J. Garrett Stevens
Item 1. Reports to Stockholders.
(a)(1) The Registrant’s Board of Trustees has determined that Mr. Timothy J. Jacoby is the audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Timothy J. Jacoby is independent for purposes of this Item.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years for professional services rendered by the registrant's principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are as follows:
(b) Audit-Related Fees. There were no fees billed in each of the last two fiscal years for assurances and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item.
(c) Tax Fees. The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance are as follows:
Preparation of Federal & State income tax returns, assistance with calculation of required income, capital gain and excise distributions and preparation of Federal excise tax returns.
(d) All Other Fees. The aggregate fees billed in each of the last two fiscal years for products and services provided by the registrant’s principal accountant, other than the services reported in paragraphs (a) through (c) of this item were $0 and $0 for the fiscal years ended November 30, 2024 and 2023, respectively.
(e)(1) The audit committee does not have pre-approval policies and procedures. Instead, the audit committee or audit committee chairman approves on a case-by-case basis each audit or non-audit service before the principal accountant is engaged by the registrant.
(e)(2) There were no services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) All non-audit fees billed by the registrant's principal accountant for services rendered to the registrant for the fiscal years ended November 30, 2024 and 2023 respectively are disclosed in (b)-(d) above. There were no audit or non-audit services performed by the registrant's principal accountant for the registrant's adviser.
(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant's audit committee members are Timothy J. Jacoby (chairman), Linda Petrone and Stuart Strauss.
(a) The Schedule of Investments is included as part of the Financial Statements and Other Information filed under Item 7 of this form.
Item 7. Financial Statements and Financial Highlights for Open-End Investment Companies.
EXCHANGE LISTED FUNDS TRUST
Akros Monthly Payout ETF (MPAY)
Annual Financials and Other Information
November 30, 2024
Exchange Listed Funds Trust TABLE OF CONTENTS | | November 30, 2024 |
Financial Statements (Form N-CSR, Item 7)
For additional information about the Fund; including its prospectus, financial information, holdings, and proxy voting information, call or visit: • 855-955-1865 • https://akrosetfs.com/fund/static/mpay |
i
Akros Monthly Payout ETF SCHEDULE OF INVESTMENTS | | November 30, 2024 |
| | Shares | | Fair Value |
COMMON STOCKS — 67.0% | | | | | |
Communications — 5.3% | | | | | |
Alphabet, Inc., Class A | | 642 | | $ | 108,466 |
Booking Holdings, Inc. | | 8 | | | 41,616 |
VeriSign, Inc. | | 155 | | | 29,013 |
| | | | | | 179,095 |
Consumer Discretionary — 7.8% | | | |
Amazon.com, Inc. | | 560 | | | 116,419 |
Home Depot, Inc. (The) | | 112 | | | 48,062 |
Lowe’s Companies, Inc. | | 130 | | | 35,416 |
MercadoLibre, Inc. | | 14 | | | 27,792 |
TJX Companies, Inc. (The) | | 298 | | | 37,456 |
| | | | | | 265,145 |
Consumer Staples — 3.0% | | | | | |
Altria Group, Inc. | | 509 | | | 29,390 |
Colgate-Palmolive Company | | 236 | | | 22,805 |
Costco Wholesale Corporation | | 50 | | | 48,593 |
| | | | | | 100,788 |
Financials — 1.8% | | | | | |
JPMorgan Chase & Company | | 238 | | | 59,433 |
| | | | | | |
Health Care — 2.5% | | | | | |
Eli Lilly & Company | | 72 | | | 57,265 |
Mettler-Toledo International, Inc. | | 21 | | | 26,275 |
| | | | | | 83,540 |
Industrials — 7.3% | | | | | |
Caterpillar, Inc. | | 94 | | | 38,174 |
Cintas Corporation | | 110 | | | 24,837 |
Expeditors International of Washington, Inc. | | 230 | | | 27,977 |
Frontdoor, Inc. | | 395 | | | 23,147 |
H&R Block, Inc. | | 331 | | | 19,622 |
Illinois Tool Works, Inc. | | 93 | | | 25,809 |
Lennox International, Inc. | | 46 | | | 30,689 |
Lockheed Martin Corporation, B | | 52 | | | 27,529 |
Otis Worldwide Corporation | | 283 | | | 29,143 |
| | | | | | 246,927 |
Technology — 39.3% | | | | | |
Accenture PLC, Class A | | 107 | | | 38,774 |
Adobe, Inc. | | 76 | | | 39,211 |
Apple, Inc. | | 752 | | | 178,473 |
Applied Materials, Inc. | | 185 | | | 32,321 |
Arista Networks, Inc. | | 77 | | | 31,248 |
Autodesk, Inc. | | 104 | | | 30,358 |
Broadcom, Inc. | | 344 | | | 55,756 |
Check Point Software Technologies Ltd. | | 158 | | | 28,756 |
Dropbox, Inc., Class A | | 770 | | | 21,298 |
Fair Isaac Corporation | | 14 | | | 33,250 |
Fortinet, Inc. | | 359 | | | 34,123 |
| | Shares | | Fair Value |
COMMON STOCKS (Continued) | | | | | |
TECHNOLOGY (Continued) | | | |
Gartner, Inc. | | 54 | | $ | 27,968 |
InterDigital, Inc. | | 138 | | | 27,042 |
KLA Corporation | | 40 | | | 25,881 |
Logitech International S.A. | | 331 | | | 26,775 |
Manhattan Associates, Inc. | | 103 | | | 29,400 |
Mastercard, Inc., Class A | | 92 | | | 49,030 |
Microsoft Corporation | | 400 | | | 169,384 |
Moody’s Corporation | | 51 | | | 25,499 |
Motorola Solutions, Inc. | | 51 | | | 25,485 |
NetApp, Inc. | | 232 | | | 28,452 |
NVIDIA Corporation | | 1,241 | | | 171,568 |
Oracle Corporation | | 226 | | | 41,774 |
QUALCOMM, Inc. | | 215 | | | 34,084 |
ServiceNow, Inc. | | 38 | | | 39,879 |
Verisk Analytics, Inc. | | 101 | | | 29,715 |
Visa, Inc., Class A | | 171 | | | 53,880 |
| | | | | | 1,329,384 |
Total Common Stocks
(Cost $2,053,609) | | | | | 2,264,312 |
| | | | | | |
EXCHANGE-TRADED FUNDS — 32.6% | | | |
Commodity — 22.2% | | | | | |
abdrn Physical Gold Shares ETF(a) | | 5,973 | | | 151,714 |
Graniteshares Gold Trust(a) | | 5,473 | | | 143,666 |
iShares Gold Trust(a) | | 3,020 | | | 151,755 |
iShares Gold Trust Micro(a) | | 5,718 | | | 151,813 |
SPDR Gold MiniShares Trust(a) | | 2,879 | | | 151,723 |
