| Agreements | (4)
Agreements (a)
Management Fee The
Fund pays the Sponsor an annual management fee, monthly in arrears, in an amount calculated as the greater of 0.15% of its average
daily net assets, or $18,750 effective January 1, 2017 ($75,000 for the period from February 20, 2016 to December 31, 2016 and
$56,250 prior to February 20, 2016 (the “Sponsor Fee”)). The Sponsor Fee is paid in consideration of the Sponsor’s
advisory services to the Fund. Additionally, Sit receives an annual fee, monthly in arrears, for its services equal to 0.50% effective
January 27, 2016 of the Fund’s average daily net assets. As of February 19, 2015, Sit has agreed to waive its license and
service fee (“CTA Fee”) and the Sponsor has voluntarily agreed to correspondingly assume the remaining expenses of
the Fund so that Fund expenses do not exceed an annual rate of 1.50%, excluding brokerage commissions and interest expense, of
the value of the Fund’s average daily net assets (the “Expense Cap”). The assumption of expenses and waiver
of the CTA Fee are contractual on the part of the Sponsor and Sit, respectively, through June 30, 2018. The
waiver of the CTA Fees, pursuant to the undertaking, amounted to $71,035, and $58,846 for the years ended June 30, 2017 and 2016,
respectively. The Fund currently accrues its daily expenses up to the Expense Cap. At the end of each month, the accrued amount
is remitted to the Sponsor as the Sponsor has assumed, and is responsible for the payment of, the routine operational, administrative
and other ordinary expenses of the Fund in excess of the Expense Cap which aggregated $230,689, and $258,585 for the years ended
June 30, 2017 and 2016, respectively. (b)
The Administrator, Custodian, Fund Accountant and Transfer Agent The
Fund has appointed U.S. Bank, a national banking association, with its principal office in Milwaukee, Wisconsin, as the custodian
(the “Custodian”). Its affiliate, U.S. Bancorp Fund Services, is the Fund accountant (“the Fund accountant”)
of the Fund, transfer agent (the “Transfer Agent”) for Fund shares and administrator for the Fund (the “Administrator”).
It performs certain administrative and accounting services for the Fund and prepares certain SEC, NFA and CFTC reports on behalf
of the Fund. (U.S. Bank and U.S. Bancorp Fund Services are referred to collectively hereinafter as “U.S. Bank”). Effective
February 19, 2016, the Fund has agreed to pay U.S. Bank 0.05% of assets under management (“AUM”), with a $50,000 minimum
annual fee payable for its administrative, accounting and transfer agent services and 0.01% of AUM, with an annual minimum of
$4,800, for custody services. For the first year of services, the Fund paid U.S. Bank 0.05% of assets under management (“AUM”),
with a $45,000 minimum annual fee payable for its administrative, accounting and transfer agent services and 0.01% of AUM, with
an annual minimum of $4,800, for custody services. The Fund paid U.S. Bank $55,623 and $49,800 for the years ended June 30, 2017
and 2016, respectively. (c)
The Distributor Effective
April 1, 2017, the Fund pays ETFMG Financial LLC. (“Distributor”), an affiliate of the Sponsor, an annual fee for
statutory and wholesaling distribution services and related administrative services equal to the greater of $15,000 or 0.015%
of the Fund’s average daily net assets, payable monthly. This fee has two components, with a portion of the fee paid to
the Distributor, for the statutory distribution services and a portion paid to the Sponsor for the related administrative services.
