UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-23214
GraniteShares ETF Trust
(Exact name of registrant as specified in charter)
205 Hudson Street, 7th floor
New York, New York 10013
(Address of principal executive offices) (Zip code)
William Rhind
GraniteShares ETF Trust
205 Hudson Street, 7th floor
New York, New York 10013
(Name and address of agent for service)
Copy to:
W. Thomas Conner, Esq.
Vedder Price
1633 Broadway, 31st Floor
New York, NY 10019
Registrant’s telephone number, including area code:1-800-422-3554
Date of fiscal year end:June 30
Date of reporting period:December 31, 2018
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. | Reports to Stockholders. |
The Report to Shareholders is attached herewith.
GraniteShares ETF Trust
Semi-Annual Report
December 31, 2018
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF
GraniteShares HIPS US High Income ETF
Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. Please contact your financial intermediary to elect to receive shareholder reports and other communications electronically. You may elect to receive all future reports in paper free of charge. Please contact your financial intermediary to continue receiving paper copies of your shareholder reports and for information about whether your election to receive reports in paper will apply to all funds held with your financial intermediary.
Table of Contents
Shareholder Expense Example (Unaudited)
December 31, 2018
As a shareholder of the Fund you incur two types of costs: (1) transaction costs, including brokerage commissions paid on purchases and sales of Fund shares; and (2) ongoing costs, including management fees and other fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars and cents) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.
The expense examples are based on an investment of $1,000 invested at July 1, 2018 and held for the entire period ended December 31, 2018.
ACTUAL EXPENSES
The first line under the Fund in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line for the Fund under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line under the Fund in the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line under the Fund in the table is useful in comparing ongoing Fund costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Beginning Account Value 7/1/2018 | | | Ending Account Value 12/31/2018 | | | Annualized Expense Ratio for the Period | | | Expenses Paid During the Period(1) | |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | | | | | | | | | | | | | | | |
Actual | | $ | 1,000.00 | | | $ | 885.20 | | | | 0.25 | % | | $ | 1.19 | |
Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,023.95 | | | | 0.25 | % | | $ | 1.28 | |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | | | | | | | | | | | | | | | | |
Actual | | $ | 1,000.00 | | | $ | 778.20 | | | | 0.35 | % | | $ | 1.57 | |
Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,023.44 | | | | 0.35 | % | | $ | 1.79 | |
GraniteShares HIPS US High Income ETF | | | | | | | | | | | | | | | | |
Actual | | $ | 1,000.00 | | | $ | 899.90 | | | | 0.70 | % | | $ | 3.35 | |
Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,021.68 | | | | 0.70 | % | | $ | 3.57 | |
(1)Expenses are calculated using the Fund’s annualized expense ratio, multiplied by the average account value for the period, multiplied by 184/365 (to reflect the six month period).
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Schedule of Investments |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF
December 31, 2018 (unaudited)
Investments | | Principal | | | Value | |
U.S. TREASURY OBLIGATIONS – 100.6%(a) | | | | | | | | |
U.S. Treasury Bill, 2.20%, 01/03/19 | | $ | 3,300,000 | | | $ | 3,299,794 | |
U.S. Treasury Bill, 2.22%, 01/03/19(b) | | | 25,000 | | | | 24,998 | |
U.S. Treasury Bill, 2.21%, 01/10/19(b) | | | 2,910,000 | | | | 2,908,546 | |
U.S. Treasury Bill, 2.22%, 01/10/19(b) | | | 575,000 | | | | 574,713 | |
U.S. Treasury Bill, 2.21%, 01/17/19 | | | 2,800,000 | | | | 2,797,334 | |
U.S. Treasury Bill, 2.22%, 01/17/19(b) | | | 250,000 | | | | 249,762 | |
U.S. Treasury Bill, 2.25%, 01/17/19(b) | | | 2,000,000 | | | | 1,998,096 | |
U.S. Treasury Bill, 2.27%, 01/24/19(b) | | | 2,300,000 | | | | 2,296,792 | |
U.S. Treasury Bill, 2.28%, 01/24/19(b) | | | 200,000 | | | | 199,721 | |
U.S. Treasury Bill, 2.29%, 01/24/19(b) | | | 100,000 | | | | 99,861 | |
U.S. Treasury Bill, 2.30%, 01/24/19 | | | 1,000,000 | | | | 998,605 | |
U.S. Treasury Bill, 2.31%, 01/31/19(b) | | | 1,200,000 | | | | 1,197,791 | |
U.S. Treasury Bill, 2.33%, 01/31/19(b) | | | 3,000,000 | | | | 2,994,478 | |
U.S. Treasury Bill, 2.32%, 02/07/19(b) | | | 4,200,000 | | | | 4,190,093 | |
U.S. Treasury Bill, 2.34%, 02/14/19 | | | 450,000 | | | | 448,715 | |
U.S. Treasury Bill, 2.35%, 02/14/19 | | | 2,920,000 | | | | 2,911,664 | |
U.S. Treasury Bill, 2.32%, 02/21/19(b) | | | 610,000 | | | | 607,999 | |
U.S. Treasury Bill, 2.33%, 02/21/19(b) | | | 1,400,000 | | | | 1,395,406 | |
U.S. Treasury Bill, 2.34%, 02/21/19 | | | 1,500,000 | | | | 1,495,078 | |
U.S. Treasury Bill, 2.36%, 02/28/19 | | | 1,500,000 | | | | 1,494,356 | |
U.S. Treasury Bill, 2.38%, 02/28/19(b) | | | 1,450,000 | | | | 1,444,545 | |
U.S. Treasury Bill, 2.39%, 02/28/19 | | | 400,000 | | | | 398,495 | |
U.S. Treasury Bill, 2.36%, 03/07/19(b) | | | 1,500,000 | | | | 1,493,663 | |
U.S. Treasury Bill, 2.38%, 03/07/19(b) | | | 1,320,000 | | | | 1,314,424 | |
U.S. Treasury Bill, 2.40%, 03/07/19(b) | | | 1,150,000 | | | | 1,145,142 | |
U.S. Treasury Bill, 2.42%, 03/07/19(b) | | | 250,000 | | | | 248,944 | |
U.S. Treasury Bill, 2.38%, 03/14/19 | | | 1,450,000 | | | | 1,443,197 | |
U.S. Treasury Bill, 2.39%, 03/14/19 | | | 2,500,000 | | | | 2,488,272 | |
U.S. Treasury Bill, 2.40%, 03/28/19 | | | 3,000,000 | | | | 2,983,239 | |
U.S. Treasury Bill, 2.41%, 03/28/19(b) | | | 850,000 | | | | 845,251 | |
U.S. Treasury Bill, 2.41%, 04/04/19 | | | 1,000,000 | | | | 993,812 | |
U.S. Treasury Bill, 2.42%, 04/04/19 | | | 2,000,000 | | | | 1,987,625 | |
U.S. Treasury Bill, 2.44%, 04/04/19 | | | 570,000 | | | | 566,473 | |
U.S. Treasury Bill, 2.45%, 04/04/19(b) | | | 175,000 | | | | 173,917 | |
U.S. Treasury Bill, 2.40%, 04/11/19 | | | 145,000 | | | | 144,044 | |
U.S. Treasury Bill, 2.42%, 04/11/19 | | | 2,000,000 | | | | 1,986,814 | |
| | | | | | | | |
Total United States Treasury Obligations (Cost $51,840,932) | | | | | | | 51,841,659 | |
| | | | | | | | |
Total Investments – 100.6% (Cost $51,840,932) | | | | | | | 51,841,659 | |
Liabilities in Excess of Other Assets – (0.6)% | | | | | | | (333,127 | ) |
Net Assets – 100.0% | | | | | | $ | 51,508,532 | |
(a) | Represents zero coupon bonds. Rates shown reflects the effective yield. |
(b) | A portion or all of the security is owned by GraniteShares BCOM Cayman Limited., a wholly-owned subsidiary of the Fund. See Note 2. |
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Schedule of Investments |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF (continued)
December 31, 2018 (unaudited)
At December 31, 2018, open futures contracts were as follows:
| | | | | | | | | | | Value/ | | | Value/ | |
Description | | Number of Contracts | | Expiration Date | | Contract Type | | Notional Amount | | | Unrealized Appreciation | | | Unrealized Depreciation | |
Brent Crude(a) | | 65 | | 1/31/2019 | | Long | | $ | 3,497,000 | | | $ | – | | | $ | (1,009,780 | ) |
Coffee ‘C’(a) | | 31 | | 3/19/2019 | | Long | | | 1,184,006 | | | | – | | | | (161,437 | ) |
Copper(a) | | 51 | | 3/27/2019 | | Long | | | 3,354,525 | | | | – | | | | (120,650 | ) |
Corn(a) | | 200 | | 3/14/2019 | | Long | | | 3,750,000 | | | | – | | | | (71,687 | ) |
Cotton No. 2(a) | | 21 | | 3/07/2019 | | Long | | | 758,100 | | | | – | | | | (76,745 | ) |
Crude Oil(a) | | 69 | | 2/20/2019 | | Long | | | 3,154,680 | | | | – | | | | (442,320 | ) |
Gasoline RBOB(a) | | 28 | | 2/28/2019 | | Long | | | 1,542,912 | | | | – | | | | (180,004 | ) |
Gold 100 OZ(a) | | 52 | | 2/26/2019 | | Long | | | 6,662,760 | | | | 303,940 | | | | – | |
KC Hard Red Winter Wheat(a) | | 34 | | 3/14/2019 | | Long | | | 830,875 | | | | – | | | | (44,675 | ) |
Lean Hogs(a) | | 42 | | 2/14/2019 | | Long | | | 1,024,380 | | | | – | | | | (4,520 | ) |
Live Cattle(a) | | 52 | | 2/28/2019 | | Long | | | 2,576,600 | | | | 98,370 | | | | – | |
LME Nickel(a) | | (20) | | 1/14/2019 | | Short | | | (1,274,700 | ) | | | 19,140 | | | | – | |
LME Nickel(a) | | 20 | | 1/14/2019 | | Long | | | 1,274,700 | | | | – | | | | (234,630 | ) |
LME Nickel(a) | | 21 | | 3/18/2019 | | Long | | | 1,345,869 | | | | – | | | | (18,978 | ) |
LME Primary Aluminum(a) | | 45 | | 1/14/2019 | | Long | | | 2,050,594 | | | | – | | | | (255,894 | ) |
LME Primary Aluminum(a) | | (45) | | 1/14/2019 | | Short | | | (2,050,594 | ) | | | 108,450 | | | | – | |
LME Primary Aluminum(a) | | 47 | | 3/18/2019 | | Long | | | 2,171,400 | | | | – | | | | (110,450 | ) |
LME Zinc(a) | | 21 | | 1/14/2019 | | Long | | | 1,303,312 | | | | – | | | | (75,206 | ) |
LME Zinc(a) | | (21) | | 1/14/2019 | | Short | | | (1,303,313 | ) | | | 55,219 | | | | – | |
LME Zinc(a) | | 21 | | 3/18/2019 | | Long | | | 1,297,013 | | | | – | | | | (54,459 | ) |
Natural Gas(a) | | 168 | | 2/26/2019 | | Long | | | 4,789,680 | | | | – | | | | (1,918,680 | ) |
NY Harbour ULSD(a) | | 25 | | 2/28/2019 | | Long | | | 1,753,395 | | | | – | | | | (176,005 | ) |
Silver(a) | | 24 | | 3/27/2019 | | Long | | | 1,864,800 | | | | 141,155 | | | | – | |
Soybean(a) | | 71 | | 3/14/2019 | | Long | | | 3,177,250 | | | | – | | | | (109,438 | ) |
Soybean Meal(a) | | 54 | | 3/14/2019 | | Long | | | 1,673,460 | | | | – | | | | (24,590 | ) |
Soybean Oil(a) | | 78 | | 3/14/2019 | | Long | | | 1,303,380 | | | | – | | | | (58,596 | ) |
Sugar #11(a) | | 120 | | 2/28/2019 | | Long | | | 1,616,832 | | | | – | | | | (33,230 | ) |
Wheat (CBD)(a) | | 87 | | 3/14/2019 | | Long | | | 2,189,138 | | | | – | | | | (72,213 | ) |
Total Futures Contracts | | | | $ | 51,518,054 | | | $ | 726,274 | | | $ | (5,254,187 | ) |
Net Unrealized Appreciation (Depreciation) | | | | | | | | | | | | $ | (4,527,913 | ) |
(a) | A portion or all of the security is owned by GraniteShares BCOM Cayman Limited., a wholly-owned subsidiary of the Fund. See Note 2. |
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Schedule of Investments |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF (continued)
December 31, 2018 (unaudited)
The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of December 31, 2018:
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Asset Valuation Inputs | | | | | | | | | | | | | | | | |
Investments in Securities | | | | | | | | | | | | | | | | |
U.S. Treasury Obligations | | $ | 51,841,659 | | | $ | – | | | $ | – | | | $ | 51,841,659 | |
Other Investments | | | | | | | | | | | | | | | | |
Futures | | | 726,274 | | | | – | | | | – | | | | 726,274 | |
Total | | $ | 52,567,933 | | | $ | – | | | $ | – | | | $ | 52,567,933 | |
Liability Valuation Inputs | | | | | | | | | | | | | | | | |
Other Investments | | | | | | | | | | | | | | | | |
Futures | | $ | 5,254,187 | | | $ | – | | | $ | – | | | $ | 5,254,187 | |
Total | | $ | 5,254,187 | | | $ | – | | | $ | – | | | $ | 5,254,187 | |
As of December 31, 2018, there were no Level 3 investments held in the Fund.