| | | | | | 750,671 |
Equity — 10.4% | | | | | |
iShares Global Infrastructure ETF | | 2,960 | | | 164,871 |
SPDR S&P Global Infrastructure ETF | | 186 | | | 11,771 |
Vanguard Real Estate ETF | | 1,179 | | | 115,731 |
Vanguard Total International Stock ETF | | 960 | | | 59,242 |
| | | | | | 351,615 |
| | | | | | |
Total Exchange-Traded Funds
(Cost $1,066,065) | | | | | 1,102,286 |
| | | | | | |
Total Investments — 99.6%
(Cost $3,119,674) | | | | | 3,366,598 |
| | | | | | |
Other Assets in Excess of Liabilities — 0.4% | | | | | 12,487 |
| | | | | | |
TOTAL NET ASSETS — 100.0% | | | | $ | 3,379,085 |
1
Akros Monthly Payout ETF SUMMARY OF INVESTMENTS | | November 30, 2024 |
Security Type/Sector | | Percent of
Total Net
Assets |
Common Stocks | | | |
Communications | | 5.3 | % |
Consumer Discretionary | | 7.8 | % |
Consumer Staples | | 3.0 | % |
Financials | | 1.8 | % |
Health Care | | 2.5 | % |
Industrials | | 7.3 | % |
Technology | | 39.3 | % |
Total Common Stocks | | 67.0 | % |
Exchange-Traded Funds | | | |
Commodity | | 22.2 | % |
Equity | | 10.4 | % |
Total Exchange-Traded Funds | | 32.6 | % |
Total Investments | | 99.6 | % |
Other Assets in Excess of Liabilities | | 0.4 | % |
Total Net Assets | | 100.0 | % |
2
EXCHANGE LISTED FUNDS TRUST STATEMENT OF ASSETS AND LIABILITIES | | November 30, 2024 |
| | Akros Monthly
Payout ETF |
Assets | | | |
Investments, at value | | $ | 3,366,598 |
Cash | | | 12,553 |
Dividends and interest receivable | | | 1,328 |
Total Assets | | | 3,380,479 |
| | | | |
Liabilities | | | |
Advisory fee payable | | | 1,394 |
Total Liabilities | | | 1,394 |
| | | | |
Net Assets | | $ | 3,379,085 |
| | | | |
Net Assets consist of: | | | |
Paid-in capital | | | 3,341,782 |
Accumulated earnings | | | 37,303 |
Net Assets | | $ | 3,379,085 |
| | | | |
Shares of Beneficial Interest Outstanding
(unlimited number of shares authorized, no par value) | | | 130,001 |
| | | | |
Net Asset Value, Offering and Redemption Price Per Share | | $ | 25.99 |
Investments, at cost | | $ | 3,119,674 |
3
EXCHANGE LISTED FUNDS TRUST STATEMENT OF OPERATIONS | | |
| | Akros Monthly
Payout ETF |
| | For the
Year Ended
November 30,
2024 |
Investment Income | | | | |
Dividend income | | $ | 48,071 | |
Less foreign taxes withheld | | | (282 | ) |
Interest income | | | 244 | |
Total investment income | | | 48,033 | |
| | | | | |
Expenses | | | | |
Advisory fees | | | 18,017 | |
Total expenses | | | 18,017 | |
Waiver | | | (6,006 | ) |
Net Expenses | | | 12,011 | |
Net Investment Income (Loss) | | | 36,022 | |
| | | | | |
Net Realized and Unrealized Gain (Loss) on Investments | | | | |
Net Realized Gain (Loss) on: | | | | |
Investments | | | (22,717 | ) |
In-kind redemptions | | | 317,522 | |
| | | | 294,805 | |
Net Change in Unrealized Gain (Loss) on: | | | | |
Investments | | | 200,036 | |
| | | | | |
Net Realized and Unrealized Gain (Loss) on Investments | | | 494,841 | |
| | | | | |
Net Increase (Decrease) in Net Assets Resulting From Operations | | $ | 530,863 | |
4
EXCHANGE LISTED FUNDS TRUST STATEMENTS OF CHANGES IN NET ASSETS | | |
| | Akros Monthly Payout ETF |
| | Year Ended
November 30,
2024 | | Year Ended
November 30,
2023 |
Operations | | | | | | | | |
Net investment income (loss) | | $ | 36,022 | | | $ | 47,766 | |
Net realized gain (loss) on investments | | | 294,805 | | | | 46,370 | |
Net change in unrealized gain (loss) on investments | | | 200,036 | | | | 1,447 | |
Net Increase (Decrease) in Net Assets Resulting From Operations | | | 530,863 | | | | 95,583 | |
| | | | | | | | | |
Distributions to Shareholders: | | | | | | | | |
Distribution | | | (37,342 | ) | | | (47,766 | ) |
Return of capital | | | (132,424 | ) | | | (107,965 | ) |
Total Distributions to Shareholders | | | (169,766 | ) | | | (155,731 | ) |
| | | | | | | | | |
Capital Share Transactions | | | | | | | | |
Proceeds from shares sold | | | 5,413,817 | | | | 2,037,440 | |
Cost of shares redeemed | | | (4,387,754 | ) | | | (2,478,108 | ) |
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions | | | 1,026,063 | | | | (440,668 | ) |
Net Increase (Decrease) in Net Assets | | | 1,387,160 | | | | (500,816 | ) |
| | | | | | | | | |
Net Assets | | | | | | | | |
Beginning of year | | | 1,991,925 | | | | 2,492,741 | |
End of year | | $ | 3,379,085 | | | $ | 1,991,925 | |
| | | | | | | | | |
Change in Share Transactions | | | | | | | | |
Shares sold | | | 220,000 | | | | 90,000 | |
Shares redeemed | | | (180,000 | ) | | | (110,000 | ) |
Net Increase (Decrease) in Shares Outstanding | | | 40,000 | | | | (20,000 | ) |
5
EXCHANGE LISTED FUNDS TRUST FINANCIAL HIGHLIGHTS | |
|
Akros Monthly Payout ETF
(For a Share Outstanding Throughout the Period Presented) | | Year Ended
November 30,
2024 | | Year Ended
November 30,
2023 | | Period Ended
November 30,
2022(a) |
Net asset value, beginning of period | | $ | 22.13 | | | $ | 22.66 | | | $ | 24.28 | |
| | | | | | | | | | | | | |
Investment operations: | | | | | | | | | | | | |
Net investment income(b) | | | 0.37 | | | | 0.49 | | | | 0.34 | |
Net realized and unrealized gain (loss) on investments | | | 5.31 | | | | 0.55 | | | | (1.16 | ) |
Total from investment operations | | | 5.68 | | | | 1.04 | | | | (0.82 | ) |
| | | | | | | | | | | | | |
Distributions to shareholders from: | | | | | | | | | | | | |
Net investment income | | | (0.46 | ) | | | (0.48 | ) | | | (0.33 | ) |
Return of capital | | | (1.36 | ) | | | (1.09 | ) | | | (0.47 | ) |
Total distributions | | | (1.82 | ) | | | (1.57 | ) | | | (0.80 | ) |
| | | | | | | | | | | | | |
Net asset value, end of period | | $ | 25.99 | | | $ | 22.13 | | | $ | 22.66 | |
Net Asset Value, Total Return | | | 26.67 | % | | | 4.77 | % | | | (3.36 | )%(c) |
| | | | | | | | | | | | | |
Ratios and Supplemental Data: | | | | | | | | | | | | |
Net assets, end of period (000 omitted) | | $ | 3,379 | | | $ | 1,992 | | | $ | 2,493 | |
| | | | | | | | | | | | | |
