[Global
X Adaptive Risk Managed High Yield ETF]
[
]: [ ]
Prospectus
[
], 2026
The
information in this Prospectus is not complete and may be changed. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. The securities described herein may not be
sold until the registration statement becomes effective. This Prospectus is not
an offer to sell or the solicitation of an offer to buy securities and is not
soliciting an offer to buy these securities in any state in which the offer,
solicitation or sale would be unlawful.
The
Securities and Exchange Commission ("SEC") [and the Commodity Futures Trading
Commission (“CFTC”)] has not approved or disapproved these securities or passed
upon the adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
Shares
in the Fund (defined below) are not guaranteed or insured by the Federal Deposit
Insurance Corporation or any other agency of the U.S. Government, nor are shares
deposits or obligations of any bank. Such shares in the Fund involve investment
risks, including the loss of principal.
TABLE
OF CONTENTS
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| FUND
SUMMARY |
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| ADDITIONAL
INFORMATION ABOUT THE FUND |
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| A
FURTHER DISCUSSION OF PRINCIPAL RISKS |
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| A
FURTHER DISCUSSION OF OTHER RISKS |
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| PORTFOLIO
HOLDINGS INFORMATION |
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| FUND
MANAGEMENT |
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| DISTRIBUTOR |
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| BUYING
AND SELLING FUND SHARES |
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| FREQUENT
TRADING |
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| DISTRIBUTION
AND SERVICE PLAN |
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| DIVIDENDS
AND DISTRIBUTIONS |
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INVESTMENTS
BY INVESTMENT COMPANIES |
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| TAXES |
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| DETERMINATION
OF NET ASSET VALUE |
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| PREMIUM/DISCOUNT
AND SHARE INFORMATION |
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| INFORMATION
REGARDING THE INDEX AND THE INDEX PROVIDER |
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| OTHER
SERVICE PROVIDERS |
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| ADDITIONAL
INFORMATION |
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| FINANCIAL
HIGHLIGHTS |
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| OTHER
INFORMATION |
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[Global
X Adaptive Risk Managed High Yield ETF]
Ticker:
[ ] Exchange: [ ]
INVESTMENT
OBJECTIVE
The
[Global X Adaptive Risk Managed High Yield ETF] ("Fund") seeks to provide
investment results that correspond generally to the price and yield performance,
before fees and expenses, of the [Adaptive Wealth Strategies Risk Managed High
Yield Index] ("Underlying Index").
FEES
AND EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares (“Shares”) of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the tables and examples
below.
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment):
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Management
Fees: |
[
] |
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Distribution
and Service (12b-1) Fees: |
None |
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Other
Expenses:1 |
[
] |
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Total
Annual Fund Operating Expenses: |
[
]% |
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Expense
Reimbursement and/or Fee Waiver:2 |
[(
)]% |
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Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement: |
[
]% |
1 Other
Expenses are based on estimated amounts for the current fiscal
year.
2 [Pursuant
to an Expense Limitation Agreement, the Adviser has contractually agreed to
reimburse or waive fees and/or limit Fund expenses to the extent necessary to
assure that the operating expenses of the Fund (exclusive of taxes, brokerage
fees, commissions, and other transaction expenses, interest, and extraordinary
expenses (such as litigation and indemnification expenses)) will not exceed [ ]%
of the Fund's average daily net assets per year, until at least April 1,
2028.]
Example:
The following example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other funds. This example does not take
into account customary brokerage commissions that you pay when purchasing or
selling Shares of the Fund in the secondary market. The example assumes that you
invest $10,000 in the Fund for the time periods indicated and then sell all of
your Shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:
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One
Year |
Three
Years |
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$[
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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 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. This is a
new fund and does not yet have a portfolio turnover rate to
disclose.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund invests at least 80% of its total assets, plus borrowings for investment
purposes (if any), in the securities of the [Adaptive Wealth Strategies Risk
Managed High Yield Index] (the "Underlying Index"), or in investments that have
economic characteristics that are similar to the economic characteristics of
such component securities, either individually or in the aggregate. The Fund's
80% investment policy is non-fundamental and requires 60 days prior written
notice to shareholders before it can be changed.
The
Underlying Index is owned and was developed by NorthCrest Asset Management (the
"Index Provider"). The Underlying Index is calculated and maintained by
Solactive AG (the "Calculation Agent"). [The Underlying Index is designed to
dynamically allocate between either 100% exposure to the Solactive USD High
Yield Corporates Total Market Index ("High
Yield
Bond Position") or 100% exposure to the Solactive 1-3 month US T-Bill Index
("U.S. Treasury Position"). The High Yield Bond Position, is designed to track
the performance of a basket of US dollar-denominated high yield corporate bonds.
Currently, the bonds eligible for inclusion in the High Yield Bond Position
include US dollar-denominated high yield corporate bonds that: (i) are issued by
companies with a country of risk classified as developed markets by Solactive AG
(“Solactive” or “Calculation Agent”); (ii) have a composite rating calculated
from available ratings among three rating agencies: Moody’s ® Investors Service,
Inc. (“Moody’s”), Fitch, Inc. (“Fitch”) and Standard & Poor’s ® Financial
Services, LLC (“S&P”) as sub-investment grade; (iii) are from issuers with
at least $1 billion outstanding face value; (iv) have at least $400 million of
outstanding face value; (v) have an original maturity date at most 15 years; and
(vi) have at least one year to maturity (or at least 20 months to maturity for
bonds newly added to the index). In addition, the High Yield Bond Position may
include a substantial number of bonds offered pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “1933 Act”). Under normal circumstances,
the High Yield Bond Position is reconstituted and rebalanced on a monthly basis.
The US Treasury Position is designed to measure the performance of public
obligations of the U.S. Treasury that have a remaining maturity of greater than
or equal to 1 month and less than 3 months.]
The
Underlying Index seeks to provide exposure to the High Yield Bond Position
during periods of normal high yield bond market returns, and seeks to provide
exposure to the U.S. Treasury Position prior to and during periods of adverse
market conditions, as determined by the quantitative model developed by the
Index Provider. The Underlying Index seeks to anticipate periods of adverse
market conditions using quantitative signals (explained in further detail below)
that have been developed based on historical data. The Underlying Index uses two
quantitative signals calculated daily by the Calculation Agent to determine how
the Underlying Index will be allocated between either the High Yield Bond
Position or the U.S. Treasury Position, as further described below:
I.The
moving average convergence divergence (“MACD”), which shows the relationship
between two moving averages of the prices of securities within the High Yield
Bond Position by subtracting the 26-day exponential moving average of the High
Yield Bond Position from its 12-day exponential moving average and;
II.The
level of the Cboe Volatility Index (“VIX”), which is a benchmark index designed
to measure the market’s expectation of future volatility.
The
allocation to either the High Yield Bond Position or the U.S. Treasury Position
is determined as follows:
•Exit
Voting: If the Underlying Index is currently invested in the High Yield Bond
Position, both signals must be triggered for the Underlying Index to exit the
High Yield Bond Position and enter the U.S. Treasury Position.
•Entry
Voting: If the Underlying Index is currently invested in the U.S. Treasury
Position, both signals must be triggered for the Underlying Index to exit the
U.S. Treasury Position and enter the High Yield Bond Position.
The
trigger threshold for each signal is based on a predetermined Z-score level for
that given signal. A Z-score (often referred to as a “standard score”) is a
measure of how many standard deviations below or above the mean a data point is,
and can be used to identify data points that may be considered outliers relative
to the mean. The Z-score threshold is determined using historical returns data
for the High Yield Bond Position since its inception in December of 2006. The
Z-scores identify cases where the recent performance of the High Yield Bond
Position or the VIX are sufficiently statistically different from the historical
performance to indicate if positive market returns may be likely going forward.
Depending on the performance of the High Yield Bond Position and the VIX, each
signal may remain unchanged for an extended period of time or may change states
over relatively short periods of time.
Each
signal looks at the recent performance of the High Yield Bond Position or the
VIX, and compares that to the historical performance of the High Yield Bond
Position or the VIX, respectively. Below is a description of each signal and its
trigger threshold for market entry or exit:
MACD
Signal:
•Market
Exit Vote: If the prior day Z-Score of the MACD is below -1.00 based on
historical data, it may indicate that a drawdown event is possible, and the
signal votes to move out of the High Yield Bond Position and into the U.S.
Treasury Position.
•Market
Entry Vote: If the prior day Z-Score of the MACD is above-1.00 based on
historical data, it may indicate that the High Yield Bond Position will
experience positive returns, and the signal votes to re-enter the High Yield
Bond Position.
VIX
Signal:
•Market
Exit Vote: If the Z-Score of the level of the VIX is above 2.00, the signal
votes to exit the High Yield Bond Position and enter the U.S. Treasury Position.
If the Z-score of the level of the VIX is above 2.00, based on historical data,
it may indicate that a drawdown event is possible, and the signal votes to move
out of the High Yield Bond Position and into the U.S. Treasury
Position.
•Market
Entry Vote: If the Z-Score of the level of the VIX is below 2.00, the signal
indicates to exit the U.S. Treasury Position and enter the High Yield Bond
Position. If the Z-score of the level of the VIX is below 2.00, based on
historical data, it may indicate that the High Yield Bond Position will
experience positive returns, and the signal votes to re-enter the High Yield
Bond Position.
Each
of the signals are calculated daily by the Calculation Agent. Whenever the
required number of signals are triggered, the Underlying Index allocates 100%
weight to either the constituents of the High Yield Bond Position or the U.S.
Treasury Position. As a result, the Fund may engage in active and frequent
trading of its portfolio securities to achieve its investment objective.
Whenever the Underlying Index rebalances into either the High Yield Bond
Position or into the Treasury Position, the new weights go into effect four
trading days after the decision and will be changed on a pro rata basis by 50%
on the first day of rebalancing and by the remaining 50% on the next business
day. After changing its allocation, the Underlying Index must remain in the same
allocation (the High Yield Bond Position or the U.S. Treasury Position) for at
least ten trading days before it can change its allocation again. The Fund's
investment objective and Underlying Index may be changed without shareholder
approval.
In
seeking to track the Underlying Index, the Fund may purchase the component
securities of the High Yield Bond Position, the U.S. Treasury Position, and/or
may purchase other ETFs that have economic characteristics that are similar to
the economic characteristics of such component securities and/or high yield
bonds. The Underlying Index is sponsored by the Index Provider, which is an
organization that is independent of, and unaffiliated with, the Fund and Global
X Management Company LLC, the investment adviser for the Fund ("Adviser"). The
Fund's investment objective and Underlying Index may be changed without
shareholder approval.
The
Adviser uses an indexing approach to try to achieve the Fund's investment
objective. Unlike many investment companies, the Fund does not try to outperform
the Underlying Index.
The
Fund generally uses a representative sampling strategy with respect to the
Underlying Index. “Representative sampling” is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index in terms of key risk
factors, performance attributes and other characteristics. These include market
capitalization and other financial characteristics of securities. The Fund may
or may not hold all of the securities in the Underlying Index. In doing so, the
Fund may not track its Underlying Index with the same degree of accuracy as when
the Fund replicates the composition and weighting of the Underlying
Index.
The
Adviser expects that, over time, the correlation between the Fund's performance
and that of the Underlying Index, before fees and expenses, will exceed 95%. A
correlation percentage of 100% would indicate perfect correlation.
The
Fund concentrates its investments (i.e., hold 25% or more of its total assets)
in a particular industry or group of industries to approximately the same extent
that the Underlying Index is concentrated. As of [ ], the Underlying Index had
significant exposure to the [consumer discretionary and communications sectors].
The Fund is classified as “non-diversified,” which means it may invest a larger
percentage of its assets in a smaller number of issuers than a diversified
fund.
SUMMARY
OF PRINCIPAL RISKS
As
with any investment, you could lose all or part of your investment in the Fund,
and the Fund's performance could trail that of other investments. There is no
guarantee that the Fund will achieve its investment objective. An investment in
the Fund is not a bank deposit and it is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency, the
Adviser or any of its affiliates. The Fund is subject to the principal risks
noted below, any of which may adversely affect the Fund's net asset value
("NAV"), trading price, yield, total return and ability to meet its investment
objective, as well as other risks that are described in greater detail in the
Additional
Information About the Fund
section of the Prospectus and in the Statement of Additional Information
("SAI").
Asset
Class Risk: Securities
and other assets in the Underlying Index or otherwise held in the Fund's
portfolio may underperform in comparison to the general securities markets, a
particular securities market or other asset classes.
Bond
Investment Risk: Investments
in debt securities are generally affected by changes in prevailing interest
rates and the creditworthiness of the issuer. The values of debt securities may
rise or fall in response to market fluctuations, changes in interest rates,
actual or perceived inability of issuers, guarantors or liquidity providers to
make scheduled payments, or illiquidity in debt markets. The Fund’s yield on
investments in debt securities will fluctuate as the securities in the Fund are
rebalanced and reinvested in securities with different interest rates.
Investments in bonds are also subject to credit risk. Credit risk is the risk
that an issuer of debt securities will be unable to pay principal and
interest
when due, or that the value of the security will suffer because investors
believe the issuer is less able to make required principal and interest
payments. This is broadly gauged by the credit ratings of the debt securities in
which the Fund invests. However, credit ratings are only the opinions of the
rating agencies issuing them, do not purport to reflect the risk of fluctuations
in market value and are not absolute guarantees as to the payment of interest
and the repayment of principal.
ETF
Investment Risk: The
Fund is subject to the same risks as underlying ETFs in which it may invest,
including: that the underlying ETF’s shares may trade at a premium or discount
to NAV; that an underlying ETF may experience a lack of liquidity that can
result in greater volatility than its underlying securities; that an active
trading market for an underlying ETF’s shares may not develop or be maintained;
that trading in an underlying ETF’s shares may be halted in certain
circumstances; and that an underlying ETF may fail to achieve its investment
objective, which may adversely affect the value of the Fund’s investment in the
underlying ETF and the overall performance of the Fund. Subjective decisions
made by the investment adviser of an underlying ETF may cause the underlying ETF
to incur losses or to miss profit opportunities on which it may otherwise have
capitalized. Because the value of an underlying ETF's shares depends on the
demand in the market, the Adviser may not be able to liquidate the Fund’s
holdings in those shares at the most optimal time, thereby adversely affecting
the Fund’s performance.
An underlying ETF that seeks to track an
underlying index may experience tracking error in relation to the index.
Further, a lack of liquidity may result in the underlying ETF’s value being more
volatile than the underlying portfolio securities. Underlying ETFs in which the
Fund invests may be non-diversified under the Investment Company Act of 1940 and
its shares may be more volatile and fluctuate more than shares of a diversified
fund that invests in a broader range of securities. In addition, investments in
the securities of underlying ETFs may involve duplication of advisory fees and
certain other expenses.
Fixed
Income Securities Risk: Fixed-income
securities are subject to interest rate risk, which refers to fluctuations in
the value of a fixed-income security resulting from changes in interest rates.
