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: | 811-23439 |
Exact name of registrant as specified in charter: | ETF Opportunities Trust |
Address of principal executive offices: | 8730 Stony Point Parkway, Suite 205 Richmond, VA 23235 |
Name and address of agent for service | The Corporation Trust Co., Corporation Trust Center, 1209 Orange St., Wilmington, DE 19801
With Copy to:
John H. Lively Practus LLP 11300 Tomahawk Creek Parkway, Ste. 310 Leawood, KS 66211 |
Registrant’s telephone number, including area code: | (804) 267-7400 |
Date of fiscal year end: | July 31 |
Date of reporting period: | July 31, 2022 |
Item #1. Reports to Stockholders. | |
INDEX | American Conservative Values ETF |
ANNUAL REPORT
For the Year Ended July 31, 2022
American Conservative Values ETF
1
ANNUAL REPORT
American Conservative Values ETF
Dear Shareholders,
Welcome to our community of politically conservative investors.
Since the American Conservative Values ETF’s (ACVF) inception to date (10/28/2020 until 07/31/2022), nearly all major stock indexes produced positive results. The large-cap S&P 500® Index, a stock market index tracking the stock performance of 500 large companies listed on exchanges in the United States and the Russell 1000® Index, a stock market index that tracks the highest-ranking 1,000 stocks in the Russell 3000® Index, repeatedly reached record highs into year end 2021, before entering a significant market correction in 2022. The S&P 500® was in a drawdown of over -20% in early June, which is widely considered the definition of a bear market before recovering somewhat during July.
Acknowledging the difficult market environment, I am extremely pleased with our performance to date (Table 2) as well as our boycotted companies (Table 1). ACVF is actively managed and endeavors to balance performance, competitive with large-cap benchmarks such as the S&P 500®, with the sense of purpose and advocacy of boycotting companies that are most hostile to conservative values. Maximizing the economic value of these boycotts while also preserving predictable large cap performance is our goal.
This trailing 12-month period, particularly year to date was difficult for US large- cap stocks and most market sectors. The market has sold off in reaction to rising inflation, the war in Ukraine and the Fed’s raising short term interest rates to contain inflation, which increases the probability of an economic recession. The factor that most significantly affected ACVF’s relative performance vs. the S&P 500® during this period was the relative performance of the companies we are boycotting (the “Boycotts”), which are S&P 500® constituents. ACVF’s out performance of the S&P 500® during this period was due to the company and sector miss- weights introduced to the Fund portfolio by avoiding ownership of the Boycotts. On average the Boycotts underperformed the S&P 500® during this period by a weighted average of almost -7.0%. Performance of each of the Boycotts is contained in Table 1.
During this period, ACVF initiated new Boycotts on American Express, Bank of America, Lowe’s, Nasdaq, Warner Bros Discovery and Netflix and ended Boycotts on Wells Fargo and 3M.
2
ANNUAL REPORT
American Conservative Values ETF
Shareholder Letter - continued (unaudited)July 31, 2022
Table 1
For the trailing one year Period of (7/31/2021 until 07/31/2022)
Boycotted Company |
| % Return |
| Return +/- |
PROGRESSIVE CORP | | 23.2 | | 27.8 |
COCA-COLA CO/THE | | 16.0 | | 20.6 |
APPLE INC | | 12.1 | | 16.7 |
JOHNSON & JOHNSON | | 4.0 | | 8.6 |
LOWE’S COS INC* | | 1.0 | | 5.7 |
NASDAQ INC* | | -1.9 | | 2.7 |
DICK’S SPORTING GOODS, INC | | -4.6 | | 0.0 |
AT&T INC | | -5.2 | | -0.6 |
WALMART INC | | -6.0 | | -1.3 |
AMERICAN EXPRESS CO* | | -8.6 | | -4.0 |
GOLDMAN SACHS GROUP INC | | -9.1 | | -4.4 |
BANK OF AMERICA CORP* | | -10.0 | | -5.4 |
VERIZON COMMUNICATIONS INC | | -13.1 | | -8.5 |
ALPHABET INC-CL A | | -13.7 | | -9.0 |
ALPHABET INC-CL C | | -13.7 | | -9.1 |
AMAZONCOM INC | | -18.9 | | -14.3 |
DELTA AIR LINES INC | | -20.3 | | -15.7 |
BLACKROCK INC | | -21.0 | | -16.4 |
JPMORGAN CHASE & CO | | -21.8 | | -17.2 |
SALESFORCE INC | | -23.9 | | -19.3 |
THE NEW YORK TIMES COMPANY | | -26.5 | | -21.8 |
STARBUCKS CORP | | -28.8 | | -24.1 |
NIKE INC -CL B | | -30.8 | | -26.2 |
COMCAST CORP-CLASS A | | -34.8 | | -30.2 |
GENERAL MOTORS CO | | -36.2 | | -31.6 |
WARNER BROS DISCOVERY INC* | | -39.5 | | 0.48 |
WALT DISNEY CO/THE | | -39.7 | | -35.1 |
TWITTER INC | | -40.3 | | -35.7 |
META PLATFORMS INC-CLASS A | | -55.4 | | -50.7 |
NETFLIX INC* | | -56.6 | | -51.9 |
*Denoted Companies Boycott period was less than 1 year
3
ANNUAL REPORT
American Conservative Values ETF
Shareholder Letter - continued (unaudited)July 31, 2022
In furtherance of the goal of maximizing the economic value of these boycotts while also preserving predictable large-cap performance, the management team seeks to control ACVF’s risk to the S&P 500® by employing portfolio construction which is diversified among economic sector and style factors, resulting in an ETF solidly within the large-cap blend style box. By monitoring the risks created by our boycotts and utilizing such a portfolio construction, the resulting performance should produce returns consistent with the large cap blend style universe and large-cap indexes, a high correlation to the S&P 500® as well as beta close to 1.0. Beta measures the sensitivity of an investment to the movement of its benchmark. A beta higher than 1.0 indicates the investment has been more volatile than the benchmark and a beta of less than 1.0 indicates the investment has been less volatile than the benchmark.
This was accomplished while also avoiding ownership of 29 of the companies most hostile to conservative values (chart includes 2 share classes of Google/Alphabet), which represented on average close to 27% of the S&P 500® company weights.
Since Inception (10/28/2020 until 07/31/2022), a $10,000(A) investment in ACVF would have returned a profit of $2,552, which is $48 dollars greater than the return of the S&P 500® for a $10,000 investment for that same period. We achieved these results, while also keeping approximately $2,700 of your investment out of the companies we believe are most hostile to conservative values.
(A)This illustrates the performance of a hypothetical $10,000 investment made in Fund two years ago. It assumes reinvestment of dividends and capital gains, but does reflect the effect of any applicable sales charges or redemption fees. This does not imply any future performance.
Thank you for your continued support and confidence in the American Conservative Values ETF (ACVF).
Sincerely,
William E. Flaig, Jr.
Founder and CEO
Ridgeline Research LLC
4
ANNUAL REPORT
American Conservative Values ETF
Shareholder Letter - continued (unaudited)July 31, 2022
Investment Objective
The American Conservative Values ETF (the “Fund”) seeks to achieve long-term capital appreciation with capital preservation as a secondary objective.
Table 2
PERFORMANCE (as of July 31, 2022)
| 3 MONTH |
| 6 MONTH |
| 1 YEAR |
| YTD |
| SINCE |
ACVF – Market (Close) | -0.10% | | -7.33% | | -4.13% | | -12.62% | | 16.17% |
ACVF – NAV | -0.12% | | -7.35% | | -4.06% | | -12.59% | | 16.17% |
S&P 500® – Total Return | -0.39% | | -7.81% | | -4.64% | | -12.58% | | 15.97% |
The performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher that the performance data quoted. For the most recent month-end performance, please call 1-888-909-6030.
*Since Inception Returns are Annualized
CURRENT BOYCOTTS (as of July 31, 2022)
ALPHABET INC-CL A | JPMORGAN CHASE & CO |
ALPHABET INC-CL C | LOWE’S COS INC |
AMAZON.COM INC | META PLATFORMS INC-CLASS A |
AMERICAN EXPRESS CO | NASDAQ INC |
APPLE INC | NETFLIX INC |
AT&T INC | NIKE INC -CL B |
BANK OF AMERICA CORP | PROGRESSIVE CORP |
BLACKROCK INC | SALESFORCE INC |
COCA-COLA CO/THE | STARBUCKS CORP |
COMCAST CORP-CLASS A | THE NEW YORK TIMES COMPANY |
DELTA AIR LINES INC | TWITTER INC |
DICK’S SPORTING GOODS, INC. | VERIZON COMMUNICATIONS INC |
GENERAL MOTORS CO | WALMART INC |
GOLDMAN SACHS GROUP INC | WALT DISNEY CO/THE |
JOHNSON & JOHNSON | WARNER BROS DISCOVERY INC |
5
ANNUAL REPORT
American Conservative Values ETF
Shareholder Letter - continued (unaudited)July 31, 2022
Important Disclosure Statement
Must be preceded or accompanied by a current prospectus.
An investment in the Fund is subject to risks, including the possible loss of the principal amount invested. Overall stock market risks may affect the value of individual securities in which the Fund invests. The Fund is actively managed, the Adviser’s investment decisions impact the Fund’s performance. The Fund and Adviser are new, the ETF has only recently commenced operations. This Fund may not be suitable for all investors.
Fund holdings are subject to change and are not a recommendation to buy or sell any security. Please see the Schedule of Investments for a complete list of holdings.
The ACVF ETF is distributed by Foreside Fund Services, LLC.