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Schedule of Investments |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF
December 31, 2018 (unaudited)
Investments | | Principal | | | Value | |
U.S. TREASURY OBLIGATIONS – 98.2%(a) | | | | | | | | |
U.S. Treasury Bill, 2.20%, 01/03/19 | | $ | 700,000 | | | $ | 699,956 | |
U.S. Treasury Bill, 2.21%, 01/10/19 | | | 1,000,000 | | | | 999,500 | |
U.S. Treasury Bill, 2.22%, 01/17/19(b) | | | 50,000 | | | | 49,952 | |
U.S. Treasury Bill, 2.27%, 01/24/19 | | | 600,000 | | | | 599,163 | |
U.S. Treasury Bill, 2.31%, 01/31/19(b) | | | 200,000 | | | | 199,632 | |
U.S. Treasury Bill, 2.33%, 02/07/19 | | | 700,000 | | | | 698,349 | |
U.S. Treasury Bill, 2.34%, 02/14/19 | | | 50,000 | | | | 49,857 | |
U.S. Treasury Bill, 2.35%, 02/14/19 | | | 180,000 | | | | 179,486 | |
U.S. Treasury Bill, 2.32%, 02/21/19(b) | | | 65,000 | | | | 64,787 | |
U.S. Treasury Bill, 2.34%, 02/21/19(b) | | | 200,000 | | | | 199,344 | |
U.S. Treasury Bill, 2.38%, 02/28/19(b) | | | 50,000 | | | | 49,812 | |
U.S. Treasury Bill, 2.39%, 02/28/19 | | | 100,000 | | | | 99,624 | |
U.S. Treasury Bill, 2.38%, 03/07/19(b) | | | 130,000 | | | | 129,451 | |
U.S. Treasury Bill, 2.40%, 03/07/19(b) | | | 190,000 | | | | 189,197 | |
U.S. Treasury Bill, 2.38%, 03/14/19(b) | | | 400,000 | | | | 398,123 | |
U.S. Treasury Bill, 2.41%, 04/04/19 | | | 200,000 | | | | 198,763 | |
| | | | | | | | |
Total United States Treasury Obligations (Cost $4,804,896) | | | | | | | 4,804,996 | |
| | | | | | | | |
Total Investments – 98.2% (Cost $4,804,896) | | | | | | | 4,804,996 | |
Other Assets in Excess of Liabilities – 1.8% | | | | | | | 86,439 | |
Net Assets – 100.0% | | | | | | $ | 4,891,435 | |
(a) | Represents zero coupon bonds. Rates shown reflects the effective yield. |
(b) | A portion or all of the security is owned by GraniteShares GSCI Cayman Limited., a wholly-owned subsidiary of the Fund. See Note 2. |
At December 31, 2018, open futures contracts were as follows:
| | | | | | | | | | | Value/ | | | Value/ | |
Description | | Number of Contracts | | Expiration Date | | Contract Type | | Notional Amount | | | Unrealized Appreciation | | | Unrealized Depreciation | |
GOLDMAN SACHS Index(a) | | 52 | | 1/16/2019 | | Long | | $ | 4,878,250 | | | $ | - | | | $ | (445,514 | ) |
(a) | A portion or all of the security is owned by GraniteShares GSCI Cayman Limited., a wholly-owned subsidiary of the Fund. See Note 2. |
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Schedule of Investments |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF (continued)
December 31, 2018 (unaudited)
The following table summarizes valuation of the Fund’s investments under the fair value hierarchy levels as of December 31, 2018:
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Asset Valuation Inputs | | | | | | | | | | | | | | | | |
Investments in Securities | | | | | | | | | | | | | | | | |
U.S. Treasury Obligations | | $ | 4,804,996 | | | $ | – | | | $ | – | | | $ | 4,804,996 | |
Total | | $ | 4,804,996 | | | $ | – | | | $ | – | | | $ | 4,804,996 | |
Liability Valuation Inputs | | | | | | | | | | | | | | | | |
Other Investments | | | | | | | | | | | | | | | | |
Futures | | $ | 445,514 | | | $ | – | | | $ | – | | | $ | 445,514 | |
Total | | $ | 445,514 | | | $ | – | | | $ | – | | | $ | 445,514 | |
As of December 31, 2018, there were no Level 3 investments held in the Fund.
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Statements of Assets and Liabilities |
December 31, 2018 (Unaudited)
| | GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | | GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | |
Assets: | | | | | | | | |
Investments at cost | | $ | 51,840,932 | | | $ | 4,804,896 | |
Investments at value | | $ | 51,841,659 | | | $ | 4,804,996 | |
Cash | | | 503,596 | | | | 1,089,456 | |
Due from broker | | | 4,202,031 | | | | 532,843 | |
Unrealized appreciation on open futures contracts | | | 726,274 | | | | — | |
Total Assets | | | 57,273,560 | | | | 6,427,295 | |
Liabilities: | | | | | | | | |
Distributions to shareholders | | | 499,719 | | | | 1,088,275 | |
Advisory fees payable | | | 11,122 | | | | 2,071 | |
Unrealized depreciation on open futures contracts | | | 5,254,187 | | | | 445,514 | |
Total Liabilities | | | 5,765,028 | | | | 1,535,860 | |
Net Assets | | $ | 51,508,532 | | | $ | 4,891,435 | |
| | | | | | | | |
Net Assets Consist of: | | | | | | | | |
Paid-in capital | | $ | 58,412,045 | | | $ | 6,743,720 | |
Distributable earnings/accumulated (loss) | | | (6,903,513 | ) | | | (1,852,285 | ) |
Net Assets | | $ | 51,508,532 | | | $ | 4,891,435 | |
| | | | | | | | |
Shares Outstanding | | | 2,252,000 | | | | 252,000 | |
Net Asset Value per share | | $ | 22.87 | | | $ | 19.41 | |
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Statementsof Operations |
December 31, 2018
| | GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | | GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | |
| | Six Months Ended December 31, 2018 (Unaudited) | | | Six Months Ended December 31, 2018 (Unaudited) | |
Investment Income: | | | | | | | | |
Interest | | $ | 472,471 | | | $ | 77,732 | |
Total Investment Income | | | 472,471 | | | | 77,732 | |
Expenses: | | | | | | | | |
Advisory fees | | | 57,580 | | | | 13,613 | |
Tax fees | | | 57 | | | | 57 | |
Trustees’ fees | | | 1,502 | | | | 1,502 | |
CCO fees | | | 4,468 | | | | 1,571 | |
Total Expenses | | | 63,607 | | | | 16,743 | |
Expense Reimbursement | | | (5,970 | ) | | | (3,073 | ) |
Net Expenses | | | 57,637 | | | | 13,670 | |
Net Investment Income | | | 414,834 | | | | 64,062 | |
Net Realized and Unrealized Gain (Loss) on: | | | | | | | | |
Net realized gain (loss) on: | | | | | | | | |
Investments | | | (37 | ) | | | (69 | ) |
Futures contracts | | | (2,436,981 | ) | | | (1,416,848 | ) |
Net realized loss | | | (2,437,018 | ) | | | (1,416,917 | ) |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | |
Investments | | | 164 | | | | 87 | |
Futures contracts | | | (3,808,102 | ) | | | (616,664 | ) |
Net change in unrealized appreciation (depreciation) | | | (3,807,938 | ) | | | (616,577 | ) |
Net Realized and Unrealized Loss | | | (6,244,956 | ) | | | (2,033,494 | ) |
Net Decrease in Net Assets Resulting from Operations | | $ | (5,830,122 | ) | | $ | (1,969,432 | ) |
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Statements of Changes in Net Assets |
December 31, 2018
| | GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | | GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | |
| | Six Months Ended December 31, 2018 (Unaudited) | | | Year Ended June 30, 2018 | | | Six Months Ended December 31, 2018 (Unaudited) | | | Year Ended June 30, 2018 | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income | | $ | 414,834 | | | $ | 184,940 | | | $ | 64,062 | | | $ | 47,678 | |
Net realized gain (loss) | | | (2,437,018 | ) | | | 643,990 | | | | (1,416,917 | ) | | | 838,635 | |
Net change in unrealized gain (loss) | | | (3,807,938 | ) | | | (714,209 | ) | | | (616,577 | ) | | | 153,369 | |
Net Increase (Decrease) in Net Assets Resulting from Operations | | | (5,830,122 | ) | | | 114,721 | | | | (1,969,432 | ) | | | 1,039,682 | |
| | | | | | | | | | | | | | | | |
Distributions to shareholders | | | (499,719 | ) | | | (20,807 | )* | | | (1,088,275 | ) | | | (6,519 | )* |
| | | | | | | | | | | | | | | | |
From share transactions: | | | | | | | | | | | | | | | | |
Proceeds from sales of shares | | | 27,786,730 | | | | 28,816,954 | | | | 1,570,375 | | | | 8,175,050 | |
Cost of shares redeemed | | | — | | | | (1,346,661 | ) | | | (1,304,358 | ) | | | (3,938,162 | ) |
Net increase in net assets resulting from share transactions | | | 27,786,730 | | | | 27,470,293 | | | | 266,017 | | | | 4,236,888 | |
Total Increase (Decrease) in net assets | | | 21,456,889 | | | | 27,564,207 | | | | (2,791,690 | ) | | | 5,270,051 | |
| | | | | | | | | | | | | | | | |
Net Assets: | | | | | | | | | | | | | | | | |
Beginning of year/period | | | 30,051,643 | | | | 2,487,436 | | | | 7,683,125 | | | | 2,413,074 | |
End of year/period | | $ | 51,508,532 | | | $ | 30,051,643 | ** | | $ | 4,891,435 | | | $ | 7,683,125 | ** |
| | | | | | | | | | | | | | | | |
Changes in Shares Outstanding: | | | | | | | | | | | | | | | | |
Shares outstanding, beginning of year/period | | | 1,152,000 | | | | 102,000 | | | | 252,000 | | | | 102,000 | |
Shares sold | | | 1,100,000 | | | | 1,100,000 | | | | 50,000 | | | | 300,000 | |
Shares redeemed | | | — | | | | (50,000 | ) | | | (50,000 | ) | | | (150,000 | ) |
Shares outstanding, end of year/period | | | 2,252,000 | | | | 1,152,000 | | | | 252,000 | | | | 252,000 | |
| * | Includes distributions from net investment income. |
| ** | Includes undistributed net investment income of $145,591 and $1,034,492, respectively. |
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Financial Highlights |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | Six Months Ended December 31, 2018 (Unaudited) | | | Year Ended June 30, 2018 | | | For the Period May 19, 2017(a) to June 30, 2017 | |
Operating Performance: | | | | | | | | | | | | |
Net asset value, beginning of year/period | | $ | 26.09 | | | $ | 24.39 | | | $ | 25.00 | |
Net investment income(b) | | | 0.23 | | | | 0.32 | | | | 0 .01 | |
Net realized and unrealized gain (loss)(c) | | | (3.23) | | | | 1.43 | | | | (0.62 | ) |
Total gain (loss) from investment operations | | | (3.00) | | | | 1.75 | | | | (0.61 | ) |
Less distributions from: | | | | | | | | | | | | |
Net investment income | | | (0.22) | | | | (0.05 | ) | | | — | |
Net asset value, end of year/period | | $ | 22.87 | | | $ | 26.09 | | | $ | 24.39 | |
Total Return(d) | | | (11.48 | )%(e) | | | 7.19% | | | | (2.46 | )%(e) |
Ratios to Average Net Assets and Supplemental Data: | | | | | | | | | | | | |
Net assets, end of year/period (in 000’s) | | $ | 51,509 | | | $ | 30,052 | | | $ | 2,487 | |
Ratio of net investment income to average net assets | | | 1.80 | %(f) | | | 1.21 | % | | | 0.49 | %(f) |
Ratio of operating expenses before waivers/reimbursements | | | 0.28 | %(f) | | | 0.52 | % | | | 1.85 | %(f) |
Ratio of net operating expenses net of waivers/reimbursements | | | 0.25 | %(f) | | | 0.27 | % | | | 0.30 | %(f) |
Portfolio turnover rate | | | — | % | | | — | % | | | — | % |
(a) | Commencement of operations. |
(b) | Per share data is calculated using the average daily shares outstanding method. |
(c) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized losses presented in the Consolidated Statements of Operations due to the timing of sales and repurchases of Fund shares in relation to fluctuating market values of the investments of the Fund. |
(d) | Total return would have been lower if certain fees had not been reimbursed by the Advisor. |
(e) | Not annualized. |
(f) | Annualized. |
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Consolidated Financial Highlights |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | | Six Months Ended December 31, 2018 (Unaudited) | | | Year Ended June 30, 2018 | | | For the Period May 19, 2017(a)to June 30, 2017 | |
Operating Performance: | | | | | | | | | | | | |
Net asset value, beginning of year/period | | $ | 30.49 | | | $ | 23.66 | | | $ | 25.00 | |
Net investment income(b) | | | 0.24 | | | | 0.28 | | | | 0.01 | |
Net realized and unrealized gain (loss)(c) | | | (7.00 | ) | | | 6.59 | | | | (1.35 | ) |
Total gain (loss) from investment operations | | | (6.76 | ) | | | 6.87 | | | | (1.34 | ) |
Less distributions from: | | | | | | | | | | | | |
Net investment income | | | (4.32 | ) | | | (0.04 | ) | | | — | |
Net asset value, end of year/period | | $ | 19.41 | | | $ | 30.49 | | | $ | 23.66 | |
Total Return(d) | | | (22.18 | )%(e) | | | 29.08 | % | | | (5.37 | )%(e) |
Ratios to Average Net Assets and Supplemental Data: | | | | | | | | | | | | |
Net assets, end of year/period (in 000’s) | | $ | 4,891 | | | $ | 7,683 | | | $ | 2,413 | |
Ratio of net investment income to average net assets | | | 1.65 | %(f) | | | 1.03 | % | | | 0.45 | %(f) |
Ratio of operating expenses before waivers/reimbursements | | | 0.43 | %(f) | | | 0.88 | % | | | 2.12 | %(f) |
Ratio of net operating expenses net of waivers/reimbursements | | | 0.35 | %(f) | | | 0.37 | % | | | 0.40 | %(f) |
Portfolio turnover rate | | | — | % | | | — | % | | | — | % |
(a) | Commencement of operations. |
(b) | Per share data is calculated using the average daily shares outstanding method. |
(c) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized losses presented in the Consolidated Statements of Operations due to the timing of sales and repurchases of Fund shares in relation to fluctuating market values of the investments of the Fund. |
(d) | Total return would have been lower if certain fees had not been reimbursed by the Advisor. |
(e) | Not annualized. |
(f) | Annualized. |
See accompanying notes to consolidated financial statements.
