N-CSRS 1 fp0052997_ncsrs.htm

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 811-22668

 

ETF Series Solutions
(Exact name of registrant as specified in charter)

 

615 East Michigan Street

Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)

 

Kristina Nelson

ETF Series Solutions

615 East Michigan Street

Milwaukee, WI 53202
(Name and address of agent for service)

 

(414)-765-6076

Registrant's telephone number, including area code

 

Date of fiscal year end: August 31

 

Date of reporting period: February 29, 2020

 

 

 

Item 1. Reports to Stockholders.

 

Deep Value ETF

 

Semi-Annual Report

February 29, 2020

 

Deep Value ETF

Ticker: DVP

 

Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the Fund’s reports from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

 

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. Please contact your financial intermediary to elect to receive shareholder reports and other Fund communications electronically.

 

You may elect to receive all future reports in paper free of charge. Please contact your financial intermediary to inform them that you wish to continue receiving paper copies of shareholder reports and for details about whether your election to receive reports in paper will apply to all funds held with your financial intermediary.

 

 

Deep Value ETF

 

TABLE OF CONTENTS

 

 

Page

Letter to Shareholders

1

Portfolio Allocation

3

Schedule of Investments

4

Statement of Assets and Liabilities

6

Statement of Operations

7

Statements of Changes in Net Assets

8

Financial Highlights

9

Notes to Financial Statements

11

Expense Example

20

Approval of Advisory Agreement and Board Consideration

21

Federal Tax Information

24

Information About Portfolio Holdings

24

Information About Proxy Voting

24

Information About the Fund’s Trustees

25

Frequency Distribution of Premiums and Discounts

25

 

 

 

 

Deep Value ETF

 

Letter to Shareholders
(Unaudited)

 

 

Dear DVP Shareholders,

 

Thank you for your investment in Deep Value ETF (the “Fund” or “DVP”). The information presented in this report relates to the operations of DVP for the period from September 1, 2019 through February 29, 2020 (the “Current Fiscal Period”).

 

As a reminder, the Fund seeks to provide investment results that, before fees and expenses, correspond to the total return performance of the Deep Value Index (the “Index”). The Index is comprised of 20 undervalued dividend paying stocks within the S&P 500® Index with solid balance sheets, earnings and strong free cash flow. The companies within the Index are weighted based on a rules-based assessment of their valuations so that stocks that are most attractively valued receive a higher weight.

 

For the current fiscal period, the fund was down -2.39% at market and -2.38% at NAV. This compares to the underlying index which was down -2.25% and the S&P 500® Index, a broad market Index that was up 1.92% during the same current fiscal period.

 

The largest positive contributor to return for the current fiscal period was Cardinal Health, Inc. (CAH), gaining 23.24% and adding 1.18% to the return of the Fund. The second largest contributor was L Brands, Inc. (LB), gaining 35.20% and contributing 1.08% to the return of the Fund for the current fiscal period. The third most positive contributor for the current fiscal period was Nordstrom, Inc. (JWN), gaining 20.94% and adding 0.70% to the return of the Fund.

 

The largest negative contributor to return for the current fiscal period was Nucor Corporation (NUE), down -26.64% and detracting -2.00% from the return of the Fund. The second largest negative contributor was DXC Technology Company (DXC), down -24.32% and detracting -1.91% from the return of the Fund. The third largest detractor to return for the current fiscal period was Franklin Resources, Inc. (BEN), declining -15.57% and reducing the return of the Fund by -1.52%.

 

As a reminder, the full index is reconstituted annually in September. The portion of the index with the ten smallest weighted companies is rebalanced quarterly in March, June, and December.

 

DVP began distributing income to shareholders on a quarterly basis in December of 2014 and continued its quarterly distributions in September and December of 2019.

 

We appreciate your investment in Deep Value ETF.

