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 (811-23377)
Tidal ETF Trust
(Exact name of registrant as specified in charter)
234 West Florida Street, Suite 203
Milwaukee, Wisconsin 53204
(Address of principal executive offices) (Zip code)
Eric W. Falkeis
Tidal ETF Trust
234 West Florida Street, Suite 203
Milwaukee, Wisconsin 53204
(Name and address of agent for service)
(844) 986-7700
Registrant's telephone number, including area code
Date of fiscal year end: May 31
Date of reporting period: May 31, 2024
Updated June 27, 2024
Item 1. Reports to Stockholders.
Newday Ocean Health ETF Tailored Shareholder Report
Newday Ocean Health ETF Tailored Shareholder Report
annual Shareholder Report May 31, 2024 Newday Ocean Health ETF Ticker: AHOY ( Listed on NYSE Arca, Inc.) |
This annual shareholder report contains important information about the Newday Ocean Health ETF (the "Fund") for the period June 1, 2023 to May 31, 2024. You can find additional information about the Fund at www.newdayimpactetfs.com. You can also request this information by contacting us at (833) 486-7347 or by sending an email request to info@newdayimpactetfs.com.
What were the Fund costs for the past six months?
(based on a hypothetical $10,000 investment)
Fund Name | Costs of a $10,000 investment | Costs paid as a percentage of a$10,000 investment |
|---|
Newday Ocean Health ETF | $75 | 0.75% |
Cumulative Performance
Date | Newday Ocean Health ETF (NAV) | Newday Ocean Health ETF (MKT) | MSCI ACWI Net Total Return Index (USD) | S&P 500 TR |
6/6/22 | 10000 | 10000 | 10000 | 10000 |
6/30/22 | 9453 | 9445 | 9164 | 9195 |
7/31/22 | 10183 | 10191 | 9804 | 10043 |
8/31/22 | 9681 | 9719 | 9443 | 9633 |
9/30/22 | 8826 | 8839 | 8539 | 8746 |
10/31/22 | 9435 | 9434 | 9054 | 9454 |
11/30/22 | 9945 | 9939 | 9756 | 9983 |
12/31/22 | 9367 | 9376 | 9372 | 9408 |
1/31/23 | 9945 | 9930 | 10044 | 9999 |
2/28/23 | 9575 | 9589 | 9756 | 9755 |
3/31/23 | 9759 | 9757 | 10057 | 10113 |
4/30/23 | 9736 | 9729 | 10202 | 10271 |
5/31/23 | 9580 | 9591 | 10092 | 10315 |
6/30/23 | 10312 | 10328 | 10678 | 10997 |
7/31/23 | 10605 | 10599 | 11069 | 11350 |
8/31/23 | 10351 | 10360 | 10760 | 11169 |
9/30/23 | 9836 | 9848 | 10315 | 10637 |
10/31/23 | 9555 | 9573 | 10005 | 10413 |
11/30/23 | 10484 | 10496 | 10928 | 11364 |
12/31/23 | 10937 | 10951 | 11453 | 11881 |
1/31/24 | 11084 | 11061 | 11520 | 12080 |
2/29/24 | 11537 | 11550 | 12015 | 12725 |
3/31/24 | 11900 | 11916 | 12392 | 13135 |
4/30/24 | 11756 | 11720 | 11983 | 12598 |
5/31/24 | 12264 | 12293 | 12470 | 13223 |
Annual Performance
Annualized Returns for the Year Ended May 31, 2024: | 1 Year | Since Inception (6/6/2022) | Ending Value (5/31/2024) |
|---|
Newday Ocean Health ETF - NAV | 28.01% | 10.84% | $12,264 |
Newday Ocean Health ETF - Market | 28.18% | 10.97% | $12,293 |
MSCI ACWI Net Total Return Index | 23.56% | 11.77% | $12,470 |
S&P 500® Total Return Index | 28.19% | 15.12% | $13,223 |
How did the Fund perform last year and what affected its performance?
The Fund returned 28.01% (NAV) for the fiscal year ended May 31, 2024 vs 23.56% for the MSCI All Country World Index and 28.19% for the S&P 500 Total Return Index. The Fund invests substantially all of its assets in a portfolio of global equities and performance was affected by investing in a portfolio of securities with a high active share relative to the benchmark. During the reporting period global equity markets were significantly influenced by shifting expectations around inflation and interest rates, with stocks rallying on growing confidence that slowing inflation will allow for rate cuts towards the end of 2024.
What Factors Influenced Performance
Greater exposure to the industrial sector relative to the benchmark weighed on performance during the reporting period. Active positioning within the consumer discretionary sector had a positive contribution to performance during the reporting period. Stock selection within the utilities sector had a negative impact on the Fund’s return for the year. Lack of exposure to certain mega-cap stocks, where much of the broader market’s gains were concentrated, also detracted from performance relative to the benchmark.
Positioning
Top Contributors: Overweight in Industrial sector Positioning in Materials sector Top Detractors: Positioning in the Utilities sector Lack of exposure to certain mega-cap stocks
The Fund’s past performance is not a good indicator of future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares but assume reinvestment of capital gains, dividends and return of capital. The line graph above assumes an initial investment of $10,000 in the Fund.
Newday Ocean Health ETF Tailored Shareholder Report
Newday Ocean Health ETF Tailored Shareholder Report
Key Fund Statistics
(as of May 31, 2024 )
| |
|---|
Fund Size (Thousands) | $3,036 |
Number of Holdings | 26 |
Total Advisory Fee Paid | $18,994 |
Annual Portfolio Turnover | 93% |
What did the Fund invest in?
(as of May 31, 2024 )
Sector Breakdown (% of net assets)
Sector | % of Net Assets |
Industrial | 43.3 |
Consumer, Non-cyclical | 25.9 |
Basic Materials | 13.7 |
Consumer, Cyclical | 9.2 |
Utilities | 4.3 |
Financial | 2.6 |
Cash & Cash Equivalents | 1.0 |
Percentages are based on total net assets. Cash & Cash Equivalents represents cash, short-term investments and other assets in excess of liabilities.
Top 10 Holdings | (% of net assets) |
|---|
Tetra Tech, Inc. | 5.1 |
DSM-Firmenich AG | 5.0 |
Xylem, Inc. | 5.0 |
Cargotec Oyj - Class B | 5.0 |
Walmart, Inc. | 4.8 |
Ecolab, Inc. | 4.7 |
Organo Corp. | 4.4 |
Costco Wholesale Corp. | 4.4 |
Veolia Environnement SA - ADR | 4.3 |
McKesson Corp. | 4.2 |
How has the Fund changed?
During the reporting period the Fund made material changes to its principal investment strategies. The Fund revised its principal investment strategies to (i) modify the criteria for inclusion in the Fund’s investment universe, (ii) revise the criteria for excluding companies from the Fund’s investment universe, (iii) reduce the target number of holdings in the Fund's portfolio, and (iv) revise the portfolio selection process to include a description of the qualitative analysis undertaken with respect to potential investments.
Changes in and Disagreements with Accountants
There were no changes in or disagreements with accountants during the reporting period.
Householding
Householding is an option available to certain investors of the Fund. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Householding for the Fund is available through certain broker-dealers. If you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, please contact your broker-dealer. If you are currently enrolled in householding and wish to change your householding status, please contact your broker-dealer.
Distributor: Foreside Fund Services, LLC
For additional information about the Fund; including its prospectus, financial information, holdings and proxy information, visit www.newdayimpactetfs.com .
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any substantive amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.