GraniteShares ETF Trust
Notes to Consolidated Financial Statements
December 31, 2018 (unaudited)
1. ORGANIZATION
The GraniteShares ETF Trust (the “Trust”) was organized as a Delaware statutory trust on November 7, 2016. The Trust is registered with the Securities and Exchange Commission (the “SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and the offering of each Fund’s shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”). GraniteShares Advisors LLC (the “Adviser”) serves as investment adviser to the Funds. Each Fund is a non-diversified series of a management investment company under the 1940 Act. The Trust is an open-end management investment company currently consisting of three investment series, of which two are presented below (each, a “Fund,” and collectively, the “Funds”) and presented herein. The remaining Fund in the Trust is presented separately.
Fund | | Commencement of Operations |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | May 19, 2017 |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | | May 19, 2017 |
2. CONSOLIDATED SUBSIDIARY
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF and GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF invest in certain commodity-related investments through GraniteShares BCOM Cayman Limited and GraniteShares GSCI Cayman Limited respectively, wholly-owned subsidiaries (each, a “Subsidiary”, collectively, the “Subsidiaries”).
The following table reflects the net assets of each Subsidiary as a percentage of each Fund’s net assets at December 31, 2018:
Fund | | Wholly Owned Subsidiary | | Value | | | Percentage of Fund’s Net Assets | |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | GraniteShares BCOM Cayman Limited | | $ | 7,541,615 | | | | 14.6 | % |
| | | | | | | | | | |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | | GraniteShares GSCI Cayman Limited | | $ | 915,411 | | | | 18.7 | % |
3. SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The Fund follows the accounting and reporting guidance in the Accounting Standards Codifications 946, “Financial Services—Investment Companies” issued by the U.S. Financial Accounting Standards Board.
The following is a summary of significant accounting policies followed by the Funds in the preparation of its financial statements.
Investment Transactions and Investment Income: Investment transactions are recorded on the trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income, if any, is recorded on the ex-dividend date or, in the case of foreign securities, as soon as each Fund is informed of the ex-dividend dates. Interest income, including accretion of discounts and amortization of premiums, is recorded on the accrual basis.
Dividend Distributions: Distributions to shareholders are recorded on the ex-dividend date and are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. The Funds distribute all or substantially all of their net investment income to shareholders in the form of dividends.
Futures contracts: The GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF and The GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF, through their Subsidiaries, invest in a combination of exchange-listed commodity futures contracts in the normal course of pursuing their investment objectives. A futures contract is a financial instrument in which a party agrees to pay a fixed price for securities or commodities at a specified future date. Futures contracts are traded at market prices on exchanges pursuant to terms common to all market participants. Upon entering into such contracts, the Funds are required to deposit with the broker, either in cash or in securities, an initial margin in an amount equal to a certain percentage of the contract amount. Subsequent fluctuations in the value of the contract are recorded for financial statement purposes as unrealized gains or losses by the Funds and variation margin receivable or payable. Payments received or paid by the Funds adjust the variation margin accounts. When a contract is closed, the Funds record a realized gain or loss.
GraniteShares ETF Trust
Notes to Consolidated Financial Statements (continued)
December 31, 2018 (unaudited)
Futures contracts may be highly volatile. Price movements may be sudden and extreme, and are influenced by a variety of factors including, among other things, changing supply and demand relationships; climate; government agricultural, trade, fiscal, monetary and exchange control programs and policies; national and international political and economic events; crop diseases; the purchasing and marketing programs of different nations; and changes in interest rates.
Open futures contracts at December 31, 2018 are listed in the Consolidated Schedules of Investments. As of December 31, 2018, the balance of margin deposited with the broker by the GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF and the GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF was $4,202,031, and $532,843, respectively, as presented on the Consolidated Statements of Assets and Liabilities as due from broker. At December 31, 2018, the GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF had variation margin payable to the broker of $325,882, and the GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF had variation margin receivable from broker in the amount of $87,329. The variation margin payable/receivable is represented by the difference between the balance of margin on deposit with the broker and the unrealized appreciation/depreciation on open futures contracts as of December 31, 2018.
4. SECURITIES VALUATION
Investment Valuation: Each Fund calculates its net asset value (“NAV”) each day the New York Stock Exchange (the “NYSE”) is open for trading as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time (the “NAV Calculation Time”).
If a market quotation is not readily available or is deemed not to reflect market value, GraniteShares Advisors LLC, (the “Adviser”) determines the price of the security held by each Fund based on a determination of the security’s fair value pursuant to policies and procedures approved by the Board of Trustees (the “Board”). In addition, each Fund may use fair valuation to price securities that trade on a foreign exchange when a significant event has occurred after the foreign exchange closes but before the time at which the Fund’s NAV is calculated. Such valuations would typically be categorized as Level 2 or Level 3 in the fair value hierarchy described below.
Exchange-traded futures contracts are valued at the closing price in the market where such contracts are principally traded. If no closing price is available, exchange-traded futures contracts are fair valued at the mean of the last bid and asked prices, if available, and otherwise at the closing bid price. Such valuations are typically categorized as Level 1 in the fair value hierarchy described below.
Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Board or its delegate at fair value. These securities generally include but are not limited to, restricted securities (securities which may not be publicly sold without registration under the 1933 Act) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; a security whose market price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of each Fund net asset value (as may be the case in foreign markets on which the security is primarily traded) or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the pricing service, does not reflect the security’s “fair value.” A variety of factors may be considered in determining the fair value of such securities.
Valuing the Funds’ investments using fair value pricing will result in using prices for those investments that may differ from current market valuations.
5. FAIR VALUE MEASUREMENT
The Financial Accounting Standards Board (FASB) established a framework for measuring fair value in accordance with U.S. GAAP. Under Fair Value Measurements and Disclosures, various inputs are used in determining the value of the exchange traded fund’s investments. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three Levels of inputs of the fair value hierarchy are defined as follows:
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
GraniteShares ETF Trust
Notes to Consolidated Financial Statements (continued)
December 31, 2018 (unaudited)
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The hierarchy classification of inputs used to value each Fund’s investments at December 31, 2018 is disclosed at the end of each Fund’s Consolidated Schedule of Investments.
6. ADVISORY AND OTHER AGREEMENTS
GraniteShares Advisors LLC, the investment adviser to the Fund, is a Delaware limited Liability Company located at 205 Hudson Street, 7th Floor, New York, NY 10013. The Adviser provides investment advisory services to exchange-traded funds. The Adviser serves as investment adviser to the Fund with overall responsibility for the portfolio management of the Fund, subject to the supervision of the Board of Trustees (the “Board”) of the Trust.
For its services, the Adviser receives a fee that is equal to 0.25% per annum of the average daily net assets of the COMB Fund and 0.35% per annum of the average daily net assets of the COMG Fund, in each case calculated daily and paid monthly. Pursuant to the Advisory Agreement, the Adviser is responsible for substantially all expenses of each Fund (excluding interest, taxes, brokerage commissions, expenses related to short sales, other expenditures which are capitalized in accordance with generally accepted accounting principles, other extraordinary expenses not incurred in the ordinary course of each Fund’s business, and amounts, if any, payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act).
Pursuant to the Advisory Agreement, the Adviser has agreed to pay all expenses of the Funds, except for: (i) brokerage expenses and other fees, charges, taxes, levies or expenses (such as stamp taxes) incurred in connection with the execution of portfolio transactions or in connection with creation and redemption transactions; (ii) legal fees or expenses in connection with any arbitration, litigation or pending or threatened arbitration or litigation, including any settlements in connection therewith; (iii) compensation and expenses of the Independent Trustees; (iv) compensation and expenses of counsel to the Independent Trustees; (v) compensation and expenses of the Trust’s Chief Compliance Officer; (vi) extraordinary expenses; (vii) distribution fees and expenses paid by the Trust under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act; (viii) interest and taxes of any kind or nature; (ix) any fees and expenses related to the provision of securities lending services; and (x) the advisory fee payable to the Adviser under the Advisory Agreement.
This contractual arrangement may only be changed or eliminated by or with the consent of the Funds’ Board of Trustees.
During the period ended December 31, 2018, the COMB Fund and the COMG Fund was reimbursed $15,287 and $7,048, respectively, through payments made from the Adviser.
GraniteShares Advisors LLC is the only related party involved with the operations of the Funds.
Administrator, Custodian, Accounting Agent and Transfer Agent Services: The Bank of New York Mellon (in each capacity, the “Administrator”, “Custodian,” “Accounting Agent” or “Transfer Agent”) serves as the Funds’ Administrator, Custodian, Accounting Agent and Transfer Agent pursuant to the Funds Administration and Accounting Agreement. The Bank of New York Mellon is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company.
Distribution and Service Fees: Foreside Fund Services, LLC. (“Distributor”) serves as the Funds’ distributor. The Trust has adopted a distribution and service plan (“Rule 12b-1 Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Rule 12b-1 Plan, the Fund is authorized to pay an amount up to a maximum annual rate of 0.25% of its average net assets in connection with the sale and distribution of its shares and pay service fees in connection with the provision of ongoing services to shareholders. No distribution fees are currently charged to the Funds; there are no plans to impose these fees.
GraniteShares ETF Trust
Notes to Consolidated Financial Statements (continued)
December 31, 2018 (unaudited)
Share Transactions
The Funds issue and redeem shares at NAV only with certain authorized participants in large increments known as Creation Units. A Creation Unit consists of 50,000 shares. Purchases of Creation Units are made by tendering a basket of designated stocks to a fund and redemption proceeds are paid with a basket of securities from a fund’s portfolio with a balancing cash component to equate the market value of the basket of securities delivered or redeemed to the NAV per Creation Unit on the transaction date. Cash may be substituted equivalent to the value of certain securities generally when they are not available in sufficient quantity for delivery. A fund’s shares are available in smaller increments to investors in the secondary market at market prices and may be subject to commissions. Authorized participants pay a transaction fee to the shareholder servicing agent when purchasing and redeeming Creation Units of a fund. The transaction fee is used to defray the costs associated with the issuance and redemption of Creation Units.
7. INVESTMENT TRANSACTIONS
There were no cost of purchases and proceeds from sales of investment securities (excluding short-term investments) for the period ended December 31, 2018.
8. VALUATION OF DERIVATIVE INSTRUMENTS
The Funds have adopted authoritative standards of accounting for derivative instruments which establish disclosure requirements for derivative instruments. These standards improve financial reporting for derivative instruments by requiring enhanced disclosures that enables investors to understand how and why a fund uses derivatives instruments, how derivatives instruments are accounted for and how derivative instruments affect a fund’s financial position and results of operations. The Funds use derivative instruments as part of their principal investment strategy to achieve their investment objective.
The following is the location and each Fund’s fair values of derivative investments disclosed, if any, in the Consolidated Statements of Assets and Liabilities, categorized by primary market risk exposure as of December 31, 2018:
Fund | | Asset Derivatives: | | Commodity Risk | |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | Unrealized appreciation on futures contracts | | $ | 726,274 | |
Fund | | Liability Derivatives: | | Commodity Risk | |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | Unrealized depreciation on futures contracts | | $ | 5,254,187 | |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | | Unrealized depreciation on futures contracts | | | 445,514 | |
The following is the location and the effect of derivative investments, if any, on each of the fund’s Consolidated Statements of Operations, categorized by primary market risk exposure during the period ended December 31, 2018:
Fund | | Realized Gain (Loss): | | Commodity Risk | |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | Futures contracts | | $ | (2,436,981 | ) |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | | Futures contracts | | | (1,416,848 | ) |
Fund | | Change in Unrealized Appreciation/(Depreciation): | | Commodity Risk | |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | Futures contracts | | $ | (3,808,102 | ) |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | | Futures contracts | | | (616,664 | ) |
The following is a summary of the average volume derivative activity for the period ended December 31, 2018:
| | GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | | GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | |
Futures contracts: | | | | | | | | |
Average notional value of contracts | | $ | 48,175,055 | | | $ | 6,776,425 | |
For the purpose of this calculation, the absolute value of quarterly outstanding notional amounts were used.
GraniteShares ETF Trust
Notes to Consolidated Financial Statements (continued)
December 31, 2018 (unaudited)
9. FEDERAL INCOME TAX MATTERS
The Funds-intend to qualify as a ‘‘regulated investment company’’ under Subchapter M of the Internal Revenue Code of 1986, as amended. If so qualified, the Funds will not be subject to Federal income tax to the extent they distribute substantially all of their net investment income and net capital gains to its shareholders. Accounting for Uncertainty in Income Taxes provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the consolidated financial statements, and requires the evaluation of tax positions taken or expected to be taken in the course of preparing each Fund’s tax returns to determine whether the tax positions are ‘‘more-likely-than-not’’ of being sustained by the applicable tax authority. Tax positions not deemed to meet the more than- likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Interest and penalty related to income taxes would be recorded as income tax expense. Management of the Funds is required to analyze all open tax years, as defined by IRS statute of limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of June 30, 2018, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examination in progress and are not aware of any tax positions for which it is reasonably possible that the amounts of unrecognized tax benefits will significantly change in the next twelve months.