Changes in interest rates can significantly affect the value of fixed-income
securities. A rise in interest rates typically causes fixed income security
prices to fall, with longer-maturity or higher-duration fixed income securities
being more sensitive to such fluctuations. Conversely, a decline in interest
rates may increase fixed income security prices; however, this environment can
also reduce the yield of newly issued fixed income securities, potentially
lowering the Fund's income over time. In periods of falling interest rates,
reinvestment risk may arise as the Fund may need to reinvest proceeds from
maturing securities at lower yields, which could negatively impact overall
returns. Additionally, an unexpected event could interfere with an issuer’s
ability to make timely interest or principal payments or cause market
speculation about the issuer’s ability to make such payments. Such events may
significantly reduce the credit quality and market value of an issuer’s fixed
income securities and/or other debt securities regardless of the broader
interest rate environment. These risks may result in losses to the Fund or
underperformance relative to other investments. The value of the Fund’s fixed
income investments is also dependent on their maturity. Generally, the longer
the maturity of a fixed income security, the greater its sensitivity to changes
in interest rates.
U.S.
Treasury Obligations Risk: U.S.
Treasury obligations may differ in their interest rates, maturities, times of
issuance and other characteristics. U.S. Treasury obligations are subject to
inflation risk, as the price of short term U.S. Treasury obligations tends to
fall during inflationary periods as investors seek higher yielding investments.
Changes to interest rates may also adversely affect the value and liquidity of
the U.S. Treasury obligations. Similar to other issuers, changes to the
financial condition or credit rating of the U.S. government may cause the value
of the Fund's investments in U.S. Treasury obligations to decline.
Notwithstanding that U.S. Treasury obligations are backed by the full faith and
credit of the United States, circumstances could arise that could prevent the
timely payment of interest or principal, such as reaching the legislative "debt
ceiling," which can in turn drive debt higher. Such non-payment could result in
losses to the Fund and substantial negative consequences for the U.S. economy
and the global financial system.
Credit
Risk: Credit
risk refers to the possibility that the issuer of the security will not be able
to make principal and interest payments when due. A downgrade or perceived
changes in an issuer’s credit rating or the market’s perception of an issuer’s
creditworthiness may also affect the value of the Fund’s investments.
Cybersecurity
Risk: With
the increased use of technologies such as the Internet to conduct business, the
Fund, like all companies, may be susceptible to operational, information
security and related risks. Cybersecurity incidents involving the Fund and its
service providers (including, without limitation, the Adviser, fund accountant,
custodian, transfer agent and financial intermediaries) have the ability to
cause disruptions and impact business operations, potentially resulting in
financial losses, impediments to trading, the inability of Fund shareholders to
transact business, violations of applicable privacy and other
laws,
regulatory fines, penalties, reputational damage, reimbursement or other
compensation costs, and/or additional compliance costs.
Extension
Risk: Extension
risk is the risk that, when interest rates rise, certain obligations will be
paid off by the issuer (or other obligated party) more slowly than anticipated,
causing the value of these debt securities to fall. Rising interest rates tend
to extend the duration of debt securities, making their market value more
sensitive to changes in interest rates. The value of longer-term debt securities
generally changes more in response to changes in interest rates than
shorter-term debt securities. As a result, in a period of rising interest rates,
securities may exhibit additional volatility and may lose value.
Focus
Risk: The
Fund may from time to time have a significant amount of its assets invested in a
particular industry, group of industries, or one or more sectors to
approximately the same extent that the Underlying Index focuses in investments
related to a particular industry, group of industries, and/or one or more
sectors. In such event, the Fund’s performance will depend to a greater extent
on the overall condition of such industry(ies) or sector(s), and an economic,
business, political, regulatory, or other occurrence affecting such
industry(ies) or sector(s) will have an increased impact on the value of the
Fund’s shares compared to the value of shares of a fund that invests in a
broader range of industries or sectors.
[Risks
Related to Investing in the Communication Services Sector: Companies
in the communication services sector may be affected by industry competition,
substantial capital requirements, government regulation, cyclicality of revenues
and earnings, obsolescence of communications products and services due to
technological advancement, a potential decrease in the discretionary income of
targeted individuals and changing consumer tastes and interests.]
[Risks
Related to Investing in the Consumer Discretionary Sector: The
consumer discretionary sector may be affected by changes in domestic and
international economies, exchange and interest rates, inflation, competition,
consumers’ disposable income and consumer preferences, social trends and
marketing campaigns.]
Geographic
Risk: The
Fund’s investments in securities of issuers located in a particular country or
geographic region may subject the Fund to certain risks to a greater extent than
if its investments were less focused, including: natural, biological or other
disasters and the spread of infectious diseases; economic, political and social
instability; security concerns; and trade disputes with key trading partners.
The securities in which the Fund invests and, consequently, the Fund are also
subject to specific risks as a result of their business operations in a
particular country or region, including, but not limited to:
Risk
of Investing in the United States: Investments
in United States issuers may subject the Fund to legal, regulatory, political,
currency, security, and economic risks specific to the United States. A decrease
in imports or exports, changes in trade regulations, inflation and/or an
economic recession in the U.S. may have a material adverse effect on the U.S.
economy.
Government
Debt Risk: Countries
with high levels of public debt and spending may experience stifled economic
growth. Such countries may face higher borrowing costs and, in some cases, may
implement austerity measures that could have an adverse effect on economic
growth. Such developments could contribute to prolonged periods of recession and
adversely impact investments in the Fund.
High
Yield Securities Risk: Securities
that are rated below investment grade (commonly referred to as "junk bonds",
including those bonds rated lower than "BBB-" by Standard &
Poor’s®
(a division of the McGraw-Hill Companies, Inc.) ("S&P") and Fitch, Inc.
("Fitch"), "Baa3" by Moody’s®
Investors Service, Inc. ("Moody’s"), or "BBB (low)" by Dominion Bond Rating
Service Limited ("DBRS"), or are unrated but may be judged to be of comparable
quality, at the time of purchase, may be more volatile than higher-rated
securities of similar maturity. Investing in junk bonds is
speculative.
Income
Risk: Income
risk is the risk that the Fund’s income will decline because of falling interest
rates.
Indexing
Strategy Risk: The
Fund is generally not actively managed, and the Adviser does not attempt to take
defensive positions in declining markets. Unlike many investment companies, the
Fund does not seek to outperform its Underlying Index. Therefore, it would not
necessarily buy or sell a security unless that security is added or removed,
respectively, from the Underlying Index, even if that security generally is
underperforming. Additionally, if a constituent of the Underlying Index were
removed, even outside of a regular rebalance of the Underlying Index, the
Adviser anticipates that the Fund make similar changes to its portfolio.
Maintaining investments in securities regardless of market conditions or the
performance of individual securities could cause the Fund’s return to be lower
than if the Fund employed an active strategy.
Index-Related
Risk: There
is no guarantee that the Fund will achieve a high degree of correlation to the
Underlying Index and therefore achieve its investment objective. Market
disruptions and regulatory restrictions could have an
adverse
effect on the Fund’s ability to adjust its exposure to the required levels in
order to track the Underlying Index. Errors in index data, index computations
and/or the construction of the Underlying Index in accordance with its
methodology 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, which may have an adverse
impact on the Fund and its shareholders.
Management
Risk: The
Fund may not fully replicate its Underlying Index and may hold securities not
included in its Underlying Index. The Adviser’s investment strategy, the
implementation of which is subject to a number of constraints, may cause the
Fund to underperform the market or its relevant benchmark or adversely affect
the ability of the Fund to achieve its investment objective.
Representative
Sampling Risk: Representative
sampling is a method of indexing that involves investing in a representative
sample of securities that collectively have a similar investment profile to the
Underlying Index and resemble the Underlying Index in terms of risk factors and
other key characteristics. When the Fund utilizes a representative sampling
strategy, the Fund is subject to an increased risk of tracking error, in that
the securities selected in the aggregate for the Fund may not have an investment
profile similar to those of the Underlying Index.
Tracking
Error Risk:
Tracking error may occur because of differences between the instruments held in
the Fund's portfolio and those included in the Underlying Index, pricing
differences, transaction costs incurred by the Fund, the Fund's holding of
uninvested cash, size of the Fund, differences in timing of the accrual of or
the valuation of dividends or interest, tax gains or losses, changes to the
Underlying Index or the costs to the Fund of complying with various new or
existing regulatory requirements. This risk may be heightened during times of
increased market volatility or other unusual market conditions. Tracking error
also may result because the Fund incurs fees and expenses, while the Underlying
Index does not.
Interest
Rate Risk: Interest
rate risk refers to fluctuations in the value of fixed income securities
resulting from changes in the level of interest rates. When interest rates
decline, prices of fixed-income securities generally increase; and decrease when
interest rates increase. The Fund may lose money if short-term or long-term
interest rates rise sharply.
Variable and floating rate securities also
increase or decrease in value in response to changes in interest rates, although
generally are less sensitive to interest rate changes than fixed rate
securities. Variable and floating rate securities may decline in value if their
interest rates do not rise as much, or as quickly, as interest rates in general.
When the Fund holds variable or floating rate securities, a decrease in market
interest rates will adversely affect the income received from such securities,
which may also impact the net asset value of the Fund’s Shares.
Issuer
Risk: Fund
performance depends on the performance of individual companies in which the Fund
invests. Changes to the financial condition of any of those companies may cause
the value of such company's securities to decline.
Market
Risk: Turbulence
in the financial markets and reduced liquidity may negatively affect issuers,
which could have an adverse effect on the Fund and its investments. The Fund’s
NAV could decline over short periods due to short-term market movements and over
longer periods during market downturns. Trade policy, including the imposition
of tariffs, may dampen consumer spending and result in decreased confidence in
the markets. Additionally, political uncertainty regarding U.S. policy,
including the U.S. government’s approach to trade, may also impact the markets.
Furthermore, local, regional or global events such as war, acts of terrorism,
the spread of infectious diseases, inflation and recessions, changes in interest
or exchange rates, or other events could have a significant impact on the Fund
and its investments and trading of its Shares. Market risk factors may result in
increased volatility and/or decreased liquidity in the securities
markets.
Model
Portfolio Risk: The
Underlying Index utilizes a proprietary methodology to determine its allocations
to the securities in which the Fund invests. Investments selected using a
proprietary methodology (i.e., quantitative model) may perform differently from
the market as a whole or from their expected performance. There can be no
assurance that use of a model will enable the Fund to achieve positive returns
or outperform the market.
New
Fund Risk: The
Fund is a new fund, with limited or no operating history, which may result in
additional risks for investors in the Fund. There can be no assurance that the
Fund will grow to or maintain an economically viable size, in which case the
Board of Trustees may determine to liquidate the Fund. While shareholder
interests will be the paramount consideration, the timing of any liquidation may
not be favorable to certain individual shareholders. New funds are also subject
to Large Shareholder Risk.
Non-Diversification
Risk:
The Fund is classified as a “non-diversified” investment company under the
Investment Company Act of 1940 ("1940 Act"), which means that the Fund may
invest a greater portion of its assets in securities of individual issuers
than
a diversified fund. As a result, changes in the market value of a single
investment may have a greater impact on the Fund’s NAV and may make the Fund
more volatile than more diversified funds.
Operational
Risk: The
Fund is exposed to operational risk arising from a number of factors, including
but not limited to human error, processing and communication errors, errors of
the Fund's service providers, counterparties or other third-parties, failed or
inadequate processes, cyber security incidents, and technology or systems
failures. The Fund and the Adviser seek to reduce these operational risks
through controls and procedures. However, these measures do not address every
possible risk and may be inadequate for those risks that they are intended to
address.
Quantitative
Signals Risk:
The performance of the Underlying Index will be significantly affected by the
extent to which the signals utilized to determine whether the Underlying Index
is invested in the High Yield Bond Position or the U.S. Treasury Position
correctly identify potential drawdowns and periods of positive returns. The
methodology upon which the Underlying Index relies is based on certain
assumptions made in reliance on historical market data and it may fail to
predict future market events or respond in a way that is advantageous for the
Fund. There can be no assurance that the signals will behave as expected in all
market conditions.
Risks
Associated with Exchange-Traded Funds: As
an ETF, the Fund is subject to the following risks:
Authorized
Participants Concentration Risk: The
Fund has a limited number of financial institutions that may act as Authorized
Participants and engage in creation or redemption transactions directly with the
Fund, and none of those Authorized Participants is obligated to engage in
creation and/or redemption transactions. To the extent that those Authorized
Participants exit the business or are unable to process creation and/or
redemption orders, such as in times of market stress, Shares may be more likely
to trade at a premium or discount to NAV and/or at wider intraday bid-ask
spreads, and possibly face trading halts and/or delisting from an
exchange.
Large
Shareholder Risk: Certain
shareholders, including an Authorized Participant, the Adviser, an affiliate of
the Adviser, or funds managed by the Adviser, may own a substantial amount of
the Fund’s Shares. Redemptions by large shareholders could have a significant
negative impact on the Fund. If a large shareholder were to redeem all, or a
large portion, of its Shares, there is no guarantee that the Fund will be able
to maintain sufficient assets to continue operations in which case the Board of
Trustees may determine to liquidate the Fund. In addition, transactions by large
shareholders may account for a large percentage of the trading volume on a
national securities exchange and may, therefore, have a material upward or
downward effect on the market price of the Shares.
Listing
Standards Risk: The
Fund is required to comply with listing requirements adopted by the listing
exchange. Non-compliance with such requirements may result in the Fund's shares
being delisted by the listing exchange. Any resulting liquidation of the Fund
could cause the Fund to incur elevated transaction costs and could result in
negative tax consequences for its shareholders.
Market
Trading Risks and Premium/Discount Risks: Shares
of the Fund are publicly traded on a national securities exchange, which may
subject shareholders to numerous market trading risks. In stressed market
conditions, the market for the Shares may become less liquid in response to the
deteriorating liquidity of the Fund’s portfolio. This adverse effect on the
liquidity of the Shares, as well as disruptions to creations and redemptions,
the existence of extreme market volatility or potential lack of assets in the
Fund or an active trading market for Shares may result in Shares trading at a
significant premium or discount to NAV. If a shareholder purchases Shares at a
time when the market price is at a premium to the NAV or sells Shares at a time
when the market price is at a discount to the NAV, the shareholder may sustain
losses. The NAV of the Fund is calculated at the end of each business day and
fluctuates with changes in the market value of the Fund’s holdings. The trading
price of the Fund’s Shares fluctuates, in some cases materially, throughout
trading hours in response to changes in the Fund’s NAV.
[Rule
144A Securities and Other Exempt Securities Risk: The
market for Rule 144A and other securities exempt from certain registration
requirements may be less active than the market for publicly-traded securities.
Also, the Fund may get only limited information about the issuer of a given
restricted security, and therefore may be less able to determine the security’s
market or fair value or assess the investment risks as fully as for other
issuers for which more information is available. Rule 144A and other exempt
securities, while initially privately placed, carry the risk that their
liquidity may become impaired and the Fund may be unable to dispose of the
securities at a desirable time or price. Restricted securities may be subject to
limitations on the resale which may have an adverse effect on their
marketability and their liquidity, and may prevent the Fund from disposing of
them promptly at advantageous prices, if at all.]
Securities
Lending Risk: Securities
lending involves a risk of loss because the borrower may fail to return the
securities in a timely manner or at all. If the Fund is not able to recover the
securities loaned, it may sell the collateral and purchase a replacement
security in the market. Lending securities entails a risk of loss to the Fund if
and to the extent that the market value of the loaned securities increases and
the collateral is not increased accordingly. Additionally, the Fund will bear
any loss on the investment of cash collateral it receives. These events could
also trigger adverse tax consequences for the Fund. As securities on loan may
not be voted by the Fund, there is a risk that the Fund may not be able to
recall the securities in sufficient time to vote on material proxy
matters.