 

Sincerely,

 

J. Garrett Stevens
Chief Executive Officer
Exchange Traded Concepts, Adviser to the Fund

 

1

 

 

Deep Value ETF

 

Letter to Shareholders (Continued)
(Unaudited)

 

 

Must be preceded or accompanied by a prospectus.

 

Investing involves risk. Principal loss is possible. The Fund has the same risks as the underlying securities traded on the exchange throughout the day. Redemptions are limited and often commissions are charged on each trade, and ETFs may trade at a premium or discount to their net asset value. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. As with all index funds, the performance of the Fund and its Index may differ from each other for a variety of reasons. For example, the Fund incurs operating expenses and portfolio transaction costs not incurred by the Index. In addition, the Fund may not be fully invested in the securities of the Index at all times or may hold securities not included in the Index. The Fund is not actively managed and may be affected by a general decline in market segments related to the index. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value.

 

Free Cash Flow – a measure of performance calculated as operating cash flow minus capital expenditures.

 

Deep Value Index – The Index is constructed using an objective, rules-based methodology that begins with an initial universe that mirrors the companies listed on the S&P 500® Index. The universe of companies is then narrowed to include only companies that have positive earnings and returns on invested capital, generate free cash flow, and currently pay a dividend. The remaining companies are then evaluated based on valuation metrics. The companies within the Index are weighted based on a rules-based assessment of their valuations relative to each other so that, at the time of each reconstitution, the 5 most undervalued companies are each weighted at 7.5%, the next 5 most undervalued companies are each weighted at 4.5% and the next 10 most undervalued companies are each weighted at 4.0%. From time to time, the Index may include more or less than 20 companies as a result of events such as acquisitions, spin-offs and other corporate actions.

 

Standard & Poor’s 500 (S&P 500® Index) – An index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500® is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe.

 

You cannot invest directly in an index.

 

Past performance is not a guarantee of future results.

 

Fund holdings are subject to change and are not a recommendation to buy or sell any security. For a complete listing of the Fund’s holdings please view the schedule of investments.

 

Deep Value ETF is distributed by Quasar Distributors, LLC.

 

2

 

 

Deep Value ETF

 

Portfolio Allocation
As of February 29, 2020 (Unaudited)

 

 

Sector

Percentage of
Net Assets

Consumer Discretionary

23.4%

Materials

18.6

Health Care

15.7

Information Technology

12.3

Financials

10.8

Industrials

7.8

Energy

6.4

Communication Services

4.8

Short-Term Investments

0.5

Liabilities in Excess of Other Assets

(0.3)

Total

100.0%

 

3

 

 

Deep Value ETF

 

Schedule of Investments
February 29, 2020 (Unaudited)

 

 

 

Shares

 

Security Description

 

Value

 
       

COMMON STOCKS — 99.8%

       
       

Communication Services — 4.8%

       
    1,035,758  

CenturyLink, Inc.

  $ 12,501,599  
                 
       

Consumer Discretionary 23.4%

       
    273,141  

BorgWarner, Inc.

    8,631,256  
    290,953  

Kohl’s Corporation

    11,390,810  
    572,420  

L Brands, Inc.

    12,398,617  
    1,368,749  

Macy’s, Inc.

    18,108,549  
    309,016  

Nordstrom, Inc.

    10,722,855  
              61,252,087  
       

Energy 6.4%

       
    513,220  

Halliburton Company

    8,704,211  
    239,503  

HollyFrontier Corporation

    8,066,461  
              16,770,672  
       

Financials 10.8%

       
    72,938  

Ameriprise Financial, Inc.

    10,306,139  
    828,306  

Franklin Resources, Inc.

    18,023,939  
              28,330,078  
       

Health Care 15.7%

       
    499,559  

Cardinal Health, Inc.

    26,037,015  
    215,203  

Gilead Sciences, Inc.

    14,926,480  
              40,963,495  
       

Industrials 7.8%

       
    217,848  

Delta Air Lines, Inc.