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation) for federal income tax purposes were as follows:
Fund | | Federal Tax Cost of Investments | | | Gross Unrealized Appreciation | | | Gross Unrealized Depreciation | | | Net Unrealized Appreciation (Depreciation) | |
GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | | $ | 29,529,802 | | | $ | 1,598 | | | $ | (1,035 | ) | | $ | 563 | |
GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF | | | 7,499,309 | | | | 376 | | | | (363 | ) | | | 13 | |
10. INDEMNIFICATION
In the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. Management expects this risk of loss due to be remote.
11. PRINCIPAL RISKS
The Fund is “non-diversified,” meaning that a relatively high percentage of its assets may be invested in a limited number of issuers of securities.
In the normal course of business, each Fund makes investments in financial instruments where the risk of potential loss exists due to changes in the market. The following is a description of select risks of investing in the Funds.
Fixed Income Securities: The Fund will invest in Fixed Income Securities. The Fixed Income Securities in which the Fund may invest include U.S. government securities, U.S. government agency securities, corporate bonds, debentures and notes, mortgage-backed and other asset-backed securities, event-linked bonds, bank certificates of deposit, fixed time deposits, bankers’ acceptances, commercial paper and other short-term fixed income securities with maturities of up to two years. The Fund’s Fixed Income Securities earn interest income for the Fund and can be used as collateral (also referred to as “margin”) for the Fund’s investments in Commodity Futures. The Fund does not target a specific duration or maturity for the debt securities in which it invests. The average duration of the portfolio of Fixed Income Securities will vary based on interest rates.
Commodity-linked derivative instruments: Commodities are assets that have tangible properties, such as oil, metals, and agricultural products. A commodity-linked instrument is a financial instrument whose value is linked to the movement of a commodity, commodity index, or commodity futures contract. The value of commodity-linked instruments may be affected by overall market movements and other factors affecting the value of a particular industry or commodity, such as weather, disease, embargoes, or political and regulatory developments.
● | Commodity Futures:The Funds expect to gain exposure to the commodity futures markets initially by investing in Commodity Futures through the Subsidiary. A Commodity Futures contract is a standardized contract traded on, or subject to the rules of, an exchange that calls for the future delivery of a specified quantity and type of underlying commodity at a specified time and place or, alternatively, may call for cash settlement. |
The Funds’ prospectus contains additional information regarding risks associated with investments in the Funds.
12. SUBSEQUENT EVENTS
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
GraniteShares ETF Trust
GraniteShares HIPS US High Income ETF
December 31, 2018 (Unaudited)
Investments | | Shares | | | Value | |
|
COMMON STOCKS – 85.6% |
|
Capital Markets – 16.4% | | | | | | | | |
AllianceBernstein Holding LP(a) | | | 808 | | | $ | 22,075 | |
Apollo Global Management LLC, Class A(a) | | | 3,401 | | | | 83,461 | |
Apollo Investment Corp. | | | 577 | | | | 7,155 | |
Ares Capital Corp. | | | 3,466 | | | | 54,000 | |
Ares Management Corp., Class A | | | 1,274 | | | | 22,652 | |
Artisan Partners Asset Management, Inc., Class A | | | 595 | | | | 13,155 | |
Barings BDC, Inc. | | | 416 | | | | 3,748 | |
BlackRock Capital Investment Corp. | | | 561 | | | | 2,968 | |
BlackRock TCP Capital Corp. | | | 478 | | | | 6,233 | |
Blackstone Group LP (The)(a) | | | 9,956 | | | | 296,788 | |
BrightSphere Investment Group PLC | | | 652 | | | | 6,963 | |
Carlyle Group LP (The)(a) | | | 2,886 | | | | 45,454 | |
Cohen & Steers, Inc. | | | 177 | | | | 6,075 | |
Diamond Hill Investment Group, Inc. | | | 27 | | | | 4,035 | |
Eaton Vance Corp. | | | 950 | | | | 33,421 | |
Ellington Financial LLC(a) | | | 228 | | | | 3,495 | |
Federated Investors, Inc., Class B | | | 776 | | | | 20,603 | |
Franklin Resources, Inc. | | | 2,452 | | | | 72,726 | |
FS KKR Capital Corp. | | | 1,893 | | | | 9,806 | |
Goldman Sachs BDC, Inc. | | | 325 | | | | 5,974 | |
Golub Capital BDC, Inc. | | | 488 | | | | 8,047 | |
Hercules Capital, Inc. | | | 777 | | | | 8,586 | |
Invesco Ltd. | | | 3,406 | | | | 57,016 | |
Janus Henderson Group PLC (United Kingdom) | | | 1,373 | | | | 28,449 | |
Legg Mason, Inc. | | | 703 | | | | 17,934 | |
Main Street Capital Corp. | | | 469 | | | | 15,857 | |
New Mountain Finance Corp. | | | 562 | | | | 7,070 | |
Oaktree Capital Group LLC(a) | | | 1,288 | | | | 51,198 | |
Oaktree Specialty Lending Corp. | | | 957 | | | | 4,048 | |
Och-Ziff Capital Management Group LLC, Class A(a) | | | 3,431 | | | | 3,157 | |
PennantPark Floating Rate Capital Ltd. | | | 313 | | | | 3,621 | |
PennantPark Investment Corp. | | | 558 | | | | 3,554 | |
Prospect Capital Corp. | | | 2,513 | | | | 15,857 | |
Solar Capital Ltd. | | | 337 | | | | 6,467 | |
TCG BDC, Inc. | | | 488 | | | | 6,051 | |
TPG Specialty Lending, Inc. | | | 398 | | | | 7,200 | |
Victory Capital Holdings, Inc., Class A* | | | 549 | | | | 5,611 | |
Waddell & Reed Financial, Inc., Class A | | | 637 | | | | 11,517 | |
Total Capital Markets | | | | | | | 982,027 | |
Diversified Financial Services – 0.0%† | | | | | | | | |
Nuveen LLC, Escrow Shares*(b) | | | 338 | | | | 0 | |
Energy Equipment & Services – 6.6% | | | | | | | | |
Archrock, Inc. | | | 900 | | | $ | 6,741 | |
Helmerich & Payne, Inc. | | | 765 | | | | 36,674 | |
Schlumberger Ltd. | | | 9,655 | | | | 348,352 | |
USA Compression Partners LP(a) | | | 257 | | | | 3,336 | |
Total Energy Equipment & Services | | | | | | | 395,103 | |
Equity Real Estate Investment – 36.3%(c) | | | | | | | | |
Alexander & Baldwin, Inc.*(d) | | | 544 | | | | 9,999 | |
Alexander's, Inc.(d) | | | 31 | | | | 9,447 | |
American Campus Communities, Inc.(d) | | | 1,119 | | | | 46,315 | |
Apple Hospitality REIT, Inc.(d) | | | 1,747 | | | | 24,912 | |
Armada Hoffler Properties, Inc.(d) | | | 405 | | | | 5,694 | |
See accompanying notes to financial statements.
GraniteShares ETF Trust
GraniteShares HIPS US High Income ETF (continued)
December 31, 2018 (Unaudited)
Investments | | Shares | | | Value | |
| | | | | | | | |
COMMON STOCKS (continued) | | | | | | | | |
| | | | | | | | |
Equity Real Estate Investment (continued) | | | | | | | | |
Brandywine Realty Trust(d) | | | 1,455 | | | $ | 18,726 | |
Brixmor Property Group, Inc.(d) | | | 2,449 | | | | 35,976 | |
CatchMark Timber Trust, Inc., Class A(d) | | | 396 | | | | 2,812 | |
Chesapeake Lodging Trust(d) | | | 473 | | | | 11,518 | |
Colony Capital, Inc.(d) | | | 4,019 | | | | 18,809 | |
CoreCivic, Inc.(d) | | | 972 | | | | 17,331 | |
CorEnergy Infrastructure Trust, Inc.(d) | | | 98 | | | | 3,242 | |
CoreSite Realty Corp.(d) | | | 393 | | | | 34,281 | |
Corporate Office Properties Trust(d) | | | 889 | | | | 18,696 | |
DiamondRock Hospitality Co.(d) | | | 1,680 | | | | 15,254 | |
EPR Properties(d) | | | 610 | | | | 39,058 | |
Equity Commonwealth(d) | | | 995 | | | | 29,860 | |
Four Corners Property Trust, Inc.(d) | | | 552 | | | | 14,462 | |
Front Yard Residential Corp.(d) | | | 406 | | | | 3,544 | |
Gaming and Leisure Properties, Inc.(d) | | | 1,632 | | | | 52,730 | |
GEO Group, Inc. (The)(d) | | | 1,007 | | | | 19,838 | |
Gladstone Commercial Corp.(d) | | | 233 | | | | 4,175 | |
Global Net Lease, Inc.(d) | | | 628 | | | | 11,065 | |
Hannon Armstrong Sustainable Infrastructure Capital, Inc.(d) | | | 492 | | | | 9,373 | |
Highwoods Properties, Inc.(d) | | | 845 | | | | 32,693 | |
Hospitality Properties Trust(d) | | | 1,351 | | | | 32,262 | |
Host Hotels & Resorts, Inc.(d) | | | 5,965 | | | | 99,437 | |
Independence Realty Trust, Inc.(d) | | | 729 | | | | 6,692 | |
InfraREIT, Inc.(d) | | | 319 | | | | 6,705 | |
Investors Real Estate Trust(d) | | | 98 | | | | 4,809 | |
Iron Mountain, Inc.(d) | | | 2,329 | | | | 75,483 | |
Jernigan Capital, Inc.(d) | | | 151 | | | | 2,993 | |
Kimco Realty Corp.(d) | | | 3,448 | | | | 50,513 | |
Kite Realty Group Trust(d) | | | 654 | | | | 9,215 | |
Lexington Realty Trust(d) | | | 1,702 | | | | 13,973 | |
Life Storage, Inc.(d) | | | 384 | | | | 35,708 | |
Macerich Co. (The)(d) | | | 849 | | | | 36,745 | |
MGM Growth Properties LLC, Class A(d) | | | 2,180 | | | | 57,574 | |
Monmouth Real Estate Investment Corp., Class A(d) | | | 757 | | | | 9,387 | |
National Storage Affiliates Trust(d) | | | 725 | | | | 19,184 | |
One Liberty Properties, Inc.(d) | | | 119 | | | | 2,882 | |
Outfront Media, Inc.(d) | | | 1,130 | | | | 20,476 | |
Park Hotels & Resorts, Inc.(d) | | | 1,629 | | | | 42,321 | |
Pebblebrook Hotel Trust(d) | | | 1,396 | | | | 39,521 | |
Piedmont Office Realty Trust, Inc., Class A(d) | | | 1,051 | | | | 17,909 | |
PotlatchDeltic Corp.(d) | | | 519 | | | | 16,421 | |
Preferred Apartment Communities, Inc., Class A(d) | | | 335 | | | | 4,710 | |
QTS Realty Trust, Inc., Class A(d) | | | 421 | | | | 15,598 | |
Retail Opportunity Investments Corp.(d) | | | 931 | | | | 14,784 | |
Retail Properties of America, Inc., Class A(d) | | | 1,769 | | | | 19,194 | |
RLJ Lodging Trust(d) | | | 1,424 | | | | 23,354 | |
Ryman Hospitality Properties, Inc.(d) | | | 418 | | | | 27,876 | |
Simon Property Group, Inc.(d) | | | 2,553 | | | | 428,878 | |
SITE Centers Corp.(d) | | | 1,200 | | | | 13,284 | |
Spirit Realty Capital, Inc.(d) | | | 702 | | | | 24,746 | |
STAG Industrial, Inc.(d) | | | 932 | | | | 23,188 | |
See accompanying notes to financial statements.