Ratios to Average Net Assets: | | | | | | | | | | | | |
Expenses before fee waiver(d) | | | 0.75 | % | | | 0.75 | % | | | 0.75 | %(e) |
Expenses after fee waiver(d) | | | 0.50 | % | | | 0.50 | % | | | 0.50 | %(e) |
Net investment income | | | 1.50 | % | | | 2.18 | % | | | 2.60 | %(e) |
Portfolio turnover rate(f) | | | 601 | % | | | 448 | % | | | 223 | %(c) |
6
EXCHANGE LISTED FUNDS TRUST NOTES TO FINANCIAL STATEMENTS | | November 30, 2024 |
Note 1 – Organization
Exchange Listed Funds Trust (the “Trust”) was organized on April 4, 2012 as a Delaware statutory trust and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940 (the “1940 Act”), as an open-end management investment company. The Agreement and Declaration of Trust permits the Trust to issue an unlimited number of shares of beneficial interest (“Shares”) in one or more series representing interests in separate portfolios of securities. The Trust has registered its Shares in multiple separate series. The assets of each series in the Trust are segregated and a shareholder’s interest is limited to the series in which Shares are held. The financial statements presented herein are for the Akros Monthly Payout ETF (the “Fund”).
The Fund is classified as a diversified investment company under the 1940 Act.
The Fund is a passively managed exchange-traded fund (“ETF”).
The Fund’s investment objective is to seek to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Akros Multi-Asset Index (the “Index”). The Fund commenced operations on May 6, 2022.
Under the Trust’s organizational documents, its officers and Board of Trustees (the “Board”) are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, in the normal course of business, the Trust may enter into contracts with vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust.
Note 2 – Basis of Presentation and Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the Trust in the preparation of the financial statements. These policies are in conformity with generally accepted accounting principles in the United States of America (“GAAP”). The Trust is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies.”
(a) Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and income and expenses during the reporting period. Management believes the estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the financial statements may differ from the value the Fund ultimately realizes upon sale of the securities.
(b) Valuation of Investments
The Fund records investments at fair value using procedures approved by the Board and are generally valued using market valuations (Market Approach). A market valuation generally means a valuation (i) obtained from an exchange, a pricing service, or a major market maker (or dealer) or (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). A price obtained from a pricing service based on such pricing service’s valuation matrix may be considered a market valuation. Any assets or liabilities denominated in currencies other than the U.S. dollar are converted into U.S. dollars at the current market rates on the date of valuation as quoted by one or more sources.
In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, establishing requirements to determine fair value in good faith for purposes of the 1940 Act. The rule permits fund boards to designate a fund’s investment adviser to perform fair-value determinations, subject to board oversight and certain other conditions. The rule also defines when market quotations are “readily available” for purposes of the 1940 Act and requires a fund to fair value a portfolio investment when a market quotation is not readily available. The SEC also adopted new Rule 31a-4 under the 1940 Act, which sets forth recordkeeping requirements associated with fair-value determinations.
7
EXCHANGE LISTED FUNDS TRUST NOTES TO FINANCIAL STATEMENTS (Continued) | | November 30, 2024 |
Pursuant to the requirements of Rule 2a-5, the Board (i) has designated the Adviser as the Board’s valuation designee to perform fair-value determinations for the Fund through the Adviser’s Valuation Committee and (ii) has approved the Adviser’s Valuation Procedures.
In the event that current market valuations are not readily available or such valuations do not reflect current fair market value, the Trust’s procedures require the Valuation Committee, in accordance with the Trust’s Board-approved Valuation Procedures, to determine a security’s fair value. In determining such value, the Valuation Committee may consider, among other things, (i) price comparisons among multiple sources, (ii) a review of corporate actions and news events, and (iii) a review of relevant financial indicators (e.g., movement in interest rates or market indices). Fair value pricing involves subjective judgments and it is possible that the fair value determination for a security is materially different than the value that could be realized upon the sale of the security. In addition, fair value pricing could result in a difference between the prices used to calculate the Fund’s net asset value (“NAV”) and the prices used by the Fund’s Index. This may result in a difference between the Fund’s performance and the performance of the Fund’s Index. With respect to securities that are primarily listed on foreign exchanges, the value of the Fund’s portfolio securities may change on days when the investors will not be able to purchase or sell their Shares.
The Fund discloses the fair value of its investments in a hierarchy that distinguishes between: (1) market participant assumptions developed based on market data obtained from sources independent of the Fund (observable inputs) and (2) the Fund’s own assumptions about market participant assumptions developed based on the best information available under the circumstances (unobservable inputs). The three levels defined by the hierarchy are as follows:
• Level 1 – Quoted prices in active markets for identical assets.