    10,049,328  
    222,205  

Southwest Airlines Company

    10,263,649  
              20,312,977  
       

Information Technology 12.3%

       
    669,182  

DXC Technology Company

    16,133,978  
    768,682  

HP, Inc.

    15,980,899  
              32,114,877  
       

Materials 18.6%

       
    259,833  

International Paper Company

    9,603,428  
    177,640  

LyondellBasell Industries NV - Class A

    12,694,154  
    396,282  

Nucor Corporation

    16,386,261  

 

The accompanying notes are an integral part of these financial statements.

 

4

 

 

Deep Value ETF

 

Schedule of Investments
February 29, 2020 (Unaudited) (Continued)

 

 

 

Shares

 

Security Description

 

Value

 
       

COMMON STOCKS — 99.8% (Continued)

       
       

Materials 18.6% (Continued)

       
    296,934  

WestRock Company

  $ 9,873,056  
              48,556,899  
                 
       

TOTAL COMMON STOCKS (Cost $303,890,027)

    260,802,684  
                 
       

SHORT-TERM INVESTMENTS — 0.5%

       
    1,249,363  

Invesco - Government & Agency Portfolio, Institutional Class, 1.50%*

    1,249,363  
       

TOTAL SHORT-TERM INVESTMENTS (Cost $1,249,363)

    1,249,363  
                 
       

TOTAL INVESTMENTS 100.3% (Cost $305,139,390)

    262,052,047  
       

Liabilities in Excess of Other Assets (0.3)%

    (670,656 )
       

NET ASSETS 100.0%

  $ 261,381,391  

 

Percentages are stated as a percent of net assets.

 

*

Rate shown is the annualized seven-day yield as of February 29, 2020.

 

The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS® is a service mark of MSCI, Inc. and S&P and has been licensed for use by the Fund’s Administrator, U.S. Bancorp Fund Services, LLC.

 

The accompanying notes are an integral part of these financial statements.

 

5

 

 

Deep Value ETF

 

Statement of Assets and Liabilities
February 29, 2020 (Unaudited)

 

 

ASSETS

       

Investments in securities, at value (cost $305,139,390)

  $ 262,052,047  

Dividends and interest receivable

    691,876  

Receivable for securities sold

    2,824,716  

Total assets

    265,568,639  
         

LIABILITIES

       

Payables for securities purchased

    4,125,547  

Management fees payable, net of waiver

    61,701  

Total liabilities

    4,187,248  
         

NET ASSETS

  $ 261,381,391  
         

Net Assets Consist of:

       

Paid-in capital

  $ 335,733,085  

Total distributable earnings (accumulated deficit)

    (74,351,694 )

Net assets

  $ 261,381,391  
         

Net Asset Value:

       

Net assets

  $ 261,381,391  

Shares outstanding ^

    9,550,000  

Net asset value, offering and redemption price per share

  $ 27.37  

 

^

No par value, unlimited number of shares authorized.

 

The accompanying notes are an integral part of these financial statements.

 

6

 

 

Deep Value ETF

 

Statement of Operations
For the Six-Months Ended February 29, 2020 (Unaudited)

 

 

INVESTMENT INCOME

       

Dividends (Net of foreign withholding taxes of $26,923)

  $ 5,521,598  

Interest

    7,290  

Total investment income

    5,528,888  
         

EXPENSES

       

Management fees

    1,197,971  

Total expenses

    1,197,971  

Less: fees waived +

    (808,630 )

Net expenses

    389,341  

Net investment income (loss)

    5,139,547  
         

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS

       

Net realized gain (loss) on investments

    (11,140,763 )

Change in unrealized appreciation (depreciation) on investments

    (451,551 )

Net realized and unrealized gain (loss) on investments

    (11,592,314 )

Net increase (decrease) in net assets resulting from operations

  $ (6,452,767 )

 

+

See Note 3 in Notes to Financial Statements.