A copy of the registrant’s Code of Ethics is filed herewith.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees of the Trust has determined that there is at least one audit committee financial expert serving on its audit committee. Mr. Dusko Culafic is the “audit committee financial expert” and is considered to be “independent” as each term is defined in Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. There were no “Other services” provided by the principal accountant. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
Newday Ocean Health ETF
| | FYE 5/31/2024 | FYE 5/31/2023 |
| ( a ) Audit Fees | $12,500 | $12,500 |
| ( b ) Audit-Related Fees | N/A | N/A |
| ( c ) Tax Fees | $3,000 | $3,000 |
| ( d ) All Other Fees | N/A | N/A |
(e)(1) The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant.
(e)(2) The percentage of fees billed by Cohen & Company, Ltd. applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
| | FYE 5/31/2024 | FYE 5/31/2023 |
| Audit-Related Fees | 0% | 0% |
| Tax Fees | 0% | 0% |
| All Other Fees | 0% | 0% |
(f) All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full-time permanent employees of the principal accountant.
(g) The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any other controlling entity, etc.—not sub-adviser) for the last two years.
| Non-Audit Related Fees | FYE 5/31/2024 | FYE 5/31/2023 |
| Registrant | N/A | N/A |
| Registrant’s Investment Adviser | N/A | N/A |
(h) The audit committee of the board of trustees/directors has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.
(i) The registrant has not been identified by the U.S. Securities and Exchange Commission as having filed an annual report issued by a registered public accounting firm branch or office that is located in a foreign jurisdiction where the Public Company Accounting Oversight Board is unable to inspect or completely investigate because of a position taken by an authority in that jurisdiction.
(j) The registrant is not a foreign issuer.
Item 5. Audit Committee of Listed Registrants.
(a) The registrant is an issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934 (the “Act”), and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Act. The independent members of the committee are as follows: Dusko Culafic, Eduardo Mendoza, and Mark H.W. Baltimore.
(b) Not applicable
Item 6. Investments.
| (a) | Schedule of Investments is included within the financial statements filed under Item 7 of this Form. |
Item 7. Financial Statements and Financial Highlights for Open-End Investment Companies.
Core Financial Statements
May 31, 2024
| | | |
| Tidal ETF Trust |
| •Newday Ocean Health ETF | | AHOY | | NYSE Arca, Inc. |
Table of Contents
| Schedule of Investments | Newday Ocean Health ETF |
| May 31, 2024 |
| COMMON STOCKS - 99.0% | | Shares | | | Value | |
| Chemicals - 13.7% | | | |
| Croda International PLC | | | 2,049 | | | $ | 118,439 | |
| DSM-Firmenich AG | | | 1,334 | | | | 153,001 | |
| Ecolab, Inc. | | | 615 | | | | 142,803 | |
| | | | | | | | 414,243 | |
| | | | | | | | | |
| Electronics - 4.2% | | | | | | | | |
| Badger Meter, Inc. | | | 660 | | | | 127,354 | |
| | | | | | | | | |
| Engineering & Construction - 12.2% | | | | | | | | |
| Acciona SA | | | 952 | | | | 121,848 | |
| Jacobs Solutions, Inc. | | | 899 | | | | 125,267 | |
| Stantec, Inc. | | | 1,521 | | | | 122,738 | |
| | | | | | | | 369,853 | |
| | | | | | | | | |
| Environmental Control - 8.9% | | | | | | | | |
| Kurita Water Industries Ltd. | | | 2,733 | | | | 116,871 | |
| Tetra Tech, Inc. | | | 736 | | | | 154,185 | |
| | | | | | | | 271,056 | |
| | | | | | | | | |
| Food - 11.8% | | | | | | | | |
| Austevoll Seafood ASA | | | 9,779 | | | | 79,617 | |
| Grieg Seafood ASA | | | 11,237 | | | | 77,631 | |
| Oceana Group Ltd. | | | 20,062 | | | | 77,552 | |
| The Kroger Co. | | | 2,356 | | | | 123,384 | |
| | | | | | | | 358,184 | |
| | | | | | | | | |
| Healthcare - Products - 3.8% | | | | | | | | |
| Agilent Technologies, Inc. | | | 881 | | | | 114,891 | |
| | | | | | | | | |
| Household Products & Wares - 3.2% | | | | | | | | |
| Reckitt Benckiser Group PLC | | | 1,736 | | | | 98,402 | |
| | | | | | | | | |
| Investment Companies - 2.6% | | | | | | | | |
| Aker ASA - Class A | | | 1,342 | | | | 79,869 | |
| | | | | | | | | |
| Machinery - Diversified - 13.0% | | | | | | | | |
| Organo Corp. | | | 2,387 | | | | 133,822 | |
| Xylem, Inc. | | | 1,078 | | | | 152,020 | |
| Zurn Elkay Water Solutions Corp. | | | 3,449 | | | | 107,988 | |
| | | | | | | | 393,830 | |
The accompanying notes are an integral part of these financial statements.
| Schedule of Investments (Continued) | Newday Ocean Health ETF |
| May 31, 2024 |
| Pharmaceuticals - 7.1% | | | |
| CVS Health Corp. | | | 1,455 | | | | 86,718 | |
| McKesson Corp. | | | 225 | | | | 128,158 | |
| | | | | | | | 214,876 | |
| | | | | | | | | |
| Retail - 9.2% | | | | | | | | |
| Costco Wholesale Corp. | | | 165 | | | | 133,632 | |
| Walmart, Inc. | | | 2,223 | | | | 146,184 | |
| | | | | | | | 279,816 | |
| | | | | | | | | |
| Transportation - 5.0% | | | | | | | | |
| Cargotec Oyj - Class B | | | 1,822 | | | | 151,314 | |
| | | | | | | | | |
| Water - 4.3% | | | | | | | | |
| Veolia Environnement SA - ADR | | | 7,770 | | | | 130,769 | |
| TOTAL COMMON STOCKS (Cost $2,700,048) | | | | | | | 3,004,457 | |
| | | | | | | | | |
| SHORT-TERM INVESTMENTS - 0.7% | | | | | | | | |
| Money Market Funds - 0.7% | | | | | | | | |
| First American Government Obligations Fund - Class X, 5.24%(a) | | | 22,164 | | | | 22,164 | |
| TOTAL SHORT-TERM INVESTMENTS (Cost $22,164) | | | | | | | 22,164 | |
| | | | | | | | | |
| TOTAL INVESTMENTS - 99.7% (Cost $2,722,212) | | | | | | $ | 3,026,621 | |
| Other Assets in Excess of Liabilities - 0.3% | | | | | | | 8,965 | |
| TOTAL NET ASSETS - 100.0% | | | | | | $ | 3,035,586 | |
Percentages are stated as a percent of net assets.
| ADR - American Depositary Receipt |
| AG - Aktiengesellschaft |
| ASA - Advanced Subscription Agreement |
| PLC - Public Limited Company |
| SA - Sociedad Anónima |
| (a) | | The rate shown represents the 7-day yield as of May 31, 2024. |
The accompanying notes are an integral part of these financial statements.
| Statements of Assets and Liabilities | Newday Ocean Health ETF |
| May 31, 2024 |
| ASSETS: | | | |
| Investments, at value | | $ | 3,026,621 | |
| Dividends and interest receivable | | | 10,885 | |
| Total assets | | | 3,037,506 | |
| | | | | |
| LIABILITIES: | | | | |
| Payable to adviser | | | 1,920 | |
| Total liabilities | | | 1,920 | |
| NET ASSETS | | $ | 3,035,586 | |
| | | | | |
| NET ASSETS CONSISTS OF: | | | | |
| Paid-in capital | | $ | 2,736,879 | |
| Total distributable earnings | | | 298,707 | |
| Total net assets | | $ | 3,035,586 | |
| | | | | |
| Net asset value | | $ | 3,035,586 | |
| Shares issued and outstanding(a) | | | 125,000 | |
| Net asset value per share | | $ | 24.28 | |
| | | | | |
| COST: | | | | |
| Investments cost | | $ | 2,722,212 | |
| (a) | Unlimited shares authorized without par value. |
The accompanying notes are an integral part of these financial statements.
