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: 811-23895
THE 2023 ETF SERIES TRUST II
(Exact name of registrant as specified in charter)
The 2023 ETF Series Trust II
c/o Foreside Management Services, LLC
Three Canal Plaza, Suite 100
Portland, Maine 04101
(Address of principal executive offices) (Zip code)
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
(Name and address of agent for service)
Registrant’s telephone number, including area code: (614) 416-9058
Date of fiscal year end: June 30
Date of reporting period: December 31, 2023
Item 1. Reports to Shareholders.
(a) | The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”): |
Industry Group Summary | % of Investments |
Software & Services | 17.8 % |
Health Care Equipment & Services | 15.9 |
Semiconductors & Semiconductor Equipment | 11.9 |
Pharmaceuticals, Biotechnology & Life Sciences | 10.0 |
Media & Entertainment | 7.5 |
Food, Beverage & Tobacco | 6.8 |
Consumer Discretionary Distribution & Retail | 6.0 |
Capital Goods | 5.5 |
Banks | 4.4 |
Consumer Services | 3.7 |
Technology Hardware & Equipment | 3.7 |
Financial Services | 3.2 |
Household & Personal Products | 2.7 |
Cash and cash equivalents | 0.9 |
100.0 % |
Shares | Description | Value ($) |
COMMON STOCKS — 98.9% | ||
Banks — 4.4% | ||
25,089 | U.S. Bancorp | 1,085,852 |
22,125 | Wells Fargo & Co. | 1,088,992 |
Total Banks | 2,174,844 | |
Capital Goods — 5.5% | ||
12,003 | General Electric Co. | 1,531,943 |
13,084 | Otis Worldwide Corp. | 1,170,625 |
Total Capital Goods | 2,702,568 | |
Consumer Discretionary Distribution & Retail — 6.0% | ||
11,459 | Amazon.com, Inc. * | 1,741,081 |
12,909 | TJX Cos, Inc. | 1,210,993 |
Total Consumer Discretionary Distribution & Retail | 2,952,074 | |
Consumer Services — 3.7% | ||
45,923 | Aramark | 1,290,436 |
2,941 | Hilton Worldwide Holdings, Inc. | 535,527 |
Total Consumer Services | 1,825,963 | |
Financial Services — 3.1% | ||
2,576 | American Express Co. | 482,588 |
4,060 | Visa, Inc. – Class A | 1,057,021 |
Total Financial Services | 1,539,609 | |
Food, Beverage & Tobacco — 6.8% | ||
27,113 | Coca-Cola Co. | 1,597,769 |
3,650 | Constellation Brands, Inc. – Class A | 882,387 |
11,818 | Mondelez International, Inc. – Class A | 855,978 |
Total Food, Beverage & Tobacco | 3,336,134 | |
Health Care Equipment & Services — 15.9% | ||
15,477 | Abbott Laboratories | 1,703,553 |
1,844 | Cigna Group | 552,186 |
2,582 | Elevance Health, Inc. | 1,217,568 |
3,330 | Intuitive Surgical, Inc. * | 1,123,409 |
4,980 | Quest Diagnostics, Inc. | 686,643 |
4,790 | UnitedHealth Group, Inc. | 2,521,791 |
Total Health Care Equipment & Services | 7,805,150 | |
Household & Personal Products — 2.7% | ||
8,860 | Procter & Gamble Co. | 1,298,344 |
Media & Entertainment — 7.5% | ||
14,025 | Alphabet, Inc. – Class A * | 1,959,152 |
Shares | Description | Value ($) |
4,784 | Meta Platforms, Inc. – Class A * | 1,693,345 |
Total Media & Entertainment | 3,652,497 | |
Pharmaceuticals, Biotechnology & Life Sciences — 9.9% | ||
2,413 | Eli Lilly & Co. | 1,406,586 |
12,898 | Johnson & Johnson | 2,021,632 |
13,277 | Merck & Co., Inc. | 1,447,459 |
Total Pharmaceuticals, Biotechnology & Life Sciences | 4,875,677 | |
Semiconductors & Semiconductor Equipment — 11.9% | ||
736 | Broadcom, Inc. | 821,560 |
2,768 | KLA Corp. | 1,609,038 |
2,065 | Lam Research Corp. | 1,617,432 |
10,510 | Texas Instruments, Inc. | 1,791,535 |
Total Semiconductors & Semiconductor Equipment | 5,839,565 | |
Software & Services — 17.8% | ||
5,171 | Accenture PLC – Class A | 1,814,556 |
9,410 | Microsoft Corp. | 3,538,536 |
17,712 | Oracle Corp. | 1,867,376 |
5,713 | Salesforce, Inc. * | 1,503,319 |
Total Software & Services | 8,723,787 | |
