, market, and regulatory risk exposure;

Existing disclosure of relevant policies;

Deviation from established industry norms;

Relevant company initiatives to provide research and/or products to disadvantaged consumers;

Whether the proposal focuses on specific products or geographic regions;

The potential burden and scope of the requested report; and

Recent significant controversies, litigation, or fines at the company.

Generally vote for proposals requesting that a company report on the financial and legal impact of its prescription

drug reimportation policies unless such information is already publicly disclosed.

Generally vote against proposals requesting that companies adopt specific policies to encourage or constrain

prescription drug reimportation. Such matters are more appropriately the province of legislative activity and may

place the company at a competitive disadvantage relative to its peers.


WWW.ISSGOVERNANCE.COM		69 of 87


UNITED STATES Proxy Voting Guidelines

Product Safety and Toxic/Hazardous Materials

General Recommendation: Generally vote for proposals requesting that a company report on its policies,

initiatives/procedures, and oversight mechanisms related to toxic/hazardous materials or product safety in its

supply chain, unless:

The company already discloses similar information through existing reports such as a supplier code of conduct

and/or a sustainability report;

The company has formally committed to the implementation of a toxic/hazardous materials and/or product

safety and supply chain reporting and monitoring program based on industry norms or similar standards

within a specified time frame; or

The company has not been recently involved in relevant significant controversies, fines, or litigation.

Vote case-by-case on resolutions requesting that companies develop a feasibility assessment to phase-out of certain

toxic/hazardous materials, or evaluate and disclose the potential financial and legal risks associated with utilizing

certain materials, considering:

The company’s current level of disclosure regarding its product safety policies, initiatives, and oversight

mechanisms;

Current regulations in the markets in which the company operates; and

Recent significant controversies, litigation, or fines stemming from toxic/hazardous materials at the company.

Generally vote against resolutions requiring that a company reformulate its products.

Tobacco-Related Proposals

General Recommendation: Vote case-by-case on resolutions regarding the advertisement of tobacco products,

considering:

Recent related fines, controversies, or significant litigation;

Whether the company complies with relevant laws and regulations on the marketing of tobacco;

Whether the company’s advertising restrictions deviate from those of industry peers;

Whether the company entered into the Master Settlement Agreement, which restricts marketing of tobacco

to youth; and

Whether restrictions on marketing to youth extend to foreign countries.

Vote case-by-case on proposals regarding second-hand smoke, considering;

Whether the company complies with all laws and regulations;

The degree that voluntary restrictions beyond those mandated by law might hurt the company’s

competitiveness; and

The risk of any health-related liabilities.

Generally vote against resolutions to cease production of tobacco-related products, to avoid selling products to

tobacco companies, to spin-off tobacco-related businesses, or prohibit investment in tobacco equities. Such

business decisions are better left to company management or portfolio managers.

Generally vote against proposals regarding tobacco product warnings. Such decisions are better left to public

health authorities.


WWW.ISSGOVERNANCE.COM		70 of 87


UNITED STATES Proxy Voting Guidelines

Climate Change

Say on Climate (SoC) Management Proposals

General Recommendation: Vote case-by-case on management proposals that request shareholders to approve

the company’s climate transition action plan21, taking into account the completeness and rigor of the plan.

Information that will be considered where available includes the following:

The extent to which the company’s climate related disclosures are in line with TCFD recommendations and

meet other market standards;

Disclosure of its operational and supply chain GHG emissions (Scopes 1, 2, and 3);

The completeness and rigor of company’s short-, medium-, and long-term targets for reducing operational and

supply chain GHG emissions (Scopes 1, 2, and 3 if relevant);

Whether the company has sought and received third-party approval that its targets are science-based;

Whether the company has made a commitment to be “net zero” for operational and supply chain emissions

(Scopes 1, 2, and 3) by 2050;

Whether the company discloses a commitment to report on the implementation of its plan in subsequent

years;

Whether the company’s climate data has received third-party assurance;

Disclosure of how the company’s lobbying activities and its capital expenditures align with company strategy;

Whether there are specific industry decarbonization challenges; and

The company’s related commitment, disclosure, and performance compared to its industry peers.

Say on Climate (SoC) Shareholder Proposals

General Recommendation: Vote case-by-case on shareholder proposals that request the company to disclose a

report providing its GHG emissions levels and reduction targets and/or its upcoming/approved climate transition

action plan and provide shareholders the opportunity to express approval or disapproval of its GHG emissions

reduction plan, taking into account information such as the following:

The completeness and rigor of the company’s climate-related disclosure;

The company’s actual GHG emissions performance;

Whether the company has been the subject of recent, significant violations, fines, litigation, or controversy

related to its GHG emissions; and

Whether the proposal’s request is unduly burdensome (scope or timeframe) or overly prescriptive.

Climate Change/Greenhouse Gas (GHG) Emissions

General Recommendation: Vote case-by-case on resolutions requesting that a company disclose information on

the climate change related financial, physical, or regulatory risks it faces to its operations and investments or on

how the company identifies, measures, and manages such risks, considering:

___________________________________

21 Variations of this request also include climate transition related ambitions, or commitment to reporting on the

implementation of a climate plan.


WWW.ISSGOVERNANCE.COM		71 of 87


UNITED STATES Proxy Voting Guidelines

Whether the company already provides current, publicly-available information on the climate change-

related financial, physical, or regulatory risks its faces to its operations and investments or on the impact

that climate change may have on the company;

Associated company policies and practices addressing climate change related risks and/or opportunities;

The company's level of disclosure compared to industry peers; and

Whether there are significant controversies, fines, penalties, or litigation associated with the

company's climate change-related performance.

Vote case-by-case on proposals requesting that a company report on its greenhouse gas (GHG) emissions from

company operations and/or products and operations, considering:

Whether the company discloses current, publicly-available information on the impacts that GHG emissions

may have on the company as well as associated company policies and procedures to address related risks

and/or opportunities;

Whether the company's level of disclosure is comparable to that of industry peers; or

Whether there are significant, controversies, fines, penalties, or litigation associated with the

company's GHG emissions.

Vote case-by-case on proposals that call for the adoption of GHG reduction goals from products and operations,

considering:

The company's actual GHG emissions performance;

The company's current GHG emission policies, oversight mechanisms, and related initiatives;

Whether the company provides disclosure of year-over-year GHG emissions performance data;

Whether company disclosure lags behind industry peers; and

Whether the company has been the subject of recent, significant violations, fines, litigation, or controversy

related to GHG emissions.

Energy Efficiency

General Recommendation: Generally vote for proposals requesting that a company report on its energy efficiency

policies, unless:

The company complies with applicable energy efficiency regulations and laws, and discloses its participation in

energy efficiency policies and programs, including disclosure of benchmark data, targets, and performance

measures; or

The proponent requests adoption of specific energy efficiency goals within specific timelines.

Renewable Energy

General Recommendation: Generally vote for requests for reports on the feasibility of developing renewable

energy resources unless the report would be duplicative of existing disclosure or irrelevant to the company’s line

of business.

Generally vote against proposals requesting that the company invest in renewable energy resources. Such

decisions are best left to management’s evaluation of the feasibility and financial impact that such programs may

have on the company.

Generally vote against proposals that call for the adoption of renewable energy goals, taking into account:


WWW.ISSGOVERNANCE.COM		72 of 87


UNITED STATES Proxy Voting Guidelines

The scope and structure of the proposal;

The company's current level of disclosure on renewable energy use and GHG emissions; and

The company's disclosure of policies, practices, and oversight implemented to manage GHG emissions and

mitigate climate change risks.

Diversity

Board Diversity

General Recommendation: Generally vote for requests for reports on a company's efforts to diversify the board,

unless:

The gender and racial minority representation of the company’s board is reasonably inclusive in relation to

companies of similar size and business; or

The board already reports on its nominating procedures and gender and racial minority initiatives on the

board and within the company.