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.
Trend
Lag Risk: Trend
indicator signal changes pursuant to which the Fund's exposure and investments
are determined, are designed to become effective three trading days after the
quantitative signals indicate a rebalance is required, and after changing its
allocation the Underlying Index must remain in the same allocation for at least
ten trading days before it can change its allocation again. As a result of this,
the Fund may be exposed to downward trends and/or market volatility and may not
achieve immediate exposure to upward trends and/or market
volatility.
Turnover
Risk: The
Fund may engage in frequent and active trading, which may significantly increase
the Fund’s portfolio turnover rate. At times, the Fund may have a portfolio
turnover rate substantially greater than 100%. For example, a portfolio turnover
rate of 300% is equivalent to the Fund buying and selling all of its securities
three times during the course of a year. A high portfolio turnover rate would
result in high brokerage costs for the Fund, may result in higher taxes when
Shares are held in a taxable account and lower Fund performance.
Valuation
Risk: The
sales price the Fund could receive for a security may differ from the Fund’s
valuation of the security and may differ from the value used by the Underlying
Index, particularly for securities that trade in low value or volatile markets
or that are valued using a fair value methodology (such as during trading
halts). 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.
PERFORMANCE
INFORMATION
The
Fund does not have a full calendar year of performance. 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 showing the variability of the Fund's returns and comparing the Fund's
performance to a broad-based benchmark index and the Underlying Index. The
Fund's performance is not necessarily indicative of how the Fund will perform in
the future.
FUND
MANAGEMENT
Investment
Adviser:
Global X Management Company LLC.
Portfolio
Managers:
The professionals primarily responsible for the day-to-day management of the
Fund are Nam To, CFA and Sandy Lu, CFA (“Portfolio Managers”). Messrs. To and Lu
have been Portfolio Managers of the Fund since the Fund's inception.
PURCHASE
AND SALE OF FUND SHARES
Shares
of the Fund are or will be listed and traded at market prices on a national
securities exchange. Shares may only be purchased and sold on the exchange
through a broker-dealer. The price of Shares is based on market price, and
because ETF shares trade at market prices rather than at NAV, Shares may trade
at a price greater than NAV (a premium) or less than NAV (a discount). Only
"Authorized Participants" (as defined in the SAI) who have entered into
agreements with the Fund's distributor, SEI Investments Distribution Co.
("Distributor"), may engage in creation or redemption transactions directly with
the Fund. The Fund will only issue or redeem Shares that have been aggregated
into blocks called "Creation Units". The Fund will issue or redeem Creation
Units in return for a basket of cash and/or securities that the Fund specifies
any day that the national securities exchanges are open for business (“Business
Day”). An investor may incur costs attributable to the difference between the
highest price a buyer is willing to pay to purchase shares of the Fund (bid) and
the lowest price a seller is willing to accept for shares of the Fund (ask) when
buying or selling shares in the secondary market (the “bid-ask spread”). To
access information regarding the Fund’s net asset value, market price, premiums
and discounts, and bid-ask spreads, please go to
www.globalxetfs.com.
TAX
INFORMATION
The
Fund intends to make distributions that may be taxable to you as ordinary income
or capital gains, unless you are investing through a tax-advantaged arrangement
such as a 401(k) plan or an individual retirement account ("IRA"), in which case
distributions from such tax-advantaged arrangement may be taxable to you.
PAYMENTS
TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
The
Adviser and its related companies may pay broker-dealers or other financial
intermediaries (such as a bank) for the sale of Fund Shares and related
services. These payments may create a conflict of interest by influencing your
broker-dealer, sales persons or other intermediary or its employees or
associated persons to recommend the Fund over another investment. Ask your
financial adviser or visit your financial intermediary's website for more
information.
ADDITIONAL
INFORMATION ABOUT THE FUND
This
Prospectus contains information about investing in the Fund. Please read this
Prospectus carefully before you make any investment decisions. Shares of the
Fund are listed for trading on a national securities exchange. The market price
for a Share of the Fund may be different from the Fund's most recent NAV. ETFs
are funds that trade like other publicly-traded securities. The Fund is designed
to track the Underlying Index. Similar to shares of an index mutual fund, each
Share of the Fund represents an ownership interest in an underlying portfolio of
securities. Unlike shares of a mutual fund, which can be bought and redeemed
from the issuing fund by all shareholders at a price based on NAV, Shares of the
Fund may be purchased or redeemed directly from the Fund at NAV solely by
Authorized Participants and only in Creation Unit increments. Also, unlike
shares of a mutual fund, Shares of the Fund are listed on a national securities
exchange and trade in the secondary market at market prices that change
throughout the day. The Fund is designed to be used as part of broader asset
allocation strategies. Accordingly, an investment in the Fund should not
constitute a complete investment program. An index is a financial calculation,
based on a grouping of financial instruments, and is not an investment product,
while the Fund is an actual investment portfolio. The performance of the Fund
and its Underlying Index may vary for a number of reasons, including transaction
costs, non-U.S. currency valuations, asset valuations, corporate actions (such
as mergers and spin-offs), timing variances and differences between the Fund's
portfolio and the Underlying Index resulting from the Fund's legal restrictions
(such as diversification requirements) that apply to the Fund but not to the
Underlying Index.
[The
investment objective of the Fund is to seek to provide investment results that
correspond generally to the price and yield performance, before fees and
expenses, of the Underlying Index. The Fund invests at least 80% of its net
assets, plus borrowings for investment purposes (if any), in the securities of
the Underlying Index or in investments that have economic characteristics that
are similar to the economic characteristics of such component securities, either
individually or in the aggregate. The Fund's 80% investment policy is
non-fundamental and requires 60 days prior written notice to shareholders before
it can be changed. The Fund generally uses a representative sampling strategy
with respect to the Underlying Index. “Representative sampling” is an indexing
strategy that involves investing in a representative sample of securities that
collectively has an investment profile similar to the Underlying Index in terms
of key risk factors, performance attributes and other characteristics. Under a
representative sampling strategy, the Fund may or may not hold all of the
securities in the Underlying Index. In addition, the Fund may also invest in
equity index futures for cash flow management purposes and as a portfolio
management technique. The Fund may sell securities that are represented in its
Underlying Index in anticipation of their removal from such Underlying Index or
purchase securities not represented in its Index in anticipation of their
addition to such Underlying Index.
The
Fund concentrates its investments (i.e., hold 25% or more of its total assets)
in a particular industry or group of industries to approximately the same extent
that the Underlying Index is concentrated. The Fund's investment objective and
its Underlying Index may be changed without shareholder approval upon at least
60 days prior written notice to shareholders.]
A
FURTHER DISCUSSION OF PRINCIPAL RISKS
The
Fund is subject to various risks, including the principal risks noted below, any
of which may adversely affect the Fund's NAV, trading price, yield, total return
and ability to meet its investment objective. You could lose all or part of your
investment in the Fund, and the Fund could underperform other
investments.
Asset
Class Risk
The
returns from the types of securities and/or assets in which the Fund invests may
under-perform returns from the various general securities markets or different
asset classes. The assets in the Underlying Index may under-perform investments
that track other markets, segments, sectors or assets. Different types of assets
tend to go through cycles of out-performance and under-performance in comparison
to the general securities markets.
Bond
Investment Risk
Investments
in debt securities are generally affected by changes in prevailing interest
rates and the creditworthiness of the issuer. The values of debt securities may
rise or fall in response to market fluctuations, changes in interest rates,
actual or perceived inability of issuers, guarantors or liquidity providers to
make scheduled payments, or illiquidity in debt markets. The Fund’s yield on
investments in debt securities will fluctuate as the securities in the Fund are
rebalanced and reinvested in securities with different interest rates.
Investments in bonds are also subject to credit risk. Credit risk is the risk
that an issuer of debt securities will be unable to pay principal and interest
when due, or that the value of the security will suffer because investors
believe the issuer is less able to make required principal and interest
payments. This is broadly gauged by the credit ratings of the debt securities in
which the Fund invests. However, credit
ratings
are only the opinions of the rating agencies issuing them, do not purport to
reflect the risk of fluctuations in market value and are not absolute guarantees
as to the payment of interest and the repayment of principal.
ETF
Investment Risk
The
Fund may hold ETFs to gain exposure to certain asset classes. As a result, the
Fund may be subject to the same risks as the underlying ETFs.
An
underlying ETFs that seeks to track an underlying index may experience tracking
error in relation to the index, or a lack of liquidity may result in an
underlying ETF’s value being more volatile than the underlying portfolio
securities. Because the value of an underlying ETF's shares depends on the
demand in the market, the Adviser may not be able to liquidate the Fund’s
holdings in those shares at the most optimal time, thereby adversely affecting
the Fund’s performance. Further, an underlying ETF's shares may trade at a
premium or discount to NAV.
Underlying
ETFs in which the Fund invests may be non-diversified under the Investment
Company Act of 1940 (“1940 Act”). This means that there is no restriction under
the 1940 Act on how much an underlying ETF may invest in the securities of a
single issuer. Therefore, the value of an underlying ETF’s shares may be
volatile and fluctuate more than shares of a diversified fund that invests in a
broader range of securities. In addition, the Fund or underlying ETFs may hold
common portfolio positions, thereby reducing any diversification benefits of the
underlying ETFs.
Investments
in the securities of an underlying ETF may also involve the duplication of
advisory fees and certain other expenses. The Fund will pay brokerage
commissions in connection with the purchase and sale of shares of underlying
ETFs, which could result in greater expenses to the Fund.
A
complete list of each underlying ETF held by the Fund can be found daily on the
Trust’s website.
Fixed
Income Securities Risk
Fixed-income
securities include a broad array of short-, medium-, and long-term obligations
issued by the U.S. or foreign governments, government or international agencies
and instrumentalities, and corporate and private issuers of various types.
Changes in interest rates can significantly affect the value of fixed-income
securities. A rise in interest rates typically causes fixed income security
prices to fall, with longer-maturity or higher-duration fixed income securities
being more sensitive to such fluctuations. Conversely, a decline in interest
rates may increase fixed income security prices; however, this environment can
also reduce the yield of newly issued fixed income securities, potentially
lowering the Fund's income over time. In periods of falling interest rates,
reinvestment risk may arise as the Fund may need to reinvest proceeds from
maturing securities at lower yields, which could negatively impact overall
returns. Additionally, an unexpected event could interfere with an issuer’s
ability to make timely interest or principal payments or cause market
speculation about the issuer’s ability to make such payments. Such events may
significantly reduce the credit quality and market value of an issuer’s fixed
income securities and/or other debt securities regardless of the broader
interest rate environment. These risks may result in losses to the Fund or
underperformance relative to other investments. Fixed-income securities include
a broad array of short-, medium-, and long-term obligations issued by the U.S.
or foreign governments, government or international agencies and
instrumentalities, and corporate and private issuers of various types. On the
maturity date of a fixed-income security, the issuer of the fixed-income
security (the borrower) must pay back the borrowed amount. The value of the
Fund’s fixed income investments is also dependent on their maturity. Generally,
the longer the maturity of a fixed income security, the greater its sensitivity
to changes in interest rates.
U.S.
Treasury Obligations Risk
A
security backed by the U.S. Treasury or the full faith and credit of the United
States is guaranteed only as to the timely payment of interest and principal
when held to maturity. Investments in debt securities are generally affected by
changes in prevailing interest rates and the creditworthiness of the issuer.
Prices of U.S. Treasury securities fall when prevailing interest rates rise.
Price fluctuations of longer-term U.S. Treasury securities are greater than
price fluctuations of shorter-term U.S. Treasury securities and may be as great
as price fluctuations of common stock. The Fund’s yield on investments in U.S.
Treasury securities will fluctuate as the Fund is invested in U.S. Treasury
securities with different interest rates. Notwithstanding that U.S. Treasury
obligations are backed by the full faith and credit of the United States,
circumstances could arise that could prevent the timely payment of interest or
principal, such as reaching the legislative "debt ceiling”. A high national debt
level could increase market pressures to meet government funding needs, which
may drive debt higher. In addition, a high national debt level raises concerns
that
the
U.S. government will not be able to make principal or interest payments when
they are due. Similar to other issuers, changes to the financial condition or
credit rating of the U.S. government may cause the value of the Fund's
investments in U.S. Treasury obligations to decline. In addition, uncertainty in
regard to the U.S. debt ceiling may increase the volatility in U.S. Treasury
obligations and can heighten the potential for a credit rating downgrade, which
could have an adverse effect on the value of the Fund’s U.S. Treasury
obligations.
Credit
Risk
Credit
risk is the risk that the issuer of the security will not be able to make
principal and interest payments when due. A downgrade or perceived change in an
issuer’s credit rating or the market’s perception of an issuer’s
creditworthiness may also affect the value of the Fund’s investment in that
issuer.
Cybersecurity
Risk
With
the increased use of technologies such as the Internet to conduct business, the
Fund, like all companies, may be susceptible to operational, information
security and related risks. Cybersecurity incidents involving the Fund,
Authorized Participants, or service providers (including, without limitation,
the Adviser, fund accountant, custodian, transfer agent and financial
intermediaries) have the ability to cause disruptions and impact business
operations, potentially resulting in financial losses, impediments to trading,
the inability of Fund shareholders to transact business, violations of
applicable privacy and other laws, regulatory fines, penalties, reputational
damage, reimbursement or other compensation costs, and/or additional compliance
costs.
Cybersecurity
incidents can result from deliberate cyberattacks or unintentional events and
may arise from external or internal sources. Cyber attacks may include infection
by malicious software or gaining unauthorized access to digital systems,
networks or devices that are used to service the Fund’s operations (e.g., by
“hacking” or “phishing”). Cyber attacks may also be carried out in a manner that
does not require gaining unauthorized access, such as causing denial-of-service
attacks on websites (i.e., efforts to make network services unavailable to
intended users). In addition, cyber-attacks may render records of Fund assets
and transactions, shareholder ownership of Fund Shares, and other data integral
to the functioning of the Fund inaccessible or inaccurate or incomplete.
Substantial costs may be incurred by the Fund in order to resolve or prevent
cyber incidents in the future. While the Fund has established business
continuity plans in the event of, and risk management systems to prevent, such
cyber-attacks, there are inherent limitations in such plans and systems,
including the possibility that certain risks have not been identified and that
prevention and remediation efforts will not be successful. Furthermore, the Fund
cannot control the cyber security plans and systems put in place by service
providers to the Fund, issuers in which the Fund invests, market makers or
Authorized Participants.
Similar
adverse consequences could result from cybersecurity incidents affecting issuers
of securities in which the Fund invests, counterparties with which the Fund
engages, governmental and other regulatory authorities, exchanges and other
financial market operators, banks, brokers, dealers, insurance companies, other
financial institutions and other parties. In addition, substantial costs may be
incurred in order to prevent any cybersecurity incidents in the future. Although
the Fund’s service providers may have established business continuity plans and
risk management systems to mitigate cybersecurity risks, there can be no
guarantee or assurance that such plans or systems will be effective, or that all
risks that exist, or may develop in the future, have been completely anticipated
and identified or can be protected against. The Fund and its shareholders could
be negatively impacted as a result.