Pursuant to the Marketing Agent Agreement between the Sponsor, the Fund and the Distributor, the Distributor assists the Sponsor
and the Fund with certain functions and duties relating to distribution and marketing services to the Fund, including reviewing
and approving marketing materials and certain regulatory compliance matters. The Distributor also assists with the processing
of creation and redemption orders. ALPS
Distributors, Inc. (“ALPS”) provided statutory and wholesaling distribution services to the Fund from December 1,
2015 through March 31, 2017. The Fund paid an annual fee for such distribution services and related administrative services equal
to $15,000 plus 0.02% of the Fund’s average daily net assets, payable monthly. This fee had two components, with a portion
of the fee paid to ALPS for the statutory distribution services and a portion paid to the Sponsor for the related administrative
services. Pursuant to the Marketing Agent Agreement between the Sponsor, the Fund and the ALPS, the former distributor assisted
the Sponsor and the Fund with certain functions and duties relating to distribution and marketing services to the Fund, including
reviewing and approving marketing materials and certain regulatory compliance matters. ALPS also assisted with the processing
of creation and redemption orders. Esposito
Securities LLC (“Esposito”) provided statutory and wholesaling distribution services to the Fund from its inception
through November 30, 2015. The Fund paid Esposito an annual fee for such distribution services, equal to 0.02% of Fund’s
average daily net assets, with a minimum of $15,000 payable annually. Pursuant to the Distribution Services Agreement between
the Sponsor, the Fund and Esposito, the former distributor assisted the Sponsor and the Fund with certain functions and duties
relating to distribution and marketing services to the Fund, including reviewing and approving marketing materials and certain
regulatory compliance matters. Esposito also assisted with the processing of creation and redemption orders. The
Fund incurred $17,605, and $17,117 in distribution and related administrative services for the years ended June 30, 2017 and 2016,
respectively, which is included in the Statements of Operations. (d)
The Commodity Broker SG
Americas Securities, LLC (the “Commodity Broker”), a Delaware limited liability company, serves as the Fund’s
clearing broker. In its capacity as clearing broker, the Commodity Broker executes and clears the Fund’s futures transactions
and performs certain administrative services for the Fund. The
Fund pays respective brokerage commissions, including applicable exchange fees, National Futures Association (“NFA”)
fees, give–up fees, pit brokerage fees and other transaction related fees and expenses charged in connection with trading
activities in CFTC regulated investments. Brokerage commissions on futures contracts are recognized on a half-turn basis. The
Sponsor does not expect brokerage commissions and fees to exceed 0.204% of the net asset value of the Fund for execution and clearing
services on behalf of the Fund, although the actual amount of brokerage commissions and fees in any year or any part of any year
may be greater. The effects of trading spreads, financing costs associated with financial instruments, and costs relating to the
purchase of U.S. Treasury Securities or similar high credit quality short-term fixed-income or similar securities are not included
in the foregoing analysis. For the years ended June 30, 2017 and 2016, the Fund incurred $27,257, and $27,382, respectively, in
Brokerage Commissions and fees as disclosed in the Statements of Operations. (e)
The Trustee Under
the Amended and Restated Declaration of Trust and Trust Agreement (the “Trust Agreement”), Wilmington Trust Company,
the Trustee of the Fund (the “Trustee”) serves as the sole trustee of the Fund in the State of Delaware. The Trustee
will accept service of legal process on the Fund in the State of Delaware and will make certain filings under the Delaware Statutory
Trust Act. Under the Trust Agreement, the Sponsor has the exclusive management and control of all aspects of the business of the
Fund. The Trustee does not owe any other duties to the Fund, the Sponsor or the Shareholders of the Fund. The Trustee has no duty
or liability to supervise or monitor the performance of the Sponsor, nor does the Trustee have any liability for the acts or omissions
of the Sponsor. For the years ended June 30, 2017 and 2016, the Fund incurred $5,000 and $5,000, respectively, in trustee fees
which is included in Other Expenses in the Statements of Operations. (f)
Routine Offering, Operational, Administrative and Other Ordinary Expenses The
Sponsor, in accordance with the Fund’s Expense Cap limitation pays all of the routine offering, operational, administrative
and other ordinary expenses of the Fund in excess of 1.50% (excluding brokerage commissions and interest expense) of the Fund’s
average daily net assets, including, but not limited to, accounting and computer services, the fees and expenses of the Trustee,
Administrator, Custodian, Transfer Agent and Distributor, legal and accounting fees and expenses, tax return preparation expenses,
filing fees, and printing, mailing and duplication costs. For the years ended June 30, 2017 and 2016, the Fund incurred $542,088
and $546,307, respectively in routine offering, operational, administrative or other ordinary expenses. The
CTA fee waiver by Sit and the assumption of Fund expenses above the Expense Cap by the Sponsor, pursuant to the undertaking (as
discussed in Note 4a), amounted to $230,689 and $258,585, respectively, for the years ended June 30, 2017 and 2016, respectively. (g)
Organizational and Offering Costs Expenses
incurred in connection with organizing the Fund and up to the offering of its Shares upon commencement of its investment operations
on February 19, 2015, were paid by the Sponsor and Sit without reimbursement. Accordingly,
all such expenses are not reflected in the Statements of Operations. The Fund will bear the costs of its continuous offering of
Shares and ongoing offering expenses. Such ongoing offering costs will be included as a portion of the Routine Offering, Operational,
Administrative and Other Ordinary Expenses. These costs will include registration fees for regulatory agencies and all legal,
accounting, printing and other expenses associated therewith. These costs will be accounted for as a deferred charge and thereafter
amortized to expense over twelve months on a straight-line basis or a shorter period if warranted. For
the years ended June 30, 2017 and 2016, respectively, the Fund did not incur such expenses. (h)
Extraordinary Fees and Expenses The
Fund will pay all extraordinary fees and expenses, if any. Extraordinary fees and expenses are fees and expenses which are nonrecurring
and unusual in nature, such as legal claims and liabilities, litigation costs or indemnification or other unanticipated expenses.
Such extraordinary fees and expenses, by their nature, are unpredictable in terms of timing and amount. For the years ended June
30, 2017 and 2016, respectively, the Fund did not incur such expenses. |