GraniteShares ETF Trust
GraniteShares HIPS US High Income ETF (continued)
December 31, 2018 (Unaudited)
Investments | | Shares | | | Value | |
| | | | | | |
COMMON STOCKS (continued) | | | | | | | | |
| | | | | | | | |
Equity Real Estate Investment (continued) | | | | | | | | |
STORE Capital Corp.(d) | | | 1,549 | | | $ | 43,852 | |
Summit Hotel Properties, Inc.(d) | | | 813 | | | | 7,910 | |
Sunstone Hotel Investors, Inc.(d) | | | 1,841 | | | | 23,951 | |
Tanger Factory Outlet Centers, Inc.(d) | | | 763 | | | | 15,428 | |
Taubman Centers, Inc.(d) | | | 500 | | | | 22,745 | |
UMH Properties, Inc.(d) | | | 282 | | | | 3,339 | |
Uniti Group, Inc.(d) | | | 1,506 | | | | 23,448 | |
Urban Edge Properties(d) | | | 945 | | | | 15,706 | |
VEREIT, Inc.(d) | | | 7,850 | | | | 56,128 | |
Washington Real Estate Investment Trust(d) | | | 649 | | | | 14,927 | |
Weingarten Realty Investors(d) | | | 976 | | | | 24,215 | |
Weyerhaeuser Co.(d) | | | 6,196 | | | | 135,445 | |
WP Carey, Inc.(d) | | | 1,300 | | | | 84,942 | |
Xenia Hotels & Resorts, Inc.(d) | | | 912 | | | | 15,686 | |
Total Equity Real Estate Investment | | | | | | | 2,173,354 | |
| | | | | | | | |
Mortgage Real Estate Investment – 8.2% | | | | | | | | |
AGNC Investment Corp.(d) | | | 4,271 | | | | 74,913 | |
Annaly Capital Management, Inc.(d) | | | 10,637 | | | | 104,455 | |
Apollo Commercial Real Estate Finance, Inc.(d) | | | 908 | | | | 15,127 | |
Arbor Realty Trust, Inc.(d) | | | 724 | | | | 7,291 | |
ARMOUR Residential REIT, Inc.(d) | | | 345 | | | | 7,073 | |
Blackstone Mortgage Trust, Inc., Class A(d) | | | 992 | | | | 31,605 | |
Capstead Mortgage Corp.(d) | | | 736 | | | | 4,909 | |
Chimera Investment Corp.(d) | | | 1,523 | | | | 27,140 | |
Colony Credit Real Estate, Inc.(d) | | | 1,025 | | | | 16,185 | |
Granite Point Mortgage Trust, Inc.(d) | | | 351 | | | | 6,329 | |
Invesco Mortgage Capital, Inc.(d) | | | 900 | | | | 13,032 | |
KKR Real Estate Finance Trust, Inc.(d) | | | 229 | | | | 4,385 | |
Ladder Capital Corp.(d) | | | 796 | | | | 12,314 | |
MFA Financial, Inc.(d) | | | 3,672 | | | | 24,529 | |
New Residential Investment Corp.(d) | | | 2,961 | | | | 42,076 | |
New York Mortgage Trust, Inc.(d) | | | 1,269 | | | | 7,475 | |
PennyMac Mortgage Investment Trust(d) | | | 495 | | | | 9,217 | |
Redwood Trust, Inc.(d) | | | 673 | | | | 10,142 | |
Starwood Property Trust, Inc.(d) | | | 2,244 | | | | 44,229 | |
TPG RE Finance Trust, Inc.(d) | | | 343 | | | | 6,270 | |
Two Harbors Investment Corp.(d) | | | 2,004 | | | | 25,731 | |
Total Mortgage Real Estate Investment | | | | | | | 494,427 | |
| | | | | | | | |
Oil, Gas & Consumable Fuels – 18.1% | | | | | | | | |
Alliance Resource Partners LP(a) | | | 738 | | | | 12,797 | |
Andeavor Logistics LP(a) | | | 599 | | | | 19,462 | |
Antero Midstream Partners LP(a) | | | 608 | | | | 13,005 | |
Black Stone Minerals LP(a) | | | 1,142 | | | | 17,678 | |
Buckeye Partners LP(a) | | | 1,055 | | | | 30,584 | |
CNX Midstream Partners LP(a) | | | 198 | | | | 3,223 | |
Crestwood Equity Partners LP(a) | | | 334 | | | | 9,322 | |
CVR Energy, Inc. | | | 203 | | | | 6,999 | |
CVR Refining LP(a) | | | 180 | | | | 1,877 | |
DCP Midstream LP(a) | | | 618 | | | | 16,371 | |
Dominion Energy Midstream Partners LP(a) | | | 424 | | | | 7,649 | |
Enable Midstream Partners LP(a) | | | 296 | | | | 4,005 | |
Energy Transfer LP(a) | | | 16,767 | | | | 221,492 | |
EnLink Midstream LLC | | | 488 | | | | 4,631 | |
EnLink Midstream Partners LP(a) | | | 2,436 | | | | 26,820 | |
See accompanying notes to financial statements.
GraniteShares ETF Trust
GraniteShares HIPS US High Income ETF (continued)
December 31, 2018 (Unaudited)
Investments | | Shares | | | Value | |
| | | | | | |
COMMON STOCKS (continued) | | | | | | | | |
| | | | | | | | |
Oil, Gas & Consumable Fuels (continued) | | | | | | | | |
Enterprise Products Partners LP(a) | | | 10,330 | | | $ | 254,015 | |
EQM Midstream Partners LP(a) | | | 462 | | | | 19,981 | |
Genesis Energy LP(a) | | | 750 | | | | 13,853 | |
Holly Energy Partners LP(a) | | | 312 | | | | 8,911 | |
Magellan Midstream Partners LP(a) | | | 1,604 | | | | 91,524 | |
MPLX LP(a) | | | 1,965 | | | | 59,540 | |
NGL Energy Partners LP(a) | | | 826 | | | | 7,921 | |
Noble Midstream Partners LP(a) | | | 253 | | | | 7,297 | |
NuStar Energy LP(a) | | | 616 | | | | 12,893 | |
SemGroup Corp., Class A | | | 489 | | | | 6,738 | |
Shell Midstream Partners LP(a) | | | 855 | | | | 14,031 | |
Ship Finance International Ltd. (Norway) | | | 636 | | | | 6,697 | |
Sunoco LP(a) | | | 398 | | | | 10,822 | |
Tallgrass Energy LP, Class A | | | 1,805 | | | | 43,934 | |
Targa Resources Corp. | | | 1,599 | | | | 57,596 | |
TC PipeLines LP(a) | | | 371 | | | | 11,917 | |
Viper Energy Partners LP(a) | | | 905 | | | | 23,566 | |
Western Gas Equity Partners LP(a) | | | 328 | | | | 9,095 | |
Western Gas Partners LP(a) | | | 733 | | | | 30,955 | |
Total Oil, Gas & Consumable Fuels | | | | | | | 1,087,201 | |
| | | | | | | | |
Total Common Stocks (Cost $5,558,413) | | | | | | | 5,132,112 | |
| | | | | | | | |
INVESTMENT COMPANIES – 13.5% | | | | | | | | |
Aberdeen Global Premier Properties Fund | | | 696 | | | | 3,466 | |
Aberdeen Total Dynamic Dividend Fund | | | 860 | | | | 6,201 | |
Advent Claymore Convertible Securities and Income Fund | | | 283 | | | | 3,549 | |
AllianceBernstein Global High Income Fund, Inc. | | | 699 | | | | 7,360 | |
AllianceBernstein National Municipal Income Fund, Inc. | | | 231 | | | | 2,802 | |
AllianzGI Convertible & Income Fund | | | 729 | | | | 3,783 | |
BlackRock California Municipal Income Trust | | | 258 | | | | 3,088 | |
BlackRock Core Bond Trust | | | 435 | | | | 5,307 | |
BlackRock Corporate High Yield Fund, Inc. | | | 995 | | | | 9,234 | |
BlackRock Credit Allocation Income Trust | | | 843 | | | | 9,425 | |
BlackRock Debt Strategies Fund, Inc. | | | 424 | | | | 4,142 | |
BlackRock Enhanced Global Dividend Trust | | | 552 | | | | 5,172 | |
BlackRock Floating Rate Income Strategies Fund, Inc. | | | 300 | | | | 3,570 | |
BlackRock Income Trust, Inc. | | | 517 | | | | 2,916 | |
BlackRock Limited Duration Income Trust | | | 294 | | | | 3,931 | |
BlackRock Multi-Sector Income Trust | | | 302 | | | | 4,639 | |
BlackRock Muni Intermediate Duration Fund, Inc. | | | 307 | | | | 3,884 | |
BlackRock MuniAssets Fund, Inc. | | | 291 | | | | 3,745 | |
BlackRock Municipal 2030 Target Term Trust | | | 568 | | | | 11,650 | |
BlackRock Municipal Income Quality Trust | | | 212 | | | | 2,646 | |
See accompanying notes to financial statements.
GraniteShares ETF Trust
GraniteShares HIPS US High Income ETF (continued)
December 31, 2018 (Unaudited)
Investments | | Shares | | | Value | |
| | | | | | |
INVESTMENT COMPANIES (continued) | | | | | | | | |
BlackRock Municipal Income Trust | | | 363 | | | $ | 4,425 | |
BlackRock MuniHoldings California Quality Fund, Inc. | | | 331 | | | | 4,081 | |
BlackRock MuniHoldings Investment Quality Fund | | | 305 | | | | 3,886 | |
BlackRock MuniHoldings New Jersey Quality Fund, Inc. | | | 242 | | | | 3,044 | |
BlackRock MuniHoldings New York Quality Fund, Inc. | | | 250 | | | | 2,995 | |
BlackRock MuniVest Fund, Inc. | | | 524 | | | | 4,328 | |
BlackRock MuniYield California Quality Fund, Inc. | | | 278 | | | | 3,514 | |
BlackRock MuniYield Fund, Inc. | | | 380 | | | | 4,758 | |
BlackRock MuniYield Michigan Quality Fund, Inc. | | | 239 | | | | 2,968 | |
BlackRock MuniYield New York Quality Fund, Inc. | | | 319 | | | | 3,675 | |
BlackRock MuniYield Quality Fund III, Inc. | | | 551 | | | | 6,640 | |
BlackRock MuniYield Quality Fund, Inc. | | | 247 | | | | 3,206 | |
BlackRock Resources & Commodities Strategy Trust | | | 771 | | | | 5,443 | |
BlackRock Taxable Municipal Bond Trust | | | 458 | | | | 9,627 | |
Blackstone / GSO Strategic Credit Fund | | | 361 | | | | 4,863 | |
Brookfield Real Assets Income Fund, Inc. | | | 294 | | | | 5,607 | |
ClearBridge MLP & Midstream Fund, Inc. | | | 576 | | | | 5,996 | |
Cohen & Steers Limited Duration Preferred and Income Fund, Inc. | | | 235 | | | | 5,125 | |
Cohen & Steers REIT and Preferred Income Fund, Inc. | | | 385 | | | | 6,853 | |
DoubleLine Income Solutions Fund | | | 830 | | | | 14,384 | |
Dreyfus Strategic Municipal Bond Fund, Inc. | | | 396 | | | | 2,764 | |
Dreyfus Strategic Municipals, Inc. | | | 501 | | | | 3,597 | |
DWS Municipal Income Trust | | | 319 | | | | 3,286 | |
Eaton Vance Floating-Rate Income Trust | | | 326 | | | | 4,127 | |
Eaton Vance Limited Duration Income Fund | | | 937 | | | | 11,169 | |
Eaton Vance Municipal Bond Fund | | | 546 | | | | 6,164 | |
Eaton Vance Senior Floating-Rate Trust | | | 299 | | | | 3,752 | |
Eaton Vance Tax-Advantaged Dividend Income Fund | | | 597 | | | | 11,337 | |
Eaton Vance Tax-Advantaged Global Dividend Income Fund | | | 629 | | | | 8,517 | |
First Trust High Income Long/Short Fund | | | 282 | | | | 3,745 | |
First Trust Intermediate Duration Preferred & Income Fund | | | 495 | | | | 9,801 | |
Flaherty & Crumrine Dynamic Preferred and Income Fund, Inc. | | | 154 | | | | 3,137 | |
Flaherty & Crumrine Preferred Securities Income Fund, Inc. | | | 358 | | | | 5,989 | |
Gabelli Dividend & Income Trust (The) | | | 667 | | | | 12,206 | |
Gabelli Equity Trust, Inc. | | | 2,063 | | | | 10,521 | |
Gabelli Utility Trust | | | 435 | | | | 2,584 | |
See accompanying notes to financial statements.
GraniteShares ETF Trust
GraniteShares HIPS US High Income ETF (continued)
December 31, 2018 (Unaudited)
Investments | | Shares | | | Value | |
| | | | | | |
INVESTMENT COMPANIES (continued) | | | | | | | | |
Guggenheim Strategic Opportunities Fund | | | 258 | | | $ | 4,714 | |
Highland Floating Rate Opportunities Fund | | | 589 | | | | 7,539 | |
India Fund, Inc. (The) | | | 218 | | | | 4,412 | |
Invesco Advantage Municipal Income Trust II | | | 357 | | | | 3,524 | |
Invesco California Value Municipal Income Trust | | | 386 | | | | 4,366 | |
Invesco Dynamic Credit Opportunities Fund | | | 602 | | | | 6,183 | |
Invesco Municipal Opportunity Trust | | | 543 | | | | 6,071 | |
Invesco Municipal Trust | | | 449 | | | | 5,002 | |
Invesco Quality Municipal Income Trust | | | 428 | | | | 4,802 | |
Invesco Trust for Investment Grade Municipals | | | 438 | | | | 5,028 | |
Invesco Value Municipal Income Trust | | | 378 | | | | 5,111 | |
John Hancock Financial Opportunities Fund | | | 152 | | | | 4,245 | |
John Hancock Preferred Income Fund | | | 214 | | | | 4,032 | |
John Hancock Preferred Income Fund II | | | 174 | | | | 3,262 | |
John Hancock Preferred Income Fund III | | | 259 | | | | 4,103 | |
John Hancock Premium Dividend Fund | | | 393 | | | | 5,447 | |
John Hancock Tax-Advantaged Dividend Income Fund | | | 301 | | | | 6,146 | |
Kayne Anderson MLP/Midstream Investment Co. | | | 802 | | | | 11,035 | |
Liberty All-Star Equity Fund | | | 1,612 | | | | 8,673 | |
MainStay MacKay DefinedTerm Municipal Opportunities Fund | | | 222 | | | | 4,333 | |
MFS Charter Income Trust | | | 436 | | | | 3,196 | |
MFS Multimarket Income Trust | | | 625 | | | | 3,200 | |
Morgan Stanley Emerging Markets Domestic Debt Fund, Inc. | | | 545 | | | | 3,303 | |
NexPoint Strategic Opportunities Fund | | | 261 | | | | 5,202 | |
Nuveen AMT-Free Municipal Credit Income Fund | | | 1,625 | | | | 22,717 | |
Nuveen AMT-Free Quality Municipal Income Fund | | | 2,131 | | | | 26,233 | |
Nuveen California AMT-Free Quality Municipal Income Fund | | | 386 | | | | 4,894 | |
Nuveen California Quality Municipal Income Fund | | | 1,176 | | | | 14,994 | |
Nuveen Credit Strategies Income Fund | | | 1,093 | | | | 8,088 | |
Nuveen Enhanced Municipal Value Fund | | | 202 | | | | 2,600 | |
Nuveen Floating Rate Income Fund | | | 465 | | | | 4,292 | |
Nuveen Floating Rate Income Opportunity Fund | | | 388 | | | | 3,500 | |
Nuveen High Income November 2021 Target Term Fund | | | 454 | | | | 4,041 | |
Nuveen Intermediate Duration Municipal Term Fund | | | 384 | | | | 4,754 | |
Nuveen Mortgage Opportunity Term Fund | | | 130 | | | | 2,905 | |
Nuveen Municipal Credit Income Fund | | | 1,151 | | | | 15,446 | |
Nuveen Municipal High Income Opportunity Fund | | | 518 | | | | 6,029 | |
See accompanying notes to financial statements.