The
rapid development and increasingly widespread use of artificial intelligence
technologies could increase the effectiveness of cyber attacks and exacerbate
the risks.
Extension
Risk
Extension
risk is the risk that, when interest rates rise, certain obligations will be
paid off by the issuer (or other obligated party) more slowly than anticipated,
causing the value of these debt securities to fall. Rising interest rates tend
to extend the duration of debt securities, making them more sensitive to changes
in interest rates. The value of longer-term debt securities generally changes
more in response to changes in interest rates than shorter-term debt securities.
As a result, in a period of rising interest rates, securities may exhibit
additional volatility and may lose value. Extension risk is particularly
prevalent for a callable debt security where an increase in interest rates could
result in the issuer of that security choosing not to redeem the debt security
as anticipated on the security’s call date. Such a decision by the issuer could
have the effect of lengthening the debt security’s expected maturity, making it
more vulnerable to interest rate risk and reducing its market
value.
Focus
Risk
In
following its methodology, the Underlying Index may be focused to a significant
degree in securities of issuers in a particular industry or group of industries
and/or may have significant exposure to one or more sectors. The Fund will also
focus its investments to approximately the same extent as the Underlying Index.
In such event, the Fund’s performance will be particularly susceptible to
adverse events impacting such industry(ies) or sector(s), and the Fund may be
susceptible to an increased risk of loss, including losses due to events that
adversely affect the Fund’s investments more than the market as a whole, to the
extent that the Fund's investments are focused in the securities of a particular
issuer or issuers within the same geographic region, market, industry, group of
industries, sector or asset class.
Such heightened risks, any of which
may adversely affect the issuers in which the Fund invests, may include, but are
not limited to, the following: general economic conditions or cyclical market
patterns that could negatively affect supply and demand; competition for
resources; adverse labor relations; political or world events; obsolescence of
technologies; and increased competition or new product introductions that may
affect the profitability or viability of issuers in a particular industry or
sector. In addition, at times, such industry(ies) or sector(s) may underperform
other such categories or the market as a whole.
Risks
Related to Investing in the Communication Services Sector
[The
communication services sector consists of both companies in the
telecommunication services industry as well as those in the media and
entertainment industry. Examples of companies in the telecommunication services
industry group include providers of fiber-optic, fixed-line, cellular and
wireless telecommunications networks. Companies in the media and entertainment
industry group encompass a variety of services and products including television
broadcasting, gaming products, social media, networking platforms, online
classifieds, online review websites, and Internet search engines. Companies in
the communication services sector may be affected by industry competition,
substantial capital requirements, government regulation, and obsolescence of
communications products and services due to technological advancement.
Fluctuating domestic and international demand, shifting demographics and often
unpredictable changes in consumer tastes can drastically affect a communication
services company's profitability. In addition, 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.]
[Risks
Related to Investing in the Consumer Discretionary Sector
The
success of consumer product manufacturers and retailers is tied closely to the
performance of the overall domestic and international economy, exchange and
interest rates, competition and consumer confidence. Success depends heavily on
disposable household income and consumer spending and may be strongly affected
by social trends and marketing campaigns. Moreover, the consumer discretionary
sector can be significantly affected by several factors, including, without
limitation, consumers’ disposable income and changing consumer preferences,
demographics, cyclical revenue generation, commodity price volatility, depletion
of resources, labor relations, inflation, import and export controls, supply
chain disruptions, intense competition, cyber-attacks, technological
developments and government regulation. ]
Geographic
Risk
Geographic
risk is the risk that the Fund’s assets may be focused in countries located in
the same geographic region. This investment focus will subject the Fund to risks
associated with that particular region, or a region economically tied to that
particular region, such as a natural, biological, or other disasters and the
spread of infectious diseases. The Fund may invest in countries or regions with
economies that are heavily dependent upon trading with key partners. Any
reduction in this trading may cause an adverse impact on the economy in which
the Fund invests and on the Fund’s investments. The countries in which the Fund
invests may be subject to considerable degrees of economic, political and social
instability. Additionally, countries in which the Fund may invest have
experienced security concerns, which may cause uncertainty in the markets and
may adversely affect the economy and the Fund’s investments. As a result, an
economic downturn, social or political unrest, or government restrictions on
international trade, among other things, in one or more of these regions may
impact the performance of the constituents in which the Fund invests, even if
the Fund does not invest directly in companies located in such region.
The
securities in which the Fund invests and, consequently, the Fund are also
subject to specific risks as a result of their business operations a particular
country or region, including, but not limited to:
Risk
of Investing in the United States
Investments
in United States issuers may subject the Fund to legal, regulatory, political,
currency, security, and economic risks specific to the United States. A decrease
in imports or exports, changes in trade regulations, including the imposition of
tariffs on trading partners, inflation and/or an economic recession in the U.S.
may have a material adverse effect on the U.S. economy and the securities listed
on U.S. exchanges. Proposed and adopted policy and legislative changes in the
U.S. are changing many aspects of financial, commercial, public health,
environmental, and other regulation and may have a significant effect on U.S.
markets generally, as well as on the value of certain securities. Governmental
agencies project that the U.S. will continue to maintain elevated public debt
levels for the foreseeable future. Although elevated debt levels do not
necessarily indicate or cause economic problems, elevated public debt service
costs may constrain future economic growth. The U.S. has developed increasingly
strained relations with a number of foreign countries. If relations with certain
countries deteriorate, it could adversely affect U.S. issuers as well as
non-U.S. issuers that rely on the U.S. for trade. The U.S. has also experienced
increased internal political discord. If this trend were to continue, it may
have an adverse impact on the U.S. economy and the issuers in which the Fund
invests.
Government
Debt Risk
Investments
in debt instruments issued or guaranteed by governments can involve a high
degree of risk. Countries with high levels of public debt and spending may
experience stifled economic growth and may be unwilling or unable to repay
public debt. A country’s willingness or ability to pay debt due in a timely
manner may be affected by the size of the debt and economic burden to the
country, governmental policy, failure to enact economic reforms required by the
International Monetary Fund or other agencies, currency reserves and cash flow.
Such countries may face higher borrowing costs and, in some cases, may implement
austerity measures that could have an adverse effect on economic growth. Such
developments could contribute to prolonged periods of recession in these
countries and adversely impact investments in the Fund.
High
Yield Securities Risk
Securities
that are rated below investment grade, (high yield securities), typically
involve greater risk and are less liquid than higher-rated securities. Changes
in general economic conditions, changes in the financial condition of the
issuers and changes in interest rates may adversely impact the ability of
issuers of high yield securities to make timely payments of interest and
principal.
The Fund may invest in high yield securities that offer
generally a higher current yield than that available from higher grade issues,
but they typically involve greater risk. Securities rated below investment grade
commonly are referred to as “junk bonds.” High yield securities are subject to a
greater risk of default, illiquidity, price volatility and uncertainty in
valuation. The ability of issuers of high yield securities to make timely
payments of interest and principal may be impacted by adverse changes in general
economic conditions, changes in the financial condition of their issuers and
price fluctuations in response to changes in interest rates. High yield
securities are less liquid than investment grade securities and may be difficult
to price or sell, particularly in times of negative sentiment toward high yield
securities. Issuers of high yield securities may have a larger amount of
outstanding debt relative to their assets than issuers of investment grade
securities have. Periods of economic downturn or rising interest rates may cause
the issuers of high yield securities to experience financial distress, which
could adversely impact their ability to make timely payments of principal and
interest and could increase the possibility of default. The market value and
liquidity of high yield securities may be impacted negatively by adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, especially in a market characterized by low trade volume.
Income
Risk
The
Fund’s income may decline when interest rates fall. This decline can occur
because the Fund may invest in or have exposure to lower-yielding bonds as bonds
in its portfolio mature or the Fund otherwise needs to purchase additional
bonds. If the Fund’s income declines, distributions by the Fund to shareholders
may be less.
Indexing
Strategy Risk
The
Fund is generally not actively managed and may be affected by a general decline
in market segments relating to the Underlying Index. The Fund invests in
securities included in, or representative of, the Underlying Index regardless of
their investment merits, and the Adviser does not otherwise attempt to take
defensive positions in declining markets. Unlike many investment companies, the
Fund does not seek to outperform its Underlying Index. Therefore, the Fund would
not necessarily buy or sell a security unless that security is added or removed,
respectively, from the Underlying Index, even if that security generally is
underperforming. Additionally, if a constituent of the Underlying Index were
removed, even outside of a regular rebalance of the Underlying Index, the
Adviser anticipates that the Fund would make similar changes to its portfolio.
Maintaining
investments in securities regardless of market conditions or the performance of
individual securities could cause the Fund’s return to be lower than if the Fund
employed an active strategy.
Index-Related
Risk
There
is no guarantee that the Fund will achieve a high degree of correlation to the
Underlying Index and therefore achieve its investment objective. Market
disruptions and regulatory restrictions could have an adverse effect on the
Fund’s ability to adjust its exposure to the required levels in order to track
the Underlying Index. There is no assurance that the Index Provider will compile
the Underlying Index accurately, or that the Underlying Index will be
determined, comprised or calculated accurately. Errors in index data, index
computations and/or the construction of the Underlying Index in accordance with
its methodology 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, which may have
an adverse impact on the Fund and its shareholders. The Index Provider may be
exposed to operational risks, including the failure of its systems or
technology, which may impact the Fund and its ability to track the Underlying
Index.
Management
Risk
The
Fund may not fully replicate its Underlying Index and may hold securities not
included in its Underlying Index. Therefore, the Fund is subject to the risk
that the Adviser’s investment strategy, the implementation of which is subject
to a number of constraints, may cause the Fund to underperform the market or its
relevant benchmark or adversely affect the ability of the Fund to achieve its
investment objective. While the Fund uses an indexing approach, implementation
of the Fund’s principal investment strategy may result in tracking error risk,
which is described below. There is no guarantee that a Fund’s investment results
will have a high degree of correlation to those of its Underlying Index or that
a Fund will achieve its investment objective.
Representative
Sampling Risk
Representative
sampling is a method of indexing that involves investing in a representative
sample of securities that collectively have a similar investment profile to the
Underlying Index and resemble the Underlying Index in terms of risk factors and
other key characteristics. When the Fund utilizes a representative sampling
strategy, the Fund is subject to an increased risk of tracking error, in that
the securities selected in the aggregate for the Fund may not have an investment
profile similar to those of the Underlying Index.
Tracking
Error Risk
Tracking
error is the divergence of the Fund's performance from that of the Underlying
Index. Tracking error may occur because of differences between the securities
and other instruments held in the Fund's portfolio and those included in the
Underlying Index, pricing differences (including differences between a
security's price at the local market close and the Fund's valuation of a
security at the time of calculation of the Fund's NAV), transaction costs
incurred by the Fund, the Fund's holding of uninvested cash, differences in
timing of the accrual of or the valuation of dividends or interest, tax gains or
losses, changes to the Underlying Index, or the costs to the Fund of complying
with various new or existing regulatory requirements. This risk may be
heightened during times of increased market volatility or other unusual market
conditions. Tracking error also may result because the Fund incurs fees and
expenses, while the Underlying Index does not.
Interest
Rate Risk
Interest
rate risk is the risk that prices of fixed income securities generally increase
in value when interest rates decline and decrease in value when interest rates
increase. The Fund may lose money if short-term or long-term interest rates rise
sharply. Interest rates may rise, with potentially sudden and unpredictable
effects on the markets and the Fund's investments. Interest rates are measured
by the US 10-Year Treasury Yield for long-term yields and the Federal Funds rate
(continuous series) for short-term rates. Duration is a measure used to
determine the sensitivity of a security’s price to changes in interest rates.
Securities of lower credit quality or with longer durations tend to be more
sensitive to changes in interest rates, often making them more volatile in
response to interest rate changes than securities of higher credit quality or
with shorter durations. Interest rate fluctuations may also negatively impact
the values of equity and other non-fixed income securities. Inflation-indexed
bonds, including Treasury Inflation-Protected Securities, decline in value when
real interest rates rise (the real interest rate is the rate of interest an
investor expects to receive after allowing for inflation). In certain interest
rate environments, such as when real interest rates are rising faster than
nominal interest rates, inflation-indexed bonds may experience greater losses
than other
fixed
income securities with similar durations.
Variable and floating rate
securities generally are less sensitive to interest rate changes but may decline
in value if their interest rates do not rise as much, or as quickly, as interest
rates in general. Conversely, floating rate securities will not generally
increase in value if interest rates decline. Inverse floating rate securities
may decrease in value if interest rates increase. Inverse floating rate
securities may also exhibit greater price volatility than a fixed rate
obligation with similar credit quality. When the Fund holds variable or floating
rate securities, a decrease (or, in the case of inverse floating rate
securities, an increase) in market interest rates will adversely affect the
income received from such securities, which may also impact the net asset value
of the Fund’s Shares.
The Board of Governors of the Federal Reserve
System (“Federal Reserve”) has periodically cut interest rates in response to
cooling inflation, however, the Federal Reserve has indicated it will take a
measured approach to future rate cuts in light of persistent inflationary
pressures. There is a risk that interest rates across the U.S. financial system
will remain elevated. Such policies may expose fixed-income and related markets
to heightened volatility and may reduce liquidity for certain Fund investments,
which could cause the value of the Fund’s investments and the NAV of the Fund’s
Shares to decline. To the extent the Fund experiences high redemptions of its
Shares in connection with these developments or otherwise, the Fund may
experience increased portfolio turnover, which will increase the costs that the
Fund incurs and may lower the Fund’s performance. The liquidity levels of the
Fund’s investments may also be affected by increased portfolio turnover or by a
substantial increase in interest rates. Further, fixed income markets have
consistently grown over the past three decades while the capacity for
traditional dealer counterparties to engage in fixed income trading has not kept
pace and in some cases has decreased. As a result, dealer inventories of
corporate bonds, which provide a core indication of the ability of financial
intermediaries to “make markets,” are at or near historic lows in relation to
market size. This reduction in dealer inventories could potentially lead to
decreased liquidity and increased volatility in the fixed income markets. If
sudden or large-scale rises in interest rates were to occur, the Fund could also
face above-average redemption requests, which could cause the Fund to lose value
due to downward pricing forces and reduced market liquidity.
Issuer
Risk
Fund
performance depends on the performance of individual companies in which the Fund
invests. Changes to the financial condition of any of those companies may cause
the value of such company's securities to decline.
Market
Risk
Market
risk is the risk that the value of the securities in which the Fund invests may
go up or down in response to the prospects of individual issuers and/or general
economic conditions. Turbulence in the financial markets and reduced liquidity
may negatively affect issuers, which could have an adverse effect on the Fund
and its investments. The Fund’s NAV could decline over short periods due to
short-term market movements and over longer periods during market downturns.