Vote case-by-case on proposals asking a company to increase the gender and racial minority representation on its

board, taking into account:

The degree of existing gender and racial minority diversity on the company’s board and among its executive

officers;

The level of gender and racial minority representation that exists at the company’s industry peers;

The company’s established process for addressing gender and racial minority board representation;

Whether the proposal includes an overly prescriptive request to amend nominating committee

charter language;

The independence of the company’s nominating committee;

Whether the company uses an outside search firm to identify potential director nominees; and

Whether the company has had recent controversies, fines, or litigation regarding equal employment practices.

Equality of Opportunity

General Recommendation: Generally vote case-by-case on proposals requesting a company disclose its diversity

policies or initiatives, or proposals requesting disclosure of a company’s comprehensive workforce diversity data,

including requests for EEO-1 data. Factors that will be considered are:

Whether the company publicly discloses equal opportunity policies and initiatives;

Whether the company publicly discloses comprehensive workforce diversity data/EEO-1 report; or

Whether the company has recent significant workplace discrimination/fair employment violations or litigation.

Generally vote against proposals seeking information on the diversity efforts of suppliers and service providers.

Such requests may pose a significant burden on the company.


WWW.ISSGOVERNANCE.COM		73 of 87


UNITED STATES Proxy Voting Guidelines

Gender Identity, Sexual Orientation, and Domestic Partner Benefits

General Recommendation: Generally vote for proposals seeking to amend a company’s EEO statement or diversity

policies to prohibit discrimination based on sexual orientation and/or gender identity, unless the change would be

unduly burdensome.

Generally vote against proposals to extend company benefits to, or eliminate benefits from, domestic partners.

Decisions regarding benefits should be left to the discretion of the company.

Gender, Race/Ethnicity Pay Gap

General Recommendation: Vote case-by-case on requests for reports on a company's pay data by gender or race/

ethnicity, or a report on a company’s policies and goals to reduce any gender or race/ethnicity pay gaps, taking

into account:

The company's current policies and disclosure related to both its diversity and inclusion policies and

practices and its compensation philosophy on fair and equitable compensation practices;

Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

gender, race, or ethnicity pay gap issues;

The company’s disclosure regarding gender, race, or ethnicity pay gap policies or initiatives compared to its

industry peers; and

Local laws regarding categorization of race and/or ethnicity and definitions of ethnic and/or racial minorities.

Racial Equity and/or Civil Rights Audit Guidelines

General Recommendation: Vote case-by-case on proposals asking a company to conduct an independent racial

equity and/or civil rights audit, taking into account:

The company’s established process or framework for addressing racial inequity and discrimination internally;

Whether the company adequately discloses workforce diversity and inclusion metrics and goals;

Whether the company has issued a public statement related to its racial justice efforts in recent years, or has

committed to internal policy review;

Whether the company has engaged with impacted communities, stakeholders, and civil rights experts;

The company’s track record in recent years of racial justice measures and outreach externally; and

Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

racial inequity or discrimination.

Environment and Sustainability

Facility and Workplace Safety

General Recommendation: Vote case-by-case on requests for workplace safety reports, including reports on

accident risk reduction efforts, taking into account:


WWW.ISSGOVERNANCE.COM		74 of 87


UNITED STATES Proxy Voting Guidelines

The company’s current level of disclosure of its workplace health and safety performance data, health and

safety management policies, initiatives, and oversight mechanisms;

The nature of the company’s business, specifically regarding company and employee exposure to health and

safety risks;

Recent significant controversies, fines, or violations related to workplace health and safety; and

The company's workplace health and safety performance relative to industry peers.

Vote case-by-case on resolutions requesting that a company report on safety and/or security risks associated with

its operations and/or facilities, considering:

The company’s compliance with applicable regulations and guidelines;

The company’s current level of disclosure regarding its security and safety policies, procedures, and

compliance monitoring; and

The existence of recent, significant violations, fines, or controversy regarding the safety and security of the

company’s operations and/or facilities.

Natural Capital- Related and/or Community Impact Assessment Proposals

General Recommendation: Vote case-by-case on requests for reports on policies and/or the potential

(community) social and/or environmental impact of company operations, considering:

Alignment of current disclosure of applicable company policies, metrics, risk assessment report(s) and risk

management procedures with any relevant, broadly accepted reporting frameworks;

The impact of regulatory non-compliance, litigation, remediation, or reputational loss that may be associated

with failure to manage the company’s operations in question, including the management of relevant

community and stakeholder relations;

The nature, purpose, and scope of the company’s operations in the specific region(s);

The degree to which company policies and procedures are consistent with industry norms; and

The scope of the resolution.

Hydraulic Fracturing

General Recommendation: Generally vote for proposals requesting greater disclosure of a company's (natural gas)

hydraulic fracturing operations, including measures the company has taken to manage and mitigate the potential

community and environmental impacts of those operations, considering:

The company's current level of disclosure of relevant policies and oversight mechanisms;

The company's current level of such disclosure relative to its industry peers;

Potential relevant local, state, or national regulatory developments; and

Controversies, fines, or litigation related to the company's hydraulic fracturing operations.

Operations in Protected Areas

General Recommendation: Generally vote for requests for reports on potential environmental damage as a result

of company operations in protected regions, unless:

Operations in the specified regions are not permitted by current laws or regulations;

The company does not currently have operations or plans to develop operations in these protected regions; or


WWW.ISSGOVERNANCE.COM		75 of 87


UNITED STATES Proxy Voting Guidelines

The company’s disclosure of its operations and environmental policies in these regions is comparable to

industry peers.

Recycling

General Recommendation: Vote case-by-case on proposals to report on an existing recycling program, or adopt a

new recycling program, taking into account:

The nature of the company’s business;

The current level of disclosure of the company's existing related programs;

The timetable and methods of program implementation prescribed by the proposal;

The company’s ability to address the issues raised in the proposal; and

How the company's recycling programs compare to similar programs of its industry peers.

Sustainability Reporting

General Recommendation: Generally vote for proposals requesting that a company report on its policies,

initiatives, and oversight mechanisms related to social, economic, and environmental sustainability, unless:

The company already discloses similar information through existing reports or policies such as an

environment, health, and safety (EHS) report; a comprehensive code of corporate conduct; and/or a diversity

report; or

The company has formally committed to the implementation of a reporting program based on Global

Reporting Initiative (GRI) guidelines or a similar standard within a specified time frame.

Water Issues

General Recommendation: Vote case-by-case on proposals requesting a company report on, or adopt a new policy

on, water-related risks and concerns, taking into account:

The company's current disclosure of relevant policies, initiatives, oversight mechanisms, and water usage

metrics;

Whether or not the company's existing water-related policies and practices are consistent with relevant

internationally recognized standards and national/local regulations;

The potential financial impact or risk to the company associated with water-related concerns or issues; and

Recent, significant company controversies, fines, or litigation regarding water use by the company and its

suppliers.

General Corporate Issues

Charitable Contributions

General Recommendation: Vote against proposals restricting a company from making charitable contributions.

Charitable contributions are generally useful for assisting worthwhile causes and for creating goodwill in the


WWW.ISSGOVERNANCE.COM		76 of 87


UNITED STATES Proxy Voting Guidelines

community. In the absence of bad faith, self-dealing, or gross negligence, management should determine which,

and if, contributions are in the best interests of the company.

Data Security, Privacy, and Internet Issues

General Recommendation: Vote case-by-case on proposals requesting the disclosure or implementation of data

security, privacy, or information access and management policies and procedures, considering:

The level of disclosure of company policies and procedures relating to data security, privacy, freedom of

speech, information access and management, and Internet censorship;

Engagement in dialogue with governments or relevant groups with respect to data security, privacy, or the

free flow of information on the Internet;

The scope of business involvement and of investment in countries whose governments censor or monitor the

Internet and other telecommunications;

Applicable market-specific laws or regulations that may be imposed on the company; and

Controversies, fines, or litigation related to data security, privacy, freedom of speech, or Internet censorship.

ESG Compensation-Related Proposals

General Recommendation: Vote case-by-case on proposals seeking a report or additional disclosure on the

company's approach, policies, and practices on incorporating environmental and social criteria into its executive

compensation strategy, considering:

The scope and prescriptive nature of the proposal;

The company's current level of disclosure regarding its environmental and social performance and

governance;

The degree to which the board or compensation committee already discloses information on whether it has

considered related E&S criteria; and

Whether the company has significant controversies or regulatory violations regarding social or

environmental issues.