• Level 2 – Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
• Level 3 – Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Pursuant to the Valuation Procedures noted previously, equity securities, ETFs and short-term investments are generally categorized as Level 1 in the fair value hierarchy (unless there is a fair valuation event, in which case affected securities are generally categorized as Level 2 or Level 3).
The following is a summary of the valuations as of November 30, 2024, for the Fund based upon the three levels defined above:
Akros Monthly Payout ETF
Assets | | Level 1 | | Level 2 | | Level 3 | | Total |
Common Stocks* | | $ | 2,264,312 | | $ | — | | $ | — | | $ | 2,264,312 |
Exchange-Traded Funds* | | | 1,102,286 | | | — | | | — | | | 1,102,286 |
Total | | $ | 3,366,598 | | $ | — | | $ | — | | $ | 3,366,598 |
(c) Investment Transactions and Related Income
For financial reporting purposes, investment transactions are reported on the trade date. However, for daily NAV determination, portfolio securities transactions are reflected no later than in the first calculation on the first business day following the trade date. Dividend income is recorded on the ex-dividend date. Interest income is recognized on an accrual basis and includes, where applicable, the amortization of premium or accretion of discount, using the effective yield method. Gains or losses realized on sales of securities are determined using the specific identification method by comparing the identified cost of the security lot sold with the net sales proceeds. Dividend Income on the Statements of Operations is shown net of any foreign taxes withheld on income from foreign securities, which are provided for in accordance with the Fund’s understanding of the applicable tax rules and regulations, if any.
8
EXCHANGE LISTED FUNDS TRUST NOTES TO FINANCIAL STATEMENTS (Continued) | | November 30, 2024 |
(d) Foreign Currency Transactions
The accounting records of the Fund are maintained in U.S. dollars. Financial instruments and other assets and liabilities of the Fund denominated in a foreign currency, if any, are translated into U.S. dollars at current exchange rates. Purchases and sales of financial instruments, income receipts and expense payments are translated into U.S. dollars at the exchange rate on the date of the transaction. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates from those resulting from changes in values to financial instruments. Such fluctuations are included with the net realized and unrealized gains or losses from investments. Realized foreign exchange gains or losses arise from transactions in financial instruments and foreign currencies, currency exchange fluctuations between the trade and settlement date of such transactions, and the difference between the amount of assets and liabilities recorded and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, including financial instruments, resulting from changes in currency exchange rates. The Fund may be subject to foreign taxes related to foreign income received, capital gains on the sale of securities and certain foreign currency transactions (a portion of which may be reclaimable). All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.
(e) Federal Income Tax
It is the policy of the Fund to continue to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986 (the “Code”) and to distribute substantially all of its net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required as long as the Fund qualifies as a regulated investment company.
Management of the Fund has evaluated tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether it is more-likely-than-not (i.e., greater than 50%) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in an increase in a liability for taxes payable (or a reduction of a tax refund receivable), including the recognition of any related interest and penalties as an operating expense. In general, tax positions taken in previous tax years remain subject to examination by tax authorities (generally three years for federal income tax purposes). The determination has been made that there are not any uncertain tax positions that would require the Fund to record a tax liability and, therefore, there is no impact to the Fund’s financial statements. The Fund’s policy is to classify interest and penalties associated with underpayment of federal and state income taxes, if any, as income tax expense on its Statements of Operations. As of November 30, 2024, the Fund did not have any interest or penalties associated with the underpayment of any income taxes.
(f) Distributions to Shareholders
The Fund distributes net investment income monthly and capital gains, if any, at least annually. The Fund seeks to make cash distributions once per month throughout a calendar year with the goal, but not the guarantee of an annualized target rate of 7.0%, which is based on the Fund’s per-share NAV on the date of a distribution’s declaration. The Adviser monitors the Fund’s distributions, the expected cash flow from investments and other metrics in determining whether to adjust the distribution rate during the course of a year. All or a portion of the distributions made by the Fund may be treated as a return of capital for tax purposes. Shareholders who receive a payment of a distribution consisting of a return of capital may be under the impression that they are receiving net profits when, in fact, they are not. Shareholders should not assume that the source of a distribution from the Fund is net profit. The amounts and sources of the distribution that may be reported by the Fund throughout the year are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the distribution for tax reporting purposes will depend on a variety of factors. The Fund (or your broker) will inform you of the actual amount of your ordinary income dividends, qualified dividend income, and net capital gain distributions shortly after the close of each calendar year. One or more additional distributions may be made generally in December or after the Fund’s fiscal year-end
9
EXCHANGE LISTED FUNDS TRUST NOTES TO FINANCIAL STATEMENTS (Continued) | | November 30, 2024 |
to comply with applicable law. The Fund will declare and pay capital gain distributions in cash. Distributions in cash may be reinvested automatically in additional Shares of the Fund only if the broker through whom you purchased Shares makes such option available. Your broker is responsible for distributing the income and capital gain distributions to you.
The amount of distributions from net investment income and net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g., return of capital and distribution reclassifications), such amounts are reclassified within the composition of net assets based on their federal tax basis treatment; temporary differences (e.g., wash sales and straddles) do not require a reclassification.
Note 3 – Transactions with Affiliates and Other Servicing Agreements
(a) Investment Advisory and Administrative Services
Exchange Traded Concepts, LLC (the “Adviser”) serves as the investment adviser to the Fund pursuant to an investment advisory agreement with the Trust (the “Advisory Agreement”). Under the Advisory Agreement, the Adviser provides investment advisory services to the Fund and is responsible for the day-to-day management of the Fund including, among other things, implementing changes to the Fund’s portfolio in connection with any rebalancing or reconstitution of the Index, trading portfolio securities on behalf of the Fund, and selecting broker-dealers to execute purchase and sale transactions, subject to the oversight of the Board. For the services it provides to the Fund, the Adviser receives a fee, which is calculated daily and paid monthly, at an annual rate of 0.75% on the first $1 billion in assets, 0.70% on the next $2 billion in assets, and 0.65% on assets in excess of $3 billion of average daily net assets of the Fund. The Adviser has contractually agreed to waive a portion of its advisory fee in an amount equal to 0.25% of the Fund’s average daily net assets through March 31, 2025, unless earlier terminated by the Board of the Trust for any reason at any time. For the year ended November 30, 2024, the Adviser waived $6,006 of its advisory fee. Waived fees are not recoupable in future periods.