Policy changes by central governments and governmental agencies, including the
Federal Reserve or the European Central Bank, could cause increased volatility
in financial markets and lead to higher levels of Fund redemptions from
Authorized Participants, which could have a negative impact on the Fund. Trade
policy, including the imposition of tariffs, may dampen consumer spending and
result in decreased confidence in the markets. Additionally, political
uncertainty regarding U.S. policy, including the U.S. government’s approach to
trade, may also impact the markets. Furthermore, local, regional or global
events such as war, acts of terrorism, the spread of infectious diseases,
inflation and recessions, changes in interest or exchange rates, or other events
could have a significant impact on the Fund and its investments and trading of
its Shares. Market risk factors may result in increased volatility and/or
decreased liquidity in the securities markets.
Model
Portfolio Risk
The
Underlying Index utilizes a proprietary methodology to determine its allocations
to the securities in which the Fund invests. Investments selected using a
proprietary methodology, including quantitative models, may perform differently
from the market as a whole or from their expected performance. There can be no
assurance that use of a model will enable the Fund to achieve positive returns
or outperform the market.
New
Fund Risk
The
Fund is a new fund, with limited or no operating history, which may result in
additional risks for investors in the Fund. There can be no assurance that the
Fund will grow to or maintain an economically viable size, in which case the
Board of Trustees may determine to liquidate the Fund. While shareholder
interests will be the paramount consideration, the timing of any liquidation may
not be favorable to certain individual shareholders. From time to time an
Authorized Participant, a third-party investor, the Adviser or another affiliate
of the Adviser or the Fund may invest in the Fund and hold its investment for a
specific
period of time in order to facilitate commencement of the Fund’s operations or
for the Fund to achieve size or scale. There can be no assurance that any such
entity would not redeem its investment or that the size of the Fund would be
maintained at such levels which could negatively impact the Fund.
Non-Diversification
Risk
The
Fund is classified as a “non-diversified” investment company under the 1940 Act.
This means that the Fund may invest a greater portion of its assets in
securities of individual issuers as compared to a diversified fund. As a result,
the Fund may be more susceptible to the risks associated with these particular
issuers, or to a single economic, business, political, regulatory, or other
occurrence affecting these issuers, which may negatively impact the Fund’s
performance and result in greater fluctuation in the value of the Fund’s
shares.
Operational
Risk
The
Fund is exposed to operational risk arising from a number of factors, including
but not limited to human error, processing and communication errors, errors of
the Fund's service providers, counterparties or other third-parties, failed or
inadequate processes, cybersecurity incidents, and technology or systems
failures. Disruptions of the systems of the Adviser and the Fund’s distributor
and other service providers (including, but not limited to, fund accountants,
custodians, transfer agents and administrators), market makers, Authorized
Participants, or the issuers of securities in which the Fund invests, have the
ability to cause disruptions and impact business operations, potentially
resulting in: financial losses, interference with the Fund’s ability to
calculate its NAV, disclosure of confidential trading information, impediments
to trading, submission of erroneous trades or erroneous creation or redemption
orders, the inability of the Fund or its service providers to transact business,
violations of applicable privacy and other laws, regulatory fines, penalties,
reputational damage, reimbursement or other compensation costs, or additional
compliance costs. While the Fund has established business continuity plans in
the event of, and risk management systems to prevent, technological or other
disruptions to the Fund’s operations, there are inherent limitations in such
plans and systems, including the possibility that certain risks have not been
identified and that prevention and remediation efforts will not be successful.
Furthermore, the Fund cannot control the cyber security plans and systems put in
place by service providers to the Fund, issuers in which the Fund invests,
market makers or Authorized Participants. The Fund and its shareholders could be
negatively impacted as a result. The Fund and the Adviser seek to reduce these
operational risks through controls and procedures. However, these measures do
not address every possible risk and may be inadequate for those risks that they
are intended to address.
Quantitative
Signals Risk
The
performance of the Underlying Index will be significantly affected by the extent
to which the signals utilized to determine whether the Underlying Index is
invested in the High Yield Bond Position or the U.S. Treasury Position correctly
identify potential drawdowns and periods of positive returns. The methodology
upon which the Underlying Index relies is based on certain assumptions made in
reliance on historical market data and it may fail to predict future market
events or respond in a way that is advantageous for the Fund. There can be no
assurance that the signals will behave as expected in all market conditions.
Risks
Associated with Exchange-Traded Funds
As
an ETF, the Fund is subject to the following risks:
Authorized
Participants Concentration Risk
The
Fund has a limited number of financial institutions that may act as Authorized
Participants. Only Authorized Participants who have entered into agreements with
the Fund's distributor may engage in creation or redemption transactions
directly with the Fund, and none of those Authorized Participants is obligated
to engage in creation and/or redemption transactions. To the extent that those
Authorized Participants exit the business or are unable to process creation
and/or redemption orders, such as in times of market stress, and no other
Authorized Participant is able to step forward to create and redeem in either of
those cases, Shares may trade like closed-end fund shares at a discount to NAV
and/or at wider intraday bid-ask spreads, and may possibly face trading halts
and/or delisting from the Fund's exchange.
Large
Shareholder Risk
Certain
shareholders, including an Authorized Participant, the Adviser, an affiliate of
the Adviser, or funds managed by the Adviser, may own a substantial amount of
the Fund’s Shares. Additionally, from time to time an Authorized Participant, a
third-party investor, the Adviser, or an affiliate of the Adviser may invest in
the Fund and hold its investment for a specific period of time in order to
facilitate commencement of the Fund’s operations or to allow the Fund to achieve
size or scale. There can be no assurance that any large shareholder would not
redeem its investment. These large redemptions may force the Fund to sell
portfolio securities or other assets when it might not otherwise do so, which
may negatively impact the Fund’s NAV, increase the Fund’s brokerage costs and/or
have a material effect on the market price of Fund. Redemptions by large
shareholders could have a significant negative impact on the Fund. If a large
shareholder were to redeem all, or a large portion, of its Shares, there is no
guarantee that the Fund will be able to maintain sufficient assets to continue
operations in which case the Board of Trustees may determine to liquidate the
Fund. In addition, transactions by large shareholders may account for a large
percentage of the trading volume on the Fund's exchange and may, therefore, have
a material upward or downward effect on the market price of the
Shares.
Listing
Standards Risk
The
Fund is required to comply with listing requirements adopted by the listing
exchange. Non-compliance with such requirements may result in the Fund's Shares
being delisted by the listing exchange. Any resulting liquidation of the Fund
could cause the Fund to incur elevated transaction costs and could result in
negative tax consequences for its shareholders.
Market
Trading Risks and Premium/Discount Risks
Absence
of Active Market
Although
Shares of the Fund are or will be listed for trading on a U.S. exchange and may
be listed on certain foreign exchanges, there can be no assurance that an active
trading market for the Shares will develop or be maintained.
Risks
of Secondary Listings
The
Fund's Shares may be listed or traded on U.S. and non-U.S. exchanges other than
the U.S. exchange where the Fund’s primary listing is maintained. There can be
no assurance that the Fund’s Shares will continue to trade on any such exchange
or in any market or that the Fund's Shares will continue to meet the
requirements for listing or trading on any exchange or in any market. The Fund's
Shares may be less actively traded in certain markets than others, and investors
are subject to the execution and settlement risks and market standards of the
market where they or their brokers direct their trades for execution. Certain
information available to investors who trade Shares on a U.S. exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.
Secondary
Market Trading Risk
Only
Authorized Participants who have entered into agreements with the Fund's
distributor may engage in creation or redemption transactions directly with the
Fund. Shares of the Fund may trade in the secondary market on days when the Fund
does not accept orders to purchase or redeem Shares from Authorized
Participants. On such days, Shares may trade in the secondary market with more
significant premiums or discounts than might be experienced on days when the
Fund accepts purchase and redemption orders. Secondary market trading in Fund
Shares may be halted by a stock exchange because of market conditions or other
reasons. In addition, trading in Fund Shares on a stock exchange or in any
market may be subject to trading halts caused by extraordinary market volatility
pursuant to "circuit breaker" rules on the stock exchange or market. During a
“flash crash,” the market prices of the Fund’s shares may decline suddenly and
significantly. Such a decline may not reflect the performance of the portfolio
securities held by the Fund. Flash crashes may cause Authorized Participants and
other market makers to limit or cease trading in the Fund’s shares for temporary
or longer periods. Shareholders could suffer significant losses to the extent
that they sell shares at these temporarily low market prices. There can be no
assurance that the requirements necessary to maintain the listing or trading of
Fund Shares will continue to be met or will remain unchanged.
Shares
of the Fund May Trade at Prices Other Than NAV
Shares
of the Fund may trade at, above or below NAV. The per share NAV of the Fund will
fluctuate with changes in the market value of the Fund’s holdings. The trading
prices of Shares will fluctuate in accordance with changes in the Fund's NAV as
well as market supply and demand. The trading prices of the Fund's Shares may
deviate significantly from NAV during periods of market volatility or when the
Fund has relatively few assets or experiences a lower trading volume. In
stressed market conditions, the market for the Shares may become less liquid in
response to the deteriorating liquidity of the Fund’s portfolio. Any of these
factors may lead to the Fund's Shares trading at a premium or discount to NAV.
While the creation/redemption feature is designed to make it likely that Shares
normally will trade close to the Fund’s NAV, market prices are not expected to
correlate exactly with the Fund's NAV due to timing reasons as well as market
supply and demand factors. In addition, disruptions to creations and redemptions
or the existence of extreme market volatility may result in trading prices that
differ significantly from NAV. If a shareholder purchases at a time when the
market price is at a premium to the NAV or sells at a time when the market price
is at a discount to the NAV, the shareholder may sustain losses. Since foreign
exchanges may be open on days when the Fund does not price 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 Shares.
Costs
of Buying or Selling Fund Shares
Buying
or selling Fund Shares involves two types of costs that apply to all securities
transactions. When buying or selling Shares of the Fund through a broker, you
will likely incur a brokerage commission or other charges imposed by brokers as
determined by that broker. In addition, you may incur the cost of the "spread" -
that is, the difference between what professional investors are willing to pay
for Fund Shares (the "bid" price) and the market price at which they are willing
to sell Fund Shares (the "ask" price). Because of the costs inherent in buying
or selling Fund Shares, frequent trading may detract significantly from
investment results and an investment in Fund Shares may not be advisable for
investors who anticipate regularly making small investments.
Rule
144A Securities and Other Exempt Securities Risk
The
Fund may invest in Rule 144A securities and other types of exempt securities,
which are not registered for sale pursuant to an exemption from registration
under the Securities Act of 1933. These securities are also known as privately
issued securities and typically may be resold only to qualified institutional
buyers, or in a privately negotiated transaction, or to a limited number of
purchasers, or in limited quantities after they have been held for a specified
period of time and other conditions are met for an exemption from registration.
Although these securities may be determined to be liquid, if there are an
insufficient number of qualified institutional buyers interested in purchasing
such securities at a particular time, the Fund may have difficulty selling the
securities at a desirable time or price. As a result, the Fund’s investment in
these securities may be subject to increased liquidity risk. In addition, the
issuers of Rule 144A securities may require their qualified institutional buyers
(such as the Fund) to keep certain offering information confidential, which
could adversely affect the ability of the Fund to sell such securities.
Restricted securities may be subject to limitations on the resale which may have
an adverse effect on their marketability and their liquidity, and may prevent
the Fund from disposing of them promptly at advantageous prices, if at all. In
order to sell certain restricted securities, the Fund may bear the expense of
registering the securities for resale and the risk of substantial delays in
effecting the registration. Other transaction costs may be higher for restricted
securities than unrestricted securities. Restricted securities may be difficult
to value because market quotations may not be readily available, there may be
limited other information regarding the investment’s market or fair value, and
the securities’ values may have significant volatility.]
Securities
Lending Risk
The
Fund may engage in lending its portfolio securities. Securities lending involves
a risk of loss because the borrower may fail to return the securities in a
timely manner or at all. If the Fund is not able to recover the securities
loaned, it may sell the collateral and purchase a replacement security in the
market. In connection with such loans, the Fund generally receives liquid
collateral equal to at least 102% of the value of domestic equity securities and
ADRs and 105% of the value of the foreign equity securities (other than ADRs)
being lent. This collateral is marked-to-market on a daily basis. Although the
Fund will receive collateral in connection with all loans of its securities
holdings, the Fund would be exposed to a risk of loss should a borrower default
on its obligation to return the borrowed securities (e.g., the loaned securities
may have appreciated beyond the value of the collateral held by the Fund). In
addition, the Fund will bear the risk of loss of any cash collateral that it
invests. These events could also trigger adverse tax consequences for the Fund.
Also, as securities on loan may not be voted by the Fund, there is a risk that
the Fund may not be able to recall the securities in sufficient time to vote on
material proxy matters.
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.
Trend
Lag Risk
Trend
indicator signal changes pursuant to which the Fund's exposure and investments
are determined, are designed to become effective three trading days after the
quantitative signals indicate a rebalance is required, and after changing its
allocation the Underlying Index must remain in the same allocation for at least
ten trading days before it can change its allocation again. As a result of this,
the Fund may be exposed to downward trends and/or market volatility and may not
achieve immediate exposure to upward trends and/or market
volatility.
Turnover
Risk
The
Fund may engage in frequent and active trading, which may significantly increase
the Fund’s portfolio turnover rate. At times, the Fund may have a portfolio
turnover rate substantially greater than 100%. For example, a portfolio turnover
rate of 300% is equivalent to the Fund buying and selling all of its securities
three times during the course of a year. A high portfolio turnover rate would
result in high brokerage costs for the Fund, may result in higher taxes when
Shares are held in a taxable account and lower Fund performance.
Valuation
Risk
The
sales price the Fund could receive for a security may differ from the Fund’s
valuation of the security and may differ from the value used by the Underlying
Index, particularly for securities that trade in low value or volatile markets
or that are valued using a fair value methodology (such as during trading
halts). Fund securities that are valued using techniques other than market
quotations, including “fair valued” securities, may be subject to greater
fluctuations in their value from one day to the next than would be the case if
market quotations were used. Because non-U.S. 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.
A
FURTHER DISCUSSION OF OTHER RISKS
The
Fund may also be subject to certain other risks associated with its investments
and investment strategies.
Leverage
Risk
Under
the 1940 Act, the Fund is permitted to borrow from a bank up to 33 1/3% of its
net assets for short term or emergency purposes. The Fund may borrow money at
fiscal quarter end to maintain the required level of diversification to qualify
as a regulated investment company ("RIC") for purposes of the Internal Revenue
Code of 1986, as amended (the "Code"). As a result, the Fund may be exposed to
the risks of leverage, which may be considered a speculative investment
technique. Leverage magnifies the potential for gain and loss on amounts
invested and therefore increases the risks associated with investing in the
Fund. If the value of the Fund's assets increases, then leveraging would cause
the Fund's NAV to increase more sharply than it would have had the Fund not
leveraged. Conversely, if the value of the Fund's assets decreases, leveraging
would cause the Fund's NAV to decline more sharply than it otherwise would have
had the Fund not leveraged. The Fund may incur additional expenses in connection
with borrowings.
Qualification
as a Regulated Investment Company Risk
The
Fund must meet a number of diversification requirements to qualify as a RIC
under Section 851 of the Code and, if qualified, to continue to qualify. If the
Fund experiences difficulty in meeting those requirements for any fiscal
quarter, it might enter into borrowings in order to increase the portion of the
Fund’s total assets represented by cash, cash items, and U.S. government
securities shortly thereafter and, as of the close of the following fiscal
quarter, to attempt to meet the requirements. However, the Fund may incur
additional expenses in connection with any such borrowings, and increased
investments by the Fund in cash, cash items, and U.S. government securities
(whether the Fund makes such investments from borrowings) are likely to reduce
the Fund’s return to investors.