6
ANNUAL REPORT
American Conservative Values ETF
Important Disclosure Statements (unaudited)
The American Conservative Values ETF’s (the “Fund”) prospectus contains important information about the Fund’s investment objectives, potential risks, management fees, charges and expenses, and other information and should be read and considered carefully before investing. To obtain the Fund’s prospectus containing this and other important information, please call 888-909-6030. Please read the prospectus carefully before you invest. Foreside Fund Services, LLC is the distributor and Ridgeline Research LLC is the investment advisor.
The performance data quoted represents past performance and is not a guarantee of future results. Current performance of the Fund may be lower or higher than the performance data quoted. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Information provided with respect to the Fund’s Performance Data, Portfolio Holdings, Sector Weightings, Number of Holdings and Expense Ratios are as of July 31, 2022 and are subject to change at any time. For most recent information, please call 888-909-6030.
7
ANNUAL REPORT
American Conservative Values ETF
(unaudited)
| | Total Return | | Average Annual Return |
American Conservative Values ETF | | (4.06%) | | 13.83% |
S&P 500® Index | | (4.64%) | | 13.58% |
Performance figures assume the reinvestment of all dividends and distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. This does not imply any future performance.
The S&P 500® Index is a broad-based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general.
8
ANNUAL REPORT
American Conservative Values ETF
Portfolio Compositionas of July 31, 2022 (unaudited)
Holdings by Sector/Asset Class |
| Percentage of |
COMMON STOCKS: | | |
Software & Services | | 16.15% |
Healthcare | | 15.51% |
Information Technology | | 12.59% |
Financials | | 11.59% |
Consumer Discretionary | | 10.04% |
Consumer Staples | | 8.90% |
Industrials | | 8.28% |
Communication Services | | 4.08% |
Energy | | 4.08% |
Utilities | | 3.18% |
Materials | | 2.77% |
Real Estate | | 2.46% |
| | 99.63% |
See Notes to Financial Statements
9
ANNUAL REPORT
American Conservative Values ETF
Schedule of InvestmentsJuly 31, 2022
| Security Description |
| Number of |
| Fair |
99.63% | COMMON STOCKS | | | | |
| | | | | |
4.08% | COMMUNICATION SERVICES | | | | |
| Activision Blizzard, Inc. | | 1,393 | | $111,370 |
| Charter Communications, Inc.* | | 449 | | 194,013 |
| DISH Network Corp.* | | 1,681 | | 29,199 |
| Electronic Arts, Inc. | | 339 | | 44,487 |
| Fox Corp. - Class A | | 1,433 | | 47,447 |
| Fox Corp. - Class B | | 1,357 | | 41,931 |
| IAC/InterActive Corp.* | | 460 | | 31,510 |
| The Interpublic Group of Cos, Inc. | | 3,019 | | 90,178 |
| Live Nation Entertainment, Inc.* | | 381 | | 35,810 |
| Lumen Technologies, Inc. | | 2,220 | | 24,176 |
| Match Group, Inc.* | | 575 | | 42,153 |
| News Corp. -Class A | | 2,069 | | 35,463 |
| News Corp. - Class B | | 1,878 | | 32,452 |
| Omnicom Group, Inc. | | 1,373 | | 95,890 |
| Paramount Global | | 2,008 | | 47,489 |
| Spotify Technology SA* | | 306 | | 34,584 |
| Take-Two Interactive Software* | | 209 | | 27,741 |
| T-Mobile US, Inc.* | | 2,511 | | 359,224 |
| Vimeo, Inc.* | | 630 | | 3,503 |
| | | | | 1,328,620 |
| | | | | |
10.04% | CONSUMER DISCRETIONARY | | | | |
| Advance Auto Parts, Inc. | | 86 | | 16,651 |
| Aptiv PLC* | | 339 | | 35,558 |
| AutoZone, Inc.* | | 2 | | 4,275 |
| Bath & Body Works, Inc. | | 365 | | 12,972 |
| Best Buy Co., Inc. | | 297 | | 22,866 |
| Booking Holdings, Inc.* | | 86 | | 166,469 |
| BorgWarner, Inc. | | 377 | | 14,499 |
| CarMax, Inc.* | | 170 | | 16,922 |
| Carnival Corp.* | | 928 | | 8,408 |
| Chipotle Mexican Grill, Inc.* | | 43 | | 67,261 |
| DR Horton, Inc. | | 340 | | 26,530 |
| Darden Restaurants, Inc. | | 173 | | 21,537 |
| Dollar General Corp. | | 423 | | 105,086 |
See Notes to Financial Statements
10
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
| Dollar Tree, Inc.* | | 295 | | $48,781 |
| Domino’s Pizza, Inc. | | 43 | | 16,861 |
| eBay, Inc. | | 700 | | 34,041 |
| Etsy, Inc.* | | 511 | | 53,001 |
| Expedia Group, Inc.* | | 558 | | 59,176 |
| Ford Motor Co. | | 5,245 | | 77,049 |
| The Gap, Inc. | | 295 | | 2,838 |
| Garmin Ltd. | | 589 | | 57,498 |
| Genuine Parts Co. | | 213 | | 32,561 |
| Hasbro, Inc. | | 88 | | 6,927 |
| Hilton Worldwide Holdings, Inc. | | 339 | | 43,416 |
| The Home Depot, Inc. | | 1,903 | | 572,689 |
| Las Vegas Sands Corp.* | | 509 | | 19,184 |
| Lennar Corp. | | 252 | | 21,420 |
| LKQ Corp.* | | 252 | | 13,820 |
| Marriott International, Inc./MD | | 808 | | 128,327 |
| McDonald’s Corp. | | 960 | | 252,835 |
| MGM Resorts International | | 1,060 | | 34,694 |
| Norwegian Cruise Line Holdings* | | 255 | | 3,098 |
| O’Reilly Automotive, Inc.* | | 86 | | 60,509 |
| Pool Corp. | | 43 | | 15,381 |
| PulteGroup, Inc. | | 130 | | 5,671 |
| PVH Corp. | | 85 | | 5,263 |
| Ralph Lauren Corp. | | 42 | | 4,142 |
| Ross Stores, Inc. | | 426 | | 34,617 |
| Royal Caribbean Cruises Ltd.* | | 213 | | 8,245 |
| Tapestry, Inc. | | 256 | | 8,609 |
| Target Corp. | | 627 | | 102,439 |
| Tesla, Inc.* | | 912 | | 813,002 |
| The TJX Cos, Inc. | | 1,553 | | 94,981 |
| Tractor Supply Co. | | 130 | | 24,892 |
| Ulta Beauty, Inc.* | | 43 | | 16,723 |
| Under Armour, Inc. - Class A* | | 169 | | 1,565 |
| Under Armour, Inc. - Class C* | | 208 | | 1,718 |
| VF Corp. | | 338 | | 15,102 |
| Wynn Resorts Ltd.* | | 125 | | 7,935 |
| YUM! Brands, Inc. | | 384 | | 47,055 |
| | | | | 3,265,099 |
| | | | | |
See Notes to Financial Statements
11
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
8.90% | CONSUMER STAPLES | | | | |
| Altria Group, Inc. | | 1,987 | | $87,150 |
| Archer-Daniels-Midland Co. | | 1,102 | | 91,213 |
| Brown-Forman Corp. | | 263 | | 19,520 |
| Church & Dwight Co., Inc. | | 213 | | 18,738 |
| The Clorox Co. | | 36 | | 5,106 |
| Colgate-Palmolive Co. | | 884 | | 69,606 |
| Constellation Brands, Inc. | | 335 | | 82,514 |
| Costco Wholesale Corp. | | 1,346 | | 728,590 |
| The Estee Lauder Cos., Inc. | | 213 | | 58,170 |
| General Mills, Inc. | | 510 | | 38,143 |
| The Hershey Co. | | 129 | | 29,407 |
| Kimberly-Clark Corp. | | 296 | | 39,010 |
| The Kraft Heinz Co. | | 805 | | 29,648 |
| The Kroger Co. | | 1,095 | | 50,852 |
| McCormick & Co., Inc./MD | | 170 | | 14,850 |
| Mondelez International, Inc. | | 2,024 | | 129,617 |
| Monster Beverage Corp.* | | 802 | | 79,895 |
| PepsiCo, Inc. | | 2,600 | | 454,896 |
| Philip Morris International, Inc. | | 1,436 | | 139,507 |
| The Procter & Gamble Co. | | 4,368 | | 606,759 |
| Sysco Corp. | | 600 | | 50,940 |
| Tyson Foods, Inc. | | 337 | | 29,659 |
| Walgreens Boots Alliance, Inc. | | 1,100 | | 43,582 |
| | | | | 2,897,372 |
| | | | | |
4.08% | ENERGY | | | | |
| Baker Hughes Co. | | 885 | | 22,736 |
| Chevron Corp. | | 2,192 | | 359,006 |
| ConocoPhillips | | 932 | | 90,805 |
| EOG Resources, Inc. | | 465 | | 51,717 |
| Exxon Mobil Corp. | | 4,827 | | 467,881 |
| Halliburton Co. | | 841 | | 24,641 |
| Hess Corp. | | 127 | | 14,284 |
| Kinder Morgan, Inc. | | 1,942 | | 34,937 |
| Marathon Petroleum Corp. | | 848 | | 77,728 |
| Occidental Petroleum Corp. | | 849 | | 55,822 |
| ONEOK, Inc. | | 377 | | 22,522 |
See Notes to Financial Statements
12
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
| Pioneer Natural Resources Co. | | 85 | | $20,141 |
| Schlumberger NV | | 1,601 | | 59,285 |
| The Williams Cos., Inc. | | 800 | | 27,272 |
| | | | | 1,328,777 |
| | | | | |
11.59% | FINANCIALS | | | | |
| Aflac, Inc. | | 844 | | 48,361 |
| The Allstate Corp. | | 380 | | 44,449 |
| American International Group, Inc. | | 1,179 | | 61,037 |