| Statements of Operations | Newday Ocean Health ETF |
| For the Year Ended May 31, 2024 |
| INVESTMENT INCOME: | | | |
| Dividend income | | $ | 50,749 | |
| Less: Dividend withholding taxes | | | (3,413 | ) |
| Less: Issuance fees | | | (496 | ) |
| Interest income | | | 510 | |
| Total investment income | | | 47,350 | |
| | | | | |
| EXPENSES: | | | | |
| Investment advisory fee | | | 18,994 | |
| Total expenses | | | 18,994 | |
| NET INVESTMENT INCOME | | | 28,356 | |
| | | | | |
| REALIZED AND UNREALIZED GAIN | | | 610,527 | |
| Net realized gain from: | | | | |
| Investments | | | 302,550 | |
| Foreign currency translation | | | 903 | |
| Net realized gain | | | 303,453 | |
| Net change in unrealized appreciation on: | | | | |
| Investments | | | 307,059 | |
| Foreign currency translation | | | 15 | |
| Net change in unrealized appreciation | | | 307,074 | |
| Net realized and unrealized gain | | | 610,527 | |
| NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 638,883 | |
The accompanying notes are an integral part of these financial statements.
| Statements of Changes in Net Assets | Newday Ocean Health ETF |
| | | Year ended
May 31, 2024 | | | Period ended
May 31, 2023(a) | |
| OPERATIONS: | | | | | | | | |
| Net investment income | | $ | 28,356 | | | $ | 12,630 | |
| Net realized gain/(loss) | | | 303,453 | | | | (24,771 | ) |
| Net change in unrealized appreciation/(depreciation) | | | 307,074 | | | | (2,715 | ) |
| Net increase/(decrease) in net assets from operations | | | 638,883 | | | | (14,856 | ) |
| | | | | | | | | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS: | | | | | | | | |
| Distributions to shareholders | | | (15,372 | ) | | | (5,932 | ) |
| Total distributions to shareholders | | | (15,372 | ) | | | (5,932 | ) |
| | | | | | | | | |
| CAPITAL TRANSACTIONS: | | | | | | | | |
| Subscriptions | | | 1,595,213 | | | | 1,928,735 | |
| Redemptions | | | (1,091,085 | ) | | | — | |
| Net increase in net assets from capital transactions | | | 504,128 | | | | 1,928,735 | |
| | | | | | | | | |
| NET INCREASE IN NET ASSETS | | | 1,127,639 | | | | 1,907,947 | |
| | | | | | | | | |
| NET ASSETS: | | | | | | | | |
| Beginning of the year/period | | | 1,907,947 | | | | — | |
| End of the year/period | | $ | 3,035,586 | | | $ | 1,907,947 | |
| | | | | | | | | |
| SHARES TRANSACTIONS | | | | | | | | |
| Subscriptions | | | 75,000 | | | | 100,000 | |
| Redemptions | | | (50,000 | ) | | | — | |
| Total increase in shares outstanding | | | 25,000 | | | | 100,000 | |
| (a) | Inception date of the Fund was June 6, 2022. |
The accompanying notes are an integral part of these financial statements.
| Financial Highlights | Newday Ocean Health ETF |
| For a share outstanding throughout the periods presented |
| | | Year ended
May 31, 2024 | | | Period ended
May 31, 2023(a) | |
| PER SHARE DATA: | | | | | | | | |
| | | | | | | | | |
| Net asset value, beginning of year/period | | $ | 19.08 | | | $ | 20.00 | |
| | | | | | | | | |
| INVESTMENTS OPERATIONS: | | | | | | | | |
| Net investment income(b) | | | 0.24 | | | | 0.17 | |
| Net realized and unrealized gain (loss) on investments | | | 5.08 | | | | (1.01 | ) |
| Total from investment operations | | | 5.32 | | | | (0.84 | ) |
| | | | | | | | | |
| LESS DISTRIBUTIONS FROM: | | | | | | | | |
| From net investment income | | | (0.12 | ) | | | (0.08 | ) |
| Total distributions | | | (0.12 | ) | | | (0.08 | ) |
| | | | | | | | | |
| Net asset value, end of year/period | | $ | 24.28 | | | $ | 19.08 | |
| | | | | | | | | |
| TOTAL RETURN(c) | | | 28.01 | % | | | (4.20 | )% |
| | | | | | | | | |
| SUPPLEMENTAL DATA AND RATIOS: | | | | | | | | |
| Net assets, end of year/period (in thousands) | | $ | 3,036 | | | $ | 1,908 | |
| Ratio of expenses to average net assets(d) | | | 0.75 | % | | | 0.75 | % |
| Ratio of net investment income to average net assets(d) | | | 1.12 | % | | | 0.88 | % |
| Portfolio turnover rate(c)(e) | | | 93 | % | | | 40 | % |
| (a) | Inception date of the Fund was June 6, 2022. |
| (b) | Net investment income per share has been calculated based on average shares outstanding during the year. |
| (c) | Not annualized for periods less than one year. |
| (d) | Annualized for periods less than one year. |
| (e) | Portfolio turnover rates exclude in-kind transactions. |
The accompanying notes are an integral part of these financial statements.
| Notes to the Financial Statements | Newday Ocean Health ETF |
| May 31, 2024 |
The Newday Ocean Health ETF (the “Fund”) is a non-diversified series of shares of beneficial interest of Tidal ETF Trust (the “Trust”). The Trust was organized as a Delaware statutory trust on June 4, 2018 and is registered with the Securities and Exchange Commission (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 Trust is governed by the Board of Trustees (the “Board”). Tidal Investments LLC (f/k/a Torso Investments, LLC) (“Tidal Investments” or the “Adviser”), a Tidal Financial Group company, serves as investment adviser to the Fund and Newday Funds, Inc., doing business as Newday Impact (the “Sub-Adviser”), serves as sub-adviser to the Fund. The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 “Financial Services—Investment Companies.” The Fund commenced operations on June 6, 2022.
The investment objective of the Fund is to seek to capture long-term capital appreciation.
| NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES |
The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
| | A. | Security Valuation. Equity securities, which may include Real Estate Investment Trusts (“REITs”), Business Development Companies (“BDCs”), and Master Limited Partnerships (“MLPs”), listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on the NASDAQ Stock Market, LLC (“NASDAQ”)), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 p.m. EST if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price or mean between the most recent quoted bid and ask prices for long and short positions. For a security that trades on multiple exchanges, the primary exchange will generally be considered the exchange on which the security is generally most actively traded. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. Prices of securities traded on the securities exchange will be obtained from recognized independent pricing agents (“Independent Pricing Agents”) each day that the Fund is open for business. |
Under Rule 2a-5 of the 1940 Act, a fair value will be determined by the Valuation Designee (as defined in Rule 2a-5) in accordance with the Pricing and Valuation Policy and Fair Value Procedures, as applicable, of the Adviser, subject to oversight by the Board. When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the Adviser’s Pricing and Valuation Policy and Fair Value Procedures, as applicable. Fair value pricing is an inherently subjective process, and no single standard exists for determining fair value. Different funds could reasonably arrive at different values for the same security. The use of fair value pricing by a Fund may cause the net asset value (“NAV”) of its shares to differ significantly from the NAV that would be calculated without regard to such considerations.
