Exchange
Traded Concepts Trust
6 Meridian Small Cap Equity ETF
Summary Prospectus | May 6, 2020
Principal Listing Exchange for the Fund:
NYSE Arca, Inc. | Ticker Symbol: SIXS
Before you invest, you may want to review
the Fund’s prospectus, which contains more information about the Fund and its risks. You can find the Fund’s prospectus
and other information about the Fund online at www.6meridianfunds.com. You can also get this information at no cost by calling
866-SIXM-ETF (749-6383), by sending an e-mail request to 6MeridianETFs@seic.com or by asking any financial intermediary that offers
shares of the Fund. The Fund’s prospectus and statement of additional information, each dated May 6, 2020, as each may be
amended or supplemented from time to time, are incorporated by reference into this summary prospectus and may be obtained, free
of charge, at the website, phone number or email address noted above.
Beginning on January 1, 2021, as permitted
by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Fund’s shareholder reports will
no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary, such as
a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a
report is posted and provided with a website link to access the report.
If you already elected to receive shareholder
reports electronically, you will not be affected by this change and you need not take any action. Please contact your financial
intermediary to elect to receive shareholder reports and other Fund communications electronically.
You may elect to receive all future reports
in paper free of charge. Please contact your financial intermediary to inform them that you wish to continue receiving paper copies
of your shareholder reports and for details about whether your election to receive reports in paper will apply to all funds held
with your financial intermediary.
Investment Objective
The 6 Meridian Small Cap Equity ETF (the
“Fund”) seeks to provide capital appreciation.
Fees and Expenses
This table describes the fees and expenses
that you may pay if you buy and hold shares of the Fund. This table and the Example below do not include the brokerage commissions
that investors may pay on their purchases and sales of shares of the Fund.
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage
of the value of your investment)
|
Management Fee
|
0.61%
|
Distribution and Service (12b-1) Fees
|
0.00%
|
Other Expenses1
|
0.36%
|
Total Annual Fund Operating Expenses
|
0.97%
|
1 Other Expenses are based on
estimated amounts for the current fiscal year.
Example
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 sell 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. Although your actual costs
may be higher or lower, based on these assumptions your cost would be:
Portfolio Turnover
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 of the Fund are held in a taxable account. These costs,
which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. Because the Fund
is new, portfolio turnover information is not yet available.
Principal Investment Strategies
The Fund is an actively managed exchange-traded
fund (“ETF”) that invests, under normal circumstances, at least 80% of its net assets (plus the amount of any borrowings
for investment purposes) in small-capitalization equity securities. 6 Meridian LLC, the Fund’s sub-adviser (the “Sub-Adviser”),
considers small-capitalization companies to be those with market capitalizations within the range of the market capitalization
of companies included in the S&P SmallCap 600® Index ($17.3 million to $4.4 billion as of March 31, 2020). Although the
Fund invests primarily in small-capitalization securities, the Fund may invest in equity securities of companies of any capitalization.
The equity securities in which the Fund invests are mainly common stocks. The Fund also may invest in real estate investment trusts
(“REITs”).
In selecting investments for the Fund,
6 Meridian LLC (the “Sub-Adviser”) uses a quantitatively-driven strategy designed to emphasize high quality small-capitalization
securities. Pursuant to this strategy, securities are first ranked on a composite of several variables intended to measure profitability,
growth, and ability to service financing obligations. Securities ranking the lowest on this composite measure, as expressed relative
to the distribution of all securities measured, are excluded from the investable universe. The remaining securities are then ranked
separately on measures of multiple investment factors including beta and value. Beta is intended to measure the exposure of a security
to broad market risk, and is defined here as the co-movement of the return of a security with the return of the securities included
in the investable universe scaled by the volatility of the investable universe’s returns. For example, a security that has
a beta of 1 has the same market risk as the securities in the investable universe, a security that has a beta less than 1 has less
market risk than the securities in the investable universe, and a security that has a beta greater than 1 has more market risk
than the securities in the investable universe. For purposes of this model, lower values for beta rank more favorably. Value is
calculated using ratios of fundamental measures of company size to the market value of that company. The securities that rank highest
on a sequential percentile basis for each factor measure are included in the Fund’s portfolio, at weights determined based
on the number of factors for which the security ranks highly.
Principal Risks
As with all funds, a shareholder is subject
to the risk that his or her investment could lose money. An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the FDIC or any government agency. The principal risks affecting shareholders’ investments in the Fund are
set forth below.
Asset Class Risk. Securities and
other assets in the Fund’s portfolio may underperform in comparison to the general financial markets, a particular financial
market or other asset classes.