| Ameriprise Financial, Inc. | | 174 | | 46,966 |
| Aon PLC | | 213 | | 61,992 |
| Arthur J Gallagher & Co. | | 86 | | 15,393 |
| Bank of New York Mellon Corp. | | 1,228 | | 53,369 |
| Berkshire Hathaway, Inc. - Class B* | | 2,814 | | 845,888 |
| Capital One Financial Corp. | | 428 | | 47,007 |
| Cboe Global Markets, Inc. | | 88 | | 10,857 |
| The Charles Schwab Corp. | | 2,698 | | 186,297 |
| Chubb Ltd. | | 633 | | 119,409 |
| Cincinnati Financial Corp. | | 173 | | 16,840 |
| Citigroup, Inc. | | 3,105 | | 161,150 |
| Citizens Financial Group, Inc. | | 716 | | 27,187 |
| CME Group, Inc. | | 463 | | 92,359 |
| Discover Financial Services | | 174 | | 17,574 |
| Fifth Third BanCorp | | 1,183 | | 40,364 |
| First Republic Bank/California | | 255 | | 41,491 |
| Franklin Resources, Inc. | | 250 | | 6,863 |
| Hartford Financial Services Group | | 298 | | 19,212 |
| Huntington Bancshares, Inc. | | 1,311 | | 17,423 |
| Intercontinental Exchange, Inc. | | 717 | | 73,127 |
| Invesco Ltd. | | 132 | | 2,342 |
| KeyCorp | | 888 | | 16,250 |
| Lincoln National Corp. | | 208 | | 10,679 |
| Loews Corp. | | 203 | | 11,825 |
| MarketAxess Holdings, Inc. | | 43 | | 11,644 |
| Marsh & McLennan Cos., Inc. | | 547 | | 89,686 |
| MetLife, Inc. | | 1,476 | | 93,357 |
| Moody’s Corp. | | 248 | | 76,942 |
| Morgan Stanley | | 2,569 | | 216,567 |
See Notes to Financial Statements
13
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
| MSCI, Inc. | | 45 | | $21,660 |
| Northern Trust Corp. | | 337 | | 33,626 |
| PNC Financial Services Group | | 769 | | 127,608 |
| Principal Financial Group, Inc. | | 171 | | 11,447 |
| Prudential Financial, Inc. | | 799 | | 79,892 |
| Raymond James Financial, Inc. | | 255 | | 25,110 |
| Regions Financial Corp. | | 1,518 | | 32,151 |
| Rocket Cos., Inc. | | 3,103 | | 29,541 |
| S&P Global, Inc. | | 574 | | 216,358 |
| State Street Corp. | | 507 | | 36,017 |
| SVB Financial Group* | | 86 | | 34,705 |
| Synchrony Financial | | 87 | | 2,913 |
| T Rowe Price Group, Inc. | | 298 | | 36,794 |
| The Travelers Cos., Inc. | | 339 | | 53,799 |
| Truist Financial Corp. | | 2,024 | | 102,151 |
| US Bancorp | | 2,424 | | 114,413 |
| Wells Fargo & Co. | | 4,607 | | 202,109 |
| Willis Towers Watson PLC | | 130 | | 26,902 |
| | | | | 3,771,103 |
| | | | | |
15.51% | HEALTHCARE | | | | |
| Abbott Laboratories | | 2,091 | | 227,584 |
| AbbVie, Inc. | | 2,155 | | 309,264 |
| Agilent Technologies, Inc. | | 213 | | 28,563 |
| Align Technology, Inc.* | | 86 | | 24,163 |
| AmerisourceBergen Corp. | | 255 | | 37,212 |
| Amgen, Inc. | | 667 | | 165,062 |
| AstraZeneca PLC | | 722 | | 47,818 |
| Baxter International, Inc. | | 83 | | 4,869 |
| Becton Dickinson and Co. | | 298 | | 72,804 |
| Biogen, Inc.* | | 213 | | 45,808 |
| Boston Scientific Corp.* | | 1,560 | | 64,038 |
| Bristol-Myers Squibb Co. | | 2,866 | | 211,453 |
| Cardinal Health, Inc. | | 249 | | 14,830 |
| Catalent, Inc.* | | 86 | | 9,727 |
| Centene Corp.* | | 462 | | 42,952 |
See Notes to Financial Statements
14
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
| Cigna Corp. | | 503 | | $138,506 |
| The Cooper Cos., Inc. | | 43 | | 14,061 |
| CVS Health Corp. | | 1,481 | | 141,702 |
| Danaher Corp. | | 963 | | 280,686 |
| Dexcom, Inc.* | | 344 | | 28,236 |
| Edwards Lifesciences Corp.* | | 595 | | 59,821 |
| Elevance Health, Corp. | | 213 | | 101,622 |
| Eli Lilly & Co. | | 1,047 | | 345,185 |
| Embecta Corp.* | | 59 | | 1,736 |
| Gilead Sciences, Inc. | | 1,689 | | 100,918 |
| HCA Healthcare, Inc. | | 254 | | 53,955 |
| Hologic, Inc.* | | 127 | | 9,065 |
| Humana, Inc. | | 125 | | 60,250 |
| IDEXX Laboratories, Inc.* | | 45 | | 17,963 |
| Illumina, Inc.* | | 170 | | 36,836 |
| Incyte Corp.* | | 132 | | 10,254 |
| Intuitive Surgical, Inc.* | | 393 | | 90,457 |
| IQVIA Holdings, Inc.* | | 169 | | 40,606 |
| Laboratory Corporation of America | | 86 | | 22,548 |
| McKesson Corp. | | 213 | | 72,757 |
| Medtronic PLC | | 1,540 | | 142,481 |
| Merck & Co., Inc. | | 3,163 | | 282,582 |
| Mettler-Toledo International, Inc.* | | 1 | | 1,350 |
| Pfizer, Inc. | | 6,556 | | 331,144 |
| Regeneron Pharmaceuticals, Inc.* | | 132 | | 76,783 |
| ResMed, Inc. | | 87 | | 20,925 |
| Stryker Corp. | | 380 | | 81,605 |
| Thermo Fisher Scientific, Inc. | | 457 | | 273,473 |
| UnitedHealth Group, Inc. | | 1,047 | | 567,830 |
| Veeva Systems, Inc.* | | 292 | | 65,285 |
| Vertex Pharmaceuticals, Inc.* | | 463 | | 129,830 |
| West Pharmaceutical Services, Inc. | | 43 | | 14,773 |
| Zimmer Biomet Holdings, Inc. | | 137 | | 15,123 |
| Zimvie Inc. | | 13 | | 252 |
| Zoetis, Inc. | | 594 | | 108,435 |
| | | | | 5,045,182 |
| | | | | |
See Notes to Financial Statements
15
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
8.28% | INDUSTRIALS | | | | |
| 3M Co. | | 327 | | $46,839 |
| American Airlines Group, Inc.* | | 2,194 | | 30,080 |
| AMETEK, Inc. | | 167 | | 20,625 |
| The Boeing Co.* | | 575 | | 91,603 |
| Canadian Pacific Railway Ltd. | | 124 | | 9,780 |
| Carrier Global Corp. | | 465 | | 18,846 |
| Caterpillar, Inc. | | 633 | | 125,492 |
| CH Robinson Worldwide, Inc. | | 132 | | 14,612 |
| Cintas Corp. | | 86 | | 36,592 |
| Copart, Inc.* | | 251 | | 32,153 |
| CSX Corp. | | 2,528 | | 81,730 |
| Cummins, Inc. | | 213 | | 47,139 |
| Deere & Co. | | 338 | | 115,995 |
| Eaton Corp. PLC | | 466 | | 69,150 |
| Emerson Electric Co. | | 758 | | 68,273 |
| Equifax, Inc. | | 128 | | 26,740 |
| Expeditors International of Washington, Inc. | | 172 | | 18,275 |
| Fastenal Co. | | 636 | | 32,665 |
| FedEx Corp. | | 255 | | 59,438 |
| Fortive Corp. | | 300 | | 19,335 |
| General Dynamics Corp. | | 211 | | 47,827 |
| General Electric Co. | | 1,179 | | 87,140 |
| Honeywell International, Inc. | | 960 | | 184,762 |
| JB Hunt Transport Services, Inc. | | 43 | | 7,881 |
| Illinois Tool Works, Inc. | | 255 | | 52,979 |
| Ingersoll Rand, Inc. | | 340 | | 16,932 |
| Jacobs Engineering Group, Inc. | | 125 | | 17,163 |
| Johnson Controls International | | 1,102 | | 59,409 |
| L3Harris Technologies, Inc. | | 254 | | 60,952 |
| Lockheed Martin Corp. | | 292 | | 120,833 |
| Nielsen Holdings PLC | | 256 | | 6,131 |
| Norfolk Southern Corp. | | 298 | | 74,849 |
| Northrop Grumman Corp. | | 171 | | 81,892 |
| Old Dominion Freight Line, Inc. | | 87 | | 26,405 |
| Otis Worldwide Corp. | | 250 | | 19,543 |
| PACCAR, Inc. | | 382 | | 34,961 |
See Notes to Financial Statements
16
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
| Parker-Hannifin Corp. | | 129 | | $37,293 |
| Quanta Services, Inc. | | 43 | | 5,965 |
| Raytheon Technologies Corp. | | 1,688 | | 157,338 |
| Republic Services, Inc. | | 130 | | 18,026 |
| Rockwell Automation, Inc. | | 43 | | 10,977 |
| Southwest Airlines Co.* | | 846 | | 32,250 |
| Stanley Black & Decker, Inc. | | 170 | | 16,546 |
| Trane Technologies PLC | | 210 | | 30,868 |
| TransDigm Group, Inc.* | | 43 | | 26,761 |
| Union Pacific Corp. | | 753 | | 171,157 |
| United Airlines Holdings, Inc.* | | 296 | | 10,878 |
| United Parcel Service, Inc. | | 750 | | 146,168 |
| Verisk Analytics, Inc. | | 214 | | 40,714 |
| Westinghouse Air Brake Technologies Corp. | | 167 | | 15,609 |
| Waste Management, Inc. | | 468 | | 77,014 |
| WW Grainger, Inc. | | 43 | | 23,372 |
| Xylem, Inc. | | 87 | | 8,007 |
| | | | | 2,693,964 |
| | | | | |
12.59% | INFORMATION TECHNOLOGY | | | | |
| Advanced Micro Devices, Inc.* | | 2,802 | | 264,705 |
| Amphenol Corp. | | 672 | | 51,831 |
| Analog Devices, Inc. | | 421 | | 72,395 |
| Applied Materials, Inc. | | 1,364 | | 144,557 |
| Arista Networks, Inc.* | | 1,344 | | 156,751 |
| Broadcom, Inc. | | 419 | | 224,366 |
| CDW Corp./DE | | 130 | | 23,599 |