Human Rights, Human Capital Management, and International

Operations

Human Rights Proposals

General Recommendation: Vote case-by-case on proposals requesting a report on company or company supplier

labor and/or human rights standards and policies, taking into consideration:

Whether such information is publicly disclosed;

Whether the company is lagging industry peers; and

Whether there are recent, significant company controversies, fines, or litigation regarding human rights at the

company or its suppliers.


WWW.ISSGOVERNANCE.COM		77 of 87


UNITED STATES Proxy Voting Guidelines

Vote case-by-case on proposals to implement company or company supplier labor and/or human rights standards

and policies, considering:

The scope of the request;

The degree to which existing relevant policies and practices are disclosed;

Whether or not existing relevant policies are consistent with internationally recognized standards;

Deviation from industry sector peer company standards and practices.

Whether company facilities and those of its suppliers are monitored and how;

Company participation in fair labor organizations or other internationally recognized human rights initiatives;

Scope and nature of business conducted in markets known to have higher risk of workplace labor/

human rights abuse; and

Recent, significant company controversies, fines, or litigation regarding human rights at the company or its

suppliers.

Vote case-by-case on proposals requesting that a company conduct an assessment of the human rights risks in its

operations or in its supply chain, or report on its human rights risk assessment process, considering:

The degree to which existing relevant policies and practices are disclosed, including information on the

implementation of these policies and any related oversight mechanisms;

The company’s industry and whether the company or its suppliers operate in countries or areas where there is

a history of human rights concerns;

Recent significant controversies, fines, or litigation regarding human rights involving the company or its

suppliers, and whether the company has taken remedial steps; and

Whether the proposal is unduly burdensome or overly prescriptive.

Mandatory Arbitration

General Recommendation: Vote case-by-case on requests for a report on a company’s use of mandatory

arbitration on employment-related claims, taking into account:

The company's current policies and practices related to the use of mandatory arbitration agreements

on workplace claims;

Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

the use of mandatory arbitration agreements on workplace claims; and

The company's disclosure of its policies and practices related to the use of mandatory arbitration

agreements compared to its peers.

Operations in High-Risk Markets

General Recommendation: Vote case-by-case on requests for a report on a company’s potential financial and

reputational risks associated with operations in “high-risk” markets, such as a terrorism-sponsoring state or

politically/socially unstable region, taking into account:

The nature, purpose, and scope of the operations and business involved that could be affected by social

or political disruption;

Current disclosure of applicable risk assessment(s) and risk management procedures;

Compliance with U.S. sanctions and laws;

Consideration of other international policies, standards, and laws; and

Whether the company has been recently involved in recent, significant controversies, fines, or litigation

related to its operations in "high-risk" markets.


WWW.ISSGOVERNANCE.COM		78 of 87


UNITED STATES Proxy Voting Guidelines

Outsourcing/Offshoring

General Recommendation: Vote case-by-case on proposals calling for companies to report on the risks associated

with outsourcing/plant closures, considering:

Controversies surrounding operations in the relevant market(s);

The value of the requested report to shareholders;

The company’s current level of disclosure of relevant information on outsourcing and plant closure

procedures; and

The company’s existing human rights standards relative to industry peers.

Sexual Harassment

General Recommendation: Vote case-by-case on requests for a report on company actions taken to strengthen

policies and oversight to prevent workplace sexual harassment, or a report on risks posed by a company’s failure

to prevent workplace sexual harassment, taking into account:

The company's current policies, practices, oversight mechanisms related to preventing workplace sexual

harassment;

Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to

workplace sexual harassment issues; and

The company's disclosure regarding workplace sexual harassment policies or initiatives compared to its

industry peers.

Weapons and Military Sales

General Recommendation: Vote against reports on foreign military sales or offsets. Such disclosures may involve

sensitive and confidential information. Moreover, companies must comply with government controls and

reporting on foreign military sales.

Generally vote against proposals asking a company to cease production or report on the risks associated with the

use of depleted uranium munitions or nuclear weapons components and delivery systems, including disengaging

from current and proposed contracts. Such contracts are monitored by government agencies, serve multiple

military and non-military uses, and withdrawal from these contracts could have a negative impact on the

company’s business.

Political Activities

Lobbying

General Recommendation: Vote case-by-case on proposals requesting information on a company’s lobbying

(including direct, indirect, and grassroots lobbying) activities, policies, or procedures, considering:

The company’s current disclosure of relevant lobbying policies, and management and board oversight;


WWW.ISSGOVERNANCE.COM		79 of 87


UNITED STATES Proxy Voting Guidelines

The company’s disclosure regarding trade associations or other groups that it supports, or is a member of, that

engage in lobbying activities; and

Recent significant controversies, fines, or litigation regarding the company’s lobbying-related activities.

Political Contributions

General Recommendation: Vote case-by-case on proposals requesting greater disclosure of a company's political

contributions and trade association spending policies and activities, considering:

The company's policies, and management and board oversight related to its direct political contributions and

payments to trade associations or other groups that may be used for political purposes;

The company's disclosure regarding its support of, and participation in, trade associations or other groups

that may make political contributions;

The company's disclosure of its direct corporate political contributions; and

Recent significant controversies, fines, or litigation related to the company's political contributions or political

activities.

Vote against proposals barring a company from making political contributions. Businesses are affected by

legislation at the federal, state, and local level; barring political contributions can put the company at a competitive

disadvantage.

Vote against proposals to publish in newspapers and other media a company's political contributions. Such

publications could present significant cost to the company without providing commensurate value to shareholders.

Political Expenditures and Lobbying Congruency

General Recommendation: Generally vote case-by-case on proposals requesting greater disclosure of a company’s

alignment of political contributions, lobbying, and electioneering spending with a company’s publicly stated values

and policies, considering:

The company’s policies, management, board oversight, governance processes, and level of disclosure related

to direct political contributions, lobbying activities, and payments to trade associations, political action

committees, or other groups that may be used for political purposes;

The company’s disclosure regarding: the reasons for its support of candidates for public offices; the

reasons for support of and participation in trade associations or other groups that may make political

contributions; and other political activities;

Any incongruencies identified between a company’s direct and indirect political expenditures and its publicly

stated values and priorities; and

Recent significant controversies related to the company’s direct and indirect lobbying, political contributions,

or political activities.

Generally vote case-by-case on proposals requesting comparison of a company’s political spending to objectives

that can mitigate material risks for the company, such as limiting global warming.


WWW.ISSGOVERNANCE.COM		81 of 87


UNITED STATES Proxy Voting Guidelines

8.Mutual Fund Proxies

Election of Directors

General Recommendation: Vote case-by-case on the election of directors and trustees, following the same

guidelines for uncontested directors for public company shareholder meetings. However, mutual fund boards do

not usually have compensation committees, so do not withhold for the lack of this committee.

Closed End Funds- Unilateral Opt-In to Control Share Acquisition Statutes

General Recommendation: For closed-end management investment companies (CEFs), vote against or withhold

from nominating/governance committee members (or other directors on a case-by-case basis) at CEFs that have

not provided a compelling rationale for opting-in to a Control Share Acquisition statute, nor submitted a by-law

amendment to a shareholder vote.

Converting Closed-end Fund to Open-end Fund

General Recommendation: Vote case-by-case on conversion proposals, considering the following factors:

Past performance as a closed-end fund;

Market in which the fund invests;

Measures taken by the board to address the discount; and

Past shareholder activism, board activity, and votes on related proposals.

Proxy Contests

General Recommendation: Vote case-by-case on proxy contests, considering the following factors:

Past performance relative to its peers;

Market in which the fund invests;

Measures taken by the board to address the issues;

Past shareholder activism, board activity, and votes on related proposals;

Strategy of the incumbents versus the dissidents;

Independence of directors;

Experience and skills of director candidates;

Governance profile of the company; and

Evidence of management entrenchment.