GraniteShares ETF Trust
GraniteShares HIPS US High Income ETF (continued)
December 31, 2018 (Unaudited)
Investments | | Shares | | | Value | |
| | | | | | |
INVESTMENT COMPANIES (continued) | | | | | | | | |
Nuveen Municipal Value Fund, Inc. | | | 1,657 | | | $ | 15,360 | |
Nuveen New Jersey Quality Municipal Income Fund | | | 339 | | | | 4,319 | |
Nuveen New York AMT-Free Quality Municipal Income Fund | | | 709 | | | | 8,260 | |
Nuveen New York Quality Municipal Income Fund | | | 251 | | | | 3,075 | |
Nuveen Pennsylvania Quality Municipal Income Fund | | | 304 | | | | 3,709 | |
Nuveen Preferred & Income Opportunities Fund | | | 834 | | | | 6,956 | |
Nuveen Preferred & Income Securities Fund | | | 1,634 | | | | 13,529 | |
Nuveen Preferred & Income Term Fund | | | 182 | | | | 3,680 | |
Nuveen Quality Municipal Income Fund | | | 1,628 | | | | 20,415 | |
Nuveen Real Asset Income and Growth Fund | | | 225 | | | | 3,067 | |
Nuveen Taxable Municipal Income Fund | | | 215 | | | | 4,162 | |
PGIM Global Short Duration High Yield Fund, Inc. | | | 333 | | | | 4,302 | |
PGIM Short Duration High Yield Fund, Inc. | | | 270 | | | | 3,518 | |
PIMCO Corporate & Income Opportunity Fund | | | 678 | | | | 10,400 | |
PIMCO Corporate & Income Strategy Fund | | | 317 | | | | 4,720 | |
PIMCO Dynamic Credit and Mortgage Income Fund | | | 1,097 | | | | 23,092 | |
PIMCO Dynamic Income Fund | | | 456 | | | | 13,306 | |
PIMCO High Income Fund | | | 1,056 | | | | 8,459 | |
PIMCO Income Opportunity Fund | | | 125 | | | | 3,174 | |
PIMCO Income Strategy Fund II | | | 487 | | | | 4,641 | |
PIMCO Municipal Income Fund II | | | 503 | | | | 6,695 | |
PIMCO Municipal Income Fund III | | | 266 | | | | 2,963 | |
PIMCO Strategic Income Fund, Inc. | | | 351 | | | | 3,398 | |
Putnam Managed Municipal Income Trust | | | 455 | | | | 3,058 | |
Putnam Municipal Opportunities Trust | | | 323 | | | | 3,627 | |
Reaves Utility Income Fund | | | 404 | | | | 11,890 | |
Templeton Emerging Markets Income Fund | | | 387 | | | | 3,723 | |
Templeton Global Income Fund | | | 1,076 | | | | 6,488 | |
Tortoise Energy Infrastructure Corp. | | | 399 | | | | 7,940 | |
Tortoise MLP Fund, Inc. | | | 384 | | | | 4,704 | |
Tri-Continental Corp. | | | 430 | | | | 10,114 | |
Voya Global Equity Dividend and Premium Opportunity Fund | | | 787 | | | | 4,612 | |
Wells Fargo Income Opportunities Fund | | | 545 | | | | 3,940 | |
Wells Fargo Multi-Sector Income Fund | | | 257 | | | | 2,850 | |
Western Asset Emerging Markets Debt Fund, Inc. | | | 488 | | | | 5,998 | |
Western Asset Global High Income Fund, Inc. | | | 363 | | | | 3,002 | |
Western Asset High Income Fund II, Inc. | | | 697 | | | | 4,015 | |
Western Asset Inflation-Linked Opportunities & Income Fund | | | 497 | | | | 5,045 | |
Western Asset Managed Municipals Fund, Inc. | | | 349 | | | | 4,432 | |
| | | | | | | | |
Total Investment Companies (Cost $862,181) | | | | | | | 812,684 | |
| | | | | | | | |
MONEY MARKET FUND – 1.0% | | | | | | | | |
| | | | | | | | |
BlackRock Treasury Trust, 2.22%(e) (Cost $57,694) | | | 57,694 | | | | 57,694 | |
| | | | | | | | |
Total Investments – 100.1% (Cost $6,478,288) | | | | | | | 6,002,490 | |
Liabilities in Excess of Other Assets – (0.1)% | | | | | | | (7,514 | ) |
Net Assets – 100.0% | | | | | | $ | 5,994,976 | |
See accompanying notes to financial statements.
GraniteShares ETF Trust
GraniteShares HIPS US High Income ETF (continued)
December 31, 2018 (Unaudited)
* | Non-income producing security. |
† | Amount rounds to less than 0.1% of net assets. |
(a) | Master Limited Partnership ("MLP") |
(b) | Fair valued using significant unobservable inputs. |
(c) | To the extent the Fund invests more heavily in particular sectors of the economy its performance will be especially sensitive to developments that significantly affect those sectors. |
(d) | Real Estate Investment Trust ("REIT") |
(e) | Rate shown reflects the 7-day yield as of December 31, 2018. |
The following table summarizes valuation of the Fund's investments under the fair value hierarchy levels as of December 31, 2018:
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Asset Valuation Inputs | | | | | | | | | | | | | | | | |
Investments in Securities | | | | | | | | | | | | | | | | |
Common Stocks | | $ | 5,132,112 | | | $ | – | | | $ | – | (a) | | $ | 5,132,112 | |
Investment Companies | | | 812,684 | | | | – | | | | – | | | | 812,684 | |
Money Market Fund | | | 57,694 | | | | – | | | | – | | | | 57,694 | |
Total | | $ | 6,002,490 | | | $ | – | | | $ | – | | | $ | 6,002,490 | |
(a) | Includes securities determined to have no value at December 31, 2018. |
See accompanying notes to financial statements.
GraniteShares ETF Trust
Statement of Assets and Liabilities |
December 31, 2018 (Unaudited)
| | GraniteShares HIPS US High Income ETF | |
Assets: | | | | |
Investments at cost | | $ | 6,478,288 | |
Investments at value | | $ | 6,002,490 | |
Securities sold receivable | | | 1,467,767 | |
Dividends receivable | | | 39,219 | |
Total Assets | | | 7,509,476 | |
Liabilities: | | | | |
Payable to custodian | | | 667 | |
Securities purchased payable | | | 1,467,098 | |
Distributions to shareholders | | | 43,000 | |
Advisory fees payable | | | 3,735 | |
Total Liabilities | | | 1,514,500 | |
Net Assets | | $ | 5,994,976 | |
| | | | |
Net Assets Consist of: | | | | |
Paid-in capital | | $ | 7,237,037 | |
Distributable earnings/accumulated (loss) | | | (1,242,061 | ) |
Net Assets | | $ | 5,994,976 | |
| | | | |
Shares Outstanding | | | 400,000 | |
Net Asset Value per share | | $ | 14.99 | |
See accompanying notes to financial statements.
GraniteShares ETF Trust
| | GraniteShares HIPS US High Income ETF | |
| | Six Months Ended December 31, 2018 (Unaudited) | |
Investment Income: | | | | |
Dividends | | $ | 177,542 | |
Total Investment Income | | | 177,542 | |
Expenses: | | | | |
Advisory fees | | | 26,661 | |
Tax fees | | | 43 | |
Trustees’ fees | | | 858 | |
CCO fees | | | 1,333 | |
Total Expenses | | | 28,895 | |
Expense Reimbursement | | | (2,191 | ) |
Net Expenses | | | 26,704 | |
Net Investment Income | | | 150,838 | |
Net Realized and Unrealized Gain (Loss) on: | | | | |
Net realized gain (loss) on: | | | | |
Investments | | | (355,295 | ) |
Distributions by other investment companies | | | 167 | |
In-Kind redemptions | | | 44,750 | |
Net realized loss | | | (310,378 | ) |
Net change in unrealized depreciation: | | | | |
Investments | | | (525,191 | ) |
Net change in unrealized depreciation | | | (525,191 | ) |
Net Realized and Unrealized Loss | | | (835,569 | ) |
Net Decrease in Net Assets Resulting from Operations | | $ | (684,731 | ) |
See accompanying notes to financial statements.
GraniteShares ETF Trust
Statements of Changes in Net Assets |
| | GraniteShares HIPS US High Income ETF | |
| | Six Months Ended December 31, 2018 (Unaudited) | | | Year Ended June 30, 2018* | |
Operations: | | | | | | | | |
Net investment income | | $ | 150,838 | | | $ | 151,063 | |
Net realized gain (loss) | | | (310,378 | ) | | | 135,532 | |
Net change in unrealized loss | | | (525,191 | ) | | | (25,385 | ) |
Net Increase (Decrease) in Net Assets Resulting from Operations | | | (684,731 | ) | | | 261,210 | |
| | | | | | | | |
Distributions to shareholders | | | (284,875 | ) | | | (299,833 | ) |
Tax return of capital to shareholders | | | — | | | | (87,167 | ) |
Total distributions to shareholders | | | (284,875 | ) | | | (387,000 | )** |
| | | | | | | | |
From share transactions: | | | | | | | | |
Cost of shares redeemed | | | (821,410 | ) | | | (2,581,936 | ) |
| | | | | | | | |
Total Decrease in net assets | | | (1,791,016 | ) | | | (2,707,726 | ) |
| | | | | | | | |
Net Assets: | | | | | | | | |
Beginning of period | | | 7,785,992 | | | | 10,493,718 | |
End of period | | $ | 5,994,976 | | | $ | 7,785,992 | *** |
| | | | | | | | |
Changes in Shares Outstanding: | | | | | | | | |
Shares outstanding, beginning of period | | | 450,000 | | | | 600,000 | |
Shares sold | | | — | | | | — | |
Shares redeemed | | | (50,000 | ) | | | (150,000 | ) |
Shares outstanding, end of period | | | 400,000 | | | | 450,000 | |
* | For the period December 1, 2017 to June 30, 2018. |
** | Includes distributions from net investment income. |
*** | Includes distributions in excess of net investment income of $(267,756). |
See accompanying notes to financial statements.
GraniteShares ETF Trust
| | Six Months Ended December 31, 2018 | | | Year Ended June 30, | | | Year Ended November 30, | | | For the Period from January 6, 2015*to November | |
GraniteShares HIPS US High Income ETF | | (Unaudited) | | | 2018(a) | | | 2017 | | | 2016 | | | 30, 2015 | |
Operating Performance: | | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of year/period | | $ | 17.30 | | | $ | 17.49 | | | $ | 17.41 | | | $ | 16.54 | | | $ | 20.00 | |
Net investment income(b) | | | 0.34 | | | | 0.29 | | | | 0.57 | | | | 0.74 | | | | 0.63 | |
Distributions of net realized gains from investments in other investment companies | | | – | (d) | | | – | (d) | | | – | | | | – | | | | – | |
Net realized and unrealized gain (loss)(c) | | | (2.00 | ) | | | 0.27 | | | | 0.80 | | | | 1.42 | | | | (3.01 | ) |
Total gain (loss) from investment operations | | | (1.66 | ) | | | 0.56 | | | | 1.37 | | | | 2.16 | | | | (2.38 | ) |
Less distributions from: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | (0.65 | ) | | | (0.58 | ) | | | (0.48 | ) | | | (0.85 | ) | | | (0.59 | ) |
Tax return of capital to shareholders | | | — | | | | (0.17 | ) | | | (0.81 | ) | | | (0.44 | ) | | | (0.49 | ) |
Total distributions | | | (0.65 | ) | | | (0.75 | ) | | | (1.29 | ) | | | (1.29 | ) | | | (1.08 | ) |
Net asset value, end of year/period | | $ | 14.99 | | | $ | 17.30 | | | $ | 17.49 | | | $ | 17.41 | | | $ | 16.54 | |
Total Return(e) | | | (10.01 | )%(f) | | | 3.38 | %(f) | | | 7.87 | % | | | 14.02 | % | | | (12.39 | )%(f) |
Ratios to Average Net Assets and Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net assets, end of year/period (in 000’s) | | $ | 5,995 | | | $ | 7,786 | | | $ | 10,494 | | | $ | 6,966 | | | $ | 4,962 | |
Ratio of net investment income to average net assets | | | 3.96 | %(g) | | | 2.92 | %(g) | | | 3.18 | % | | | 4.49 | % | | | 3.72 | %(g) |
Ratio of investment income (loss) excluding tax expense to average net assets | | | 3.96 | %(g) | | | 2.92 | %(g) | | | 3.18 | % | | | 4.50 | % | | | 3.72 | %(g) |
Ratio of operating expenses before waivers/reimbursements | | | 0.76 | %(g) | | | 0.98 | %(g) | | | 0.75 | % | | | 0.76 | % | | | 0.75 | %(g) |
Ratio of net operating expenses net of waivers/reimbursements | | | 0.70 | %(g) | | | 0.70 | %(g) | | | 0.75 | % | | | 0.75 | % | | | 0.75 | %(g) |
Portfolio turnover rate | | | 28 | %(f) | | | 33 | %(f) | | | 88 | % | | | 54 | % | | | 23 | %(f) |
* | Commencement of operations. |
(a) | For the period December 1, 2017 to June 30, 2018. |
(b) | Per share data is calculated using the average daily shares outstanding method. |
(c) | Calculation of the net gain (loss) per share (both realized and unrealized) does not correlate to the aggregate realized and unrealized losses presented in the Statement of Operations due to the timing of sales and repurchases of Fund shares in relation to fluctuating market values of the investments of the Fund. |
(d) | Amount represents less than $0.005 per share. |
(e) | Total return would have been lower if certain fees had not been reimbursed by the Advisor. |
(f) | Not annualized. |
(g) | Annualized. |
See accompanying notes to financial statements.