ETC Platform Services, LLC (“ETC Platform Services”), a direct wholly owned subsidiary of the Adviser, administers the Fund’s business affairs and provides office facilities and equipment, certain clerical, bookkeeping and administrative services, paying agent services under the Fund’s unitary fee arrangement (as described below), and its officers and employees to serve as officers or Trustees of the Trust. ETC Platform Services also arranges for transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Fund to operate. For the services it provides to the Fund, ETC Platform Services is paid a fee calculated daily and paid monthly based on a percentage of the Fund’s average daily net assets.
Under the Advisory Agreement, the Adviser has agreed to pay all expenses of the Fund (including the fee charged by ETC Platform Services) except for the advisory fee, interest, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses, and distribution fees and expenses paid by the Trust under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act (collectively, “Excluded Expenses”).
Akros Technologies, Inc. is the sponsor of the Fund’s Index and the Fund (the “Sponsor”). In connection with an arrangement between the Adviser and the Sponsor, the Sponsor has agreed to assume the obligation of the Adviser to pay all expenses of the Fund (except Excluded Expenses) and, to the extent applicable, pay the Adviser a minimum fee. For its services, the Sponsor is entitled to a fee from the Adviser, which is calculated daily and paid monthly, based on a percentage of the daily net assets of the Fund. The Sponsor does not make investment decisions, provide investment advice, or otherwise act in the capacity of an investment adviser to the Fund.
An interested Trustee and certain officers of the Trust are affiliated with the Adviser and receive no compensation from the Trust for serving as officers and/or Trustee.
10
EXCHANGE LISTED FUNDS TRUST NOTES TO FINANCIAL STATEMENTS (Continued) | | November 30, 2024 |
(b) Distribution Arrangement
Foreside Fund Services, LLC (the “Distributor”), a Delaware limited liability company, is the principal underwriter and distributor of the Fund’s Shares. The Distributor does not maintain any secondary market in any Fund’s Shares.
The Trust has adopted a Rule 12b-1 Distribution and Service Plan (the “Distribution and Service Plan”) pursuant to which payments of up to a maximum of 0.25% of a Fund’s average daily net assets may be made to compensate or reimburse financial intermediaries for activities principally intended to result in the sale of the Fund’s Shares. In accordance with the Distribution and Service Plan, the Distributor may enter into agreements with financial intermediaries and dealers relating to distribution and/or marketing services with respect to the Trust.
Currently, no payments are made under the Distribution and Service Plan. Such payments may only be made after approval by the Board. The Adviser and its affiliates may, out of their own resources, pay amounts to third parties for distribution or marketing services on behalf of the Trust.
(c) Other Servicing Agreements
Effective June 16, 2024, Ultimus Fund Services, LLC (“Ultimus”) became the service provider for the Fund. Ultimus provides administration and fund accounting services to the Trust pursuant to separate servicing agreements. Brown Brothers Harriman & Co. serves as the fund’s custodian and transfer agent pursuant to a custodian agreement and transfer agency services agreement. The Adviser pays these fees.
Note 4 – Investment Transactions
Purchases and sales of investments, excluding in-kind transactions and short-term investments, for the year ended November 30, 2024, were as follows:
Fund | | Purchases | | Sales |
Akros Monthly Payout ETF | | $ | 14,948,065 | | $ | 15,974,390 |
Purchases and sales of in-kind transactions for the year ended November 30, 2024, were as follows:
Fund | | Purchases | | Sales |
Akros Monthly Payout ETF | | $ | 5,416,211 | | $ | 3,486,328 |
Note 5 – Capital Share Transactions
Fund Shares are listed and traded on the Exchange each day that the NYSE Arca, Inc. (the “Exchange”) is open for business (“Business Day”). The Fund’s Shares may only be purchased and sold on the Exchange through a broker-dealer. Because the Fund’s Shares trade at market prices rather than at their NAV, Shares may trade at a price equal to NAV, greater than NAV (premium) or less than NAV (discount).
The Fund offers and redeems Shares on a continuous basis at NAV only in large blocks of shares (each a “Creation Unit”). Except when aggregated in Creation Units, Shares are not redeemable securities of the Fund. Fund Shares may only be purchased from or redeemed directly from the Fund by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a Depository Trust Company (“DTC”) participant and, in each case, must have executed a Participant Agreement with the Distributor. Creation Units are available for purchase and redemption on each Business Day and are offered and redeemed on an in-kind basis, together with the specified cash amount, or for an all cash amount.
To the extent contemplated by a Participant Agreement, in the event an Authorized Participant has submitted a redemption request in proper form but is unable to transfer all or part of the shares comprising a Creation Unit to be redeemed by the Distributor, on behalf of the Fund, by the time as set forth in a Participant Agreement, the Distributor may nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing shares as soon as possible, which undertaking shall be secured by the Authorized Participant’s delivery and maintenance of collateral equal to a percentage
11
EXCHANGE LISTED FUNDS TRUST NOTES TO FINANCIAL STATEMENTS (Continued) | | November 30, 2024 |
of the market value as set forth in the Participant Agreement. A Participant Agreement may permit the Fund to use such collateral to purchase the missing shares, and could subject an Authorized Participant to liability for any shortfall between the cost of the Fund acquiring such shares and the value of the collateral.
Most retail investors will not qualify as Authorized Participants or have the resources to buy and sell whole Creation Units. Therefore, they will be unable to purchase or redeem the Shares directly from the Fund. Rather, most retail investors will purchase Shares in the secondary market with the assistance of a broker, which will be subject to customary brokerage commissions or fees.
A purchase (i.e., creation) transaction fee may be imposed for the transfer and other transaction costs associated with the purchase of Creation Units, and investors will be required to pay a creation transaction fee regardless of the number of Creation Units created in the transaction. The Fund may adjust the creation transaction fee from time to time based upon actual experience. In addition, a variable fee may be imposed for cash purchases, non-standard orders, or partial cash purchases of Creation Units. The variable fee is primarily designed to cover non-standard charges, e.g., brokerage, taxes, foreign exchange, execution, market impact, and other costs and expenses, related to the execution of trades resulting from such transaction. The Fund may adjust the non-standard charge from time to time based upon actual experience. Investors who use the services of an Authorized Participant, broker or other such intermediary may be charged a fee for such services which may include an amount for the creation transaction fee and non-standard charges. Investors are responsible for the costs of transferring the securities constituting the deposit securities to the account of the Trust. The Adviser may retain all or a portion of the transaction fee to the extent the Adviser bears the expenses that otherwise would be borne by the Trust in connection with the issuance of a Creation Unit, which the transaction fee is designed to cover.