WWW.ISSGOVERNANCE.COM		82 of 87


UNITED STATES Proxy Voting Guidelines

Investment Advisory Agreements

General Recommendation: Vote case-by-case on investment advisory agreements, considering the following

factors:

Proposed and current fee schedules;

Fund category/investment objective;

Performance benchmarks;

Share price performance as compared with peers;

Resulting fees relative to peers; and

Assignments (where the advisor undergoes a change of control).

Approving New Classes or Series of Shares

General Recommendation: Vote for the establishment of new classes or series of shares.

Preferred Stock Proposals

General Recommendation: Vote case-by-case on the authorization for or increase in preferred shares, considering

the following factors:

Stated specific financing purpose;

Possible dilution for common shares; and

Whether the shares can be used for antitakeover purposes.

1940 Act Policies

General Recommendation: Vote case-by-case on policies under the Investment Advisor Act of 1940, considering

the following factors:

Potential competitiveness;

Regulatory developments;

Current and potential returns; and

Current and potential risk.

Generally vote for these amendments as long as the proposed changes do not fundamentally alter the investment

focus of the fund and do comply with the current SEC interpretation.

Changing a Fundamental Restriction to a Nonfundamental Restriction

General Recommendation: Vote case-by-case on proposals to change a fundamental restriction to a non-

fundamental restriction, considering the following factors:

The fund's target investments;


WWW.ISSGOVERNANCE.COM		83 of 87


UNITED STATES Proxy Voting Guidelines

The reasons given by the fund for the change; and

The projected impact of the change on the portfolio.

Change Fundamental Investment Objective to Nonfundamental

General Recommendation: Vote against proposals to change a fund’s fundamental investment objective to non-

fundamental.

Name Change Proposals

General Recommendation: Vote case-by-case on name change proposals, considering the following factors:

Political/economic changes in the target market;

Consolidation in the target market; and

Current asset composition.

Change in Fund's Subclassification

General Recommendation: Vote case-by-case on changes in a fund's sub-classification, considering the following

factors:

Potential competitiveness;

Current and potential returns;

Risk of concentration; and

Consolidation in target industry.

Business Development Companies—Authorization to Sell Shares of Common

Stock at a Price below Net Asset Value

General Recommendation: Vote for proposals authorizing the board to issue shares below Net Asset Value (NAV)

if:

The proposal to allow share issuances below NAV has an expiration date no more than one year from the

date shareholders approve the underlying proposal, as required under the Investment Company Act of 1940;

The sale is deemed to be in the best interests of shareholders by (1) a majority of the company's independent

directors and (2) a majority of the company's directors who have no financial interest in the issuance; and

The company has demonstrated responsible past use of share issuances by either:

Outperforming peers in its 8-digit GICS group as measured by one- and three-year median TSRs; or

Providing disclosure that its past share issuances were priced at levels that resulted in only small or

moderate discounts to NAV and economic dilution to existing non-participating shareholders.


WWW.ISSGOVERNANCE.COM		84 of 87


UNITED STATES Proxy Voting Guidelines

Disposition of Assets/Termination/Liquidation

General Recommendation: Vote case-by-case on proposals to dispose of assets, to terminate or liquidate,

considering the following factors:

Strategies employed to salvage the company;

The fund’s past performance; and

The terms of the liquidation.

Changes to the Charter Document

General Recommendation: Vote case-by-case on changes to the charter document, considering the following

factors:

The degree of change implied by the proposal;

The efficiencies that could result;

The state of incorporation; and

Regulatory standards and implications.

Vote against any of the following changes:

Removal of shareholder approval requirement to reorganize or terminate the trust or any of its series;

Removal of shareholder approval requirement for amendments to the new declaration of trust;

Removal of shareholder approval requirement to amend the fund's management contract, allowing the

contract to be modified by the investment manager and the trust management, as permitted by the 1940 Act;

Allow the trustees to impose other fees in addition to sales charges on investment in a fund, such as deferred

sales charges and redemption fees that may be imposed upon redemption of a fund's shares;

Removal of shareholder approval requirement to engage in and terminate subadvisory arrangements; or

Removal of shareholder approval requirement to change the domicile of the fund.

Changing the Domicile of a Fund

General Recommendation: Vote case-by-case on re-incorporations, considering the following factors:

Regulations of both states;

Required fundamental policies of both states; and

The increased flexibility available.

Authorizing the Board to Hire and Terminate Subadvisers Without

Shareholder Approval

General Recommendation: Vote against proposals authorizing the board to hire or terminate subadvisers without

shareholder approval if the investment adviser currently employs only one subadviser.


WWW.ISSGOVERNANCE.COM		85 of 87


UNITED STATES Proxy Voting Guidelines

Distribution Agreements

General Recommendation: Vote case-by-case on distribution agreement proposals, considering the following

factors:

Fees charged to comparably sized funds with similar objectives;

The proposed distributor’s reputation and past performance;

The competitiveness of the fund in the industry; and

The terms of the agreement.

Master-Feeder Structure

General Recommendation: Vote for the establishment of a master-feeder structure.

Mergers

General Recommendation: Vote case-by-case on merger proposals, considering the following factors:

Resulting fee structure;

Performance of both funds;

Continuity of management personnel; and

Changes in corporate governance and their impact on shareholder rights.

Shareholder Proposals for Mutual Funds

Establish Director Ownership Requirement

General Recommendation: Generally vote against shareholder proposals that mandate a specific minimum

amount of stock that directors must own in order to qualify as a director or to remain on the board.

Reimburse Shareholder for Expenses Incurred

General Recommendation: Vote case-by-case on shareholder proposals to reimburse proxy solicitation expenses.

When supporting the dissidents, vote for the reimbursement of the proxy solicitation expenses.


WWW.ISSGOVERNANCE.COM		87 of 87


UNITED STATES Proxy Voting Guidelines

We empower investors and companies to build

for long-term and sustainable growth by providing

high-quality data, analytics, and insight.

GET STARTED WITH ISS SOLUTIONS

Email sales@issgovernance.com or visit www.issgovernance.com for more information.

Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies

to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is

majority owned by Deutsche Bourse Group, along with Genstar Capital and ISS management, is a leading provider

of corporate governance and responsible investment solutions, market intelligence, fund services, and events and

editorial content for institutional investors and corporations, globally. ISS’ 2,600 employees operate worldwide

across 29 global locations in 15 countries. Its approximately 3,400 clients include many of the world’s leading

institutional investors who rely on ISS’ objective and impartial offerings, as well as public companies focused on

ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS’ expertise to

help them make informed investment decisions. This document and all of the information contained in it,

including without limitation all text, data, graphs, and charts (collectively, the "Information") is the property of

Institutional Shareholder Services Inc. (ISS), its subsidiaries, or, in some cases third party suppliers.

The Information has not been submitted to, nor received approval from, the United States Securities and Exchange

Commission or any other regulatory body. None of the Information constitutes an offer to sell (or a solicitation of

an offer to buy), or a promotion or recommendation of, any security, financial product or other investment vehicle

or any trading strategy, and ISS does not endorse, approve, or otherwise express any opinion regarding any issuer,

securities, financial products or instruments or trading strategies.

The user of the Information assumes the entire risk of any use it may make or permit to be made of the

Information.

ISS MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION

AND EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED

WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS,

MERCHANTABILITY, AND FITNESS for A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION.

Without limiting any of the foregoing and to the maximum extent permitted by law, in no event shall ISS have any

liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost

profits), or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude

or limit any liability that may not by applicable law be excluded or limited.