As described above, the Fund utilizes various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| | Level 1 – | Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. |
| | 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 instruments, 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. |
| NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
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 inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following is a summary of the inputs used to value the Fund’s investments as of May 31, 2024:
| Investments in Securities | | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common Stocks | | $ | 3,004,457 | | | $ | — | | | $ | — | | | $ | 3,004,457 | |
| Money Market Funds | | | 22,164 | | | | — | | | | — | | | | 22,164 | |
| Total Investments in Securities | | $ | 3,026,621 | | | $ | — | | | $ | — | | | $ | 3,026,621 | |
| | | | | | | | | | | | | | | | | |
| Refer to the Schedule of Investments for industry classifications. |
| | | | | | | | | | | | | | | | | |
| | B. | Federal Income Taxes. The Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provision for federal income taxes or excise taxes has been made. |
In order to avoid imposition of the excise tax applicable to regulated investment companies, the Fund intends to declare as dividends in each calendar year at least 98.0% of its net investment income (earned during the calendar year) and at least 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years. As a registered investment company, the Fund is subject to a 4% excise tax that is imposed if the Fund does not distribute by the end of any calendar year at least the sum of (i) 98% of its ordinary income (not taking into account any capital gain or loss) for the calendar year and (ii) 98.2% of its capital gain in excess of its capital loss (adjusted for certain ordinary losses) for a one year period generally ending on October 31 of the calendar year (unless an election is made to use the fund’s fiscal year). The Fund generally intends to distribute income and capital gains in the manner necessary to minimize (but not necessarily eliminate) the imposition of such excise tax. The Fund may retain income or capital gains and pay excise tax when it is determined that doing so is in the best interest of shareholders. Management, in consultation with the Board of Trustees, evaluates the costs of the excise tax relative to the benefits of retaining income and capital gains, including that such undistributed amounts (net of the excise tax paid) remain available for investment by the Fund and are available to supplement future distributions. Tax expense is disclosed in the Statement of Operations, if applicable.
As of May 31, 2024, the Fund did not have any tax positions that did not meet the threshold of being sustained by the applicable tax authority. Generally, tax authorities can examine all the tax returns filed for the last three years. The Fund identifies its major tax jurisdiction as U.S. Federal and the Commonwealth of Delaware; however, the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially.
| | C. | Foreign Currency. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. |
The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
The Fund reports net realized foreign exchange gains or losses that arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at period end, resulting from changes in exchange rates.
| NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
| D. | Securities Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts and premiums on debt securities purchased are accreted and amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Dividends received from REITs generally are comprised of ordinary income, capital gains, and may include return of capital. Debt income is recorded on an accrual basis. Other non-cash dividends are recognized as investment income at the fair value of the property received. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. |
| | E. | Distributions to Shareholders. Distributions to shareholders from net investment income, if any, for the Fund are declared and paid at least annually. Distributions to shareholders from net realized gains on securities, if any, for the Fund are normally declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
| | F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. |
| | G. | Share 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 or other assets, minus all liabilities by the total number of shares outstanding for 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 (“NYSE”) is closed for trading. |
| | H. | Guarantees and Indemnifications. In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote. |
| | I. | Illiquid Securities. Pursuant to Rule 22e-4 under the 1940 Act, the Fund has adopted a Board-approved Liquidity Risk Management Program (the “Program”) that requires, among other things, that the Fund limit its illiquid investments that are assets to no more than 15% of the value of the the Fund’s net assets. An illiquid investment is any security that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. If the Fund should be in a position where the value of illiquid investments held by a Fund exceeds 15% of the Fund’s net assets, the Fund will take such steps as set forth in the Program. |
| | J. | Recently Issued Accounting Pronouncements. In June 2022, the FASB issued Accounting Standards Update 2022-03, which amends Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies guidance for fair value measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023 and for interim periods within those fiscal years, with early adoption permitted. The Fund is currently evaluating the impact, if any, of these amendments on the financial statements. |
| | K. | Reclassification of Capital Accounts. U.S. GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. These differences are primarily due to adjustments for redemptions in-kind. For the year ended May 31, 2024, the following adjustments were made: |
| Paid-In Capital | | Total Distributable (Accumulated) Earnings (Losses) |
| $304,016 | | $(304,016) |
| | | During the year ended May, 31, 2024, the Fund realized $304,016 in net capital gains resulting from in-kind redemptions, in which Authorized Participants exchanged Fund shares for securities held by the Fund rather than for cash. Because such gain are not taxable to the Fund, and are not distributed to shareholders, they have been reclassified from distributable (accumulated) earnings (losses) to paid-in capital. |
| NOTE 3 – PRINCIPAL INVESTMENTS RISKS |
| | A. | Associated Risk of Investing Using Ocean Health Metrics and ESG Principles. The Fund’s investment strategy limits the types and number of investment opportunities available to the Fund, and, as a result, the Fund may underperform other funds that do not primarily seek to invest in companies based on Ocean Health metrics or that are screened based on ESG principals. In addition, Ocean Health and ESG investing may affect the Fund’s exposure to some companies or industries, and the Fund will forgo some investment opportunities because they are screened out based on the Fund’s investment strategy. |
| | B. | Equity Market Risk. The equity securities held in the Fund’s portfolio may experience sudden, unpredictable drops in value or long periods of decline in value. This may occur because of factors that affect securities markets generally or factors affecting specific issuers, industries, or sectors in which the Fund invests. Common stocks, such as those held by the Fund, are generally exposed to greater risk than other types of securities, such as preferred stock and debt obligations, because common stockholders generally have inferior rights to receive payment from issuers. |
| | C. | General Market Risk. Economies and financial markets throughout the world are becoming increasingly interconnected, which increases the likelihood that events or conditions in one country or region will adversely impact markets or issuers in other countries or regions. Securities in the Fund’s portfolio may underperform in comparison to securities in the general financial markets, a particular financial market, or other asset classes, due to a number of factors, including inflation (or expectations for inflation), interest rates, global demand for particular products or resources, natural disasters or events, pandemic diseases, terrorism, regulatory events, and government controls. |
| | D. | Non-Diversification Risk. Although the Fund intends to invest in a variety of securities and instruments, the Fund is considered to be non-diversified, which means that it may invest a greater percentage of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. As a result, the Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a smaller number of issuers than a fund that invests more widely. This may increase the Fund’s volatility and cause the performance of a relatively smaller number of issuers to have a greater impact on the Fund’s performance. |
| | E. | Sector Risk. At times, the Fund may increase the relative emphasis of its investments in a particular sector or group of industries. The prices of securities of issuers in a particular sector may be more susceptible to fluctuations due to changes in economic or business conditions, government regulations, availability of basic resources or supplies, or other events that affect that industry or sector more than securities of issuers in other industries and sectors. To the extent that the Fund increases the relative emphasis of its investments in a particular industry or sector, the value of shares may fluctuate in response to events affecting that industry or sector. |
| | ● | Consumer Non-Cyclical Sector Risk. The Fund's investments in the consumer non-cyclical sector may expose it to specific risks that could negatively impact its performance. The consumer non-cyclical sector, often less sensitive to economic cycles, includes companies involved in the production of goods and services that consumers need on a regular basis. This sector's performance is closely linked to factors such as global economic conditions, interest rates, currency exchange rates, and overall consumer demand. The resilience of these companies often hinges on their ability to maintain steady demand for essential products and services, which may be influenced by changes in demographics, consumer habits, and public health trends. Although typically considered more stable, companies in the consumer non-cyclical sector can still face challenges such as stringent regulatory environments, shifts in consumer loyalty, and intense competition, which can affect their profitability and market share. |
| | | |