Technology Hardware & Equipment — 3.7% | ||
9,400 | Apple, Inc. | 1,809,782 |
TOTAL COMMON STOCKS (COST $47,514,595) | 48,535,994 | |
SHORT-TERM INVESTMENTS — 0.9% | ||
Money Market Funds — 0.9% | ||
450,029 | State Street Institutional Treasury Money Market Fund – Premier Class, 5.28% (a) | 450,029 |
TOTAL SHORT-TERM INVESTMENTS (COST $450,029) | 450,029 | |
TOTAL INVESTMENTS — 99.8% (Cost $47,964,624) | 48,986,023 | |
Other Assets and Liabilities (net) — 0.2% | 102,368 | |
TOTAL NET ASSETS — 100.0% | $49,088,391 |
Notes to Schedule of Investments: | |
* | Non-income producing security. |
(a) | The rate disclosed is the 7 day net yield as of December 31, 2023. |
Assets | |
Investments, at Value (cost $47,964,624) | $48,986,023 |
Dividends and Interest Receivable | 24,113 |
Receivable for Fund Shares Sold | 7,469,160 |
Total Assets | 56,479,296 |
Liabilities | |
Payable for Investments Purchased | 7,379,650 |
Accrued Advisory Fee | 11,255 |
Total Liabilities | 7,390,905 |
Net Assets | $49,088,391 |
Net Assets Consist of: | |
Paid in Capital | 48,089,914 |
Total Distributable Earnings | 998,477 |
Net Assets | $49,088,391 |
Net Asset Value, Offering and Redemption Price Per Share | $26.62 |
Shares Outstanding (unlimited authorized - no par value) | 1,844,000 |
Investment Income | |
Dividend Income | $37,445 |
Interest Income | 1,788 |
Total Investment Income | 39,233 |
Expenses | |
Advisory Fee | 12,717 |
Total Expenses | 12,717 |
Net Investment Income (Loss) | 26,516 |
Realized and Unrealized Gain (Loss): | |
Net Realized Gain on | |
Investments | 10,586 |
Net Change in Unrealized Appreciation on | |
Investments | 1,021,399 |
Net Realized and Unrealized Gain (Loss) | 1,031,985 |
Net Increase (Decrease) in Net Assets from Operations | $1,058,501 |
Period Ended December 31, 2023(a) | |
Operations: | |
Net Investment Income (Loss) | $26,516 |
Net Realized Gain (Loss) | 10,586 |
Net Change in Unrealized Appreciation (Depreciation) | 1,021,399 |
Net Increase (Decrease) in Net Assets from Operations | 1,058,501 |
Distributions: | |
Net Investment Income | (60,024 ) |
Total Distributions | (60,024 ) |
Capital Share Transactions: | |
Subscriptions | 48,089,914 |
Increase (Decrease) in Net Assets from Capital Transactions | 48,089,914 |
Total Increase (Decrease) in Net Assets | 49,088,391 |
Net Assets: | |
Beginning of Period | — |
Ending | $49,088,391 |
Share Transactions: | |
Shares sold | 1,844,000 |
Net Increase (Decrease) in Shares Outstanding from Share Transactions | 1,844,000 |
(a) | The Fund commenced operations on November 14, 2023. |
Period from Inception through December 31, 2023(a) | |
(Unaudited) | |
Net Asset Value, Beginning of Period | $25.00 |
Income (Loss) From Investment Operations: | |
Net Investment Income(b) | 0.03 |
Net Realized & Unrealized Gain (Loss)(c) | 1.63 |
Total From Investment Operations | 1.66 |
Distributions to Shareholders | |
Net Investment Income | (0.04 ) |
Total from Distributions | (0.04 ) |
Net Asset Value, End of Period | $26.62 |
Total Return on Net Asset Value(d) (e) | 6.65 % |
Supplemental Data: | |
Net Assets, End of Period (000's) | $49,088 |
Ratio of Expenses to Average Net Assets(f) | 0.50 % |
Ratio of Net Investment Income (Loss) to Average Net Assets(f) | 1.04 % |
Portfolio Turnover(e) (g) | 1 % |
(a) | The Fund commenced operations on November 14, 2023. |
(b) | Calculated based on average shares outstanding during the period. |
(c) | Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period and may not reconcile with the aggregate gains and losses in the statement of operations due to share transactions for the period. |