Every person who is, has been, or becomes a Trustee or officer of the Registrant (hereinafter referred to as a “Covered Person”) shall be indemnified by the Registrant to the fullest extent permitted by law against any and all liabilities and expenses reasonably incurred or paid by them in connection with the defense of any proceeding in which they become involved as a party or otherwise by virtue of their being or having been such a Trustee or officer, and against amounts paid or incurred by them in the settlement thereof. Every person who is, has been, or becomes an agent of the Registrant may, upon due approval of the Trustees (including a majority of the Trustees who are not interested persons of the Registrant), be indemnified by the Registrant, to the fullest extent permitted by law, against any and all liabilities and expenses reasonably incurred or paid by them in connection with the defense of any proceeding in which they become involved as a party or otherwise by virtue of their being or having been an agent, and against amounts paid or incurred by him in the settlement thereof. Every Person who is serving or has served at the request of the Registrant as a director, officer, partner, trustee, employee, agent or fiduciary of another domestic or foreign corporation, partnership, joint venture, trust, other enterprise or employee benefit plan (“Other Position”) and who was or is a party or is threatened to be made a party to any proceeding by reason of alleged acts or omissions while acting within the scope of his or her service in such Other Position, may, upon due approval of the Trustees (including a majority of the Trustees who are not interested persons of the Registrant), be indemnified by the Registrant, to the fullest extent permitted by law, against any and all liabilities and expenses reasonably incurred or paid by them in connection with the defense of any proceeding in which they become involved as a party or otherwise by virtue of their being or having held such Other Position, and against amounts paid or incurred by them in the settlement thereof.


REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933			[X]
Pre-Effective Amendment No.			[ ]
Post-Effective Amendment No. 529			[X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940			[X]
Amendment No. 531			[X]


Kacie Briody, President						Copy to:
Listed Funds Trust						Laura E. Flores
c/o U.S. Bancorp Fund Services, LLC						Morgan, Lewis & Bockius LLP
615 East Michigan Street						1111 Pennsylvania Avenue, NW
Milwaukee, Wisconsin 53202						Washington, DC 20004-2541
(Name and Address of Agent for Service)


[X]			immediately upon filing pursuant to paragraph (b)
[ ]			on pursuant to paragraph (b)
[ ]			60 days after filing pursuant to paragraph (a)(1)
[ ]			on pursuant to paragraph (a)(1)
[ ]			75 days after filing pursuant to paragraph (a)(2)
[ ]			on ______________ pursuant to paragraph (a)(2) of Rule 485.


ROUNDHILL VIDEO GAMES ETF - FUND SUMMARY			3
ROUNDHILL SPORTS BETTING & IGAMING ETF - FUND SUMMARY			10
ROUNDHILL BALL METAVERSE ETF - FUND SUMMARY			17
ROUNDHILL CANNABIS ETF - FUND SUMMARY			28
ROUNDHILL MAGNIFICENT SEVEN ETF - FUND SUMMARY			37
ADDITIONAL INFORMATION ABOUT THE INDEXES			46
ADDITIONAL INFORMATION ABOUT THE FUNDS			46
INVESTMENT OBJECTIVES			46
PRINCIPAL INVESTMENT STRATEGIES			46
PRINCIPAL INVESTMENT RISKS			47
PORTFOLIO HOLDINGS INFORMATION			68
MANAGEMENT			69
INVESTMENT ADVISER			69
SUB-ADVISER			69
PORTFOLIO MANAGERS			70
OTHER SERVICE PROVIDERS			70
HOW TO BUY AND SELL SHARES			71
BOOK ENTRY			71
FREQUENT PURCHASES AND REDEMPTIONS OF SHARES			71
DETERMINATION OF NET ASSET VALUE			71
FAIR VALUE PRICING			71
INVESTMENTS BY REGISTERED INVESTMENT COMPANIES			72
DELIVERY OF SHAREHOLDER DOCUMENTS – HOUSEHOLDING			72
DIVIDENDS, DISTRIBUTIONS, AND TAXES			72
DIVIDENDS AND DISTRIBUTIONS			72
TAXES			72
TAXES ON DISTRIBUTIONS			72
TAXES WHEN SHARES ARE SOLD ON THE EXCHANGE			73
TAXES ON PURCHASES AND REDEMPTIONS OF CREATION UNITS			73
NET INVESTMENT INCOME TAX			74
FOREIGN INVESTMENTS BY A FUND			74
TAXATION OF REIT INVESTMENTS			74
TAXATION ON CRYPTOCURRENCY			74
DISTRIBUTION PLAN			75
PREMIUM/DISCOUNT INFORMATION			75
ADDITIONAL NOTICES			75
FINANCIAL HIGHLIGHTS			75



Shareholder Fees (fees paid directly from your investment)			None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee			0.50%
Distribution and/or Service (12b-1) Fees			0.00%
Other Expenses			0.00%
Total Annual Fund Operating Expenses			0.50%


Roundhill Video Games ETF	1 Year	5 Years	Since Inception (6/3/2019)
Return Before Taxes	22.47%	-3.43%	8.63%
Return After Taxes on Distributions	22.39%	-3.53%	8.49%
Return After Taxes on Distributions and Sale of Shares	13.53%	-2.52%	6.95%
Solactive GBS Global Markets All Cap USD Index TR (reflects no deduction for fees, expenses, or taxes)	22.52%	11.01%	13.41%
Roundhill Video Games Blended Index* (reflects no deduction for fees, expenses, or taxes)	22.37%	-3.01%	9.24%


Adviser			Roundhill Financial Inc. (the “Adviser”)
Sub-Adviser			Exchange Traded Concepts, LLC
Portfolio Managers			William Hershey, Timothy Maloney and David Mazza, each a portfolio manager for the Adviser, have been portfolio managers of the Fund since March 2025. Andrew Serowik, Todd Alberico, Gabriel Tan, and Brian Cooper are each portfolio managers for the Sub-Adviser. Mr. Serowik has been a portfolio manager of the Fund since its inception in June 2019, Mr. Alberico and Mr. Tan have been portfolio managers of the Fund since July 2021, and Mr. Cooper has been a portfolio manager for the Fund since November 2021.


Roundhill Sports Betting & iGaming ETF	1 Year	5 Years	Since Inception (6/3/2020)
Return Before Taxes	16.02%	-2.84%	6.99%
Return After Taxes on Distributions	14.42%	-3.12%	6.69%
Return After Taxes on Distributions and Sale of Shares	9.93%	-2.17%	5.47%
Solactive GBS Global Markets All Cap USD Index TR (reflects no deduction for fees, expenses, or taxes)	22.52%	11.01%	14.22%
Roundhill Sports Betting & iGaming Blended Index* (reflects no deduction for fees, expenses, or taxes)	16.90%	-2.33%	11.74%


Roundhill Ball Metaverse ETF	1 Year	Since Inception (6/29/21)
Return Before Taxes	30.69%	5.16%
Return After Taxes on Distributions	30.64%	5.13%
Return After Taxes on Distributions and Sale of Shares	18.21%	4.00%
Solactive GBS Global Markets All Cap USD Index TR (reflects no deduction for fees, expenses, or taxes)	22.52%	9.25%
Ball Metaverse Index (reflects no deduction for fees, expenses, or taxes)	31.69%	5.77%


Roundhill Cannabis ETF	1 Year	Since Inception (4/19/22)
Return Before Taxes	22.64%	-30.46%
Return After Taxes on Distributions	22.64%	-30.46%
Return After Taxes on Distributions and Sale of Shares	13.40%	-20.06%
Solactive GBS Global Markets All Cap USD Index TR (reflects no deduction for fees, expenses, or taxes)	22.52%	12.49%
North American Cannabis Net Total Return Index (reflects no deduction for fees, expenses, or taxes)	14.69%	-22.92%


Adviser			Roundhill Financial Inc.
Sub-Adviser			Exchange Traded Concepts, LLC (the “Sub-Adviser”)
Portfolio Managers			William Hershey and Timothy Maloney, each a portfolio manager for the Adviser, and Andrew Serowik, Todd Alberico, Gabriel Tan and Brian Copper, each a portfolio manager for the Sub-Adviser, have been portfolio managers of the Fund since its inception in April 2022. David Mazza, also a portfolio manager for the Adviser, has been a portfolio manager of the Fund since March 2025.