| | ● | Industrials Sector Risk. The Fund may invest in companies in the industrials sector, and therefore the performance of the Fund could be negatively impacted by events affecting this sector. The industrials sector may be affected by changes in the supply of and demand for products and services, product obsolescence, claims for environmental damage or product liability and general economic conditions, among other factors. |
| | F. | Foreign Securities Risks. Investments in securities or other instruments of non-U.S. issuers involve certain risks not involved in domestic investments and may experience more rapid and extreme changes in value than investments in securities of U.S. companies. Financial markets in foreign countries often are not as developed, efficient, or liquid as financial markets in the United States, and therefore, the prices of non-U.S. securities and instruments can be more volatile. In addition, the Fund will be subject to risks associated with adverse political and economic developments in foreign countries, which may include the imposition of economic sanctions. Generally, there is less readily available and reliable information about non-U.S. issuers due to less rigorous disclosure or accounting standards and regulatory practices. |
| NOTE 3 – PRINCIPAL INVESTMENTS RISKS (CONTINUED) |
| | G. | Currency Risk. The Fund’s exposure to foreign currencies subjects the Fund to the risk that those currencies will decline in value relative to the U.S. Dollar. Currency rates in foreign countries may fluctuate significantly over short periods of time for any number of reasons, including changes in interest rates and the imposition of currency controls or other political developments in the U.S. or abroad. |
| | H. | Models and Data Risk. The composition of the Fund’s portfolio is heavily dependent on proprietary screening methodology, third-party quantitative models, as well as information and data supplied by third parties (“Models and Data”). In particular, the Sub-Adviser may utilize global equity screening models in its securities analyses. When Models and Data prove to be incorrect or incomplete, any decisions made in reliance thereon may lead to the inclusion or exclusion of securities from the Fund’s portfolio universe that would have been excluded or included had the Models and Data been correct and complete. |
| | I. | Exchange-Traded Fund (“ETF”) Risks. |
| | ● | Authorized Participants, Market Makers, and Liquidity Providers Concentration Risk. The Fund has a limited number of financial institutions that are authorized to purchase and redeem shares of the fund (“Shares”) directly from the Fund (known as “Authorized Participants” or “APs”). In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. To the extent either of the following events occur, Shares may trade at a material discount to NAV and possibly face delisting: (i) APs exit the business or otherwise become unable to process creation and/or redemption orders and no other APs step forward to perform these services; or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions. |
| | ● | Costs of Buying or Selling Shares. Due to the costs of buying or selling Shares, including brokerage commissions imposed by brokers and bid-ask spreads, frequent trading of Shares may significantly reduce investment results and an investment in Shares may not be advisable for investors who anticipate regularly making small investments. |
| | ● | Shares May Trade at Prices Other Than NAV. As with all ETFs, Shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of Shares will approximate the Fund’s NAV, there may be times when the market price of Shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of Shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for Shares in the secondary market, in which case such premiums or discounts may be significant. Because securities held by the Fund may trade on foreign exchanges that are closed when the Fund’s primary listing exchange is open, the Fund is likely to experience premiums and discounts greater than those of ETFs holding only domestic securities. |
| | ● | Trading. Although Shares are listed on a national securities exchange, NYSE, Arca Inc. (the “Exchange”), and may be traded on U.S. exchanges other than the Exchange, there can be no assurance that Shares will trade with any volume, or at all, on any stock exchange. In stressed market conditions, the liquidity of Shares may begin to mirror the liquidity of the Fund’s underlying portfolio holdings, which can be significantly less liquid than Shares. Also, in stressed market conditions, the market for Shares may become less liquid in response to deteriorating liquidity in the markets for the Fund’s underlying portfolio holdings. These adverse effects on liquidity for Shares, in turn, could lead to wider bid/ask spreads and differences between the market price of Shares and the underlying value of those Shares. |
| | J. | Market Capitalization Risk. |
| | ● | Large-Capitalization Investing. The securities of large-capitalization companies may be relatively mature compared to smaller companies and therefore subject to slower growth during times of economic expansion. Large-capitalization companies may also be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes. |
| | ● | Mid-Capitalization Investing. The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies. The securities of mid-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large-capitalization stocks or the stock market as a whole. |
| | ● | Small-Capitalization Investing. The securities of small-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large- or mid-capitalization companies. The securities of small-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large- or mid-capitalization stocks or the stock market as a whole. There is typically less publicly available information concerning smaller-capitalization companies than for larger, more established companies. |
| NOTE 3 – PRINCIPAL INVESTMENTS RISKS (CONTINUED) |
| | K. | New Fund Risk. The Fund is a recently organized management investment company with a limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decisions. There can be no assurance that the Fund will grow to or maintain an economically viable size. |
| | | |
| | L. | Management Risk. The Fund is actively-managed and may not meet its investment objective based on the Sub-Adviser’s success or failure to implement investment strategies for the Fund. |
| | | |
| | M. | Emerging Markets Risk. The Fund may invest in securities issued by companies domiciled or headquartered in emerging market nations. Investments in securities traded in developing or emerging markets, or that provide exposure to such securities or markets, can involve additional risks relating to political, economic, currency, or regulatory conditions not associated with investments in U.S. securities and investments in more developed international markets. Such conditions may impact the ability of the Fund to buy, sell, or otherwise transfer securities, adversely affect the trading market and price for Shares and cause the Fund to decline in value. |
| | N. | Depositary Receipt Risk. Depositary receipts involve risks similar to those associated with investments in foreign securities and certain additional risks. Depositary receipts listed on U.S. exchanges are issued by banks or trust companies and entitle the holder to all dividends and capital gains that are paid out on the underlying foreign shares (“Underlying Shares”). When the Fund invests in depositary receipts as a substitute for an investment directly in the Underlying Shares, the Fund is exposed to the risk that the depositary receipts may not provide a return that corresponds precisely with that of the Underlying Shares. |
| NOTE 4 – COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS |
The Adviser serves as investment adviser to the Fund pursuant to an investment advisory agreement between the Adviser and the Trust, on behalf of the Fund (the “Advisory Agreement”), and, pursuant to the Advisory Agreement, provides investment advice to the Fund and oversees the day-to-day operations of the Fund, subject to the direction and oversight of the Board. The Adviser is also responsible for trading portfolio securities for the Fund, including selecting broker-dealers to execute purchase and sale transactions.
Pursuant to the Advisory Agreement, the Fund pays the Adviser a unitary management fee (the “Management Fee”) based on the average daily net assets of the Fund at the annualized rate of 0.75%. Out of the Management Fee, the Adviser is obligated to pay or arrange for the payment of substantially all expenses of the Fund, including the cost of transfer agency, custody, fund administration, and all other related services necessary for the Fund to operate. Under the Advisory Agreement, the Adviser has agreed to pay, or require the Sub-Adviser to pay, all expenses incurred by the Fund except for interest charges on any borrowings, dividends and other expenses on securities sold short, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses, distribution fees and expenses paid by the Fund under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act (the “Excluded Expenses”), and the Management Fee payable to the Adviser. The Management Fees incurred are paid monthly to the Adviser. Management Fees for the year ended May 31, 2024 are disclosed in the Statement of Operations.
The Sub-Adviser serves as the investment sub-adviser to the Fund, pursuant to a sub-advisory agreement between the Adviser and the Sub-Adviser with respect to the Fund (the “Sub-Advisory Agreement”). Pursuant to the Sub-Advisory Agreement, the Sub-Adviser is responsible for the day-to-day management of the Fund’s portfolio, including determining the securities purchased and sold by the Fund, subject to the supervision of the Adviser and the Board. The Sub-Adviser is paid a fee by the Adviser, which is calculated and paid monthly, at an annual rate of 0.02% of the Fund’s average daily net assets (the “Sub-Advisory Fee”). The Sub-Adviser has agreed to assume the Adviser’s obligation to pay all expenses incurred by the Fund, except for the Sub-Advisory Fee payable to the Sub-Adviser and Excluded Expenses. For assuming the payment obligations for the Fund, the Adviser has agreed to pay the Sub-Adviser the profits, if any, generated by the Fund’s Management Fee, less a contractual fee retained by the Adviser. Expenses paid by the Sub-Adviser include fees charged by Tidal (defined below), which is an affiliate of the Adviser.
Tidal ETF Services LLC (“Tidal”), a Tidal Financial Group company and an affiliate of the Adviser, serves as the Fund’s administrator and, in that capacity, performs various administrative and management services for the Fund. Tidal coordinates the payment of Fund-related expenses and manages the Trust’s relationships with its various service providers.