Common Stock Risk. Common stock
holds the lowest priority in the capital structure of a company, and, therefore, takes the largest share of the company’s
risk and its accompanying volatility. The value of the common stock held by the Fund may fall due to general market and economic
conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or facts relating
to specific companies in which the Fund invests.
Early Close/Trading Halt Risk. An
exchange or market may close or issue trading halts on specific securities, or the ability to buy or sell certain securities or
financial instruments may be restricted, which may result in the Fund being unable to buy or sell certain securities or financial
instruments. In such circumstances, the Fund may be unable to rebalance its portfolio, may be unable to accurately price its investments
and/or may incur substantial trading losses.
Equity Risk. The prices of equity
securities in which the Fund invests may rise and fall daily. These price movements may result from factors affecting individual
issuers, industries or the stock market as a whole.
Issuer-Specific Risk. Fund performance
depends on the performance of the issuers to which the Fund has exposure. Issuer-specific events, including changes in the financial
condition of an issuer, can have a negative impact on the value of the Fund.
Large-Capitalization Risk. The Fund’s
performance may be adversely affected if securities of large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic expansion.
Limited Authorized Participants, Market
Makers and Liquidity Providers Risk. Because the Fund is an ETF, only a limited number of institutional investors (known as
“Authorized Participants”) are authorized to purchase and redeem shares directly from the Fund. In addition, there
may be a limited number of market makers and/or liquidity providers in the marketplace. To the extent either of the following events
occurs, shares of the Fund may trade at a material discount to their net asset value (“NAV”) per share and possibly
face delisting: (i) Authorized Participants exit the business or otherwise become unable to process creation and/or redemption
orders and no other Authorized Participants step forward to perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.
Low Beta Style Risk. Although subject
to the risks of common stocks, low beta stocks are seen as having a lower risk profile than the overall markets. However, a portfolio
comprised of low beta stocks may not produce investment exposure that has lower variability to changes in such stock’ price
levels. Low beta stocks are likely to underperform the broader market during periods of rapidly rising stock prices.
Market Risk. The market price of
a security or instrument could decline, sometimes rapidly or unpredictably, due to general market conditions that are not specifically
related to a particular company, such as real or perceived adverse economic or political conditions throughout the world, changes
in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. Local,
regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions,
or other events could have a significant impact on the market generally and on specific securities. The market value of a security
may also decline because of factors that affect a particular industry or industries, such as labor shortages or increased production
costs and competitive conditions within an industry.
Management Risk. The Sub-Adviser
continuously evaluates the Fund’s holdings, purchases and sales with a view to achieving the Fund’s investment objective.
However, the achievement of the stated investment objective cannot be guaranteed over short- or long-term market cycles. The Sub-Adviser’s
judgments about the markets, the economy, or companies may not anticipate actual market movements, economic conditions, or company
performance, and these judgments may affect the return on your investment. The quantitative strategy used by the Sub-Adviser may
not perform as expected, particularly in volatile markets.
Models and Data Risk. The Sub-Adviser
relies heavily on quantitative models as well as data and information supplied by third parties that are utilized by the models.
To the extent the models do not perform as designed or as intended, the Fund’s strategy may not be successfully implemented
and the Fund may lose value. If the models or data are incorrect or incomplete, any decisions made in reliance thereon may lead
to the inclusion or exclusion of securities that would have been excluded or included had the models or data been correct and complete.
New/Smaller Fund Risk. A new or
smaller fund is subject to the risk that its performance may not represent how the fund is expected to or may perform in the long
term. In addition, new funds have limited operating histories for investors to evaluate and new and smaller funds may not attract
sufficient assets to achieve investment and trading efficiencies. There can be no assurance that the Fund will achieve an economically
viable size, in which case it could ultimately liquidate. The Fund may be liquidated by the Board of Trustees (the “Board”)
without a shareholder vote. In a liquidation, shareholders of the Fund will receive an amount equal to the Fund’s NAV, after
deducting the costs of liquidation, including the transaction costs of disposing of the Fund’s portfolio investments. Receipt
of a liquidation distribution may have negative tax consequences for shareholders. Additionally, during the Fund’s liquidation
all or a portion of the Fund’s portfolio may be invested in a manner not consistent with its investment objective and investment
policies.
Operational Risk. The Fund and its
service providers may experience disruptions that arise from human error, processing and communications errors, counterparty or
third-party errors, technology or systems failures, any of which may have an adverse impact on the Fund.
Quality Stocks Risk. Stocks that
demonstrate attributes of quality as determined by the Sub-Adviser’s quantitative models may experience lower than expected
returns or negative returns. Many factors can affect a stock’s quality and performance and the impact of these factors on
a stock is impossible to predict.