| Cisco Systems, Inc. | | 10,410 | | 472,302 |
| Corning, Inc. | | 806 | | 29,629 |
| F5 Networks, Inc.* | | 44 | | 7,364 |
| Hewlett Packard Enterprise Co. | | 1,439 | | 20,491 |
| HP, Inc. | | 1,968 | | 65,712 |
| Intel Corp. | | 4,613 | | 167,498 |
| Juniper Networks, Inc. | | 129 | | 3,616 |
| Keysight Technologies, Inc.* | | 170 | | 27,642 |
| KLA Corp. | | 130 | | 49,860 |
| Kyndryl Holdings Inc.* | | 205 | | 2,146 |
See Notes to Financial Statements
17
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
| Lam Research Corp. | | 170 | | $85,087 |
| Microchip Technology, Inc. | | 424 | | 29,197 |
| Micron Technology, Inc. | | 1,504 | | 93,037 |
| Motorola Solutions, Inc. | | 173 | | 41,276 |
| NetApp, Inc. | | 132 | | 9,416 |
| NVIDIA Corp. | | 3,613 | | 656,228 |
| Qorvo, Inc.* | | 42 | | 4,371 |
| QUALCOMM, Inc. | | 1,543 | | 223,828 |
| Roper Technologies, Inc. | | 131 | | 57,204 |
| Seagate Technology Holdings PL | | 205 | | 16,396 |
| ServiceNow, Inc.* | | 409 | | 182,684 |
| Skyworks Solutions, Inc. | | 130 | | 14,154 |
| TE Connectivity Ltd. | | 426 | | 56,969 |
| Teradyne, Inc. | | 126 | | 12,712 |
| Texas Instruments, Inc. | | 1,291 | | 230,947 |
| Visa, Inc. | | 2,220 | | 470,884 |
| Western Digital Corp.* | | 299 | | 14,681 |
| Zebra Technologies Corp.* | | 249 | | 89,065 |
| Zoom Video Communications, Inc.* | | 239 | | 24,823 |
| | | | | 4,097,423 |
| | | | | |
2.77% | MATERIALS | | | | |
| Air Products and Chemicals, Inc. | | 258 | | 64,043 |
| Albemarle Corp. | | 43 | | 10,505 |
| Amcor PLC | | 1,902 | | 24,631 |
| Ball Corp. | | 424 | | 31,130 |
| Celanese Corp. | | 44 | | 5,170 |
| Corteva, Inc. | | 848 | | 48,802 |
| Dow, Inc. | | 929 | | 49,432 |
| DuPont de Nemours, Inc. | | 931 | | 57,005 |
| Ecolab, Inc. | | 300 | | 49,551 |
| FMC Corp. | | 44 | | 4,888 |
| Freeport-McMoRan, Inc. | | 2,029 | | 64,015 |
| International Paper Co. | | 593 | | 25,363 |
| International Flavors & Fragrances, Inc. | | 85 | | 10,544 |
See Notes to Financial Statements
18
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
| Linde PLC | | 715 | | $215,930 |
| LyondellBasell Industries NV | | 251 | | 22,369 |
| The Mosaic Co. | | 337 | | 17,746 |
| Newmont Corp. | | 802 | | 36,315 |
| Nucor Corp. | | 292 | | 39,654 |
| Packaging Corp. of America | | 87 | | 12,233 |
| PPG Industries, Inc. | | 255 | | 32,969 |
| The Sherwin-Williams Co. | | 256 | | 61,937 |
| Sylvamo Corp.* | | 51 | | 2,001 |
| Vulcan Materials Co. | | 43 | | 7,109 |
| Westrock Co. | | 213 | | 9,023 |
| | | | | 902,365 |
| | | | | |
2.46% | REAL ESTATE | | | | |
| Alexandria Real Estate Equities | | 87 | | 14,423 |
| American Tower Corp. | | 465 | | 125,936 |
| AvalonBay Communities, Inc. | | 130 | | 27,812 |
| CBRE Group, Inc.* | | 507 | | 43,409 |
| Crown Castle International Corp. | | 468 | | 84,549 |
| Digital Realty Trust, Inc. | | 297 | | 39,338 |
| Equinix, Inc. | | 131 | | 92,190 |
| Equity Residential | | 382 | | 29,945 |
| Extra Space Storage, Inc. | | 44 | | 8,339 |
| Host Hotels & Resorts, Inc.* | | 500 | | 8,905 |
| Mid-America Apartment Communities | | 44 | | 8,172 |
| Orion Office Reit Inc.* | | 16 | | 175 |
| Prologis, Inc. | | 927 | | 122,883 |
| Public Storage | | 212 | | 69,199 |
| Realty Income Corp. | | 199 | | 14,724 |
| SBA Communications Corp. | | 35 | | 11,753 |
| Simon Property Group, Inc. | | 209 | | 22,706 |
| Ventas, Inc. | | 249 | | 13,391 |
| Welltower, Inc. | | 424 | | 36,608 |
| Weyerhaeuser Co. | | 673 | | 24,443 |
| | | | | 798,900 |
| | | | | |
See Notes to Financial Statements
19
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
16.15% | SOFTWARE & SERVICES | | | | |
| Accenture PLC | | 1,132 | | $346,686 |
| Adobe, Inc.* | | 1,299 | | 532,746 |
| ANSYS, Inc.* | | 86 | | 23,993 |
| Autodesk, Inc.* | | 460 | | 99,507 |
| Automatic Data Processing, Inc. | | 594 | | 143,225 |
| Broadridge Financial Solutions | | 129 | | 20,711 |
| Cadence Design Systems, Inc.* | | 718 | | 133,605 |
| Cloudflare, Inc.* | | 222 | | 11,171 |
| Cognizant Technology Solutions | | 717 | | 48,727 |
| DXC Technology Co.* | | 250 | | 7,900 |
| Fidelity National Information | | 715 | | 73,044 |
| Fiserv, Inc.* | | 637 | | 67,318 |
| FleetCor Technologies, Inc.* | | 44 | | 9,684 |
| Fortinet, Inc.* | | 835 | | 49,808 |
| Gartner, Inc.* | | 168 | | 44,601 |
| Global Payments, Inc. | | 300 | | 36,696 |
| International Business Machine | | 1,019 | | 133,275 |
| Intuit, Inc. | | 465 | | 212,119 |
| Mastercard, Inc. | | 1,104 | | 390,584 |
| Microsoft Corp. | | 8,178 | | 2,295,892 |
| NortonLifeLock, Inc. | | 421 | | 10,327 |
| Oracle Corp. | | 2,237 | | 174,128 |
| Paychex, Inc. | | 424 | | 54,391 |
| Paycom Software, Inc.* | | 43 | | 14,211 |
| PayPal Holdings, Inc.* | | 1,675 | | 144,938 |
| Synopsys, Inc.* | | 214 | | 78,645 |
| Tyler Technologies, Inc.* | | 38 | | 15,162 |
| VeriSign, Inc.* | | 432 | | 81,717 |
| | | | | 5,254,811 |
| | | | | |
3.18% | UTILITIES | | | | |
| The AES Corp. | | 249 | | 5,533 |
| Ameren Corp. | | 31 | | 2,887 |
| American Electric Power Co., Inc. | | 549 | | 54,109 |
See Notes to Financial Statements
20
ANNUAL REPORT
American Conservative Values ETF
Schedule of Investments - continuedJuly 31, 2022
| Security Description |
| Number of |
| Fair |
| American Water Works Co., Inc. | | 87 | | $13,523 |
| CenterPoint Energy, Inc. | | 422 | | 13,373 |
| Consolidated Edison, Inc. | | 41 | | 4,070 |
| Constellation Energy Corp. | | 435 | | 28,754 |
| DTE Energy Co. | | 174 | | 22,672 |
| Dominion Energy, Inc. | | 932 | | 76,405 |
| Duke Energy Corp. | | 929 | | 102,125 |
| Edison International | | 329 | | 22,296 |
| Eversource Energy | | 339 | | 29,907 |
| Exelon Corp. | | 1,311 | | 60,948 |
| FirstEnergy Corp. | | 552 | | 22,687 |
| NextEra Energy, Inc. | | 3,875 | | 327,399 |
| Public Service Enterprise Group | | 465 | | 30,537 |
| Sempra Energy | | 338 | | 56,040 |
| The Southern Co. | | 1,263 | | 97,112 |
| WEC Energy Group, Inc. | | 258 | | 26,783 |
| Xcel Energy, Inc. | | 508 | | 37,175 |
| | | | | 1,034,335 |
| | | | | |
99.63% | TOTAL COMMON STOCKS | | | ||
| (Cost: $32,887,077) | | 32,417,951 | ||
| | | | | |
99.63% | TOTAL INVESTMENTS | | | | |
| (Cost: $32,887,077) | | 32,417,951 | ||
0.37% | Other assets, net of liabilities | | 118,899 | ||
100.00% | NET ASSETS | | $32,536,850 |
*Non-income producing
See Notes to Financial Statements
21
ANNUAL REPORT
American Conservative Values ETF
Statement of Assets and LiabilitiesJuly 31, 2022
ASSETS | | | |
Investments at fair value (cost of $ 32,887,077) (Note 1) | | $32,417,951 | |
Cash | | 107,298 | |
Dividends receivable | | 31,250 | |
TOTAL ASSETS | | 32,556,499 | |
| | | |
LIABILITIES | | | |
Accrued advisory fees | | 19,649 | |
TOTAL LIABILITIES | | 19,649 | |
NET ASSETS | | $32,536,850 | |
| | | |
Net Assets Consist of: | | | |
Paid-in capital | | $33,335,942 | |
Distributable earnings (accumulated deficit) | | (799,092 | ) |
Net Assets | | $32,536,850 | |
| | | |
NET ASSET VALUE PER SHARE | | | |
Net Assets | | $32,536,850 | |
Shares Outstanding (unlimited number of shares of beneficial interest authorized without par value) | | 1,050,000 | |
Net Asset Value and Offering Price Per Share | | $30.99 | |
See Notes to Financial Statements
22
ANNUAL REPORT
American Conservative Values ETF
Statement of OperationsYear Ended July 31, 2022
INVESTMENT INCOME | | | |
Dividend income (net of foreign tax withheld of $8) | | $461,275 | |
Total investment income | | 461,275 | |
| | | |
EXPENSES | | | |
Investment advisory fees (Note 2) | | 227,277 | |
Total expenses | | 227,277 | |
Net investment income (loss) | | 233,998 | |
| | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | | | |
Net realized gain (loss) on investments | | (257,375 | ) |
Change in unrealized appreciation (depreciation) of investments | | (1,853,190 | ) |
Net realized and unrealized gain (loss) on investments | | (2,110,565 | ) |
| |
| |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS | | $(1,876,567 | ) |
American Conservative Values ETF
Statements of Changes in Net Assets
See Notes to Financial Statements
23
ANNUAL REPORT
| | Year ended |
| October 28, | |
| | | | | |
Increase (decrease) in Net Assets | | | | | |
| | | | | |
OPERATIONS | | | | | |
Net investment income (loss) | | $233,998 | | $41,137 | |
Net realized gain (loss) on investments | | (257,375 | ) | 137,087 | |
Change in unrealized appreciation (depreciation) of investments | | (1,853,190 | ) | 1,384,064 | |
Increase (decrease) in net assets from operations | | (1,876,567 | ) | 1,562,288 | |
| | | | | |
DISTRIBUTIONS TO SHAREHOLDERS | | | | | |
Distributions to shareholders | | (238,343 | ) | (34,780 | ) |
Decrease in net assets from distributions | | (238,343 | ) | (34,780 | ) |
| | | | | |
CAPITAL STOCK TRANSACTIONS (NOTE 5) | | | | | |
Proceeds from shares issued | | 21,646,524 | | 13,054,908 | |
Shares redeemed | | (960,231 | ) | (716,949 | ) |
Increase (decrease) in net assets from capital stock transactions | | 20,686,293 |
| 12,337,959 | |
| | | | | |
NET ASSETS | | | | | |
Increase (decrease) during period | | 18,571,383 | | 13,865,467 | |
Beginning of period | | 13,965,467 |
| 100,000 | |
End of period | | $32,536,850 |
| $13,965,467 | |
*Commencement of Operations
American Conservative Values ETF
Financial Highlights
See Notes to Financial Statements
24
ANNUAL REPORT
American Conservative Values ETF
Financial HighlightsSelected Per Share Data Throughout Each Period
| | Year ended |
| October 28, | |
| | | | | |
Net asset value, beginning of period | | $32.55 |
| $25.00 | |
Investment activities | | | | | |
Net investment income (loss)(1) | | 0.25 | | 0.19 | |
Net realized and unrealized gain (loss) on investments | | (1.58 | ) | 7.53 | |
Total from investment activities | | (1.33 | ) | 7.72 | |
Distributions | | | | | |
Net investment income | | (0.21 | ) | (0.17 | ) |
Net realized gain | | (0.02 | ) | — | |
Total distributions | | (0.23 | ) | (0.17 | ) |
Net asset value, end of period | | $30.99 |
| $32.55 | |
| | | | | |
Total Return(3) | | (4.06 | %) | 30.96 | % |
Ratios/Supplemental Data | | | | | |
Ratios to average net assets(4) | | | | | |
Expenses | | 0.75 | % | 0.75 | % |
Net investment income (loss) | | 0.77 | % | 0.82 | % |
Portfolio turnover rate(5) | | 3.70 | % | 6.04 | % |
Net assets, end of period (000’s) | | $32,537 | | $13,965 | |
(1)Per share amounts caluculated using the average shares outstanding during the period.
(2)Commencement of Operations
(3)Total return is for the period indicated and has not been annualized.
(4)Ratios to average net assets has been annualized.
(5)Portfolio turnover rate is for the period indicated and excludes the effect of securities received or delivered from processing in-kind creations or redemptions and has not been annualized.
25
ANNUAL REPORT
American Conservative Values ETF
Notes to Financial StatementsJuly 31, 2022
NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The American Conservative Values ETF (the “Fund”) is a diversified series of ETF Opportunities Trust, a Delaware statutory trust (the “Trust”) which was organized on March 18, 2019 and is registered under the Investment Company Act of 1940, as amended as an open-end management investment company. The offering of the Fund’s shares is registered under the Securities Act of 1933, as amended. The Fund commenced operations on October 28, 2020.
The Fund’s objective is to seek to achieve long-term capital appreciation with capital preservation as a secondary objective.
The following is a summary of significant accounting policies consistently followed by the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 “Financial Services – Investment Companies”.
Security Valuation
The Fund records investments at fair value. Generally, the Fund’s domestic securities (including underlying ETFs which hold portfolio securities primarily listed on foreign (non-U.S.) exchanges) are valued each day at the last quoted sales price on each security’s primary exchange. Securities traded or dealt in upon one or more securities exchanges for which market quotations are readily available and not subject to restrictions against resale shall be valued at the last quoted sales price on the primary exchange or, in the absence of a sale on the primary exchange, at the mean between the current bid and ask prices on such exchange. Securities primarily traded in the NASDAQ National Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price. If market quotations are not readily available, securities will be valued at their fair market value as determined in good faith by the Trust’s fair value committee in accordance with procedures approved by the Trust’s Board of Trustees (the “Board”) and as further described below. Securities that are not traded or dealt in any securities exchange (whether domestic or foreign) and for which over-the-counter market quotations are readily available generally shall be valued at the last sale price or, in the absence of a sale, at the mean between the current bid and ask price on such over-the- counter market.
The Fund has a policy that contemplates the use of fair value pricing to determine the net asset value (“NAV”) per share of the Fund when market prices are unavailable as well as under special circumstances, such as: (i) if the primary
26
ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
market for a portfolio security suspends or limits trading or price movements of the security; and (ii) when an event occurs after the close of the exchange on which a portfolio security is principally traded that is likely to have changed the value of the security. Since most of the Fund’s investments are traded on U.S. securities exchanges, it is anticipated that the use of fair value pricing will be limited.
When the Fund uses fair value pricing to determine the NAV per share of the Fund, securities will not be priced on the basis of quotations from the primary market in which they are traded, but rather may be priced by another method that the Board believes accurately reflects fair value. Any method used will be approved by the Board and results will be monitored to evaluate accuracy. The Fund’s policy is intended to result in a calculation of the Fund’s NAV that fairly reflects security values as of the time of pricing.
The Fund has adopted fair valuation accounting standards that establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs used to develop the measurements of fair value. These inputs are summarized in the three broad levels listed below.
Various inputs are used in determining the value of the Fund’s investments. GAAP established a three-tier hierarchy of inputs to establish a classification of fair value measurements for disclosure purposes. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the level of inputs used to value the Fund’s investments as of July 31, 2022:
| | Level 1 |
| Level 2 |
| Level 3 |
| Total | |
Common Stocks | | $32,417,951 |
| $— |
| $— |
| $32,417,951 | |
| | $32,417,951 |
| $— |
| $— |
| $32,417,951 | |
27
ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
Refer to the Fund’s Schedule of Investments for a listing of the securities by type and sector.
There were no transfers into or out of any levels during the year ended July 31, 2022. The Fund held no Level 3 securities at any time during the year ended July 31, 2022.