U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”), serves as the Fund’s sub-administrator, fund accountant and transfer agent. In those capacities, Fund Services performs various administrative and accounting services for the Fund. Fund Services prepares various federal and state regulatory filings, reports and returns for the Fund, including regulatory compliance monitoring and financial reporting; prepares reports and materials to be supplied to the Board; and monitors the activities of the Fund’s custodian. U.S. Bank N.A. (the “Custodian”), an affiliate of Fund Services, serves as the Fund’s custodian.
| NOTE 4 – COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS (CONTINUED) |
Foreside Fund Services, LLC (the “Distributor”) acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares.
Certain officers and a trustee of the Trust are affiliated with the Adviser. Neither the affiliated trustee nor the Trust’s officers receive compensation from the Fund.
| NOTE 5 – PURCHASES AND SALES OF SECURITIES |
For the year ended May 31, 2024, the cost of purchases and proceeds from the sales or maturities of securities, excluding short-term investments, U.S. government securities, and in-kind transactions were $2,337,056 and $2,352,761, respectively.
For the year ended May 31, 2024, there were no purchases or sales of long-term U.S. government securities.
For the year ended May 31, 2024, in-kind transactions associated with creations and redemptions for the Fund were $1,584,051 and $1,080,969, respectively.
| NOTE 6 – INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS |
The tax character of distributions paid during the year ended May 31, 2024 and the period ended May 31, 2023 were as follows:
| Distributions paid from: | | May 31, 2024 | | | May 31, 2023 | |
| Ordinary income | | $ | 15,372 | | | $ | 5,932 | |
| | | | | | | | | |
As of the most recent fiscal year ended May 31, 2024, the components of distributable (accumulated) earnings (losses) on a tax basis were as follows:
| | | May 31, 2024 | |
| Cost of investments(1) | | $ | 2,722,326 | |
| Gross tax unrealized appreciation | | | 370,887 | |
| Gross tax unrealized depreciation | | | (66,642 | ) |
| Net tax unrealized appreciation (depreciation) | | | 304,245 | |
| Undistributed ordinary income (loss) | | | 13,728 | |
| Undistributed long-term capital gain (loss) | | | — | |
| Total distributable earnings | | | 13,728 | |
| Other accumulated gain (loss) | | | (19,266 | ) |
| Total distributable (accumulated) earnings (losses) | | $ | 298,707 | |
| | (1) | The difference between book and tax-basis unrealized appreciation was attributable primarily to the treatment of wash sales. |
Net capital losses incurred after October 31 (post-October losses) and net investment losses incurred after December 31 (late-year losses), and within the taxable year, may be elected to be deferred to the first business day of the Fund’s next taxable year. As of the year ended May 31, 2024, the Fund had not elected to defer any post-October or late year losses. As of the year ended May 31, 2024, the Fund had long-term and short-term capital loss carryovers of $19,266 and $-, respectively, which do not expire. The Fund utilized $247 of capital loss carryover in the year ended May 31, 2024.
| NOTE 7 – SHARE TRANSACTIONS |
Shares of the Fund are listed and traded on the Exchange. Market prices for the shares may be different from their NAV. The Fund issues and redeems shares on a continuous basis at NAV generally in large blocks of shares (“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 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 the 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.
| NOTE 7 – SHARE TRANSACTIONS (CONTINUED) |
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 Creation Units. The standard fixed transaction fee for the Fund is $300, payable to the Custodian. The fixed transaction fee may be waived on certain orders if the Fund’s Custodian has determined to waive some or all of the costs associated with the order or another party, such as the Adviser, has agreed to pay such fee. In addition, a variable fee may be charged on all cash transactions or substitutes for Creation Units and Redemption Units of up to a maximum of 2%, of the value of the Creation Units and Redemption Units subject to the transaction. Variable fees received by the Fund, if any, are disclosed in the capital shares transactions section of the Statement of Changes in Net Assets. 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.
| NOTE 8 – RECENT MARKET EVENTS |
U.S. international markets have experienced and may continue to experience significant periods of volatility in recent years and months due to a number of economic, political and global macro factors including rising inflation, uncertainty regarding central banks’ interest rate increases, the possibility of a national or global recession, trade tensions, political events, the war between Russia and Ukraine, significant conflict between Israel and Hamas in the Middle East, and the impact of COVID-19.The global recovery from COVID-19 may last for an extended period of time. As a result of continuing political tensions and armed conflicts, including the war between Ukraine and Russia, the U.S. and the European Union imposed sanctions on certain Russian individuals and companies, including certain financial institutions, and have limited certain exports and imports to and from Russia. The war has contributed to recent market volatility and may continue to do so. The Middle East conflict has led to significant loss of life, damaged infrastructure and escalated tensions both in the region and globally. These developments, as well as other events, could result in further market volatility and negatively affect financial asset prices, the liquidity of certain securities and the normal operations of securities exchanges and other markets, despite government efforts to address market disruptions. As a result, the risk environment remains elevated.
| NOTE 9 – SUBSEQUENT EVENTS |
In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. The Fund has determined that there are no subsequent events that would need to be disclosed or recorded in the Fund’s financial statements.
| Report of Independent Registered Public Accounting Firm | Newday Ocean Health ETF |
| |
To the Shareholders of Newday Ocean Health ETF and
Board of Trustees of Tidal ETF Trust
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Newday Ocean Health ETF (the “Fund”), a series of Tidal ETF Trust, as of May 31, 2024, the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for the year ended May 31, 2024 and for the period from June 6, 2022 (commencement of operations) to May 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of May 31, 2024, the results of its operations, the changes in net assets, and the financial highlights for each of the periods indicated above, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 2024 by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more of Tidal Investment LLC’s investment companies since 2020.
COHEN & COMPANY, LTD.
Milwaukee, Wisconsin
July 30, 2024
| Other Non-Audited Information | Newday Ocean Health ETF |
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QUALIFIED DIVIDEND INCOME/DIVIDENDS RECEIVED DEDUCTION
For the year ended May 31, 2024, certain dividends paid by the Fund may be subject to a maximum tax rate of 23.8%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003 and the Tax Cuts and Jobs Act of 2017. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
| Newday Ocean Health ETF | 100.00% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the year ended May 31, 2024, was as follows:
| Newday Ocean Health ETF | 100.00% |
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distribution under Internal Revenue Section 871(k)(2)(c) for the year ended May 31, 2024, was as follows:
| Newday Ocean Health ETF | 0.00% |
| Item 8. Changes in and Disagreements with Accountants for Open- End Management Investment Companies | Newday Ocean Health ETF |
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An open-end management investment company registered on Form N-1A [17 CFR 239.15A and 17 CFR 274.11A] must disclose the information concerning changes in and disagreements with accountants and on accounting and financial disclosure required by Item 304 of Regulation S-K [17 CFR 229.304].
Response: There have been no changes in or disagreements with the Fund’s accountants.
| Item 9. Proxy Disclosures for Open- End Management Investment Companies | Newday Ocean Health ETF |
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If any matter was submitted during the period covered by the report to a vote of shareholders of an open-end management investment company registered on Form N-1A [17 CFR 239.15A and 17 CFR 274.11A], through the solicitation of proxies or otherwise, the company must furnish the following information:
(1) The date of the meeting and whether it was an annual or special meeting.
(2) If the meeting involved the election of directors, the name of each director elected at the meeting and the name of each other director whose term of office as a director continued after the meeting.
(3) A brief description of each matter voted upon at the meeting and the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes as to each such matter, including a separate tabulation with respect to each matter or nominee for office.