Roundhill Magnificent Seven ETF	1 Year	Since Inception (4/10/23)
Return Before Taxes	22.96%	44.67%
Return After Taxes on Distributions	22.25%	44.10%
Return After Taxes on Distributions and Sale of Shares	13.61%	35.95%
Solactive GBS Global Markets All Cap USD Index TR (reflects no deduction for fees, expenses, or taxes)	22.52%	19.79%


Fund			Management Fee
Roundhill Video Games ETF			0.50%
Roundhill Sports Betting & iGaming ETF			0.75%
Roundhill Ball Metaverse ETF			0.59%
Roundhill Cannabis ETF			0.39%
Roundhill Magnificent Seven ETF			0.29%


Minimum Annual Fee*			Asset-Based Fee
$15,000			4 bps (0.04%) on the first $200 million 3.5 bps (0.035%) on the next $800 million 3 bps (0.03%) on the next $1 billion 2.5 bps (0.025%) on the balance over $2 billion


Adviser	Roundhill Financial Inc. 154 West 14th Street, 2nd Floor New York, New York 10011	Transfer Agent, Index Receipt Agent, and Administrator	U.S. Bancorp Fund Services, LLC d/b/a U.S. Bank Global Fund Services 615 East Michigan Street Milwaukee, Wisconsin 53202
Sub-Adviser	Exchange Traded Concepts, LLC 10900 Hefner Pointe Drive, Suite 400 Oklahoma City, Oklahoma 73120	Distributor	Foreside Fund Services, LLC 190 Middle Street, Suite 301 Portland, Maine 04101
Custodian	U.S. Bank National Association 1555 North Rivercenter Drive, Suite 302 Milwaukee, Wisconsin 53212	Legal Counsel	Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004-2541
Independent Registered Public Accounting Firm	Cohen & Company, Ltd. 1835 Market Street, Suite 310 Philadelphia, Pennsylvania 19103


PROSPECTUS


1 Year:			$51			3 Years:			$160			5 Years:			$280			10 Years:			$628


1 Year:			$77			3 Years:			$240			5 Years:			$417			10 Years:			$930


1 Year:			$59			3 Years:			$188			5 Years:			$328			10 Years:			$737


GENERAL INFORMATION ABOUT THE TRUST			4
ADDITIONAL INFORMATION ABOUT INVESTMENT OBJECTIVE S , POLICIES, AND RELATED RISKS			4
DIVERSIFICATION STATUS			4
GENERAL RISKS			5
DESCRIPTION OF PERMITTED INVESTMENTS			6
BORROWING			6
CANNABIS-RELATED SECURITIES			6
INVESTMENTS IN CHINA A-SHARES			7
CRYPTOCURRENCY ETFs			10
DEBT SECURITIES			15
DEPOSITARY RECEIPTS			17
DERIVATIVE INSTRUMENTS			17
DERIVATIVES REGULATORY RISK			21
EQUITY SECURITIES			21
EXCHANGE-TRADED FUNDS			22
ILLIQUID INVESTMENTS			23
INVESTMENT COMPANY SECURITIES			23
MONEY MARKET INSTRUMENTS			23
NON-U.S. SECURITIES			23
OTHER SHORT-TERM INSTRUMENTS			24
REAL ESTATE INVESTMENT TRUSTS (“REITS”)			24
REPURCHASE AGREEMENTS			25
REVERSE REPURCHASE AGREEMENTS			25
SECURITIES LENDING			25
U.S. GOVERNMENT SECURITIES			26
WHEN-ISSUED SECURITIES			27
INVESTMENT RESTRICTIONS			27
EXCHANGE LISTING AND TRADING			29
MANAGEMENT OF THE TRUST			29
PRINCIPAL SHAREHOLDERS, CONTROL PERSONS, AND MANAGEMENT OWNERSHIP			33
CODES OF ETHICS			35
PROXY VOTING POLICIES			35
INVESTMENT MANAGEMENT			35
INVESTMENT ADVISER			35
SUB-ADVISER			36
PORTFOLIO MANAGERS			36
DISTRIBUTOR			37
TRANSFER AGENT, INDEX RECEIPT AGENT, AND ADMINISTRATOR			39
CUSTODIAN			39
SECURITIES LENDING ACTIVITIES			39
LEGAL COUNSEL			40
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			40
PORTFOLIO HOLDINGS DISCLOSURE POLICIES AND PROCEDURES			40
DESCRIPTION OF SHARES			40
LIMITATION OF TRUSTEES’ LIABILITY			41
BROKERAGE TRANSACTIONS			41
PORTFOLIO TURNOVER RATE			42
BOOK ENTRY ONLY SYSTEM			43
PURCHASE AND REDEMPTION OF CREATION UNITS			44
DETERMINATION OF NET ASSET VALUE			50
DIVIDENDS AND DISTRIBUTIONS			50
FEDERAL INCOME TAXES			51
FINANCIAL STATEMENTS			58


Name	Aggregate Compensation From the Funds	Total Compensation From Fund Complex Paid to Trustees*
John L. Jacobs	$0	$130,000
Koji Felton	$0	$125,000
Pamela H. Conroy	$0	$127,500


Name and Address	% Ownership	Type of Ownership

Charles Schwab & Co., Inc. 211 Main Street San Francisco, CA 94105-1905	20.62%	Record
National Financial Services, LLC 200 Liberty Street New York, NY 10281	19.68%	Record
Morgan Stanley Smith Barney, LLC Harborside Financial Center Plaza, 23rd Floor Jersey City, NJ 07311	8.32%	Record
Citibank, N.A. 388 Greenwich Street New York, NY 10113	8.21%	Record
J.P. Morgan Securities LLC 383 Madison Avenue New York, NY 10179	7.80%	Record
BOFA Securities, Inc. One Bryant Park New York, NY 10036	7.77%	Record


Portfolio Manager	Registered Investment Companies		Other Pooled Investment Vehicles		Other Accounts
	Number of Accounts	Total Assets in the Accounts	Number of Accounts	Total Assets in the Accounts	Number of Accounts	Total Assets in the Accounts
William Hershey	28	$4.311 billion	0	$0	0	$0
Timothy Maloney	28	$4.311 billion	0	$0	0	$0
David Mazza	28	$4.311 billion	0	$0	0	$0


Name of Fund	Fixed Creation Transaction Fee	Maximum Variable Transaction Fee
Roundhill Video Games ETF	$500	2%
Roundhill Sports Betting & iGaming ETF	$500	2%
Roundhill Ball Metaverse ETF	$500	2%
Roundhill Cannabis ETF	$300	2%
Roundhill Magnificent Seven ETF	$300	2%


Name of Fund	Fixed Redemption Transaction Fee	Maximum Variable Transaction Fee
Roundhill Video Games ETF	$500	2%
Roundhill Sports Betting & iGaming ETF	$500	2%
Roundhill Ball Metaverse ETF	$500	2%
Roundhill Cannabis ETF	$300	2%
Roundhill Magnificent Seven ETF	$300	2%


Fund	Short-Term Capital Loss Carryforward	Long-Term Capital Loss Carryforward
Roundhill Video Games ETF	$6,890,002	$33,200,005
Roundhill Sports Betting & iGaming ETF	$41,445,821	$111,516,693
Roundhill Ball Metaverse ETF	$160,720,914	$117,057,157
Roundhill Cannabis ETF	—	—
Roundhill Magnificent Seven ETF	$21,151,617	—


Exhibit No.			Description of Exhibit
(a)	(i)		Certificate of Trust of Active Weighting Funds ETF Trust (now Listed Funds Trust) (the “Trust” or the “Registrant”) dated August 26, 2016 is incorporated by reference to Exhibit (a)(1) to the Registrant’s Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the Securities and Exchange Commission (the "SEC") on April 26, 2019.
	(ii)		Certificate of Amendment to the Certificate of Trust of Active Weighting Funds ETF Trust effective December 31, 2018 is incorporated herein by reference to Exhibit (a)(ii) to the Registrant’s Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.
	(iii)		Amended and Restated Declaration of Trust dated March 19, 2019 is incorporated herein by reference to Exhibit (a)(iii) to the Registrant’s Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.
(b)			Amended and Restated By-Laws dated March 19, 2019 are incorporated by reference to Exhibit (b) to the Registrant’s Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.
(c)			For information regarding the rights of the holders of securities, please see Articles IV, VII and VIII of the Declaration of Trust, filed as Exhibit (a)(i) above.
(d)	(i)	(A)	Investment Advisory Agreement dated May 24, 2019 between the Trust and Roundhill Financial Inc. (“Roundhill”) is incorporated herein by reference to Exhibit (d)(i) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on May 24, 2019.
		(B)	A mended Schedule A , dated June 7, 2023 , to the Investment Advisory Agreement is incorporated herein by reference to Exhibit (d)(i)(B) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on June 12, 2023.