A redemption transaction fee may be imposed for the transfer and other transaction costs associated with the redemption of Creation Units, and Authorized Participants will be required to pay a redemption transaction fee regardless of the number of Creation Units created in the transaction. The redemption transaction fee is the same no matter how many Creation Units are being redeemed pursuant to any one redemption request. The Fund may adjust the redemption transaction fee from time to time based upon actual experience. In addition, a variable fee, payable to the Fund, may be imposed for cash redemptions, non-standard orders, or partial cash redemptions for the Fund. The variable fee is primarily designed to cover non-standard charges, e.g., brokerage, taxes, foreign exchange, execution, market impact, and other costs and expenses, related to the execution of trades resulting from such transaction. Investors who use the services of an Authorized Participant, broker or other such intermediary may be charged a fee for such services which may include an amount for the redemption transaction fees and non-standard charges. Investors are responsible for the costs of transferring the securities constituting the Fund’s securities to the account of the Trust. The non-standard charges are payable to the Fund as it incurs costs in connection with the redemption of Creation Units, the receipt of the Fund’s securities and the cash redemption amount and other transactions costs.
Note 6 – Principal Risks
As with any investment, an investor could lose all or part of their investment in the Fund and the Fund’s performance could trail that of other investments. The Fund is subject to 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. Additional principal risks are disclosed in the Fund’s prospectus. Please refer to the Fund’s prospectus for a complete description of the principal risks of investing in the Fund.
Exchange-Traded Funds Risk. Through its investments in ETFs, the Fund is subject to the risks associated with the ETFs’ investments, including the possibility that the value of the instruments held by an ETF could decrease. A Fund’s exposure to a particular risk will be proportionate to that Fund’s overall allocation and each ETF’s asset allocation. In addition, by investing in a Fund, shareholders indirectly bear fees and expenses charged by the ETFs in addition to the Fund’s direct fees and expenses. As a result, the cost of investing in a Fund may exceed the costs of investing directly in ETFs. A Fund may purchase ETFs at prices that exceed the net asset value of their underlying investments and may sell ETF investments at prices below such net asset value, and will likely incur brokerage costs when it purchases and sells ETFs.
Market Risk. Overall market risk may affect the value of individual instruments in which a Fund invests. A Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect a Fund’s performance. Factors such as domestic and foreign (non-U.S.) economic growth and market conditions, real or perceived adverse economic or political conditions, military conflict, acts of terrorism,
12
EXCHANGE LISTED FUNDS TRUST NOTES TO FINANCIAL STATEMENTS (Continued) | | November 30, 2024 |
social unrest, natural disasters, recessions, inflation, changes in interest rate levels, supply chain disruptions, sanctions, the spread of infectious illness or other public health threats, lack of liquidity in the bond or other markets, volatility in the securities markets, adverse investor sentiment and political events affect the securities markets. U.S. and foreign stock markets have experienced periods of substantial price volatility in the past and may do so again in the future. Securities markets also may experience long periods of decline in value. A change in financial condition or other event affecting a single issuer or market may adversely impact securities markets as a whole. Rates of inflation have recently risen. The value of assets or income from an investment may be worth less in the future as inflation decreases the value of money.
Trading Risk. Shares of the Fund may trade on the Exchange above (premium) or below (discount) their NAV. The NAV of shares of the Fund will fluctuate with changes in the market value of the Fund’s holdings. The market prices of the Fund’s shares will fluctuate continuously throughout trading hours based on market supply and demand and may deviate significantly from the value of the Fund’s holdings, particularly in times of market stress, with the result that investors may pay more or receive less than the underlying value of the Fund shares bought or sold. When buying or selling shares in the secondary market, you 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), which is known as the bid-ask spread. In addition, although the Fund’s shares are currently listed on the Exchange, there can be no assurance that an active trading market for shares will develop or be maintained. Trading in Fund shares may be halted due to market conditions or for reasons that, in the view of the Exchange, make trading in shares of the Fund inadvisable. In stressed market conditions, the market for the Fund’s shares may become less liquid in response to deteriorating liquidity in the markets for the Fund’s underlying portfolio holdings. In such a circumstance, the Fund’s shares could trade at a premium or discount to their NAV.
Note 7 – Federal Income Taxes
GAAP requires certain components of net assets to be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. For the year ended November 30, 2024, the following amounts, resulting primarily from the differing book and tax treatment of return of capital distributions, have been reclassified:
Fund | | Paid-in Capital | | Total
Distributable
Earnings (Loss) |
Akros Monthly Payout ETF | | $ | 299,607 | | $ | (299,607) |
The tax character of the distributions paid during the tax year ended November 30, 2024, and November 30, 2023, were as follows:
| | Year Ended November 30, 2024 |
Fund | | Ordinary
Income | | Net Long-Term
Capital Gains | | Return of
Capital | | Total
Distributions |
Akros Monthly Payout ETF | | $ | 37,342 | | $ | — | | $ | 132,424 | | $ | 169,766 |
| | Year Ended November 30, 2023 |
Fund | | Ordinary
Income | | Net Long-Term
Capital Gains | | Return of
Capital | | Total
Distributions |
Akros Monthly Payout ETF | | $ | 47,766 | | $ | — | | $ | 107,965 | | $ | 155,731 |
As of the tax year ended November 30, 2024, the components of distributable earnings (loss) on a tax basis were as follows:
Fund | | Accumulated
Capital and
Other Losses | | Undistributed
Ordinary
Income | | Undistributed
Capital Gains
(Losses) | | Unrealized
Appreciation
(Depreciation)
on Investments | | Distributable
Earnings
(Loss) |
Akros Monthly Payout ETF | | $ | (183,602) | | $ | — | | $ | — | | $ | 220,905 | | $ | 37,303 |
At November 30, 2024, gross unrealized appreciation and depreciation of investments owned by the Fund, based on cost for federal income tax purposes were as follows:
13
EXCHANGE LISTED FUNDS TRUST NOTES TO FINANCIAL STATEMENTS (Concluded) | | November 30, 2024 |
Fund | | Tax Cost of
Investments | | Unrealized
Appreciation
on Investments | | Unrealized
Depreciation
on Investments | | Net Unrealized
Appreciation
(Depreciation)
on Investments |
Akros Monthly Payout ETF | | $ | 3,145,693 | | $ | 247,397 | | $ | (26,492) | | $ | 220,905 |
The difference between cost amounts for financial statement and federal income tax purposes is due primarily to timing differences in recognizing certain gains and losses in security transactions.