(d) | Total Return on Net Asset Value is based on the change in net asset value (“NAV”) of a share during the period and assumes reinvestment of dividends and distributions at NAV. Total Return on Net Asset Value is for the period indicated and has not been annualized. The return shown does not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | Portfolio turnover rate excludes in-kind transactions. |
Level 1 | Level 2 | Level 3 | Total | |
Asset Valuation Inputs | ||||
Common Stocks | $48,535,994 | $— | $— | $48,535,994 |
Short-Term Investments | 450,029 | — | — | 450,029 |
Total Investments | 48,986,023 | — | — | 48,986,023 |
Total | $48,986,023 | $— | $— | $48,986,023 |
Tax cost of investments | $47,964,624 |
Gross tax unrealized appreciation | $1,150,830 |
Gross tax unrealized depreciation | $(129,431) |
Net tax unrealized appreciation (depreciation) | $1,021,399 |
account during this period.
Beginning Account Value November 14, 2023(a) | Ending Account Value December 31, 2023 | Annualized Expense Ratio | Expenses Paid During the Period* | |
Actual Fund Return | $1,000.00 | $1,066.50 | 0.50% | $0.68(b) |
Hypothetical 5% Annual Return | $1,000.00 | $1,022.62 | 0.50% | $2.54(c) |
* | Expenses are calculated using each class's annualized net expense ratio (including indirect expenses incurred) for the period ended December 31, 2023, multiplied by the average account value over the period, multiplied by 184 days in the period, divided by 366 days in the year. |
(a) | Fund commencement. |
(b) | The dollar amount shown as expenses paid during the period is equal to the Fund's annualized expense ratio multiplied by the average account value during the period, multiplied by 48 days in the period, which is the number of days since inception, divided by 366 days in the year. |
(c) | The dollar amounts shown as expenses paid during the period are equal to the Fund’s annualized expense ratio multiplied by the average account value during the period, multiplied by 184 days in the period, divided by 366 days in the year (to reflect the one-half year period). |
(b) | Not applicable. |
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
(a) | Not applicable for semi-annual reports. |
Item 6. Investments.
(a) | Schedule of Investments is included as a part of the report to shareholders filed under Item 1 of this Form N-CSR. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees since the registrant last provided disclosure in response to this Item 10.
Item 11. Controls and Procedures.
(a) The Registrant’s principal executive and principal financial officers have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) are effective, as of a date within 90 days of the filing date of this Form N-CSR based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934.
(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) that occurred during the period covered by this report that have 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 to open-end investment companies.
Item 13. Exhibits.
(a)(1) | Not applicable for semi-annual reports. |
(a)(2) | The certifications required by Rule 30a-2(a) of the 1940 Act are attached hereto. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | The certifications required by Rule 30a-2(b) of the 1940 Act and 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.
The 2023 ETF Series Trust II
By: | /s/ Trent Statczar | |
Trent Statczar | ||
President (Principal Executive Officer) | ||
Date: | March 6, 2024 |
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: | /s/ Trent Statczar | |
Trent Statczar | ||
President (Principal Executive Officer) | ||
Date: | March 6, 2024 |
By: | /s/ Michael Minella | |
Michael Minella | ||
Treasurer (Principal Financial Officer) | ||
Date: | March 6, 2024 |