Tax
Treaty Reclaims Uncertainty
When
the Fund receives dividend and interest income (if any) from issuers in certain
countries, such distributions may be subject to partial withholding by local tax
authorities in order to satisfy potential local tax obligations. The Fund may
file claims to recover such withholding tax in jurisdictions where withholding
tax reclaim is possible, which may be the case as a result of bilateral treaties
between the United States and local governments. Whether or when the Fund will
receive a withholding tax refund in the future is within the control of the tax
authorities in such countries. The receipt of a refund of withholding tax would
preclude claiming a foreign tax credit, to the extent available or applicable,
with respect to such withholding tax. Where the Fund expects to recover
withholding tax based on a continuous assessment of probability of recovery, the
NAV of the Fund generally includes accruals for such tax refunds. The Fund
continues to evaluate tax developments for potential impact to the probability
of recovery. If the likelihood of receiving refunds materially decreases, for
example due to a change in tax regulation or approach, accruals in the Fund’s
NAV for such refunds may need to be written down partially or in full, which
will adversely affect that Fund’s NAV. Investors in the Fund at the time an
accrual is written down will bear the impact of any resulting reduction in NAV
regardless of whether they were investors during the accrual period. Conversely,
if a Fund receives a tax refund that has not been previously accrued, investors
in the Fund at the time the claim is successful will benefit from any resulting
increase in the Fund’s NAV. Investors who sold their shares prior to such time
will not benefit from such NAV increase.
PORTFOLIO
HOLDINGS INFORMATION
A
description of the policies and procedures of Global X Funds®
(the "Trust") with respect to the disclosure of the Fund's portfolio securities
is available in the Fund's Statement of Additional Information ("SAI"). The top
holdings of the Fund and Fund Fact Sheets providing information regarding the
Fund's top holdings can be found at www.globalxetfs.com/explore/(click on the
name of your Fund) and may be requested by calling 1-888-493-8631.
FUND
MANAGEMENT
Investment
Adviser
Global
X Management Company LLC (the "Adviser") serves as the investment adviser and
the administrator for the Fund. Subject to the supervision of the Board of
Trustees, the Adviser is responsible for managing the investment activities of
the Fund and the Fund's business affairs and other administrative matters. The
Adviser has been a registered investment adviser since 2008. The Adviser is a
Delaware limited liability company with its principal offices located at 605 3rd
Avenue, 43rd Floor, New York, New York 10158. As of [ ], 2026, the Adviser
provided investment advisory services for assets of approximately $[ ]
billion.
Pursuant
to a Supervision and Administration Agreement and subject to the general
supervision of the Board of Trustees, the Adviser provides, or causes to be
furnished, all supervisory, administrative and other services reasonably
necessary for the operation of the Fund and also bears the costs of various
third-party services required by the Fund, including audit, certain custody,
portfolio accounting, legal, transfer agency and printing costs. The Supervision
and Administration Agreement also requires the Adviser to provide investment
advisory services to the Fund pursuant to an Investment Advisory Agreement. [The
Supervision and Administration Agreement provides that the Adviser also bears
the costs for acquired fund fees and expenses generated by investments by the
Fund in affiliated investment companies.]
The
Fund pays the Adviser a fee ("Management Fee") in return for providing
investment advisory, supervisory and administrative services under an all-in fee
structure. The Fund will pay a monthly Management Fee to the Adviser at the
annual rate set forth in the table below (stated as a percentage of the Fund's
average daily net assets).
|
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| Fund |
Management
Fee |
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[Global
X Adaptive Risk Managed High Yield ETF] |
[
]%1 |
1
[Pursuant to an Expense Limitation Agreement, the Adviser has contractually
agreed to reimburse or waive fees and/or limit expenses for the Fund to the
extent necessary to assure that its operating expenses (exclusive of taxes,
brokerage fees, commissions, and other transaction expenses and extraordinary
expenses (such as litigation and indemnification expenses)) will not exceed [ ]%
of the average daily net assets of the Fund per year until at least [
].]
In
addition, the Fund bears other fees and expenses that are not covered by the
Supervision and Administration Agreement, which may vary and will affect the
total expense ratio of the Fund, such as taxes, brokerage fees, commissions and
other transaction expenses, interest and extraordinary expenses (such as
litigation and indemnification expenses). The Adviser may
earn
a profit on the Management Fee paid by the Fund. Also, the Adviser, and not the
shareholders of the Fund, would benefit from any price decreases in third-party
services, including decreases resulting from an increase in net assets.
The
Adviser or its affiliates may pay compensation out of profits derived from the
Adviser's Management Fee or other resources and not as an additional charge to
the Fund, to certain financial institutions (which may include banks, securities
dealers and other industry professionals) for the sale and/or distribution of
Fund Shares or the retention and/or servicing of Fund investors and Fund Shares
("revenue sharing"). These payments are in addition to any other fees described
in the fee table or elsewhere in the Prospectus or SAI. Examples of "revenue
sharing" payments include, but are not limited to, payments to financial
institutions for "shelf space" or access to a third party platform or fund
offering list or other marketing programs, including, but not limited to,
inclusion of the Fund on preferred or recommended sales lists, mutual fund
"supermarket" platforms and other formal sales programs; granting the Adviser
access to the financial institution's sales force; granting the Adviser access
to the financial institution's conferences and meetings; assistance in training
and educating the financial institution's personnel; and obtaining other forms
of marketing support. The level of revenue sharing payments made to financial
institutions may be a fixed fee or based upon one or more of the following
factors: gross sales, current assets and/or number of accounts of the Fund
attributable to the financial institution, or other factors as agreed to by the
Adviser and the financial institution or any combination thereof. The amount of
these revenue sharing payments is determined at the discretion of the Adviser,
from time to time, may be substantial, and may be different for different
financial institutions depending upon the services provided by the financial
institution. Such payments may provide an incentive for the financial
institution to make Shares of the Fund available to its customers and may allow
the Fund greater access to the financial institution's customers.
Approval
of Advisory Agreement
Discussions
regarding the basis for the Board of Trustees' approval of the Supervision and
Administration Agreement and the related Investment Advisory Agreement for the
Fund will be available in the Fund's report filed on Form N-CSR for the period
ended [May 31] or [November 30], respectively
Portfolio
Management
The
Portfolio Managers who are currently responsible for the day-to-day management
of the Fund's portfolio are Nam To and Sandy Lu.
[Nam
To:
Nam To, CFA, Portfolio Manager, joined the Adviser in July 2017. Prior to that,
Mr. To was a Global Economics Research Analyst at Bunge Limited. Mr. To received
his Bachelor of Arts in Philosophy and Economics from Cornell University and is
a CFA charterholder.
Sandy
Lu:
Sandy Lu, CFA, Portfolio Manager, joined the Adviser in September 2021.
Previously, Mr. Lu was a Portfolio Analyst and Junior Portfolio Manager at PGIM
Fixed Income from 2014 to 2021. Mr. Lu received his Bachelor of Science in
Economics from the Wharton School of the University of Pennsylvania and is a CFA
charterholder.]
The
SAI provides additional information about the Portfolio Managers' compensation
structure, other accounts managed by the Portfolio Managers, and the Portfolio
Managers' ownership of Shares of the Fund.
DISTRIBUTOR
SEI
Investments Distribution Co. ("Distributor") distributes Creation Units for the
Fund on an agency basis. The Distributor does not maintain a secondary market in
Shares. The Distributor has no role in determining the policies of the Fund or
the securities that are purchased or sold by the Fund. The Distributor's
principal address is One Freedom Valley Drive, Oaks, PA 19456. The Distributor
is not affiliated with the Adviser.
BUYING
AND SELLING FUND SHARES
Shares
of the Fund trade on a national securities exchange and in the secondary market
during the trading day. Shares can be bought and sold throughout the trading day
like other shares of publicly-traded securities. There is no minimum investment
for purchases made on a national securities exchange. When buying or selling
Shares through a broker, you will incur customary brokerage commissions and
charges. In addition, you will also incur the cost of the "spread," which is the
difference between what professional investors are willing to pay for Shares
(the "bid" price) and the price at which they are willing to sell Shares (the
"ask" price). The commission is frequently a fixed amount and may be a
significant proportional cost for investors seeking to buy or sell small amounts
of Shares. The spread with respect to Shares varies over time based on the
Fund's trading volume and market liquidity, and is generally lower if the Fund
has significant trading volume and market liquidity and higher if the
Fund
has little trading volume and market liquidity. Because of the costs of buying
and selling Shares, frequent trading may reduce investment return.
Shares
of the Fund may be acquired or redeemed directly from the Fund only by
Authorized Participants (as defined in the SAI) and only in Creation Units or
multiples thereof, as discussed in the "Creations and Redemptions" section in
the SAI.
Shares
generally trade in the secondary market in amounts less than a Creation Unit.
Shares of the Fund trade under the trading symbol listed for the Fund in the
Fund Summary section of this Prospectus.
The
Fund is listed on a national securities exchange, which is open for trading
Monday through Friday and is closed on weekends and the following holidays, as
observed: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Juneteenth National Independence Day, Independence Day,
Labor Day, Thanksgiving Day, and Christmas Day.
Book
Entry
Shares
of the Fund are held in book-entry form, which means that no stock certificates
are issued. The Depository Trust Company ("DTC") or its nominee is the record
owner of all outstanding Shares and is recognized as the owner of all Shares for
all purposes. Investors owning Shares are beneficial owners as shown on the
records of DTC or its participants. DTC serves as the securities depository for
all Shares. Participants include DTC, securities brokers and dealers, banks,
trust companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
Shares, you are not entitled to receive physical delivery of stock certificates
or to have Shares registered in your name, and you are not considered a
registered owner of Shares. Therefore, to exercise any rights as an owner of
Shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any securities that you hold in
book entry or "street name" form.
FREQUENT
TRADING
Unlike
frequent trading of shares of a traditional open-end mutual fund (i.e., not
exchange-traded shares), frequent trading of Shares on the secondary market does
not disrupt portfolio management, increase the Fund's trading costs, lead to
realization of capital gains, or otherwise harm Fund shareholders because these
trades do not involve the Fund directly. A few institutional investors are
authorized to purchase and redeem the Fund's Shares directly with the Fund. When
these trades are effected in-kind (i.e., for securities, and not for cash), they
do not cause any of the harmful effects (noted above) that may result from
frequent cash trades. Moreover, the Fund imposes transaction fees on in-kind
purchases and redemptions of the Fund intended to cover the custodial and other
costs incurred by the Fund in effecting in-kind trades. These fees increase if
an investor substitutes cash in part or in whole for securities, reflecting the
fact that the Fund's trading costs increase in those circumstances, although
transaction fees are subject to certain limits and therefore may not cover all
related costs incurred by the Fund. For these reasons, the Board of Trustees has
determined that it is not necessary to adopt policies and procedures to detect
and deter frequent trading and market-timing in Shares of the Fund.
DISTRIBUTION
AND SERVICE PLAN
The
Board of Trustees of the Trust has adopted a Distribution and Services Plan
("Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund is
authorized to pay distribution fees in connection with the sale and distribution
of its Shares and pay service fees in connection with the provision of ongoing
services to shareholders of each class and the maintenance of shareholder
accounts in an amount up to 0.25% of its average daily net assets each
year.
No
Rule 12b-1 fees are currently paid by the Fund, and there are no current plans
to impose these fees. However, in the event Rule 12b-1 fees are charged in the
future, because these fees are paid out of the Fund's assets on an ongoing
basis, these fees will increase the cost of your investment in the Fund. By
purchasing Shares subject to distribution fees and service fees, you may pay
more over time than you would by purchasing Shares with other types of sales
charge arrangements. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charge permitted by the rules of
FINRA. The net income attributable to Shares will be reduced by the amount of
distribution fees and service fees and other expenses of the Fund.
DIVIDENDS
AND DISTRIBUTIONS
Dividends
from net investment income, including any net foreign currency gains, generally
are declared and paid at least annually and any net realized capital gains are
distributed at least annually. In order to improve tracking error or comply with
the distribution requirements of the Code, dividends may be declared and paid
more frequently than annually for the Fund.
Dividends
and other distributions on Shares are distributed on a pro rata basis to
beneficial owners of such Shares. Dividend payments are made through DTC
participants to beneficial owners then of record with proceeds received from the
Fund. Dividends and security gain distributions are distributed in U.S. dollars
and cannot be automatically reinvested in additional Shares.
No
dividend reinvestment service is provided by the Trust. Broker-dealers may make
available the DTC book-entry Dividend Reinvestment Service for use by beneficial
owners of the Fund for reinvestment of their dividend distributions. Beneficial
owners should contact their broker to determine the availability and costs of
the service and the details of participation therein. Brokers may require
beneficial owners to adhere to specific procedures and timetables. If this
service is available and used, dividend distributions of both income and
realized gains will be automatically reinvested in additional whole Shares
purchased in the secondary market.
INVESTMENTS
BY INVESTMENT COMPANIES
Section
12(d)(1) of the 1940 Act restricts investments by investment companies in the
securities of other investment companies, including shares of the Fund.
Registered investment companies and unit investment trusts that enter into a
fund-of-funds investment agreement with the Trust ("Investing Funds") may be
permitted to invest in certain Global X Funds beyond the limits set forth in
Section 12(d)(1) of the 1940 Act, subject to certain conditions set forth in
Rule 12d1-4 under the 1940 Act.
TAXES
The
following is a summary of certain tax considerations that may be relevant to an
investor in the Fund. Except where otherwise indicated, the discussion relates
to investors who are individual United States citizens or residents and is based
on current tax law. You should consult your tax advisor for further information
regarding federal, state, local and/or foreign tax consequences relevant to your
specific situation.
Fund
Taxation.
The Fund has elected and intends to qualify as a RIC under Subchapter M of
Subtitle A, Chapter 1, of the Code. As a RIC, the Fund generally will be exempt
from federal income tax on its net investment income and realized capital gains
that it distributes to shareholders, provided that it distributes an amount
equal to at least the sum of 90% of its tax-exempt income and 90% of its
investment company taxable income (net investment income and the excess of net
short-term capital gain over net long-term capital loss), if any, for the year
(the “Distribution Requirement”) and satisfies certain other requirements of the
Code. In addition to satisfaction of the Distribution Requirement, the Fund must
derive with respect to a taxable year at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currencies,
or from other income derived with respect to its business of investing in such
stock, securities, or currencies or net income derived from an interest in a
qualified publicly traded partnership (the “Income Requirement”). Also, at the
close of each quarter of its taxable year, at least 50% of the value of the
Fund’s assets must consist of cash and cash items, U.S. government securities,
securities of other regulated investment companies and securities of other
issuers (as to which the Fund does not hold more than 5% of the value of its
total assets in securities of such issuer and as to which the Fund does not hold
more than 10% of the outstanding voting securities (including securities of a
“qualified publicly traded partnership” (“QPTP”) of such issuer), and no more
than 25% of the value of the Fund’s total assets may be invested in the
securities of (i) any one issuer (other than U.S. government securities and
securities of other regulated investment companies), (ii) two or more issuers
which such Fund controls and which are engaged in the same or similar trades or
businesses or (iii) one or more QPTPs (the “Asset Diversification Requirement”).