Security Transactions and Income
Security transactions are accounted for on the trade date. The cost of securities sold is determined generally on specific identification basis. Realized gains and losses from security transactions are determined on the basis of identified cost for book and tax purposes. Dividends are recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules.
Accounting Estimates
In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of investment income and expenses during the reporting period. Actual results could differ from those estimates.
Federal Income Taxes
The Fund has complied and intends to continue to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. The Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. Therefore, no federal income tax or excise provision is required.
Management has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken in the Fund’s tax returns. The Fund has no examinations in progress and management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Interest and penalties, if any, associated with any federal or state income tax obligations are recorded as income tax expense as incurred.
28
ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
Reclassification of Capital Accounts
GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. For the year ended July 31, 2022, such reclassifications were as follows:
Distributable earnings | | $(89,200 | ) |
Paid-in capital | | $ 89,200 | |
Dividends and Distributions
Dividends from net investment income, if any, are declared and paid quarterly by the Fund. The Fund distributes its net realized capital gains, if any, to shareholders annually. The Fund may also pay a special distribution at the end of a calendar year to comply with federal tax requirements. All distributions are recorded on the ex-dividend date.
Creation Units
The Fund issues and redeems shares to certain institutional investors (typically market makers or other broker-dealers) only in large blocks of at least 25,000 shares known as “Creation Units.” Purchasers of Creation Units (“Authorized Participants”) will be required to pay Citibank, N.A. (the “Custodian”) a fixed transaction fee (“Creation Transaction Fee”) in connection with creation orders that is intended to offset the transfer and other transaction costs associated with the issuance of Creation Units. The standard Creation Transaction Fee will be the same regardless of the number of Creation Units purchased by an investor on the applicable Business Day. The Creation Transaction Fee charged by the Custodian for each creation order is $1,500. Authorized Participants wishing to redeem shares will be required to pay to the Custodian a fixed transaction fee (“Redemption Transaction Fee”) to offset the transfer and other transaction costs associated with the redemption of Creation Units. The standard Redemption Transaction Fee will be the same regardless of the number of Creation Units redeemed by an investor on the applicable Business Day. The Redemption Transaction Fee charged by the Custodian for each redemption order is $1,500.
Except when aggregated in Creation Units, shares are not redeemable securities. Shares of the Fund 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
29
ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
Trust Company (“DTC”) participant and, in each case, must have executed an agreement with the Fund’s principal underwriter (the “Distributor”) with respect to creations and redemptions of Creation Units (“Participation Agreement”). Most retail investors will not qualify as Authorized Participants or have the resources to buy and sell whole Creation Units. Therefore, they will be unable to purchase or redeem the shares directly from the Fund. Rather, most retail investors will purchase shares in the secondary market with the assistance of a broker and will be subject to customary brokerage commissions or fees. The following table discloses the Creation Unit breakdown based on the NAV as of July 31, 2022:
| | Creation Unit | Creation | Value |
American Conservative Values ETF | | 25,000 | $1,500 | $774,750 |
To the extent contemplated by a participant agreement, in the event an Authorized Participant has submitted a redemption request in proper form but is unable to transfer all or part of the shares comprising a Creation Unit to be redeemed to the Distributor, on behalf of the Fund, by the time as set forth in a participant agreement, the Distributor may nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing shares as soon as possible, which undertaking shall be secured by the Authorized Participant’s delivery and maintenance of collateral equal to a percentage of the value of the missing shares as specified in the participant agreement. A participant agreement may permit the Fund to use such collateral to purchase the missing shares, and could subject an Authorized Participant to liability for any shortfall between the cost of the Fund acquiring such shares and the value of the collateral. Amounts are disclosed as Segregated Cash Balance from Authorized Participants for Deposit Securities and Collateral Payable upon Return of Deposit Securities on the Statement of Assets and Liabilities, when applicable.
Officers and Trustees Indemnification
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.
30
ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
NOTE 2 – | INVESTMENT ADVISORY AND DISTRIBUTION AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES |
Ridgeline Research LLC (the “Advisor”) currently provides investment advisory services pursuant to an investment advisory agreement (the “Advisory Agreement”). Under the terms of the Advisory Agreement, the Advisor manages the investment portfolio of the Fund, subject to the policies adopted by the Trust’s Board of Trustees. Under the Advisory Agreement, the Advisor, at its own expense and without reimbursement from the Trust, furnishes office space and all necessary office facilities, equipment and executive personnel necessary for managing the assets of the Fund. Under the Advisory Agreement, the Advisor assumes and pays all ordinary expenses of the Fund, except the fee paid to the Advisor pursuant to the Investment Advisory Agreement, distribution fees or expenses under a 12b-1 plan (if any), interest expenses, taxes, acquired fund fees and expenses, brokerage commissions and any other portfolio transaction related expenses and fees arising out of transactions effected on behalf of the Fund, credit facility fees and expenses, including interest expenses, and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business.
For its services with respect to the Fund, the Advisor is entitled to receive an annual advisory fee, calculated daily and payable monthly as a percentage of the Fund’s average daily net assets, at the rate of 0.75%.
The Advisor has retained Vident Investment Advisory, LLC (the “Sub-Advisor”), to serve as sub-advisor for the Fund. Pursuant to an Investment Sub-Advisory Agreement between the Advisor and the Sub-Advisor (the “Sub-Advisory Agreement”), the Sub-Advisor is responsible for trading portfolio securities on behalf of the Fund, including selecting broker-dealers to execute purchase and sale transactions as instructed by the Advisor, subject to the supervision of the Advisor and the Board. For the services it provides for the Fund, the Sub-Advisor is compensated by the Advisor from the management fees paid by the Fund to the Advisor.
For the services it provides to the Fund, the Sub-Advisor is compensated by the Advisor from the advisory fees paid by the Fund to the Advisor. Fees to the Sub-Advisor are calculated daily and paid monthly, at an annual rate based on the average daily net assets of the Fund at the following rate: 0.05% on the first $250 million in net assets; 0.04% on the next $250 million in net assets; and 0.03% on any net assets in excess of $500 million (subject to a minimum of $30,000 per year).
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ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
Commonwealth Fund Services, Inc. (“CFS”) acts as the Fund’s administrator. As administrator, CFS supervises all aspects of the operations of the Fund except those performed by the Advisor and the Sub-Advisor. For its services, fees to CFS are computed daily and paid monthly based on the average daily net assets of the Fund, subject to a minimum of $25,000 per year. The Advisor pays these fees.
Certain officers of the Trust are also officers and/or directors of CFS. Additionally, Practus, LLP serves as legal counsel to the Trust. John H. Lively, Secretary of the Trust, is Managing Partner of Practus, LLP. J. Stephen King, Jr., Assistant Secretary of the Trust, is a partner of Practus, LLP. Gino E. Malaspina, Assistant Secretary of the Trust, serves as Counsel of Practus, LLP. Tom Carter, Vice President of the Trust, is President of the Advisor. Neither the officers and/or directors of CFS, Mr. Lively, Mr. King, Mr. Malaspina or Mr. Carter receive any special compensation from the Trust or the Fund for serving as officers of the Trust.
Custodian and Transfer Agent
Citibank, N.A. serves as the Fund’s Custodian and Transfer Agent pursuant to a Global Custodial and Agency Services Agreement. For its services, Citibank, N.A. is entitled to a fee. The Advisor pays these fees monthly.
Fund Accountant
Citi Fund Services, Ohio, Inc. serves as the Fund’s Fund Accountant pursuant to a Services Agreement. The Advisor pays these fees monthly.
Distributor
Foreside Fund Services, LLC serves as the Fund’s principal underwriter pursuant to an ETF Distribution Agreement. The Advisor pays the fees for these services monthly.
NOTE 3 – INVESTMENTS
The costs of purchases and proceeds from the sales of securities other than in-kind transactions and short-term notes for the year ended July 31, 2022 were as follows:
Purchases |
| Sales |
$1,105,602 | | $1,157,747 |
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ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
The costs of purchases and proceeds from the sales of in-kind transactions associated with creations and redemptions for the year ended July 31, 2022 were as follows:
Purchases |
| Sales |
| Realized Gain |
$21,468,485 | | $791,601 | | $88,878 |
NOTE 4 – | DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL |
Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized in different periods for financial statement and tax purposes; these differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.
The tax character of distributions during the year ended July 31, 2022, and for the period October 28, 2020* to July 31, 2021 were as follows:
| | Year Ended |
| Period |
Distributions paid from: | | | | |
Ordinary income | | $237,754 | | $34,780 |
Realized gain | | 589 |
| — |
| | $238,343 |
| $34,780 |
*Commencement of operations
As of July 31, 2022, the components of distributable earnings (deficit) on a tax basis were as follows:
Accumulated undistributed net investment income (loss) | $17,981 | |
Accumulated net realized gain (loss) on investments | (346,323) | |
Net unrealized appreciation (depreciation) on investments | (470,750 | ) |
| $(799,092 | ) |
As of July, 31, 2022, the Fund had a capital loss carryforward of $346,323. $245,153 is considered short term and $101,170 is considered long term. These losses may be carried forward indefinitely.
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ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
Cost of securities for Federal Income tax purpose and the related tax-based net unrealized appreciation (depreciation) consists of:
Cost |
| Gross |
| Gross |
| Total |
$32,888,701 | | $2,832,338 | | $(3,303,088) | | $(470,750) |
The difference between book basis and tax basis net unrealized appreciation (depreciation) is attributable primarily to the deferral of wash sale losses.