		(C)	Fee Waiver Agreement between Listed Funds Trust, on behalf of the Roundhill Magnificent Seven ETF, and Roundhill Financial, Inc. - Filed Herewith.
	(ii)	(A)	Investment Sub-Advisory Agreement dated May 24, 2019 between the Trust, Roundhill and Exchange Traded Concepts, LLC is incorporated herein by reference to Exhibit (d)(ii) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on May 24, 2019.
		(B)	A mended Schedule A , dated June 7, 2023 , to the Investment Sub-Advisory Agreement is incorporated herein by reference to Exhibit (d)(ii)(B) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on June 12, 2023.
(e)	(i)	(A)	ETF Distribution Agreement, dated September 30, 2021, between the Registrant and Foreside Fund Services, LLC (the “Distributor”) (the “Distribution Agreement”) is incorporated herein by reference to Exhibit (e)(i) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on October 19, 2021.
		(B)	Sixteenth Amendment to the ETF Distribution Agreement effective December 6, 2024 is incorporated herein by reference to Exhibit (e)(iii) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on January 21, 2026.
	(ii)		Form of Authorized Participant Agreement is incorporated herein by reference to Exhibit (e)(2) to the Registrant’s Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on October 2, 2017.
(f)			Not applicable.
(g)	(i)	(A)	Custody Agreement between Registrant and U.S. Bank National Association dated April 9, 2019 is incorporated herein by reference to Exhibit (G) to the Registrant’s Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.
		(B)	Amendment and Amended Exhibit 1 to the Custody Agreement dated June 12, 2023 is incorporated herein by reference to Exhibit (g)(i)(B) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on June 12, 2023.
(h)	(i)	(A)	Fund Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, LLC dated April 9, 2019 is incorporated herein by reference to Exhibit (h)(1) to the Registrant’s Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.
		(B)	Amendment and Amended Exhibit 1 to the Fund Servicing Agreement dated June 12, 2023 is incorporated herein by reference to Exhibit (h)(i)(B) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on June 12, 2023.
	(ii)		Power of Attorney is incorporated herein by reference to Exhibit (h)(ii) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on March 27, 2025.
	(iii)		Certificate of Secretary dated February 6, 2019 is incorporated herein by reference to Exhibit (h)(vi) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on February 6, 2019.


(i)	(i)	Opinion and Consent of Counsel for Roundhill BITKRAFT Esports & Digital Entertainment ETF is incorporated herein by reference to Exhibit (i) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on May 24, 2019.
	(ii)	Opinion and Consent of Counsel for Roundhill Sports Betting & Gaming ETF is incorporated herein by reference to Exhibit (i) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on May 29, 2020.
	(iii)	Opinion and Consent of Counsel for Roundhill Ball Metaverse ETF is incorporated herein by reference to Exhibit (i)(v) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on June 28, 2021.
	(iv)	Opinion and Consent of Counsel for Roundhill Cannabis ETF in incorporated herein by reference to Exhibit (viii) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on April 14, 2022.
	(v)	Opinion and Consent of Counsel for Roundhill BIG Tech ETF, Roundhill BIG Airlines ETF, Roundhill BIG Defense ETF, Roundhill BIG Bank ETF, Roundhill BIG Oil ETF, and Roundhill BIG Railroad ETF is incorporated herein by reference to Exhibit (i)(viii) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on March 1, 2023.
(j)		Consent of Independent Registered Public Accounting Firm - Filed Herewith.
(k)		Not applicable.
(l)		Not applicable.
(m)	(i)	Rule 12b-1 Plan dated September 13, 2017 (the “12b-1 Plan”) is incorporated herein by reference to Exhibit (m) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on October 2, 2017.
	(ii)	Amended Appendix A to the Rule 12b-1 Plan is incorporated herein by reference to Exhibit (m)(ii) to Registrant’s Registration Statement on From N-1A, as filed with the SEC on April 15, 2026.
(n)		Not applicable.
(o)		Reserved.
(p)	(i)	Registrant’s Code of Ethics dated March 19, 2019 is incorporated herein by reference to Exhibit (p)(1) to the Registrant’s Registration Statement on Form N-1A (File No. 333-215588 and 811- 23226), as filed with the SEC on April 26, 2019.
	(ii)	Code of Ethics for Roundhill Financial, LLC is incorporated herein by reference to Exhibit (p)(ii) to the Registrant's Registration Statement on Form N-1A, as filed with the SEC on May 24, 2019.

	(iii)	Code of Ethics for Exchange Traded Concepts, LLC - Filed Herewith.
(q)		Opinions with Respect to the Execution of Derivatives and Purchase of Cannabis Company Securities is incorporated herein by reference to Exhibit (q) to the Registrant’s Registration Statement on Form N-1A, as filed with the SEC on April 14, 2022.


Investment Adviser and Sub-Adviser			SEC File No.
Roundhill Financial LLC			801-114971
Exchange Traded Concepts, LLC			801-70485


Name	Address	Position with Underwriter	Position with Registrant
Teresa Cowan	190 Middle Street, Suite 301, Portland, Maine 04101	President/Manager	None
Chris Lanza	190 Middle Street, Suite 301, Portland, Maine 04101	Vice President	None
Kate Macchia	190 Middle Street, Suite 301, Portland, Maine 04101	Vice President	None
Alicia Strout	190 Middle Street, Suite 301, Portland, Maine 04101	Vice President and Chief Compliance Officer	None
Gabriel E. Edelman	190 Middle Street, Suite 301, Portland, Maine 04101	Secretary	None
Susan L. LaFond	190 Middle Street, Suite 301, Portland, Maine 04101	Treasurer	None
Weston Sommers	190 Middle Street, Suite 301, Portland, Maine 04101	Financial and Operations Principal and Chief Financial Officer	None


Records Relating to:			Are located at:
Registrant’s Fund Administrator, Fund Accountant and Transfer Agent			U.S. Bancorp Fund Services, LLC 615 East Michigan Street Milwaukee, Wisconsin 53202
Registrant’s Custodian			U.S. Bank, National Association 1555 North Rivercenter Drive, Suite 302 Milwaukee, Wisconsin 53212
Registrant’s Principal Underwriter			Foreside Fund Services, LLC 190 Middle Street, Suite 301 Portland, Maine 04101
Registrant’s Investment Adviser			Roundhill Financial LLC 154 West 14th Street, 2nd Floor New York, New York 10011
Registrant’s Sub-Adviser			Exchange Traded Concepts, LLC 10900 Hefner Pointe Drive, Suite 400 Oklahoma City, Oklahoma 73120


Signature			Title

*/s/ John L. Jacobs			Trustee
John L. Jacobs

*/s/ Koji Felton			Trustee
Koji Felton

*/s/ Pamela H. Conroy			Trustee and Chairman
Pamela H. Conroy

*/s/ Kacie G. Briody			President and Principal Executive Officer
Kacie G. Briody

*/s/ Travis G. Babich			Treasurer and Principal Financial Officer
Travis G. Babich

*By: /s/ Chad Fickett Chad Fickett, Attorney-in-Fact Pursuant to Power of Attorney


Exhibit Number			Description
(d)(i)(C)			Fee Waiver Agreement between Listed Funds Trust, on behalf of the Roundhill Magnificent Seven ETF , and Roundhill Financial, Inc .
(j)			Consent of Independent Registered Public Accounting Firm
(p)(iii)			Code of Ethics for Exchange Traded Concepts, LLC


Fund	Maximum Annual Operating Expense Limit	Initial Term End Date
Roundhill Magnificent Seven ETF	0.30%	May 1, 2027