REIT Risk. Adverse economic, business
or political developments affecting real estate could have a major effect on the value of the Fund’s investments in REITs.
Investing in REITs may subject the Fund to risks associated with the direct ownership of real estate, such as decreases in real
estate values, overbuilding, increased competition and other risks related to local or general economic conditions, increases in
operating costs and property taxes, changes in zoning laws, casualty or condemnation losses, possible environmental liabilities,
regulatory limitations on rent and fluctuations in rental income. In addition, REITs are subject to the possibility of failing
to qualify for the favorable U.S. federal income tax treatment generally available to them under the Internal Revenue Code of 1986
(the “Internal Revenue Code”), and failing to maintain exemption from the registration requirements of the Investment
Company Act of 1940 (the “1940 Act”).
Small and Mid-Capitalization Risk.
The small- and mid-capitalization companies in which the Fund invests may be more vulnerable to adverse business or economic events
than larger, more established companies, and may underperform other segments of the market or the equity market as a whole. Securities
of small and mid-capitalization companies generally trade in lower volumes, are often more vulnerable to market volatility, and
are subject to greater and more unpredictable price changes than larger capitalization stocks or the stock market as a whole.
Trading Risk.
Shares of the Fund may trade on the NYSE Arca, Inc. (the “Exchange”) above or below their NAV. The NAV of shares of
the Fund will fluctuate with changes in the market value of the Fund’s holdings. In addition, although the Fund’s shares
are currently listed on the Exchange, there can be no assurance that an active trading market for shares will develop or be maintained.
Trading in Fund shares may be halted due to market conditions or for reasons that, in the view of the Exchange, make trading in
shares of the Fund inadvisable.
Value Style Risk.
Investing in or having exposure to “value” securities presents the risk that the securities may never reach what the
Sub-Adviser believes are their full market values, either because the market fails to recognize what the Sub-Adviser considers
to be the security’s true value or the Sub-Adviser misjudged that value. In addition, there may be periods during which the
investment performance of the Fund while using a value strategy may suffer.
Performance Information
The Fund is new and therefore has no performance
history. Once the Fund has completed a full calendar year of operations, a bar chart and table will be included that will provide
some indication of the risks of investing in the Fund by comparing the Fund’s return to a broad measure of market performance.
Investment Advisers
Exchange Traded Concepts, LLC serves as
the investment adviser to the Fund. 6 Meridian LLC serves as the sub-adviser to the Fund.
Portfolio Managers
Andrew Mies, Founder/Partner and Chief
Investment Officer of the Sub-Adviser, has served as a portfolio manager of the Fund since its inception in May 2020.
Ammie Weidner, Assistant Vice President,
Portfolio Trading and Operations of the Sub-Adviser, has served as a portfolio manager of the Fund since its inception in May 2020.
Will Horner, Associate, Investment Management
of the Sub-Adviser, has served as a portfolio manager of the Fund since its inception in May 2020.
Andrew Serowik, Portfolio Manager of the
Adviser, has served as a portfolio manager of the Fund since its inception in May 2020.
Travis Trampe, Portfolio Manager of the
Adviser, has served as a portfolio manager of the Fund since its inception in May 2020.
Purchase and Sale of Fund Shares
The Fund issues (or redeems) shares to
certain institutional investors (typically market makers or other broker-dealers) only in large blocks of at least 25,000 shares
known as “Creation Units.” Creation Unit transactions for the Fund are typically conducted in exchange for the deposit
or delivery of a portfolio of securities closely approximating the holdings of the Fund and a specified amount of cash. Individual
shares may only be purchased and sold on a national securities exchange through a broker-dealer. You can purchase and sell individual
shares of the Fund throughout the trading day like any publicly traded security. The Fund’s shares are listed on the Exchange.
The price of the Fund’s shares is based on market price, and because exchange-traded fund shares trade at market prices rather
than NAV, the shares may trade at prices greater than NAV (premium) or less than NAV (discount). Investors buying or selling shares
of the Fund in the secondary market will pay brokerage commissions or other charges imposed by brokers as determined by that broker.
Except when aggregated in Creation Units, the Fund’s shares are not redeemable securities.
Tax Information
Distributions made by the Fund may be taxable
as ordinary income, qualified dividend income, or long-term capital gains, unless you are investing through a tax-advantaged arrangement,
such as a 401(k) plan or individual retirement account. In that case, you may be taxed when you take a distribution from such account,
depending on the type of account, the circumstances of your distribution, and other factors.
Payments to Broker-Dealers and Other
Financial Intermediaries
If you purchase shares of the Fund through
a broker-dealer or other financial intermediary (such as a bank), the Fund or the Adviser may pay the intermediary for the sale
of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s
website for more information.
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