As of the tax year ended November 30, 2024, the Fund has non-expiring accumulated capital loss carryforwards as follows:
Fund | | Short-Term | | Long-Term | | Total Amount | | CLCF
Utilized |
Akros Monthly Payout ETF | | $ | 183,602 | | $ | — | | $ | 183,602 | | $ | 1,655 |
Note 8 – Recent Market Events
Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the market generally and on specific securities. Periods of market volatility may occur in response to such events and other economic, political, and global macro factors.
Governments and central banks, including the Federal Reserve in the United States, took extraordinary and unprecedented actions to support local and global economies and the financial markets in response to the COVID-19 pandemic, including by keeping interest rates at historically low levels for an extended period. The Federal Reserve concluded its market support activities in 2022 and began to raise interest rates in an effort to fight inflation. However, the Federal Reserve had recently lowered interest rates and may continue to do so. This and other government intervention into the economy and financial markets to address the pandemic, inflation, or other significant events in the future may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results.
Note 9 – Events Subsequent to Fiscal Period End
In preparing these financial statements, management has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Management has determined there are no subsequent events that would require disclosure in a Fund’s financial statements.
14
EXCHANGE LISTED FUNDS TRUST Report of Independent Registered
Public Accounting Firm | | November 30, 2024 |
To the Shareholders of Akros Monthly Payout ETF and
Board of Trustees of Exchange Listed Funds Trust
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Akros Monthly Payout ETF (the “Fund”), a series of Exchange Listed Funds Trust, as of November 30, 2024, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for the years ended November 30, 2024 and 2023 and for the period May 6, 2022 (commencement of operations) to November 30, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of November 30, 2024, the results of its operations for the year then ended, changes in net assets, the related notes, and the financial highlights for the years ended November 30, 2024, 2023 and for the period May 6, 2022 (commencement of operations) to November 30, 2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of November 30, 2024, by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more investment companies advised by Exchange Traded Concepts, LLC since 2012.
COHEN & COMPANY, LTD.
Cleveland, Ohio
January 28, 2025
15
EXCHANGE LISTED FUNDS TRUST APPROVAL OF CONTINUANCE OF INVESTMENT ADVISORY AGREEMENT (Form n-Csr, Item 11) | | November 30, 2024 (Unaudited) |
At a meeting held on September 17, 2024 (the “Meeting”), the Board of Trustees (the “Board”) of Exchange Listed Funds Trust (the “Trust”) considered and approved the continuance of the investment advisory agreement between the Trust, on behalf of Akros Monthly Payout ETF (the “Fund”), and Exchange Traded Concepts, LLC (“ETC”) pursuant to which ETC provides advisory services to the Fund (the “Agreement”).
Pursuant to Section 15 of the Investment Company Act of 1940 (the “1940 Act”), the Agreement must be approved by a vote of (i) the Trustees or the shareholders of the Fund and (ii) a majority of the Trustees who are not parties to the Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with its consideration of such approvals, the Board must request and evaluate, and ETC is required to furnish, such information as may be reasonably necessary to evaluate the terms of the Agreement. In addition, rules under the 1940 Act require each Fund to disclose in its shareholder reports the material factors and the conclusions with respect thereto that formed the basis for the Board’s approval of the Agreement.
Consistent with these responsibilities, prior to the Meeting, the Board reviewed written materials from ETC and, at the Meeting, representatives from ETC presented additional oral and written information to help the Board evaluate the Agreement. Among other things, representatives from ETC provided an overview of its advisory business, including investment personnel and investment processes. During the Meeting, the Board discussed the materials it received, including a memorandum from legal counsel to the Independent Trustees on the responsibilities of Trustees in considering the approval of investment advisory agreements under the 1940 Act, considered ETC’s oral presentation, and deliberated on the approval of the Agreement in light of this information. Throughout the process, the Trustees were afforded the opportunity to ask questions of and request additional materials from ETC. The Independent Trustees were assisted in their review by independent legal counsel and met with counsel separately and without management present.
In considering whether to approve the continuance of the Agreement, the Board took into account the materials provided for the Meeting, the extensive discussion before and during the Meeting, including the discussion the Independent Trustees had during their executive session with independent legal counsel. In particular, the Board took into consideration (i) the nature, extent, and quality of the services provided by ETC to the Fund; (ii) the Fund’s performance; (iii) ETC’s costs of and profits realized from providing advisory services to the Fund, including any fall-out benefits to ETC or its affiliates; (iv) comparative fee and expense data; (v) the extent to which the advisory fee for the Fund reflects economies of scale shared with Fund shareholders; and (vi) other factors the Board deemed to be relevant.
Nature, Extent, and Quality of Services. With respect to the nature, extent, and quality of the services provided to the Fund, the Board considered ETC’s specific responsibilities in all aspects of the day-to-day management of the Fund.
The Board considered that responsibilities with respect to the Fund’s portfolio include developing, implementing, and maintaining the Fund’s investment program; implementing changes to the Fund’s portfolio in connection with any rebalancing or reconstitution of the underlying index; selecting broker-dealers to execute purchase and sale transactions; determining the daily baskets of deposit securities and cash components; executing portfolio securities trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis. The Board considered that beyond portfolio management, ETC, including through its affiliates, also maintains responsibilities for overseeing compliance with relevant law; monitoring compliance with various policies and procedures and applicable securities regulations; the provision of various administrative services to the Fund and oversight of third-party administrators, quarterly reporting to the Board; and implementing Board directives as they relate to the Fund. The Board considered that those services also include arranging for and providing oversight of transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Fund to operate; administering the Fund’s business affairs; providing office facilities and equipment and certain clerical, bookkeeping, and administrative services; liaising with and reporting to the Board on matters relating to Fund operations; supervising the Fund’s registration as an investment company and the offering of Fund shares to the public, including oversight and preparation of regulatory filings; working with ETF market participants, including authorized participants, market makers, and exchanges, to help facilitate an orderly trading environment for the Fund’s shares; and providing its officers and employees to serve as officers or Trustees of the Trust.