10900 Hefner Pointe Drive, Suite 400 Oklahoma City, OK 73120 (405) 778-8377

Form N-1A Cover	Apr. 30, 2026
Prospectus [Line Items]
Document Type	485BPOS
Amendment Flag	false
Registrant Name	LISTED FUNDS TRUST
Entity Central Index Key	0001683471
Entity Investment Company Type	N-1A
Document Period End Date	Apr. 30, 2026
Prospectus Date	Apr. 30, 2026

Investment Objectives and Goals	Apr. 30, 2026
Roundhill Sports Betting & iGaming ETF
Prospectus [Line Items]
Risk/Return [Heading]	Roundhill Sports Betting & iGaming ETF
Objective [Heading]	Investment Objective
Objective, Primary [Text Block]	The Roundhill Sports Betting & iGaming ETF (“Sports Betting ETF” or the “Fund”) seeks to track the total return performance, before fees and expenses, of the Morningstar® Sports Betting & iGaming Select Index (the “Index”).
Roundhill Ball Metaverse ETF
Prospectus [Line Items]
Risk/Return [Heading]	Roundhill Ball Metaverse ETF
Objective [Heading]	Investment Objective
Objective, Primary [Text Block]	The Roundhill Ball Metaverse ETF (“Ball Metaverse ETF” or the “Fund”) seeks to track the performance, before fees and expenses, of the Ball Metaverse Index (the “Index”).
Roundhill Video Games ETF
Prospectus [Line Items]
Risk/Return [Heading]	Roundhill Video Games ETF
Objective [Heading]	Investment Objective
Objective, Primary [Text Block]	The Roundhill Video Games ETF (“Video Games ETF” or the “Fund”) seeks total return.
Roundhill Cannabis ETF
Prospectus [Line Items]
Risk/Return [Heading]	Roundhill Cannabis ETF
Objective [Heading]	Investment Objective
Objective, Primary [Text Block]	The Roundhill Cannabis ETF (“Cannabis ETF” or the “Fund”) seeks capital growth.
Roundhill Magnificent Seven ETF
Prospectus [Line Items]
Risk/Return [Heading]	Roundhill Magnificent Seven ETF
Objective [Heading]	Investment Objective
Objective, Primary [Text Block]	The Roundhill Magnificent Seven ETF (“Magnificent Seven ETF” or the “Fund”) seeks growth of capital.

Fees and Expenses	Apr. 30, 2026
Roundhill Video Games ETF
Prospectus [Line Items]
Expense Heading [Optional Text]	Fees and Expenses of the Fund
Expense Narrative [Text Block]	This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund (“Shares”). You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.
Shareholder Fees Caption [Optional Text]	Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Optional Text]	Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Expense Example [Heading]	Example
Expense Example Narrative [Text Block]	This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares.
Expense Example by, Year, Caption [Text]	Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Portfolio Turnover [Heading]	Portfolio Turnover
Portfolio Turnover [Text Block]	The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund’s performance. For the fiscal year ended December 31, 2025, the Fund’s portfolio turnover rate was 64% of the average value of its portfolio.
Portfolio Turnover, Rate	64.00%
Roundhill Sports Betting & iGaming ETF
Prospectus [Line Items]
Expense Heading [Optional Text]	Fees and Expenses of the Fund
Expense Narrative [Text Block]	This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund (“Shares”). You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.
Shareholder Fees Caption [Optional Text]	Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Optional Text]	Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Expense Example [Heading]	Example
Expense Example Narrative [Text Block]	This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares.
Expense Example by, Year, Caption [Text]	Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Portfolio Turnover [Heading]	Portfolio Turnover
Portfolio Turnover [Text Block]	The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund’s performance. For the fiscal year ended December 31, 2025, the Fund’s portfolio turnover rate was 26% of the average value of its portfolio.
Portfolio Turnover, Rate	26.00%
Roundhill Ball Metaverse ETF
Prospectus [Line Items]
Expense Heading [Optional Text]	Fees and Expenses of the Fund
Expense Narrative [Text Block]	This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund (“Shares”). You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.
Expenses Not Correlated to Ratio Due to Acquired Fund Fees [Text]	The Total Annual Fund Operating Expenses do not correlate to the expense ratio in the Fund’s Financial Highlights and financial statements because the Financial Highlights and financial statements reflect the Fund’s receipt of a rebate on certain of its investments that had the effect of reducing the Fund’s Total Annual Fund Operating Expenses to 0.58%.
Shareholder Fees Caption [Optional Text]	Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Optional Text]	Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Expense Example [Heading]	Example
Expense Example Narrative [Text Block]	This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares.
Expense Example by, Year, Caption [Text]	Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Portfolio Turnover [Heading]	Portfolio Turnover
Portfolio Turnover [Text Block]	The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund’s performance. For the fiscal year ended December 31, 2025, the Fund’s portfolio turnover rate was 55% of the average value of its portfolio.
Portfolio Turnover, Rate	55.00%
Roundhill Cannabis ETF
Prospectus [Line Items]
Expense Heading [Optional Text]	Fees and Expenses of the Fund
Expense Narrative [Text Block]	This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund (“Shares”). You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.
Expenses Not Correlated to Ratio Due to Acquired Fund Fees [Text]	Total Annual Fund Operating Expenses do not correlate to the expense ratios in the Fund’s Financial Highlights and financial statements because the Financial Highlights and financial statements include only the direct operating expenses incurred by the Fund and exclude Acquired Fund Fees and Expenses, which are the indirect costs of investing in other investment companies.
Shareholder Fees Caption [Optional Text]	Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Optional Text]	Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Expense Example [Heading]	Example
Expense Example Narrative [Text Block]	This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares.
Expense Example by, Year, Caption [Text]	Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Portfolio Turnover [Heading]	Portfolio Turnover
Portfolio Turnover [Text Block]	The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund’s performance. For the fiscal year ended December 31, 2025, the Fund’s portfolio turnover rate was 23% of the average value of its portfolio.
Portfolio Turnover, Rate	23.00%
Roundhill Magnificent Seven ETF
Prospectus [Line Items]
Expense Heading [Optional Text]	Fees and Expenses of the Fund
Expense Narrative [Text Block]	This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund (“Shares”). You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and Example below.
Expenses Not Correlated to Ratio Due to Acquired Fund Fees [Text]	Total Annual Fund Operating Expenses do not correlate to the expense ratios in the Fund’s Financial Highlights and financial statements because the Financial Highlights and financial statements include only the direct operating expenses incurred by the Fund and exclude Acquired Fund Fees and Expenses, which are the indirect costs of investing in other investment companies.
Shareholder Fees Caption [Optional Text]	Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Optional Text]	Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Expense Example [Heading]	Example
Expense Example Narrative [Text Block]	This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The Example does not take into account brokerage commissions that you may pay on your purchases and sales of Shares.
Expense Example by, Year, Caption [Text]	Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Portfolio Turnover [Heading]	Portfolio Turnover
Portfolio Turnover [Text Block]	The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which are not reflected in the Total Annual Fund Operating Expenses or in the Example, affect the Fund’s performance. For the fiscal period ended December 31, 2025, the Fund’s portfolio turnover rate was 27% of the average value of its portfolio.
Portfolio Turnover, Rate	27.00%

Shareholder Fees	Apr. 30, 2026 USD ($)
Roundhill Video Games ETF \| Roundhill Video Games ETF Class
Prospectus [Line Items]
Shareholder Fee, Other	$ 0
Roundhill Sports Betting & iGaming ETF \| Roundhill Sports Betting & iGaming ETF Class
Prospectus [Line Items]
Shareholder Fee, Other	0
Roundhill Ball Metaverse ETF \| Roundhill Ball Metaverse ETF Class
Prospectus [Line Items]
Shareholder Fee, Other	0
Roundhill Cannabis ETF \| Roundhill Cannabis ETF Class
Prospectus [Line Items]
Shareholder Fee, Other	0
Roundhill Magnificent Seven ETF \| Roundhill Magnificent Seven ETF Class
Prospectus [Line Items]
Shareholder Fee, Other	$ 0