The Fund intends to comply with these requirements.
If
for any period the Fund were to fail to meet the distribution, income or asset
diversification requirements described above, existing laws generally permit the
fund to take certain actions to bring itself back into compliance. If the Fund
were ineligible to or otherwise did not cure such a failure, or otherwise failed
to qualify as a RIC, all of the Fund’s taxable income would be subject to
federal income tax at regular corporate rates at the Fund level (without any
deduction for distributions to its shareholders). In addition, all distributions
to shareholders from earnings and profits would be taxed as dividend income,
even if the distributions were attributable to long-term capital gains or exempt
interest income earned by the Fund. Some portions of such distributions may be
eligible for the dividends- received deduction in the case of corporate
shareholders or to be treated as qualified dividend income to non-corporate
shareholders, provided, in both cases, that the shareholder meets certain
holding period and other requirements in respect of the fund shares.
Furthermore, in order to re-qualify for taxation as a RIC, the Fund
may
be required to recognize unrealized gains, pay substantial taxes and interest,
and make substantial distributions. See “Taxes – Fund Taxation” section of the
Statement of Additional Information for further discussion.
Distributions.
The Fund receives income and gains on its investments. The income, less expenses
incurred in the operation of the Fund, constitutes the Fund's net investment
income from which dividends may be paid to you. The Fund intends to qualify as a
RIC under the Code for federal tax purposes and to distribute to shareholders
substantially all of its net investment income and net capital gain each year.
Except as otherwise noted below, you will generally be subject to federal income
tax on the Fund's distributions to you. For federal income tax purposes, Fund
distributions attributable to short-term capital gains and net investment income
are taxable to you as ordinary income. Distributions attributable to net capital
gains (the excess of net long-term capital gains over net short-term capital
losses) of the Fund generally are taxable to you as long-term capital gains.
This is true no matter how long you own your Shares or whether you take
distributions in cash or additional Shares. The maximum long-term capital gain
rate applicable to individuals is 20%.
Distributions
of "qualifying dividends" will also generally be taxable to you at long-term
capital gain rates as long as certain requirements are met. In general, if 95%
or more of the gross income of the Fund (other than net capital gain) consists
of dividends received from domestic corporations or "qualified" foreign
corporations ("qualifying dividends"), then all distributions received by
individual shareholders of the Fund will be treated as qualifying dividends. But
if less than 95% of the gross income of the Fund (other than net capital gain)
consists of qualifying dividends, then distributions received by individual
shareholders of the Fund will be qualifying dividends only to the extent they
are derived from qualifying dividends earned by the Fund. For the lower rates to
apply, you must have owned your Shares for at least 61 days during the 121-day
period beginning on the date that is 60 days before the Fund's ex-dividend date
(and the Fund will need to have met a similar holding period requirement with
respect to the Shares of the corporation paying the qualifying dividend). The
amount of the Fund's distributions that qualify for this favorable treatment may
be reduced as a result of the Fund's securities lending activities (if any), a
high portfolio turnover rate or investments in debt securities or
"non-qualified" foreign corporations. In addition, whether distributions
received from foreign corporations are qualifying dividends will depend on
several factors including the country of residence of the corporation making the
distribution. Accordingly, distributions from many of the Fund's holdings may
not be qualifying dividends.
A
portion of distributions paid to shareholders that are corporations may also
qualify for the dividends-received deduction for corporations, subject to
certain holding period requirements and debt financing limitations. The amount
of the dividends qualifying for this deduction may, however, be reduced as a
result of the Fund's securities lending activities, by a high portfolio turnover
rate or by investments in debt securities or foreign corporations.
Distributions
from the Fund will generally be taxable to you in the year in which they are
paid, with one exception. Dividends and distributions declared by the Fund in
October, November or December and paid in January of the following year are
taxed as though they were paid on December 31.
You
should note that if you buy Shares of the Fund shortly before it makes a
distribution, the distribution will be fully taxable to you even though, as an
economic matter, it simply represents a return of a portion of your investment.
This adverse tax result is known as "buying into a dividend."
You
will be informed of the amount of your ordinary income dividends, qualifying
dividend income, and capital gain distributions at the time they are paid, and
you will be advised of the tax status for federal income tax purposes shortly
after the close of each calendar year. If you have not held Shares for a full
year, the Fund may designate and distribute to you, as ordinary income or
capital gain, a percentage of income that is not equal to the actual amount of
such income earned during the period of your investment in the
Fund.
The
Fund's investments in partnerships, including in partnerships defined as
Qualified Publicly Traded Partnerships for tax purposes, may result in the Fund
being subject to state, local or foreign income, franchise or withholding tax
liabilities.
Excise
Tax Distribution Requirements.
Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
RIC's "required distribution" for the calendar year ending within the RIC's
taxable year over the "distributed amount" for such calendar year. The term
"required distribution" means the sum of (a) 98% of ordinary income (generally
net investment income) for the calendar year, (b) 98.2% of capital gain (both
long-term and short-term) for the one-year period ending on November 30 (or
December 31, if the Fund so elects), and (c) the sum of any untaxed,
undistributed net investment income and net capital gains of the RIC for prior
periods. The term "distributed amount" generally means the sum of (a) amounts
actually distributed by the Fund from its current year's ordinary income and
capital gain net income and (b) any amount on which the Fund pays income tax for
the taxable year ending in the calendar year. Although the Fund intends to
distribute its net investment income and net capital gains so as to avoid excise
tax liability, the Fund may determine that it is in the interest of shareholders
to
distribute
a lesser amount. The Fund intends to declare and pay these amounts in December
(or in January, which must be treated by you as received in December) to avoid
these excise taxes, but can give no assurances that its distributions will be
sufficient to eliminate all such taxes.
Foreign
Currencies.
Under the Code, gains or losses attributable to fluctuations in exchange rates
which occur between the time the Fund accrues interest or other receivables or
accrues expenses or other liabilities denominated in a foreign currency, and the
time the Fund actually collects such receivables or pays such liabilities, are
treated as ordinary income or ordinary loss. Similarly, gains or losses from the
disposition of foreign currencies, from the disposition of debt securities
denominated in a foreign currency, or from the disposition of a forward foreign
currency contract which are attributable to fluctuations in the value of the
foreign currency between the date of acquisition of the asset and the date of
disposition also are treated as ordinary income or loss. These gains or losses,
referred to under the Code as "section 988" gains or losses, increase or
decrease the amount of the Fund's investment company taxable income available to
be distributed to its shareholders as ordinary income, rather than increasing or
decreasing the amount of the Fund's net capital gain.
Foreign
Taxes.
The Fund will be subject to foreign withholding taxes with respect to certain
payments received from sources in foreign countries. If at the close of the
taxable year more than 50% in value of the Fund's assets consists of stock in
foreign corporations, the Fund will be eligible to make an election to treat a
proportionate amount of those taxes as constituting a distribution to each
shareholder, which would allow you either (subject to certain limitations) (1)
to credit that proportionate amount of taxes against your U.S. Federal income
tax liability as a foreign tax credit or (2) to take that amount as an itemized
deduction. If the Fund is not eligible or chooses not to make this election, it
will be entitled to deduct such taxes in computing the amounts it is required to
distribute.
Sales
and Exchanges.
The sale of Shares is a taxable event on which a gain or loss is recognized. The
amount of gain or loss is based on the difference between your tax basis in
Shares and the amount you receive for them upon disposition. Generally, you will
recognize long-term capital gain or loss if you have held your Shares for over
one year at the time you sell or exchange them. Gains and losses on Shares held
for one year or less will generally constitute short-term capital gains, except
that a loss on Shares held six months or less will be re-characterized as a
long-term capital loss to the extent of any long-term capital gain distributions
that you have received on the Shares. A loss realized on a sale or exchange of
Shares may be disallowed under the so-called "wash sale" rules to the extent the
Shares disposed of are replaced with other Shares of that same Fund within a
period of 61 days beginning 30 days before and ending 30 days after the Shares
are disposed of, such as pursuant to a dividend reinvestment in Shares of the
Fund. If disallowed, the loss will be reflected in an adjustment to the basis of
the Shares acquired.
Taxes
on Purchase and Redemption of Creation Units.
An Authorized Participant who exchanges equity securities for Creation Units
generally will recognize a gain or a loss. The gain or loss will be equal to the
difference between the market value of the Creation Units at the time of
purchase (plus any cash received by the Authorized Participant as part of the
issue) and the Authorized Participant's aggregate basis in the securities
surrendered (plus any cash paid by the Authorized Participant as part of the
issue). An Authorized Participant who exchanges Creation Units for equity
securities generally will recognize a gain or loss equal to the difference
between the Authorized Participant's basis in the Creation Units (plus any cash
paid by the Authorized Participant as part of the redemption) and the aggregate
market value of the securities received (plus any cash received by the
Authorized Participant as part of the redemption). The Internal Revenue Service
(the "IRS"), however, may assert that a loss realized upon an exchange of
securities for Creation Units cannot be deducted currently under the rules
governing "wash sales," or on the basis that there has been no significant
change in economic position. Persons exchanging securities should consult their
own tax advisor with respect to whether the wash sale rules apply and when a
loss might be deductible.
IRAs
and Other Tax-Qualified Plans.
The one major exception to the preceding tax principles is that distributions
on, and sales, exchanges and redemptions of, Shares held in an IRA or other
tax-qualified plan are not currently taxable but may be taxable when funds are
withdrawn from the tax qualified plan unless the Shares were purchased with
borrowed funds.
Medicare
Tax. An
additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from the
Fund and net gains from redemptions or other taxable dispositions of Fund
Shares) of U.S. individuals, estates and trusts to the extent that such person's
"modified adjusted gross income" (in the case of an individual) or "adjusted
gross income" (in the case of an estate or trust) exceeds a threshold amount.
This Medicare tax, if applicable, is reported by you on, and paid with, your
federal income tax return.
Backup
Withholding.
The Fund will be required in certain cases to withhold and remit to the U.S.
Treasury backup withholding at the applicable rate on dividends and gross sales
proceeds paid to any shareholder (i) who has either provided an incorrect tax
identification number or no number at all, (ii) who is subject to backup
withholding by the IRS, or (iii) who has failed to certify to the Fund, when
required to do so, that he or she is not subject to backup withholding or is an
"exempt recipient."
Cost
Basis Reporting. Federal
law requires that shareholders' cost basis, gain/loss, and holding period be
reported to the IRS and to shareholders on the Consolidated Form 1099s when
"covered" securities are sold. Covered securities are any RIC and/or dividend
reinvestment plan shares acquired on or after January 1, 2012.
For
those securities defined as "covered" under current IRS cost basis tax reporting
regulations, accurate cost basis and tax lot information must be maintained for
tax reporting purposes. This information is not required for Shares that are not
"covered." The Fund and its service providers do not provide tax advice. You
should consult independent sources, which may include a tax professional, with
respect to any decisions you may make with respect to choosing a tax lot
identification method. Shareholders should contact their financial
intermediaries with respect to reporting of cost basis and available elections
for their accounts.
State
and Local Taxes.
You may also be subject to state and local taxes on income and gain attributable
to your ownership of Shares. You should consult your tax advisor regarding the
tax status of distributions in your state and locality.
U.S.
Tax Treatment of Foreign Shareholders.
A non-U.S. shareholder generally will not be subject to U.S. withholding tax on
gain from the redemption of Shares or on capital gain dividends (i.e., dividends
attributable to long-term capital gains of the Fund) unless, in the case of a
shareholder who is a non-resident alien individual, the shareholder is present
in the United States for 183 days or more during the taxable year and certain
other conditions are met. Non-U.S. shareholders generally will be subject to
U.S. withholding tax at a rate of 30% (or a lower treaty rate, if applicable) on
distributions by the Fund of net investment income, other ordinary income, and
the excess, if any, of net short-term capital gain over net long-term capital
loss for the year, unless the distributions are effectively connected with a
U.S. trade or business of the shareholder. Exemptions from U.S. withholding tax
are provided for certain capital gain dividends paid by the Fund from net
long-term capital gains, if any, interest-related dividends paid by the Fund
from its qualified net interest income from U.S. sources and short-term capital
gain dividends if such amounts are reported by the Fund. Non-U.S. shareholders
are subject to special U.S. tax certification requirements to avoid backup
withholding and claim any treaty benefits. Non-U.S. shareholders should consult
their tax advisors regarding the U.S. and foreign tax consequences of investing
in the Fund.
Other
Reporting and Withholding Requirements. Under
the Foreign Account Tax Compliance Act ("FATCA"), a 30% withholding tax is
imposed on income dividends paid by the Fund to certain foreign entities,
referred to as foreign financial institutions or nonfinancial foreign entities,
that fail to comply (or be deemed compliant) with extensive reporting and
withholding requirements designed to inform the U.S. Department of the Treasury
of U.S.-owned foreign investment accounts. After December 31, 2018, FATCA
withholding also would have applied to certain capital gain distributions,
return of capital distributions and the proceeds arising from the sale of Fund
Shares, however based on proposed regulations issued by the IRS, which may be
relied upon currently, such withholding is no longer required unless final
regulations provide otherwise (which is not expected). Information about a
shareholder in the Fund may be disclosed to the IRS, non-U.S. taxing authorities
or other parties as necessary to comply with FATCA. Withholding also may be
required if a foreign entity that is a shareholder of the Fund fails to provide
the appropriate certifications or other documentation concerning its status
under FATCA.
Consult
Your Tax Professional.
Your investment in the Fund could have additional tax consequences. You should
consult your tax professional for information regarding all tax consequences
applicable to your investments in the Fund. More tax information relating to the
Fund is also provided in the SAI. This short summary is not intended as a
substitute for careful tax planning.
DETERMINATION
OF NET ASSET VALUE
The
Fund calculates its NAV as of the regularly scheduled close of business of the [
][([" "]) (the "Exchange") (normally 4:00 p.m. Eastern time) on each day that
the Exchange is open for business, based on prices at the time of closing,
provided that any assets or liabilities denominated in currencies other than the
U.S. dollar shall be translated into U.S. dollars at the prevailing market rates
on the date of valuation as quoted by one or more major banks or dealers that
make a two-way market in such currencies (or a data service provider based on
quotations received from such banks or dealers). The NAV of the Fund is
calculated by dividing the value of the net assets of the Fund (i.e., the value
of its total assets less total liabilities) by the total number of outstanding
Shares, generally rounded to the nearest cent. The price of Fund Shares is based
on market price, and because ETF shares trade at market prices rather than NAV,
Shares may trade at a price greater than NAV (a premium) or less than NAV (a
discount).
In
calculating the Fund's NAV, the Fund's investments are generally valued using
market valuations. A market valuation generally means a valuation (i) obtained
from an exchange or a major market maker (or dealer), (ii) based on a price
quotation or other equivalent indication of value supplied by an exchange, a
pricing service, or a major market maker (or dealer), or (iii) based on
amortized cost, provided the amortized cost is approximately the value on
current sale of the security. In the case of
shares
of funds that are not traded on an exchange, a market valuation means such
fund's published NAV per share. The Fund may use various pricing services or
discontinue the use of any pricing service.