16
EXCHANGE LISTED FUNDS TRUST APPROVAL OF CONTINUANCE OF INVESTMENT ADVISORY AGREEMENT (Form n-Csr, Item 11) (Continued) | | November 30, 2024 (Unaudited) |
The Board noted that it has reviewed ETC’s responses to a detailed series of questions, which included a description of ETC’s consolidated operations, services, personnel, compliance program, risk management program, and financial condition, and an overview of the material changes to such information since it was last presented to the Board. The Board considered the qualifications, experience, and responsibilities of ETC’s investment personnel, the quality of ETC’s compliance infrastructure, and the determination of the Trust’s Chief Compliance Officer that ETC has procedures that are reasonably designed to comply with the federal securities laws. The Board considered ETC’s experience working with ETFs, including the Fund, other series of the Trust, and other ETFs outside of the Trust. The Board also noted no material changes to ETC’s staffing, management, or overall condition over the past year.
Performance. The Board reviewed the Fund’s performance in light of its stated investment objective, noting that the Fund is passively managed and its objective was to provide investment results that correspond to the total return performance of its index. The Board was provided reports regarding the Fund’s past performance, including a report comparing the Fund’s performance to the performance of its underlying index for various time periods ended June 30, 2024. The Board found that there was a difference between the Fund’s performance and its index. The Board reviewed information regarding the attribution of the Fund’s index tracking, noting that the significant component of the underperformance was the result of the index provider missing ex-dividend amounts for some fund holdings. The Board found that there were no other material components that contributed to tracking error and further noted that it received regular reports regarding the Fund’s performance, including tracking error, at its quarterly meetings throughout the year.
Cost of Advisory Services and Profitability. The Board reviewed the advisory fee paid by the Fund to ETC under the Agreement. The Board reviewed a report prepared by ISS, an independent third party, comparing the Fund’s advisory fee to those paid by a group of peer funds. The Board noted that the report included mutual funds in the peer group, which were intended to enhance the Board’s ability to evaluate the quality of fees and expenses on a broader scale. The Board took into account the differences in operations and fee structures between ETFs and mutual funds and gave such weight to the mutual fund data as it deemed appropriate. The Board noted that ISS selected the particular mutual funds that were included in its report. In support of its review of the statistical information, the Board was provided with a description of the methodology used by ISS to prepare this information. The Board noted that the Fund’s advisory fee was lower than the median of the peer group. The Board also considered that ETC had implemented a contractual fee waiver for MPAY equal to 0.25% of its average daily net assets and that inclusive of the contractual fee waiver, the Fund was the lowest fee of the whole peer group.
The Board took into account that although the Fund’s underlying index was highly specialized, corresponding to the Fund’s strategy, which may contribute to limitations in the construction of the peer group to provide meaningful direct comparisons to the Fund. The Board took into consideration that the advisory fee for the Fund is a “unitary fee,” meaning that the Fund pays no expenses other than the advisory fee and certain expenses customarily excluded from unitary fee arrangements, such as brokerage commissions, taxes and interest.
The Board noted that, under the Agreement, ETC is responsible for compensating the Fund’s other service providers and paying the Fund’s other expenses out of its own fee and resources and that, while the Fund’s index provider has assumed such responsibility, ETC is ultimately responsible for ensuring the obligation is satisfied. The Board considered information provided about the costs and expenses incurred by ETC in providing advisory services, evaluated the compensation and benefits received by ETC from its relationship with the Fund, and reviewed profitability information from ETC with respect to the Fund. The Board considered the risks borne by ETC associated with providing services to the Fund, including the entrepreneurial risk associated with sponsoring new funds, as well as the enterprise risk emanating from litigation and reputational risks, operational and business risks, and other risks associated with the ongoing management of the Fund.
17
EXCHANGE LISTED FUNDS TRUST APPROVAL OF CONTINUANCE OF INVESTMENT ADVISORY AGREEMENT (Form n-Csr, Item 11) (Concluded) | | November 30, 2024 (Unaudited) |
Economies of Scale. The Board considered whether economies of scale have been realized with respect to the Fund. The Board noted that the Fund’s investment advisory fee includes breakpoints, which allows for economies of scale to be shared through reductions in the advisory fee as Fund assets grow.
Conclusion. No single factor was determinative of the Board’s decision to approve the continuance of the Agreement on behalf of the Fund; rather, the Board based its determination on the total mix of information available to it. Based on a consideration of all the factors in their totality, the Board, including the Independent Trustees, determined that the Agreement, including the compensation payable thereunder, was fair and reasonable to the Fund. The Board, including the Independent Trustees, therefore, determined that the approval of the continuance of the Agreement was in the best interests of the Fund and its shareholders.
18
EXCHANGE LISTED FUNDS TRUST Other Information | | November 30, 2024 (Unaudited) |
Tax Information
For the year ended November 30, 2024, the Fund listed below had a percentage of the dividends paid from net investment income, including short-term capital gains (if any) designated as qualified dividend income.
Fund | | Qualified
Dividend Income |
Akros Monthly Payout ETF | | 31.67 | % |
For the year ended November 30, 2024, the Fund listed below had a percentage of the dividends paid from net investment income, including short-term capital gains (if any), qualify for the dividends received deduction available to corporate shareholders.
Fund | | Corporate Dividend
Received Deduction |
Akros Monthly Payout ETF | | 28.87 | % |
Premium/Discount information
Information regarding how often the Shares of the Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund for various time periods can be found on the Fund’s website at https://akrosetfs.com/fund/static/mpay
19
10900 Hefner Pointe Drive, Suite 400
Oklahoma City, OK 73120
Investment Adviser:
Exchange Traded Concepts, LLC
10900 Hefner Pointe Drive, Suite 400
Oklahoma City, OK 73120
Distributor:
Foreside Fund Services, LLC
Three Canal Plaza, Suite 100
Portland, ME 04101
Legal Counsel:
Chapman and Cutler LLP
320 South Canal Street
Chicago, IL 60606
This information must be preceded or accompanied by a current prospectus for the Funds.
For additional information about the Fund; including its prospectus, financial information, holdings, and proxy voting information, call or visit: • 855-955-1865 • https://akrosetfs.com/fund/static/mpay |
Item 8. Changes in and Disagreements with Accountants for Open-End Investment Companies.
There were no changes in or disagreements with accountants during the period covered by this report.
Item 9. Proxy Disclosures for Open-End Management Investment Companies.
Remuneration was paid by the company during the period covered by the report to Trustees on the company’s Board of Trustees. The Board of Trustees expensed $19,323 to each Fund in the Trust for the period covered by the report.
The disclosure regarding the Approval of Advisory Agreement, if applicable, is included as part of the financial statements included above in Item 7.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Not applicable.
Not applicable.
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees during the period covered by this report.
(a) The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act are effective based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 as of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 19. Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