GraniteShares ETF Trust
Notes to Financial Statements
December 31, 2018 (unaudited)
1. ORGANIZATION
GraniteShares HIPS US High Income ETF (the “Fund”) is a diversified series of GraniteShares ETF Trust (the “Trust”), an open-end management investment company consisting of three investment series, organized as a Delaware statutory trust on November 7, 2016. The remaining Funds in the Trust is presented separately. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Fund’s shares is registered under the Securities Act of 1933, as amended (the “Securities Act”). The investment objective of the Fund is to track the performance, before fees and expenses, of the TFMS HIPS 300 Index (the “Index”). The Fund commenced operations on January 6, 2015.
On December 13, 2017, the shareholders of the Master Income ETF (the “Reorganizing Fund”), a series of the ETF Series Solutions, approved an Agreement and Plan of Reorganization providing for the transfer of all assets and liabilities of the Reorganizing Fund to the GraniteShares ETF Trust. The GraniteShares HIPS US High Income ETF, a new series of the Trust, assumed the financial and performance history of the Master Income ETF. The tax-free merger took place on December 15, 2017.
The Fund’s fiscal year was changed to June 30. As a result, the Fund had a shortened fiscal year covering the transitional period between the Fund’s prior fiscal year end November 30, 2017 and June 30, 2018.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The Fund follows the accounting and reporting guidance in the Accounting Standards Codifications 946, “Financial Services—Investment Companies” issued by the U.S. Financial Accounting Standards Board.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Investment Transactions and Investment Income: Investment transactions are recorded on the trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income, if any, is recorded on the ex-dividend date or, in the case of foreign securities, as soon as the Fund is informed of the ex-dividend dates. Interest income, including accretion of discounts and amortization of premiums, is recorded on the accrual basis. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable tax rules and regulations.
Distributions received from the Fund’s investments in master limited partnerships (“MLPs”) generally are comprised of ordinary income and return of capital from the MLPs. The Fund allocates distributions between investment income and return of capital based on estimates. Such estimates are based on information provided by each MLP and other industry sources. These estimates may subsequently be revised based on actual allocations received from MLPs after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Fund.
Distributions received from the Fund’s investments in real estate investment trusts (“REITs”) may be characterized as ordinary income, net capital gain, or a return of capital. The proper characterization of REIT distributions is generally not known until after the end of each calendar year. As such, the Fund must use estimates in reporting the character of its income and distributions for financial statement purposes. The actual character of distributions to the Fund’s shareholders will be reflected on the Form 1099 received by shareholders after the end of the calendar year. Due to the nature of REIT investments, a portion of the distributions received by the Fund’s shareholders may represent a return of capital.
Distributions received from the Fund’s investments in closed-end funds (“CEFs”) are recorded as ordinary income, net realized capital gain or return of capital based on information reported by the CEFs and management’s estimates of such amounts based on historical information. These estimates are adjusted with the tax returns after the actual source of distributions has been disclosed by the CEFs and may differ from the estimated amounts.
Dividend Distributions: Distributions to shareholders are recorded on the ex-dividend date and are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. The Fund distributes all or substantially all of its net investment income to shareholders in the form of dividends.
GraniteShares ETF Trust
Notes to Financial Statements (continued)
December 31, 2018 (unaudited)
3. SECURITIES VALUATION
The NAV per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding of the Fund, rounded to the nearest cent. The Fund’s shares will not be priced on the days on which the New York Stock Exchange Arca, Inc. (“NYSE Arca”) is closed for trading. The offering and redemption price per share for the Fund is equal to the Fund’s NAV per share.
Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the day that the value of the security is determined.
Investments in open-end mutual funds are valued at the closing NAV. Investments in closed-end funds are valued at closing quoted sale price or the official closing price of the day, respectively. Registered fund positions held by HIPS as at December 31, 2018 are represented by closed-ended (single class) registered funds.
Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Board or its delegate at fair value. These securities generally include but are not limited to, restricted securities (securities which may not be publicly sold without registration under the 1933 Act) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; a security whose market price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of each Fund net asset value (as may be the case in foreign markets on which the security is primarily traded) or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the pricing service, does not reflect the security’s “fair value.” A variety of factors may be considered in determining the fair value of such securities.
Valuing the Fund’s investments using fair value pricing will result in using prices for those investments that may differ from current market valuations.
4. FAIR VALUE MEASUREMENT
The Financial Accounting Standards Board (FASB) established a framework for measuring fair value in accordance with U.S. GAAP. Under Fair Value Measurements and Disclosures, various inputs are used in determining the value of the exchange traded fund’s investments. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three Levels of inputs of the fair value hierarchy are defined as follows:
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
GraniteShares ETF Trust
Notes to Financial Statements (continued)
December 31, 2018 (unaudited)
The hierarchy classification of inputs used to value the Fund’s investments at December 31, 2018 is disclosed at the end of the Fund’s Schedule of Investments.
5. ADVISORY AND OTHER AGREEMENTS
GraniteShares Advisors LLC, the investment adviser to the Fund, is a Delaware limited Liability Company located at 205 Hudson Street, 7th Floor, New York, NY 10013. The Adviser provides investment advisory services to exchange-traded funds. The Adviser serves as investment adviser to the Fund with overall responsibility for the portfolio management of the Fund, subject to the supervision of the Board of Trustees (the “Board”) of the Trust.
For its services, the Adviser receives a fee that is equal to 0.70% per annum of the average daily net assets of the Fund, calculated daily and paid monthly. Pursuant to the Advisory Agreement, the Adviser is responsible for substantially all expenses of each Fund (excluding interest, taxes, brokerage commissions, expenses related to short sales, other expenditures which are capitalized in accordance with generally accepted accounting principles, other extraordinary expenses not incurred in the ordinary course of each Fund’s business, and amounts, if any, payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act).
Pursuant to the Advisory Agreement, the Adviser has agreed to pay all expenses of the Fund, except for: (i) brokerage expenses and other fees, charges, taxes, levies or expenses (such as stamp taxes) incurred in connection with the execution of portfolio transactions or in connection with creation and redemption transactions; (ii) legal fees or expenses in connection with any arbitration, litigation or pending or threatened arbitration or litigation, including any settlements in connection therewith; (iii) compensation and expenses of the Independent Trustees; (iv) compensation and expenses of counsel to the Independent Trustees; (v) compensation and expenses of the Trust’s Chief Compliance Officer; (vi) extraordinary expenses; (vii) distribution fees and expenses paid by the Trust under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act; (viii) interest and taxes of any kind or nature; (ix) any fees and expenses related to the provision of securities lending services; and (x) the advisory fee payable to the Adviser under the Advisory Agreement.
During the period ended December 31, 2018, the Fund was reimbursed $14,960 through payments made from the Adviser.
GraniteShares Advisors LLC is the only related party involved with the operations of the Funds.
The Bank of New York Mellon (in each capacity, the “Administrator”, “Custodian,” “Accounting Agent” or “Transfer Agent”) serves as the Fund’s Administrator, Custodian, Accounting Agent and Transfer Agent pursuant to the Fund Administration and Accounting Agreement. The Bank of New York Mellon is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company.
Foreside Fund Services, LLC. (“Distributor”) serves as the Fund’s distributor. The Trust has adopted a distribution and service plan (“Rule 12b-1 Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Rule 12b-1 Plan, the Fund is authorized to pay an amount up to a maximum annual rate of 0.25% of its average net assets in connection with the sale and distribution of its shares and pay service fees in connection with the provision of ongoing services to shareholders. No distribution fees are currently charged to the Fund; there are no plans to impose these fees.
6. SHARE TRANSACTIONS
Shares of the Fund are listed and traded on NYSE Arca. Market prices for the shares may be different from their NAV. The Fund issues and redeems shares on a continuous basis at NAV only in blocks of 50,000 shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in a specified universe. Once created, shares generally trade in the secondary market at market prices that change throughout the day. Except when aggregated in Creation Units, shares are not redeemable securities of the Fund. Creation Units may only be purchased or redeemed 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 participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem shares directly from the Fund. Rather, most retail investors may purchase shares in the secondary market with the assistance of a broker and are subject to customary brokerage commissions or fees.
GraniteShares ETF Trust
Notes to Financial Statements (continued)
December 31, 2018 (unaudited)
The Fund currently offers one class of shares, which has no front-end sales load, no deferred sales charge, and no redemption fee. A fixed transaction fee is imposed for the transfer and other transaction costs associated with the purchase or sale of a Creation Unit. The standard fixed transaction fee for the Fund is $750, payable to the Custodian. In addition, a variable fee may be charged on all cash transactions or substitutes for Creation Units of up to a maximum of 2% of the value of the Creation Units subject to the transaction. Variable fees are imposed to compensate the Fund for the transaction costs associated with the cash transactions. There were no variable fees received during the year. The Fund may issue an unlimited number of shares of beneficial interest, with no par value. All shares of the Fund have equal rights and privileges.
7. INVESTMENT TRANSACTIONS
During the period ended December 31, 2018, purchases and sales of securities by the Fund, excluding short-term securities and in-kind transactions, were $2,058,527 and $2,067,428, respectively.
During the period ended December 31, 2018, in-kind transactions associated with redemptions were $817,194.
8. FEDERAL INCOME TAX MATTERS
The Fund intends to qualify as a ‘‘regulated investment company’’ under Subchapter M of the Internal Revenue Code of 1986, as amended. If so qualified, the Fund will not be subject to Federal income tax to the extent they distribute substantially all of their net investment income and net capital gains to its shareholders. Accounting for Uncertainty in Income Taxes provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements, and requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are ‘‘more-likely-than-not’’ of being sustained by the applicable tax authority. Tax positions not deemed to meet the more than- likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Interest and penalty related to income taxes would be recorded as income tax expense. Management of the Fund is required to analyze all open tax years, as defined by IRS statute of limitations, for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of June 30, 2018, the Fund did not have a liability for any unrecognized tax benefits. The Fund has no examination in progress and is not aware of any tax positions for which it is reasonably possible that the amounts of unrecognized tax benefits will significantly change in the next twelve months.
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation) for federal income tax purposes were as follows:
Federal Tax Cost of Investments | | | Gross Unrealized Appreciation | | | Gross Unrealized Depreciation | | | Net Unrealized Appreciation (Depreciation) | |
$ | 7,923,638 | | | $ | 176,078 | | | $ | (376,316 | ) | | $ | (200,238 | ) |
9. INDEMNIFICATION
In the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that has not yet occurred. Management expects this risk of loss due to be remote.
10. PRINCIPAL RISKS
In the normal course of business, the Fund makes investments in financial instruments where the risk of potential loss exists due to changes in the market. The following is a description of select risks of investing in the Fund.
REIT Investment Risk: Investments in REITs involve unique risks. REITs may have limited financial resources, may trade less frequently and in limited volume, and may be more volatile than other securities. The risks of investing in REITs include certain risks associated with the direct ownership of real estate and the real estate industry in general. REITs are also subject to heavy cash flow dependency, defaults by borrowers and self-liquidation.
GraniteShares ETF Trust
Notes to Financial Statements (continued)
December 31, 2018 (unaudited)
MLP Risk: MLP investment returns are enhanced during periods of declining or low interest rates and tend to be negatively influenced when interest rates are rising. In addition, most MLPs are fairly leveraged and typically carry a portion of a “floating” rate debt. As such, a significant upward swing in interest rates would also drive interest expense higher. Furthermore, most MLPs grow by acquisitions partly financed by debt, and higher interest rates could make it more difficult to make acquisitions. MLP investments also entail many of the general tax risks of investing in a partnership. Limited partners in an MLP typically have limited control and limited rights to vote on matters affecting the partnership. Additionally, there is always the risk that an MLP will fail to qualify for favorable tax treatment.
Business Development Company (“BDC”) Risk: BDC’s may carry risks similar to those of a private equity or venture capital fund. BDC company securities are not redeemable at the option of the shareholder and they may trade in the market at a discount to their net asset value. BDCs usually trade at a discount to their NAV because they invest in unlisted securities and have limited access to capital markets. BDC’s are subject to management and other expenses, which will be indirectly paid by the Fund.
Investment Company Risk: The risks of investment in investment companies typically reflect the risks of the types of instruments in which the investment companies invest in. By investing in another investment company, the Fund becomes a shareholder of that investment company and bears its proportionate share of the fees and expenses of the other investment company. The Fund may be subject to statutory limits with respect to the amount it can invest in other investment companies, which may adversely affect the Fund’s ability to achieve its investment objective.
Sector Risk: To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors.
11. SUBSEQUENT EVENTS
Management has evaluated the events and transactions that have occurred through the date the financial statements were issued and noted no items requiring adjustment of the financial statements or additional disclosures.