In
the event that current market valuations are not readily available or such
valuations do not reflect current market values, the affected investments will
be valued using fair value pricing pursuant to the pricing policy and procedures
approved by the Board of Trustees. A price obtained from a pricing service based
on such pricing service's valuation matrix may be used to fair value a security.
The frequency with which the Fund's investments are valued using fair value
pricing is primarily a function of the types of securities and other assets in
which the Fund invests pursuant to its investment objective, strategies and
limitations.
Investments
that may be valued using fair value pricing include, but are not limited to: (i)
an unlisted security related to corporate actions; (ii) a restricted security
(i.e., one that may not be publicly sold without registration under the
Securities Act of 1933, as amended (the "Securities Act")); (iii) a security
whose trading has been suspended or which has been de-listed from its primary
trading exchange; (iv) a security that is thinly traded; (v) a security in
default or bankruptcy proceedings for which there is no current market
quotation; (vi) a security affected by currency controls or restrictions; and
(vii) a security affected by a significant event (i.e., an event that occurs
after the close of the markets on which the security is traded but before the
time as of which the Fund's NAV is computed and that may materially affect the
value of the Fund's investments). Examples of events that may be "significant
events" are government actions, natural disasters, armed conflict, acts of
terrorism, and significant market fluctuations.
Valuing
the Fund's investments using fair value pricing will result in using prices for
those investments that may differ from current market valuations. Use of fair
value prices and certain current market valuations could result in a difference
between the prices used to calculate the Fund's NAV and the prices used by the
Fund's Underlying Index, which, in turn, could result in a difference between
the Fund's performance and the performance of the Fund's Underlying
Index.
Because
foreign markets may be open on different days than the days during which a
shareholder may purchase Shares, the value of the Fund's investments may change
on days when shareholders are not able to purchase Shares. Additionally, due to
varying holiday schedules, redemption requests made on certain dates may result
in a settlement period exceeding seven calendar days.
The
value of assets denominated in foreign currencies is converted into U.S. dollars
using exchange rates deemed appropriate by the Adviser. Any use of a different
rate from the rates used by the Index Provider may adversely affect the Fund's
ability to track its Underlying Index.
The
right of redemption may be suspended or the date of payment postponed with
respect to the Fund (1) for any period during which the Exchange is closed
(other than customary weekend and holiday closings), (2) for any period during
which trading on the Exchange is suspended or restricted, (3) for any period
during which an emergency exists as a result of which disposal of the Fund's
portfolio securities or determination of its NAV is not reasonably practicable,
or (4) in such other circumstances as the SEC permits.
Subject
to oversight by the Board of Trustees, the Adviser, as “valuation designee,”
performs fair value determinations of Fund investments. In addition, the
Adviser, as the valuation designee, is responsible for periodically assessing
any material risks associated with the determination of the fair value of a
Fund's investments; establishing and applying fair value methodologies; testing
the appropriateness of fair value methodologies; and overseeing and evaluating
third-party pricing services. The Adviser has established a fair value committee
to assist with its designated responsibilities as valuation
designee.
PREMIUM/DISCOUNT
AND SHARE INFORMATION
Once
available, information regarding how often the Shares of the Fund traded on a
national securities exchange at a price above (i.e., at a premium to) or below
(i.e., at a discount to) the NAV of the Fund; the Fund’s per share NAV, and the
median bid-ask spread of the Shares can be found at
www.globalxetfs.com.
INFORMATION
REGARDING THE INDEX AND THE INDEX PROVIDER
[Adaptive
Wealth Strategies Risk Managed High Yield Index]
The
[Adaptive Wealth Strategies Risk Managed High Yield Index] (the "Underlying
Index") is owned and was developed by NorthCrest Asset Management (the "Index
Provider"). The Underlying Index is calculated and maintained by Solactive AG
(the "Calculation Agent"). [The Underlying Index is designed to dynamically
allocate between either 100% exposure to the Solactive USD High Yield Corporates
Total Market Index ("High Yield Bond Position") or 100% exposure to the
Solactive 1-3
month
US T-Bill Index ("U.S. Treasury Position"). The High Yield Bond Position, is
designed to track the performance of a basket of US dollar-denominated high
yield corporate bonds. Currently, the bonds eligible for inclusion in the High
Yield Bond Position include US dollar-denominated high yield corporate bonds
that: (i) are issued by companies with a country of risk classified as developed
markets by Solactive AG (“Solactive” or “Calculation Agent”); (ii) have a
composite rating calculated from available ratings among three rating agencies:
Moody’s ® Investors Service, Inc. (“Moody’s”), Fitch, Inc. (“Fitch”) and
Standard & Poor’s ® Financial Services, LLC (“S&P”) as sub-investment
grade; (iii) are from issuers with at least $1 billion outstanding face value;
(iv) have at least $400 million of outstanding face value; (v) have an original
maturity date at most 15 years; and (vi) have at least one year to maturity (or
at least 20 months to maturity for bonds newly added to the index). In addition,
the High Yield Bond Position may include a substantial number of bonds offered
pursuant to Rule 144A under the Securities Act of 1933, as amended (the “1933
Act”). Under normal circumstances, the High Yield Bond Position is reconstituted
and rebalanced on a monthly basis. The US Treasury Position is designed to
measure the performance of public obligations of the U.S. Treasury that have a
remaining maturity of greater than or equal to 1 month and less than 3
months.]
The
Underlying Index seeks to provide exposure to the High Yield Bond Position
during periods of normal high yield bond market returns, and seeks to provide
exposure to the U.S. Treasury Position prior to and during periods of adverse
market conditions, as determined by the quantitative model developed by the
Index Provider. The Underlying Index seeks to anticipate periods of adverse
market conditions using quantitative signals (explained in further detail below)
that have been developed based on historical data. The Underlying Index uses two
quantitative signals calculated daily by the Calculation Agent to determine how
the Underlying Index will be allocated between either the High Yield Bond
Position or the U.S. Treasury Position, as further described below:
I.The
moving average convergence divergence (“MACD”), which shows the relationship
between two moving averages of the prices of securities within the High Yield
Bond Position by subtracting the 26-day exponential moving average of the High
Yield Bond Position from its 12-day exponential moving average and;
II.The
level of the Cboe Volatility Index (“VIX”), which is a benchmark index designed
to measure the market’s expectation of future volatility.
The
allocation to either the High Yield Bond Position or the U.S. Treasury Position
is determined as follows:
•Exit
Voting: If the Underlying Index is currently invested in the High Yield Bond
Position, both signals must be triggered for the Underlying Index to exit the
High Yield Bond Position and enter the U.S. Treasury Position.
•Entry
Voting: If the Underlying Index is currently invested in the U.S. Treasury
Position, both signals must be triggered for the Underlying Index to exit the
U.S. Treasury Position and enter the High Yield Bond Position.
The
trigger threshold for each signal is based on a predetermined Z-score level for
that given signal. A Z-score (often referred to as a “standard score”) is a
measure of how many standard deviations below or above the mean a data point is,
and can be used to identify data points that may be considered outliers relative
to the mean. The Z-score threshold is determined using historical returns data
for the High Yield Bond Position since its inception in December of 2006. The
Z-scores identify cases where the recent performance of the High Yield Bond
Position or the VIX are sufficiently statistically different from the historical
performance to indicate if positive market returns may be likely going forward.
Depending on the performance of the High Yield Bond Position and the VIX, each
signal may remain unchanged for an extended period of time or may change states
over relatively short periods of time.
Disclaimer
The
Global X Adaptive Risk Managed High Yield ETF and its common shares are not
sponsored, endorsed, sold or promoted by NorthCrest Asset Management. NorthCrest
Asset Management makes no representation or warranty, express or implied, to the
shareholders of the Global X Adaptive Risk Managed High Yield ETF or any member
of the public regarding the advisability of investing in securities generally or
in the Global X Adaptive Risk Managed High Yield ETF particularly or the ability
of any data supplied by NorthCrest Asset Management, to track general stock
market performance. NorthCrest Asset Management's only relationship to the
Adviser is the licensing of certain trademarks and trade names of Adaptive
Wealth Strategies and of the data supplied by NorthCrest Asset Management
related to the Adaptive Wealth Strategies Risk Managed High Yield Index, which
is determined, composed and calculated by Solactive AG without regard to the
Global X Adaptive Risk Managed High Yield ETF or its common shares. NorthCrest
Asset Management has no obligation to take the needs of the Adviser or the
shareholders of the Global X Adaptive Risk Managed High Yield ETF into
consideration in determining, composing or calculating the data supplied by
NorthCrest Asset Management. NorthCrest Asset Management is not responsible for
and has not participated in the determination of the prices of the common shares
of the Global X Adaptive Risk Managed High Yield ETF or the timing of the
issuance or sale of such common shares. NorthCrest Asset Management has no
obligation or liability in connection with the administration, marketing or
trading of the Global X Adaptive Risk Managed High Yield ETF or their common
shares.]
OTHER
SERVICE PROVIDERS
SEI
Investments Global Funds Services is the sub-administrator for the
Fund.
[Brown
Brothers Harriman & Co.] is the custodian and transfer agent for the
Fund.
Stradley
Ronon Stevens & Young, LLP serves as counsel for the Trust and the Trust's
Independent Trustees.
[
] will serve as the Fund's independent registered public accounting firm for the
fiscal year ending [November 30, 2026].
ADDITIONAL
INFORMATION
The
Trust enters into contractual arrangements with various parties, including among
others, the Funds’ Adviser, sub-adviser(s) (as applicable), custodian(s), and
transfer agent(s) who provide services to the Funds. Shareholders are not
parties to any such contractual arrangements and are not intended beneficiaries
of those contractual arrangements, and those contractual arrangements are not
intended to create in any shareholder any right to enforce them against the
service providers or to seek any remedy under them against the service
providers, either directly or on behalf of the Trust.
This
Prospectus provides information concerning the Fund that investors should
consider in determining whether to purchase Fund Shares. Neither this Prospectus
nor the SAI is intended, or should be read, to be or give rise to an agreement
or contract between the Trust or the Fund and any investor, or to give rise to
any rights in any shareholder or other person other than any rights under
federal or state law that may not be waived.
FINANCIAL
HIGHLIGHTS
Because
the Fund had not commenced operations as of the [November 30, 2025] fiscal year
end, financial highlights are not yet available.
OTHER
INFORMATION
The
Fund is not sponsored, endorsed, sold or promoted by any national securities
exchange. No national securities exchange makes any representation or warranty,
express or implied, to the owners of Shares or any member of the public
regarding the advisability of investing in securities generally or in the Fund
particularly or the ability of the Fund to achieve its objective. No national
securities exchange has any obligation or liability in connection with the
administration, marketing or trading of the Fund.
For
purposes of the 1940 Act, shares that are issued by a registered investment
company and purchases of such shares by investment companies and companies
relying on Sections 3(c)(1) or 3(c)(7) of the 1940 Act are subject to the
restrictions set forth in Section 12(d)(1) of the 1940 Act. [Registered
investment companies are permitted to invest in the Fund beyond the limits set
forth in section 12(d)(1), subject to certain conditions set forth in Rule
12d1-4 under the 1940 Act, including that such investment companies enter into
an agreement with the Fund.]
The
method by which Creation Units are created and traded may raise certain issues
under applicable securities laws. Because new Creation Units are issued and sold
by the Fund on an ongoing basis, a "distribution," as such term is used in the
Securities Act, may occur at any point. Broker-dealers and other persons are
cautioned that some activities on their part may, depending on the
circumstances, result in their being deemed participants in a distribution in a
manner which could render them statutory underwriters and subject them to the
prospectus delivery and liability provisions of the Securities Act.
For
example, a broker-dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Units after placing an order with the
Distributor, breaks them down into constituent Shares, and sells such Shares
directly to customers, or if it chooses to couple the creation of a supply of
new Shares with an active selling effort involving solicitation of secondary
market demand for Shares. A determination of whether one is an underwriter for
purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker-dealer or its client in
the particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a categorization
as an underwriter.
Broker-dealers
who are not "underwriters" but are participating in a distribution (as
contrasted with ordinary secondary trading transactions), and thus dealing with
Shares that are part of an "unsold allotment" within the meaning of Section
4(a)(3)(C) of the Securities Act, would be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
This is because the prospectus delivery exemption in Section 4(a)(3) of the
Securities Act is not available in
respect
of such transactions as a result of Section 24(d) of the 1940 Act. As a result,
broker-dealer firms should note that dealers who are not underwriters but are
participating in a distribution (as contrasted with ordinary secondary market
transactions) and thus dealing with the Shares that are part of an overallotment
within the meaning of Section 4(a)(3)(A) of the Securities Act would be unable
to take advantage of the prospectus delivery exemption provided by Section
4(a)(3) of the Securities Act. Firms that incur a prospectus delivery obligation
with respect to Shares are reminded that, under Rule 153 of the Securities Act,
a prospectus delivery obligation under Section 5(b)(2) of the Securities Act
owed to an exchange member in connection with a sale on [ ] is satisfied by the
fact that the prospectus is available at [ ] upon request. The prospectus
delivery mechanism provided in Rule 153 is only available with respect to
transactions on an exchange.
For
more information visit our website at
www.globalxetfs.com
or
call 1-888-493-8631
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Investment
Adviser and Administrator
Global
X Management Company LLC
605 3rd Avenue, 43rd Floor
New York, NY
10158
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Distributor
SEI
Investments Distribution Co.
One
Freedom Valley Drive
Oaks,
PA 19456
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Custodian
and Transfer Agent
Brown
Brothers Harriman & Co.
50
Post Office Square
Boston,
MA 02110 |
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Sub-Administrator
SEI
Investments Global Funds Services
One
Freedom Valley Drive
Oaks,
PA 19456
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Legal
Counsel to the Global X Funds®
and Independent Trustees
Stradley
Ronon Stevens & Young, LLP
2000
K Street N.W., Suite 700
Washington,
DC 20006
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Independent
Registered Public Accounting Firm
[
]
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A
Statement of Additional
Information
dated [ ], 2026, which contains more details about the Fund, is incorporated by
reference in its entirety into this Prospectus, which means that it is legally
part of this Prospectus.
Additional
information about the Fund and its investments will appear in its annual and
semi-annual reports to shareholders and in Form N-CSR, when available. The
annual report explains the market conditions and investment strategies affecting
the Fund’s performance during its last fiscal year. In Form N-CSR you will find
the Fund’s annual and semi-annual financial statements.
You
can ask questions or obtain a free copy of the Fund’s semi-annual and annual
report, the Statement of Additional Information, or other information, such as
Fund financial statements, when available, by calling 1-888-493-8631. Free
copies of the Fund’s semi-annual and annual report and the Statement of
Additional Information are available from our website at www.globalxetfs.com.
Information
about the Fund, including its semi-annual and annual reports and the Statement
of Additional Information, has been filed with the SEC. It can be reviewed and
copied on the EDGAR database on the SEC’s internet site (http://www.sec.gov).
You can also request copies of these materials, upon payment of a duplicating
fee, by electronic request at the SEC’s e-mail address
([email protected]).
PROSPECTUS
Distributor
SEI
Investments Distribution Co.
One
Freedom Valley Drive
Oaks,
PA 19456
[
], 2026
Investment
Company Act File No.: 811-22209