Response: There were no matters submitted to a vote of shareholders during the period covered by the report.
| Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies | Newday Ocean Health ETF |
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Unless the following information is disclosed as part of the financial statements included in Item 7, an open-end management investment company registered on Form N-1A [17 CFR 239.15A and 17 CFR 274.11A] must disclose the aggregate remuneration paid by the company during the period covered by the report to:
(1) All directors and all members of any advisory board for regular compensation;
(2) Each director and each member of an advisory board for special compensation;
(3) All officers; and
(4) Each person of whom any officer or director of the Fund is an affiliated person
Response: See Item 7(a)
| Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract | Newday Ocean Health ETF |
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The Board of Trustees (the “Board” or the “Trustees”) of Tidal ETF Trust (the “Trust”) met at a meeting held on April 3, 2024 to consider the renewal of the Investment Advisory Agreement (the “Advisory Agreement”) between the Trust, on behalf of the Newday Ocean Health ETF (the “Fund”), a series of the Trust, and Tidal Investments LLC (formerly, Toroso Investments, LLC), the Fund’s investment adviser (the “Adviser”). Prior to this meeting, the Board requested and received materials to assist them in considering the renewal of the Advisory Agreement. The materials provided contained information with respect to the factors enumerated below, including a copy of the Advisory Agreement, a memorandum prepared by outside legal counsel to the Trust and Independent Trustees discussing in detail the Trustees’ fiduciary obligations and the factors they should assess in considering the renewal of the Advisory Agreement, due diligence materials relating to the Adviser (including the due diligence response completed by the Adviser with respect to a specific request letter from outside legal counsel to the Trust and Independent Trustees, the Adviser’s Form ADV, select ownership, organizational, financial and insurance information for the Adviser, biographical information of the Adviser’s key management and compliance personnel, detailed comparative information regarding the unitary advisory fee for the Fund, and information regarding the Adviser’s compliance program) and other pertinent information. Based on their evaluation of the information provided, the Trustees, by a unanimous vote (including a separate vote of the Trustees who are not “interested persons,” as that term is defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”)), approved the renewal of the Advisory Agreement for an additional one-year term.
Discussion of Factors Considered
In considering the approval of the Advisory Agreement and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors enumerated below.
| 1. | Nature, Extent and Quality of Services to be Provided. The Board considered the nature, extent and quality of the Adviser’s overall services provided to the Fund as well as its specific responsibilities in all aspects of day-to-day investment management of the Fund, including trade execution and recommendations with respect to the hiring, termination, or replacement of sub-advisers to the Fund. The Board considered the qualifications, experience and responsibilities of the Adviser’s investment management team, including Michael Venuto and Charles Ragauss, who each serve as a portfolio manager to the Fund, as well as the responsibilities of other key personnel of the Adviser involved in the day-to-day activities of the Fund. The Board reviewed due diligence information provided by the Adviser, including information regarding the Adviser’s compliance program, its compliance personnel and compliance record, as well as the Adviser’s cybersecurity program and business continuity plan. The Board noted that the Adviser does not manage any other accounts that utilize a strategy similar to that employed by the Fund. |
The Board also considered other services provided to the Fund, such as monitoring adherence to the Fund’s investment strategy and restrictions, oversight of Newday Funds, Inc., d/b/a Newday Impact (“Newday” or the “Sub-Adviser”), the Fund’s sub-adviser, and other service providers to the Fund, monitoring compliance with various Fund policies and procedures and with applicable securities regulations, and monitoring the extent to which the Fund achieves its investment objective as an actively-managed ETF. The Board noted that the Adviser is responsible for trade execution for the Fund and the Sub-Adviser is responsible for portfolio investment decisions for the Fund, subject to the supervision of the Adviser. The Board also noted that, during the review period, the Fund changed its principal investment strategies to modify the Fund’s portfolio selection criteria and target number of portfolio holdings.
The Board concluded that the Adviser had sufficient quality and depth of personnel, resources, investment methods and compliance policies and procedures essential to performing its duties under the Advisory Agreement and managing the Fund and that the nature, overall quality and extent of the management services provided to the Fund, as well as the Adviser’s compliance program, were satisfactory.
| 2. | Investment Performance of the Fund and the Adviser. The Board considered the investment performance of the Fund and the Adviser. The Board also considered the Fund’s performance against its benchmark index and select peer groups. The Board also considered that because the portfolio investment decision-making for the Fund is performed by the Sub-Adviser, the Fund’s performance is not the direct result of investment decisions made by the Adviser. |
The Board considered the performance of the Fund on an absolute basis, in comparison to its primary benchmark index (the MSCI ACWI Net Total Return Index) and in comparison to a secondary index (the S&P 500 Total Return Index). The Board also considered comparative information prepared by the Adviser, in partnership with AltaVista Research, LLC, a third-party ETF research firm, comparing the Fund to a peer group of ETFs within the Fund’s designated Morningstar category (a peer group of U.S. large blend funds) (the “AHOY Peer Group”), as well as a peer group of ETFs representing a subset of the AHOY Peer Group based on select criteria (the “AHOY Select Peer Group”). The Board noted that the Fund underperformed the MSCI ACWI Total Return Index and S&P 500 Total Return Index over the one-year and since inception periods ended December 31, 2023. The Board considered that the Fund’s performance was in-line with but slightly trailed the AHOY Peer Group average over the one-year period ended February 29, 2024. The Board also noted that the Fund ranked 149 out of 204 funds for the one-year period ended February 29, 2024.
After considering all of the information, the Board concluded that the performance of the Fund was satisfactory under current market conditions and that the Adviser has the necessary expertise and resources in providing investment advisory services in accordance with the Fund’s investment objective and strategies. Although past performance is not a guarantee or indication of future results, the Board determined that the Fund and its shareholders were likely to benefit from the Adviser’s continued management.
| 3. | Cost of Services to be Provided and Profits to be Realized by the Adviser. The Board considered the cost of services and the structure of the Adviser’s advisory fee, including a review of comparative expenses, expense components and peer group selection. The Board took into consideration that the advisory fee for the Fund was a “unitary fee,” meaning that the Fund pays no expenses other than the advisory fee and certain other costs such as interest, brokerage, and extraordinary expenses and, to the extent it is implemented, fees pursuant to the Fund’s Rule 12b-1 Plan. The Board noted that the Adviser continues to be responsible for compensating the Fund’s other service providers and paying the Fund’s other expenses out of its own fees and resources, subject to the Sub-Adviser’s contractual agreement to assume such obligation in exchange for the profits, if any, generated by the Fund’s unitary fee. The Board considered that the Fund’s advisory fee of 0.75% was above the AHOY Peer Group and AHOY Select Peer Group averages of 0.39% and 0.59%, respectively, and that the Fund’s expense ratio of 0.75% was above the AHOY Peer Group average and AHOY Select Peer Group averages of 0.40% and 0.63%, respectively. |
The Board concluded that the Fund’s expense ratio and the advisory fee were fair and reasonable in light of the comparative performance, advisory fee and expense information and the investment management services provided to the Fund by the Adviser given the nature of the Fund’s investment strategy. The Board also evaluated, based on a profitability analysis prepared by the Adviser, the fees received by the Adviser and its affiliates from their relationship with the Fund, and concluded that the fees had not been, and currently were not, excessive, and while the Fund was not yet profitable to the Adviser, the Adviser had adequate financial resources to support its services to the Fund from the revenues of its overall investment advisory business.
| 4. | Extent of Economies of Scale as the Fund Grows. The Board compared the Fund’s expenses relative to its peer groups and discussed realized and potential economies of scale. The Board considered the potential economies of scale that the Fund might realize under the structure of the advisory fee. The Board noted that the advisory fee did not contain any breakpoint reductions as the Fund’s assets grow in size, but that the Adviser would evaluate future circumstances that may warrant breakpoints in the fee structure. |
| 5. | Benefits to be Derived from the Relationship with the Fund. The Board considered the direct and indirect benefits that could be received by the Adviser and its affiliates from association with the Fund. The Board concluded that the benefits the Adviser may receive, such as greater name recognition or the ability to attract additional investor assets, appear to be reasonable and in many cases may benefit the Fund. |
Conclusion. Based on the Board’s deliberations and its evaluation of the information described above, with no single factor determinative of a conclusion, the Board, including the Independent Trustees, unanimously concluded that: (a) the terms of the Advisory Agreement are fair and reasonable; (b) the advisory fee is reasonable in light of the services that the Adviser provides to the Fund; and (c) the approval of the renewal of the Advisory Agreement for an additional one-year term was in the best interests of the Fund and its shareholders.