GRANITESHARES ETF TRUST
Board Considerations Regarding Approval of Investment Advisory Agreement (unaudited)
GraniteShares Future of Batteries ETF
GraniteShares Junior Tech Mega Trends ETF
GraniteShares Internet Infrastructure ETF
GraniteShares ETF Trust (the “Trust”) was organized as a Delaware statutory trust on November 7, 2016, and is authorized to establish multiple series, with each series representing interests in a separate portfolio of securities and other assets of the Trust (each, a “Fund” and collectively, the “Funds”). The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). On November 15, 2018, GraniteShares Advisors LLC (“GraniteShares” or the “Adviser”) was approved to serve as the investment adviser to GraniteShares Future of Batteries ETF, GraniteShares Junior Tech Mega Trends ETF and GraniteShares Internet Infrastructure ETF (each a “New Fund” and together, the “New Funds”), pursuant to Amendment No. 1, dated November 15, 2018, to the Amended and Restated Investment Advisory Agreement, dated August 17, 2018, between GraniteShares and the Trust (as amended, the “Advisory Agreement”).
Under the supervision of the Board of Trustees of the Trust (the “Board,” with the members of the Board referred to individually as the “Trustees”), GraniteShares provides a continuous program of investment management for each Fund and, among other services, determines, in its discretion, the securities to be purchased, retained or sold with respect to each Fund. GraniteShares will provide those same services to each of the New Funds.
The 1940 Act provides, in substance, that an investment advisory agreement between a fund and its investment adviser may be entered into only if it is approved by the fund’s board of trustees, including by a vote of a majority of the trustees who are not “interested person[s],” as defined by the 1940 Act, of the fund, cast in person at a meeting called for the purpose of considering such approval. At a meeting held in person on November 15, 2018 (the “November Meeting”), the Trustees who are not “interested persons” (collectively, the “Independent Trustees”) considered the approval of the Advisory Agreement with respect to each of the New Funds. As part of its review process, counsel to the Trust reviewed and discussed with the Independent Trustees various factors relevant to the consideration of the Advisory Agreement and the legal responsibilities of the Trustees related to such consideration. In this connection, the Independent Trustees also took into account their previous discussions with counsel regarding the foregoing. The Trustees, including the Independent Trustees, discussed the Advisory Agreement in light of the regulatory requirements and criteria and assessed information concerning each New Fund’s proposed investment advisory fee and expense structure, investment objective, index provider and index construction methodology, and peer funds and market opportunity, among other things.
Following an analysis and discussion of the factors identified below, in the exercise of their reasonable business judgment and in light of their respective fiduciary duties, the Trustees unanimously concluded that it was in the best interest of each of the New Funds to approve the Advisory Agreement for an initial term of two years from commencement of operations of each New Fund. In making determinations regarding the factors identified below, the Trustees considered information received (both oral and written) at the November Meeting as well as information obtained through the Board’s accumulated experience overseeing the existing Funds. In this regard, the Board’s conclusions were also based on its knowledge of how well the Adviser performs its duties obtained through Board meetings, discussions and reports during the year.
Nature, Extent and Quality of Services to Be Provided by the Adviser: With respect to the nature, extent and quality of services to be provided by the Adviser for the New Funds, the Independent Trustees considered the functions to be performed by the Adviser for the New Funds and the nature and quality of services provided by GraniteShares in the past, including the firm’s management capabilities demonstrated with respect to the existing Funds. The Trustees considered the responsibilities to be assumed by the Adviser, including, among other things: responsibility for the general management of the day-to-day investment and reinvestment of the assets of each of the New Funds to track the performance of the applicable underlying index; determining the daily basket of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of shares; and monitoring and coordinating the provision of services to the New Funds by each of the third-party service providers, including the fund administrator, transfer agent, custodian and distributor.
In considering the nature, extent and quality of the services to be provided by the Adviser, the Board considered the qualifications, experience and responsibilities of the Adviser’s investment personnel and the quality of the compliance infrastructure, including the regular reports provided by the Trust’s Chief Compliance Officer regarding compliance procedures and practices.
The Board also noted the distinctive nature of the New Funds, as ETFs, which are constructed to track the performance of a defined index of securities, before fund fees and expenses. Therefore, each of the New Funds does not follow traditional methods of active management, which may involve the buying and selling of securities based upon analysis of economic and market factors. Rather, the Adviser employs a “passive management”—or indexing—investment approach to seek achieve each New Fund’s investment objective. In this connection, the Board considered the Adviser’s expected efforts to promote each of the New Funds and the Adviser’s prior experience in organizing, managing and overseeing ETFs and coordinating their operation and administration. The Board also considered the acceptability of the terms of the Advisory Agreement, including the scope of services required to be performed by the Adviser, noting that the terms were consistent with the services provided for the existing Funds.
Based on the foregoing, the Board concluded that the Adviser and its personnel were qualified to serve each of the New Funds in such capacity, and that the nature, quality and extent of services proposed to be provided by the Adviser would be satisfactory and adequate for each of the New Funds.
Investment Performance: With respect to investment performance, the Board noted that each of the New Funds has no operating history. Consequently, the Board considered the investment objective and strategies of each of the New Funds and noted the following:
GraniteShares Future of Batteries ETF: The New Fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Indxx Future of Batteries Index. The Indxx Index is designed to measure the performance of companies listed in developed and emerging markets which Indxx, LLC, the Index provider, sponsor and publisher (“Indxx”), has identified as being involved in the production of energy storage batteries and their components. To be eligible for inclusion in the Indxx Index, a company must have 1) a minimum market capitalization of $500 million, 2) have a minimum average daily trading volume over the past 6 months of $1 million, 3) have a minimum free float equivalent to 10% of shares outstanding, 4) be either a “battery producer” or a “battery metal miner” and 5) be either a “pure play” or “quasi play” company engaged in battery production or battery metal mining. A battery producer is a company engaged in the production and distribution of lithium-ion (Li-ion) batteries or other batteries which are used in energy utility applications. A battery metal miner is either: 1) a company engaged in the development, exploration and/or mining of lithium, cobalt, graphite, silicon, nickel and/or other similar metals or minerals; or 2) a company involved in the production and distribution of lithium-ion, cathode and anode materials and other battery-associated chemicals. The Indxx Index is a modified equal weight index with each of the two categories of companies—battery producers and battery metal miners—comprising 50% of the Index. In addition to the categorization of prospective Index constituents as battery producers or battery metal miners, Indxx also identifies companies—as a “pure play” or “quasi play” company—based on the percentage of revenues attributable to the battery producer or battery metal miner activities, with a cap on the weight of quasi-play companies included in the Index.
GraniteShares Junior Tech Mega Trends ETF: The New Fund seeks investment results that, before fees and expenses, correspond generally to the total return performance of the S-Network Junior Tech Mega Trends Index. The S-Network Index is designed to measure the performance of small-capitalization companies materially engaged in developing, providing or using disruptive technologies. Disruptive technologies are those that enter traditional markets with new digital forms of production and distribution, and seek to disrupt an existing market and value network or displace established market-leading firms, products and alliances, and increasingly gain market share. S-Network Global Indexes, Inc., the index provider, sponsor and publisher (“S-Network”), identifies companies from five business segments in which developing technologies could significantly impact—i.e., disrupt—the way that industrial and other operating companies, service providers, financial institutions, retail businesses and other organizations operate. The five business segments are defined as follows: 1) artificial intelligence: companies whose technologies are focused on automation of cognitive processes, such as speech recognition, deep learning and visual navigation; 2) cybersecurity: companies whose technologies protect computers, servers or networks against unauthorized access or attack; 3) financial technology: companies whose technologies support banking, investment and related services; 4) internet of things: companies whose technologies involve the internet of computing devices embedded in everyday objects; and 5) robotics: companies whose technologies are focused on automation of physical processes such as manufacturing, surgery and transportation. S-Network constructs the Index using a two-step process. Step 1 consists of determining the universe of potential Index constituents based on market capitalization and trading volume requirements. In Step 2, S-Network identifies companies from within that universe that are materially engaged in one or more of the five business segments noted above and, therefore, eligible for inclusion in the Index.
GraniteShares Internet Infrastructure ETF: The New Fund seeks investment results that, before fees and expenses, correspond generally to the total return performance of the Solactive Internet Infrastructure Index. The Solactive Index is designed to measure the performance of developing companies involved in internet traffic and associated data and data transfer, as well as those that are established network owners and operators. Index constituents will be identified from five sectors: 1) semiconductors, 2) hosting, storage and data centers, 3) network equipment and infrastructure, 4) internet network and 5) internet service providers (ISPs). Each sector is equally weighted with each stock equally weighted within each sector. The universe of potential Index constituents is narrowed based on market capitalization requirements within each sector.
In addition to the foregoing, the Board considered the Adviser’s plans for implementing each of the above-described Index strategies and its ability to manage each of the New Funds. The Board also considered the Adviser’s overall performance record in managing the existing Funds, as well as the portfolio managers’ expertise, and determined that the Adviser’s performance was expected to be acceptable.
Comparative Fees, Costs of Services to Be Provided and the Profits to Be Realized by the Adviser from Its Relationship with the New Funds:The Board noted that the proposed advisory fee for each New Fund is a unitary fee pursuant to which the Adviser assumes substantially all expenses of the Fund (excluding interest, taxes, brokerage commissions, expenses related to short sales, other expenditures which are capitalized in accordance with generally accepted accounting principles, other extraordinary expenses not incurred in the ordinary course of each New Fund’s business, and amounts, if any, payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940 Act.) In this connection, the Board reviewed information provided in the meeting materials showing comparing each New Fund’s proposed unitary fee to peer funds identified by the Adviser and made the following observations:
GraniteShares Future of Batteries ETF: The proposed unitary fee of 70 basis points is below the unitary fee of each of its two peer ETFs—by five basis points and two basis points, respectively.
GraniteShares Junior Tech Mega Trends ETF: The proposed unitary fee of 70 basis points is four basis points below the weighted average management fee of the three peer ETFs that similarly offer exposure to multiple technology themes.
GraniteShares Internet Infrastructure ETF: The Board noted the Adviser’s statement that the New Fund had no direct competitors, with existing products purely focused on technology or traditional infrastructure, not both. The Adviser also explained that components of the New Fund’s Index could be found in very different products, such as high dividend ETFs that invest generally in network owners or operators, REIT ETFs that invest in data centers and technology ETFs that invest in semiconductors or network equipment providers. On the basis of the Adviser’s information, the Board considered the proposed unitary fee of 70 basis points relative to the foregoing and in comparison to the unitary fees in place for other thematic ETFs, including the other proposed New Funds.
The Board concluded that each New Fund’s proposed unitary fee was reasonable given the nature, extent and anticipated quality of the services expected to be provided under the Advisory Agreement.
With respect to the costs of advisory services to be provided and estimated level of profitability, the Trustees noted that the New Funds are newly organized and have no assets, and that they would have the opportunity in the future to periodically reexamine this matter.
Economies of Scale to Be Realized: With respect to economies of scale, the Board was of the view that New Funds benefit from economies of scale (if any) by virtue of a unitary fee arrangement set at a competitive level at each New Fund’s inception, that subsumes economies of scale in the fee itself. The Board also noted the start-up status of each of the New Funds.
Overall Conclusions
Based on the foregoing, the Trustees determined that the proposed advisory fee for each of the New Funds is fair and reasonable in light of the extent and anticipated quality of the services expected to be provided and the other benefits to be received and that the approval of the Advisory Agreement is in the best interest of each of the New Funds. In reaching this conclusion, no single factor was determinative or conclusive and each Trustee, in the exercise of his business judgment, may attribute different weights to different factors. At the November Meeting, the Board, including all of the Independent Trustees, approved the Advisory Agreement for an initial term of two years term of two years from commencement of operations with respect to each New Fund.
GraniteShares ETF Trust
Supplemental Information
Quarterly Portfolio Holdings Information
The Funds will be required to file their complete schedule of portfolio holdings with the SEC for their first and third quarters on Form N-Q. Copies of the filings will be available without charge on the SEC’s website at www.sec.gov. You will also be able obtain copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Proxy Voting Information
A description of the Funds proxy voting policies and procedures, as well as a record of how the Funds voted proxies during the most recent 12-month period ended June 30, is available without charge upon request by calling 1-844-476-8747. This information will also be available on the SEC’s website at www.sec.gov.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of a Fund and the Fund’s net asset value may be found on the Fund’s website atwww.graniteshares.com.
Authorized for distribution only when accompanied or preceded by a prospectus. Investors should carefully consider the fund’s investment goals, risks, charges and expense before investing. A prospectus contains this and other important information. Please read carefully before investing.
Distributor, Foreside Fund Services, LLC

GraniteShares ETF Trust
205 Hudson Street, 7th Floor
New York, NY 10013
Not applicable.
Item 3. | Audit Committee Financial Expert. |
Not applicable.
Item 4. | Principal Accountant Fees and Services. |
Not applicable.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
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(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s Board of Trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. | Controls and Procedures. |
| (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 Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
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| (b) | Therehave been no changes in the registrant’s internal controls over financial reporting that occurred during the registrant’s last fiscal quarter that has materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable.
SIGNATURES
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.
(Registrant) | GraniteShares ETF Trust |
By (Signature and Title)* | /s/ William Rhind |
| William Rhind, Trustee, President and Chief Financial Officer |
| (principal executive officer and principal financial officer) |
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.
By (Signature and Title)* | /s/ William Rhind |
| William Rhind, Trustee, President and Chief Financial Officer |
| (principal executive officer and principal financial officer) |
*Print the name and title of each signing officer under his or her signature.