NOTE 5 –TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Shares of the Fund are listed for trading on the NYSE Arca, Inc. (the “Exchange”), and trade at market prices rather than at NAV. Shares of the Fund may trade at a price that is greater than, at, or less than NAV. The Fund will issue and redeem shares at NAV only in large blocks of 25,000 shares (each block of shares is called a “Creation Unit”). Creation Units are issued and redeemed for cash and/or in-kind for securities. Individual shares may only be purchased and sold in secondary market transactions through brokers. Except when aggregated in Creation Units, the shares are not redeemable securities of the Fund.
All orders to create Creation Units must be placed with the Fund’s distributor or transfer agent either (1) through the Continuous Net Settlement System of the NSCC (“Clearing Process”), a clearing agency that is registered with the Securities and Exchange Commission (“SEC”), by a “Participating Party,” i.e., a broker-dealer or other participant in the Clearing Process; or (2) outside the Clearing Process by a DTC Participant. In each case, the Participating Party or the DTC Participant must have executed an agreement with the Distributor with respect to creations and redemptions of Creation Units (“Participation Agreement”); such parties are collectively referred to as “APs” or “Authorized Participants.” Investors should contact the Distributor for the names of Authorized Participants. All Fund shares, whether created through or outside the Clearing Process, will be entered on the records of DTC for the account of a DTC Participant.
Shares of beneficial interest transactions for the Fund were:
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ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
NOTE 6 – SECTOR RISK
If the Fund has significant investments in the securities of issuers in industries within a particular sector, any development affecting that sector will have a greater impact on the value of the net assets of the Fund than would be the case if the Fund did not have significant investments in that sector. In addition, this may increase the risk of loss of an investment in the Fund and increase the volatility of the Fund’s NAV per share. From time to time, circumstances may affect a particular sector and the companies within such sector. For instance, economic or market factors, regulation or deregulation, and technological or other developments may negatively impact all companies in a particular sector and therefore the value of the Fund’s portfolio will be adversely affected. As of July 31, 2022, the Fund had 16.15% and 15.51% of the value of its net assets invested in securities within the Software & Services and Healthcare sectors, respectively.
NOTE 7 – RISKS OF INVESTING IN THE FUND
As with all funds, a shareholder is subject to the risk that an investment in the Fund could lose money. The principal risks affecting shareholders’ investments in the Fund are set forth below. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the FDIC or any government agency.
ETF Structure Risks. The Fund is structured as an ETF and as a result is subject to special risks, including:
•Not Individually Redeemable. Shares of the Fund (“Shares”) are not individually redeemable and may be redeemed by the Fund at NAV only in large blocks known as “Creation Units.”You may incur brokerage costs purchasing enough Shares to constitute a Creation Unit.
•Trading Issues. Although it is expected that Shares will remain listed for trading on the Exchange, trading in Shares on the Exchange may be halted due to market conditions or for reasons that, in the view of the Exchange, make trading in Shares inadvisable, such as extraordinary market volatility. There can be no assurance that Shares will continue to meet the listing requirements of the Exchange or will trade with any volume. There is no guarantee that an active secondary market will develop for Shares of the Fund. In stressed market conditions, the liquidity of shares of the Fund may begin to mirror the liquidity of the Fund’s underlying portfolio holdings, which can be significantly less liquid than shares of the Fund. This adverse effect on liquidity for the Fund’s Shares in turn could lead to differences between the market price of the Fund’s shares and the underlying value of those Shares.
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ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
•Market Price Variance Risk. The market prices of Shares will fluctuate in response to changes in NAV and supply and demand for Shares and will include a “bid-ask spread” charged by the exchange specialists, market makers or other participants that trade the particular security. There may be times when the market price and the NAV vary significantly. This means that Shares may trade at a discount to NAV. The market price of Shares may deviate from the value of the Fund’s underlying portfolio holdings, particularly in times of market stress, with the result that investors may pay significantly more or receive significantly less than the underlying value of the Shares of the Fund bought or sold.
•Authorized Participants (“APs”), Market Makers, and Liquidity Providers Concentration Risk. The Fund has a limited number of financial institutions that may act as 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 of the Fund 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: Shares of the Fund. Due to the costs of buying or selling shares of the Fund, including brokerage commissions imposed by brokers and bid/ask spreads, frequent trading of shares of the Fund may significantly reduce investment results and an investment in shares of the Fund may not be advisable for investors who anticipate regularly making small investments.
Active Management Risk. The Advisor’s investment decisions about individual securities impact the Fund’s ability to achieve its investment objective. The Advisor’s judgments about the attractiveness and potential appreciation of particular investments in which the Fund invests may prove to be incorrect and there is no guarantee that the Advisor’s investment strategy will produce the desired results.
36
ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
Fund Investor Sourced Research and Opinion Risk. Company favorability ratings are collected from shareholders of the Fund, who may not be professional investors, may have no financial expertise, and may not do any research on companies prior to participation (referred to herein as “Fund Investor sourced research and opinion.” Fund Investor sourced research and opinion depends, to a large extent, on active participation of a sufficient number of shareholders. Investment decisions made using Shareholder Sourced Research may be influenced by cognitive and emotional biases, resulting in investment choices that underperform the market generally. Although the Advisor employs measures to detect irregularities in Fund Investor sourced research and opinion, there is no assurance these measures will be successful and, as a result, the integrity of the data could be compromised or could be subject to manipulation. The Advisor may be unable to collect Fund Investor sourced research and opinion for a period of time because of technical issues, failures of the Internet, cybersecurity breaches, or adverse claims on intellectual property, among other reasons.
Market Risk. Overall stock market risks may affect the value of individual securities in which the Fund invests. Factors such as domestic economic growth and market conditions, interest rate levels, and political events affect the securities markets. When the value of the Fund’s investments goes down, your investment in the Fund decreases in value and you could lose money.
Large Capitalization Securities Risk. Investments in large capitalization securities as a group could fall out of favor with the market, causing the Fund to underperform investments that focus on small capitalization securities. Larger, more established companies may be slow to respond to challenges and may grow more slowly than smaller companies.
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 industries, sectors or companies in which the Fund invests. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change.
Non-Financial Risk. Because the Fund assigns weights to securities of issuers for nonfinancial reasons, the Fund may underperform the broader equity market or other funds that do not take into consideration such non-financial factors when selecting investments.
37
ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
Portfolio Turnover Risk. Portfolio turnover refers to the rate at which the securities held by the Fund are replaced. The higher the rate, the higher the transactional and brokerage costs associated with the turnover, which may reduce the Fund’s return unless the securities traded can be bought and sold without corresponding commission costs. Active trading of securities may also increase the Fund’s realized capital gains or losses, which may affect the taxes you pay as the Fund shareholder.
Health Crisis Risk. The respiratory illness COVID-19 caused by a novel coronavirus has resulted in a global pandemic and major disruption to economies and markets around the world, including the United States. Financial markets have experienced extreme volatility and severe losses, and trading in many instruments has been disrupted. Liquidity for many instruments has been greatly reduced for periods of time. Some interest rates are very low and in some cases yields are negative. Some sectors of the economy and individual issuers have experienced particularly large losses. These circumstances may continue for an extended period of time, and may affect adversely the value and liquidity of the Fund’s investments.
Market Disruption and Geopolitical Events. Geopolitical and other events (e.g., wars, terrorism or natural disasters) may disrupt securities markets and adversely affect global economies and markets, thereby decreasing the value of the Fund’s investments. Sudden or significant changes in the supply or prices of commodities or other economic inputs may have material and unexpected effects on both global securities markets and individual countries, regions, sectors, companies, or industries, which could significantly reduce the value of the Fund’s investments. Terrorist attacks, natural disasters, epidemics or pandemics could result in unplanned or significant securities market closures or declines.
Cyber Security Risk. Failures or breaches of the electronic systems of the Advisor and the Fund’s other service providers, market makers, Authorized Participants (participants authorized to redeem Creation Units of a particular ETF) or the issuers of securities in which the Fund invests have the ability to cause disruptions and negatively impact the Fund’s business operations, potentially resulting in financial losses to the Fund and its shareholders. While the Fund has established business continuity plans and risk management systems seeking to address system breaches or failures, there are inherent limitations in such plans and systems. Furthermore, the Fund cannot control the cyber security plans and systems of the Fund’s service providers, market makers, Authorized Participants or issuers of securities in which the Fund invests.
38
ANNUAL REPORT
American Conservative Values ETF
Notes to Financial Statements - continuedJuly 31, 2022
Operational Risk. The Fund is exposed to operational risk arising from a number of factors, including but not limited to human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third parties, failed or inadequate processes and technology or systems failures. The Fund and the Advisor seek to reduce these operational risks through controls and procedures. However, these measures do not address every possible risk and may be inadequate for those risks that they are intended to address.
NOTE 8 – SUBSEQUENT EVENTS
Management has evaluated all transactions and events subsequent to the date of the Statement of Assets and Liabilities through the date on which these financial statements were issued. Except as already included in the notes to these financial statements, no additional items require disclosure.
39
ANNUAL REPORT
American Conservative Values ETF
Report of Independent Registered Public Accounting Firm
To the Shareholders of American Conservative Values ETF and
Board of Trustees of ETF Opportunities Trust
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of American Conservative Values ETF (the “Fund”), a series of ETF Opportunities Trust, as of July 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets, the related notes, and the financial highlights for each of the two periods in the period then ended (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 July 31, 2022, the results of its operations for the year then ended and the changes in net assets and the financial highlights for each of the two periods in the period then ended, 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 July 31, 2022, 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 Fund’s auditor since 2019.
COHEN & COMPANY, LTD.