At the meeting held on April 3, 2024, the Board also considered the renewal of the sub-advisory agreement (the “Sub-Advisory Agreement”) for the Fund, entered into between the Adviser and Newday. Prior to this meeting, the Board requested and received materials to assist them in considering the renewal of the Sub-Advisory Agreement. The materials provided contained information with respect to the factors enumerated below, including a copy of the Sub-Advisory Agreement, a memorandum prepared by outside legal counsel to the Trust and the Independent Trustees discussing in detail the Trustees’ fiduciary obligations and the factors they should assess in considering the renewal of the Sub-Advisory Agreement, due diligence materials prepared by the Sub-Adviser (including the due diligence response completed by the Sub-Adviser with respect to a specific request letter from outside legal counsel to the Trust and the Independent Trustees, the Sub-Adviser’s Form ADV, select ownership, organizational, financial and insurance information for the Sub-Adviser, biographical information of key management and compliance personnel, and the Sub-Adviser’s compliance manual and code of ethics) and other pertinent information. Based on their evaluation of the information provided, the Trustees, by a unanimous vote (including a separate vote of the Independent Trustees), approved the renewal of the Sub-Advisory Agreement for an additional one-year term.
Discussion of Factors Considered
In considering the approval of the Sub-Advisory Agreement and reaching their conclusions, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors enumerated below.
| 1. | Nature, extent and quality of services to be provided. The Board considered the nature, extent and quality of Newday’s overall services provided to the Fund as well as its specific responsibilities in all aspects of day-to-day investment management of the Fund. The Board considered the qualifications, experience and responsibilities of Shireen Eddleblute and Matt Zimmer, who each serve as a portfolio manager for the Fund, as well as the responsibilities of other key personnel of Newday involved in the day-to-day activities of the Fund. The Board reviewed the due diligence information provided by Newday, including information regarding Newday’s compliance program, its compliance personnel and compliance record, as well as Newday’s cybersecurity program and business continuity plan. The Board noted that Newday does not currently manage separately-managed accounts that utilize a strategy similar to the strategy that is employed by Fund. |
The Board also considered other services provided to the Fund, such as monitoring adherence to the Fund’s investment strategies and restrictions, monitoring compliance with various Fund policies and procedures and with applicable securities regulations, monitoring the extent to which the Fund meets its investment objective as an actively-managed ETF and quarterly reporting to the Board. The Board noted that Newday is responsible for Fund’s portfolio investment decisions, subject to the supervision of the Adviser. The Board also noted that, during the review period, the Fund changed its principal investment strategies to modify the Fund’s portfolio selection criteria and target number of portfolio holdings.
The Board concluded that Newday had sufficient quality and depth of personnel, resources, investment methods and compliance policies and procedures essential to performing its duties under the Newday Sub-Advisory Agreement and managing the Fund and that the nature, overall quality and extent of the management services provided to the Fund, as well as Newday’s compliance program, were satisfactory.
| 2. | Investment performance of the Fund and the Sub-Adviser. In considering Fund performance, the Board noted that Newday is responsible for selecting investments for the Fund. Accordingly, the Board considered the performance of the Fund on an absolute basis, in comparison to its primary benchmark index (the MSCI ACWI Net Total Return Index), in comparison to a secondary benchmark index (the S&P 500 Total Return Index) and in comparison to the AHOY Peer Group. The Board noted that the Fund underperformed the MSCI ACWI Total Return Index and S&P 500 Total Return Index over the one-year and since inception periods ended December 31, 2023. The Board considered that the Fund’s performance was in-line with but slightly trailed the AHOY Peer Group average over the one-year period ended February 29, 2024. The Board also noted that the Fund ranked 149 out of 204 funds for the one-year period ended February 29, 2024. |
After considering all of the information, the Board concluded that the performance of the Fund was satisfactory under current market conditions and that Newday has the necessary expertise and resources in providing investment advisory services in accordance with the Fund’s investment objective and strategies. Although past performance is not a guarantee or indication of future results, the Board determined that the Fund and its shareholders were likely to benefit from Newday’s continued management.
| 3. | Cost of services to be provided and profits to be realized by the Sub-Adviser. The Board considered the structure of the sub-advisory fees paid by the Adviser to Newday under the Newday Sub-Advisory Agreement. The Board noted that the Adviser represented to the Board that the sub-advisory fees payable under the Newday Sub-Advisory Agreement were reasonable in light of the services performed by Newday. Since the sub-advisory fees are paid by the Adviser, the overall advisory fees paid by the Fund are not directly affected by the sub-advisory fees paid to Newday. Consequently, the Board did not consider the cost of services provided by Newday or profitability from its relationship with the Fund to be material factors for consideration given that Newday is not affiliated with the Adviser and, therefore, the sub-advisory fees paid to Newday were negotiated on an arm’s-length basis. Based on all of these factors, the Board concluded that the sub-advisory fees paid to Newday by the Adviser reflected appropriate allocations of the advisory fees and were reasonable in light of the services provided by Newday. |
| 4. | Extent of economies of scale as the Fund grows. Since the sub-advisory fees payable to Newday are not paid by the Fund, the Board did not consider whether the sub-advisory fees should reflect any realized or potential economies of scale that might be realized as the Fund’s assets increase. |
| 5. | Benefits to be derived from the relationship with the Fund. The Board considered the direct and indirect benefits that could be received by Newday from its association with the Fund. The Board concluded that the benefits Newday may receive, such as greater name recognition or the ability to attract additional investor assets, appear to be reasonable and in many cases may benefit the Fund. |
Conclusion. Based on the Board’s deliberations and its evaluation of the information described above, with no single factor determinative of a conclusion, the Board, including the Independent Trustees, unanimously concluded that: (a) the terms of the Newday Sub-Advisory Agreement are fair and reasonable; (b) the sub-advisory fees are reasonable in light of the services that Newday provides to the Fund; and (c) the approval of the renewal of the Newday Sub-Advisory Agreement for an additional one-year term was in the best interests of the Fund and its shareholders.
| (b) | Financial Highlights are included within the financial statements filed under Item 7(a) of this Form.” |
Item 8. Changes in and Disagreements with Accountants for Open-End Investment Companies.
See Item 7(a).
There were no changes in or disagreements with accountants during the period covered by this report.
Item 9. Proxy Disclosure for Open-End Investment Companies.
There were no matters submitted to a vote of shareholders during the period covered by this report.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Investment Companies.
See Item 7(a).
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
See Item 7(a).
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 15. Submission of Matters to a Vote of Security Holders.
Not Applicable.
Item 16. Controls and Procedures.
| (a) | The Registrant’s President/Principal Executive Officer and Treasurer/Principal Financial Officer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider. |
| (b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 18. Recovery of Erroneously Awarded Compensation.
(a) Not Applicable
(b) Not Applicable
Item 19. Exhibits.
(2) A separate certification for each principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
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) | Tidal ETF Trust | |
| By (Signature and Title)* | /s/ Eric W. Falkeis | |
| | Eric W. Falkeis, President/Principal Executive 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/ Eric W. Falkeis | |
| | Eric W. Falkeis, President/Principal Executive Officer |
| By (Signature and Title)* | /s/ Aaron J. Perkovich | |
| | Aaron J. Perkovich, Treasurer/Principal Financial Officer |
* Print the name and title of each signing officer under his or her signature.
