EFFICIENT ACCESS TO THE ETF INDUSTRY

The ETF Industry Exposure & Financial Services ETF (TETF) is designed to provide exposure to publicly-traded companies that derive revenue from the Exchange Traded Funds ecosystem.

High Growth Opportunity

TETF provides investors an opportunity that has historically yielded high growth through companies involved in the ETF industry. Since their introduction in 1993, assets under management in ETFs worldwide have grown to more than $3.5 trillion, with more than $2.7 trillion in AUM in the United States, represented by 1705 funds and 78¹ issuers.² Over the last decade, AUM in the ETF space grew at an annualized rate of 19.4%.³

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ETFs are one of the higher-growth areas in the financial services and asset management industries. ETFs have grown at a 19%+ annual rate over the last decade and the space now boasts more than $3.5 trillion in assets worldwide. ETF net flows from 1/1/2014 to 10/31/2016 exceeded mutual fund net flows by more than $750 billion.⁵ In 2016, the U.S. ETF industry recorded record inflows totaling $293 billion—the highest ever, outpacing mutual fund flows by almost $400 billion. Many investment professionals expect increased ETF assets flows to continue. In a recent survey, 78% of par-ticipating firms saw ETF assets increasing to $5 trillion by 2020.⁶

Efficient access to the ETF industry?

With a single trade, investors in TETF can gain exposure to growth in the ETF Industry. More than just traditional asset management, TETF offers exposure to a myriad of supporting players in the ETF ecosystem (ETF sponsors, index providers, exchanges, traders, and more). Prior to TETF, it could prove challenging to gain such diversified exposure to the ETF space.

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In a single trade, TETF delivers access to dozens of companies with high exposure to the U.S. ETF industry.

Broader Exposure

Allows targeted access to the ETF industry while managing both the idiosyncratic risk of individual sponsors or product lines and the concentration in one single subsector of the ETF industry ecosystem.

Experienced indexing committee composed of industry veterans.

TETF’s portfolio is meticulously constructed by an investment committee consisting of seasoned ETF professionals with deep insight into the space’s inner workings. Current members of the index committee include Linda Zhang, Kris Monaco, Kevin Carter, Michael Venuto & Guillermo Trias.

Tiered index methodology

The unique tiered methodology allows the index to dynamically shift towards the companies where the most ETF revenue is being generated – as the ETF industry continues to evolve, TETF will evolve along with it, adjusting as necessary.

Targeted Exposure

TETF can best be thought of as a “focused financials ETF,” providing investors with exposure to partici- pants in the ETF ecosystem – historically one of the faster growing and higher margin subsectors of the financial services industry⁴ while eliminating less dynamic subsectors within the space.

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TETF’s composition, which follows the Toroso ETF Industry Index, transcends classic sector, industry, and geographic classifications by tracking an emerging industry that has the potential to be well-positioned for growth.

Although the ETF industry has been growing steadily for the past several years, ETF sponsors are not the only entities to potentially benefit from expansion throughout the space. Taking this into account, the Index seeks to provide targeted exposure to the entire ETF value chain – the intricate ecosystem of financial innovators and service providers that can profit from the success and benefits of ETFs.

The Index begins with the entire universe of public and private companies generating revenue from ETFs, including fund sponsors, exchanges, trading & custody platforms, liquidity providers, Index & data companies, and others. Utilizing a thorough, proprietary quantitative and qualitative methodology, the Index committee isolates, ranks, and places companies into portfolio tiers according to the significance of revenue exposure to ETF business. The Index is reconstituted every 6 months.

The index universe consists of:

Fund sponsors

•  ETF sponsors are asset managers that issue ETFs.

•  Today, 74% of the revenue from all ETF sponsors in the US is flowing to public companies.

Exchanges

•  Facilitate the listing and trading of ETF shares.

•  Many exchanges also provide data, research, and indexing services to the ETF industry.

Index/data providers

•  Provide the information necessary to calculate, research, and produce price discovery for ETFs.

•  ETFs have allowed these companies access to scalable revenue, similar to asset management.

ETF service providers

• Include custodians, trading platforms, distributors, and wire house platforms.

• As assets flow from mutual funds into ETFs, many of these service providers have innovated the way they service clients, better positioning these key components of the ETF ecosystem for the continued growth of ETFs.

Liquidity providers

• Facilitate the market making, creation/redemption, and trading of ETFs.

• Liquidity providers are a crucial part of the ecosystem, maintaining the benefits of the ETF structure by ensuring underlying assets are in line with a given fund’s the net asset value (NAV).

Index breakdown by Sub-Sector (As of March 31, 2017)

Source: Toroso ETF Industry Index Committee

¹ ETF.com

² ETFGI, as of December 2016.

³ ETFGI, February 2017 Global ETF AUM Growth.

⁴ PwC survey, 2015. http://www.pwc.com/gx/en/asset-management/publications/pdfs/etf-2020-exchange-traded-funds-pwc.pdf

⁵ ETFresearchcenter.com

⁶ Investment Company Institute

Data as of:

ETF Info
Ticker TETF
Expense Ratio 0.64%
Index Provider Toroso Asset Management
Exchange NYSE
CUSIP 301505814
ISIN US3015058148
Shares Outstanding 150,000
Number of Holdings 41

The Funds are distributed by SEI Investments Distribution Co. (1 Freedom Valley Drive, Oaks, PA, 19456), which is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates. Check the background of SEI Investments Distribution Co. on FINRA’s BrokerCheck.

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