Cleveland, Ohio
September 29, 2022
40
ANNUAL REPORT
ETF Opportunities Trust (the “Trust”)
Supplemental Information (unaudited)
Information pertaining to the trustees and officers of the Trust is set forth below. The names, addresses and ages of the trustees and officers of the Trust, together with information as to their principal occupations during the past five years, are listed below. The Statement of Additional Information (the “SAI”) includes additional information about the trustees and is available without charge upon request by calling, toll-free, (888) 909-6030.
The mailing address of each Trustee and officer is 8730 Stony Point Parkway, Suite 205, Richmond, Virginia, 23235, unless otherwise indicated.
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ANNUAL REPORT
ETF Opportunities Trust (the “Trust”)
Supplemental Information (unaudited) - continued
Non-Interested Trustees
NAME, AGE AND | TERM OF | PRINCIPAL | NUMBER | OTHER |
David J. Urban (67) Trustee | Indefinite, | Dean, Jones College of Business, Middle Tennessee State University since July 2013. | 13 | World Funds Trust for the twenty series of that Trust (registered investment company) |
Mary Lou H. Ivey (64) Trustee | Indefinite, | Senior Vice President, Episcopal Church Building Fund (national nonprofit organization), since January 2022. Accountant, Harris, Hardy & Johnstone, P.C., (accounting firm), 2008-2021. | 13 | World Funds Trust for the twenty series of that Trust (registered investment company) |
Theo H. Pitt, Jr. (86) Trustee | Indefinite, | Senior Partner, Community Financial Institutions Consulting (bank consulting) since 1997 to present. | 13 | Independent Trustee of Chesapeake Investment Trust for the one series of that trust; Leeward Investment Trust for the one series of that trust; Hillman Capital Management Investment Trust for the one series of that trust; Starboard Investment Trust for the fourteen series of that trust; and World Funds Trust for the twenty series of that Trust (all registered investment companies) |
Kevin Farragher Trustee | Indefinite, | Senior Product Specialist, Valkyrie Investments, January 2022 to present; Independent Consultant 2014-2021. | 13 | None |
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ANNUAL REPORT
ETF Opportunities Trust (the “Trust”)
Supplemental Information (unaudited) - continued
Officers Who Are Not Trustees
NAME, AGE AND | TERM OF | PRINCIPAL OCCUPATION(S) |
David A. Bogaert (58) President | Indefinite, | Managing Director of Business Development, Commonwealth Fund Services, Inc. (fund administration and transfer agency), October 2013 – present. |
Thomas A. Carter | Indefinite, | President Ridgeline Research September 2019 through present; President ALPS Advisors and ALPS Portfolio Solutions Distributors 2007 – November 2018. Garden leave November 2018 – September 2019. |
Karen M. Shupe (58) Treasurer and Principal Executive Officer | Indefinite, | Managing Director Fund Operations, Commonwealth Fund Services, Inc., 2003 to present. |
Ann T. MacDonald (67) Assistant Treasurer and Principal Financial Officer | Indefinite, | Managing Director, Fund Accounting and Administration, Commonwealth Fund Services, Inc., 2003 to present. |
John H. Lively (53) Secretary | Indefinite, | Attorney, Practus LLP, (law firm), May 2018 to present; Attorney, The Law Offices of John H. Lively & Associates, Inc. (law firm), March 2010 to May 2018. |
J. Stephen King (59) Assistant Secretary | Indefinite, | Attorney, Practus LLP (law firm), 2020 to present; The TCW Group, Inc. (investment management firm), 2017 to 2020. |
Gino E. Malaspina (54) Assistant Secretary | Indefinite, | Counsel, Practus LLP (law firm), since August 2022; Vice President and Senior Counsel, State Street Corporation, October 2019 to July 2022; Senior Counsel, Apex Fund Services (formerly, Atlantic Fund Services), June 2014 to October 2019. |
Holly B. Giangiulio (60) Assistant Secretary | Indefinite, | Managing Director, Corporate Operations, Commonwealth Fund Services, Inc., January 2015 to present, Corporate Accounting and HR Manager from 2010 to 2015. |
Laura B. Wright (50) Assistant Secretary | Indefinite, | Fund Administrator, Commonwealth Fund Services, Inc., 2016 to present. |
Julian G. Winters (53) Chief Compliance Officer | Indefinite, | Managing Member of Watermark Solutions, LLC (investment compliance and consulting) since March 2007. |
43
ANNUAL REPORT
ETF Opportunities Trust (the “Trust”)
Supplemental Information (unaudited) - continued
Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-888-909-6030 or on the SEC’s website at http://www.sec.gov.Information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve months ended June 30 is available on or through the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on “Form N-PORT”. These filings are available, without charge and upon request, by calling 1-888-909-6030 or on the SEC’s website at http://www.sec.gov.
44
ANNUAL REPORT
American Conservative Values ETF
Fund Expenses (unaudited)
Fund Expenses Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period, February 1, 2022 and held for the six months ended July 31, 2022.
Actual Expenses Example
The first line of 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 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 of the table below 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 on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing 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.
45
ANNUAL REPORT
American Conservative Values ETF
Fund Expenses (unaudited) - continued
| | Beginning |
| Ending |
| Annualized |
| Expenses |
American Conservative Values ETF | | $1,000.00 | | $963.50 | | 0.75% | | $3.65 |
Hypothetical** | | $1,000.00 | | $1,021.08 | | 0.75% | | $3.76 |
*Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value for the period, multiplied by 181 days in the most recent fiscal period divided by 365 days in the current year.
**5% return before expenses
46
ANNUAL REPORT
American Conservative Values ETF
Privacy Notice
The following is a description of the Fund’s policies regarding disclosure of nonpublic personal information that you provide to the Fund or that the Fund collects from other sources. In the event that you hold shares of the Fund through a broker-dealer or other financial intermediary, the privacy policy of your financial intermediary would govern how your nonpublic personal information would be shared with unaffiliated third parties.
Categories of Information the Fund Collects. The Fund collects the following nonpublic personal information about you:
•Information the Fund receives from you on or in applications or other forms, correspondence, or conversations (such as your name, address, phone number, social security number, assets, income and date of birth); and
•Information about your transactions with the Fund, its affiliates, or others (such as your account number and balance, payment history, parties to transactions, cost basis information, and other financial information).
Categories of Information the Fund Discloses. The Fund does not disclose any non-public personal information about their current or former shareholders to unaffiliated third parties, except as required or permitted by law. The Fund is permitted by law to disclose all of the information it collects, as described above, to their service providers (such as the Fund’s custodian, administrator and transfer agent) to process your transactions and otherwise provide services to you.
Confidentiality and Security. The Fund restricts access to your nonpublic personal information to those persons who require such information to provide products or services to you. The Fund maintains physical, electronic, and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
The Fund’s Privacy Notice is not part of this annual report.
Investment Advisor:
Ridgeline Research LLC
14961 Finegan Farm Drive
Darnestown, Maryland 20874
Distributor:
Foreside Fund Services, LLC
Three Canal Plaza, Suite 100
Portland, Maine 04101
Independent Registered Public Accounting Firm:
Cohen & Company, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, Ohio 44115
Fund Administration:
Commonwealth Fund Services, Inc.
8730 Stony Point Parkway, Suite 205
Richmond, Virginia 23235
Fund Accountant, Transfer Agent and Custodian:
Citi Fund Services Ohio, Inc. and Citibank, N.A.
4400 Easton Commons, Suite 200
Columbus, Ohio 43219
Legal Counsel:
Practus LLP
11300 Tomahawk Creek Parkway, Suite 310
Leawood, Kansas 66211
ITEM 2.
CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
(b) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description.
(c) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions.
ITEM 3.
AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant does not have an audit committee financial expert serving on its audit committee.
(a)(2) Not applicable.
(a)(3) At this time, the registrant believes that the collective experience provided by the members of the audit committee together offer the registrant adequate oversight for the registrant’s level of financial complexity.
ITEM 4.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $14,000 for 2022 and $14,000 for 2021.
(b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item are $0 for 2022 and $0 for 2021.
(c) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $3,000 for 2022 and $3,000 for 2021. The nature of the services comprising these fees include preparation of excise filings and income tax returns and assistance with calculation of required income, capital gain and excise distributions.
(d) The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are and $0 for 2022 and $0 for 2021.
(e)(1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pursuant to its charter, the registrant’s Audit Committee must pre-approve all audit and non-audit services to be provided to the registrant. The Audit Committee also pre-approves any non-audit services provided by the registrant’s principal accountant to the American Conservative Values ETF.
(e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) NA
(c) 0%
(d) NA
(f) The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was zero percent (0%).
(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 for 2022 and $0 for 2021.
(h) Not applicable. The Audit Committee pre-approved all non-audit services rendered to the registrant’s investment adviser and any control affiliates that provide ongoing services to the registrant.
(i) Not applicable.
(j) Not applicable.
ITEM 5.
AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6.
SCHEDULE OF INVESTMENTS.
Schedule filed under Item 1 of the Form.
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.
Not applicable.
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)).
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that has materially affected, or is 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.
ITEM 13.
EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable. There were no solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by this report by or on behalf of the registrant.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
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: ETF Opportunities Trust
By (Signature and Title)*: | /s/ Karen Shupe |
Karen Shupe Principal Executive Officer | |
Date: October 7, 2022 |
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/ Karen Shupe |
Karen Shupe Principal Executive Officer
| |
Date: October 7, 2022 | |
By (Signature and Title)*: | /s/ Ann MacDonald |
Ann MacDonald Principal Financial Officer | |
Date: October 7, 2022 |
* Print the name and title of each signing officer under his or her signature.