 

The accompanying notes are an integral part of these financial statements.

 

7

 

 

Deep Value ETF

 

Statements of Changes in Net Assets

 

 

 

   

Six-Months
Ended
February 29,
2020
(Unaudited)

   

Year Ended
August 31, 2019

 

OPERATIONS

               

Net investment income (loss)

  $ 5,139,547     $ 7,883,461  

Net realized gain (loss) on investments

    (11,140,763 )     13,376,433  

Change in unrealized appreciation (depreciation) on investments

    (451,551 )     (61,946,822 )

Net increase (decrease) in net assets resulting from operations

    (6,452,767 )     (40,686,928 )
                 

DISTRIBUTIONS TO SHAREHOLDERS

               

Net distribution to shareholders

    (7,284,870 )     (5,981,799 )

Total distributions to shareholders

    (7,284,870 )     (5,981,799 )
                 

CAPITAL SHARE TRANSACTIONS

               

Proceeds from shares sold

    153,832,620       206,892,820  

Payments for shares redeemed

    (148,523,495 )     (48,965,715 )

Net increase (decrease) in net assets derived from capital share transactions (a)

    5,309,125       157,927,105  

Net increase (decrease) in net assets

  $ (8,428,512 )   $ 111,258,378  
                 

NET ASSETS

               

Beginning of period/year

  $ 269,809,903     $ 158,551,525  

End of period/year

  $ 261,381,391     $ 269,809,903  

 

(a)

A summary of capital share transactions is as follows:

 

   

Shares

   

Shares

 

Subscriptions

    4,850,000       6,550,000  

Redemptions

    (4,700,000 )     (1,600,000 )

Net increase (decrease)

    150,000       4,950,000  

 

The accompanying notes are an integral part of these financial statements.

 

8

 

 

Deep Value ETF

 

Financial Highlights

For a capital share outstanding throughout the period/year

 

 

   

Six-Months
Ended
February 29,
2020
(Unaudited)

   

Year
Ended
August 31,
2019

   

Year
Ended
August 31,
2018

   

Year
Ended
August 31,
2017

   

Year
Ended
August 31,
2016

   

Period
Ended
August 31,
2015 (1)

 

Net asset value, beginning of period/year

  $ 28.70     $ 35.63     $ 28.60     $ 24.70     $ 22.62     $ 24.75  
                                                 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:

                                               

Net investment income (loss) (2)

    0.54       1.07       1.05       0.44       0.87       0.50  

Net realized and unrealized gain (loss) on investments

    (1.10 )     (7.18 )     6.86       3.84       2.38       (2.21 )

Total from investment operations

    (0.56 )     (6.11 )     7.91       4.28       3.25       (1.71 )
                                                 

DISTRIBUTIONS TO SHAREHOLDERS:

                                               

Distributions from:

                                               

Net investment income

    (0.77 )     (0.82 )     (0.88 )     (0.38 )     (1.17 )     (0.42 )

Total distributions

    (0.77 )     (0.82 )     (0.88 )     (0.38 )     (1.17 )     (0.42 )
                                                 

CAPITAL SHARE TRANSACTIONS:

                                               

Transaction fees

                                  0.00 (3) 

Net asset value, end of period/year

  $ 27.37     $ 28.70     $ 35.63     $ 28.60     $ 24.70     $ 22.62  
                                                 

Total return

    -2.38 %(4)     -17.24%       27.84%       17.43 %     14.99 %     -7.03 %(4)
                                                 

SUPPLEMENTAL DATA:

                                               

Net assets at end of period/year (000’s)

  $ 261,381     $ 269,810     $ 158,552     $ 97,252     $ 75,349     $ 208,129  
                                                 

RATIOS TO AVERAGE NET ASSETS:

                                               

Expenses before fees waived

    0.80 %(5)     0.80 %     0.80 %     0.80 %     0.80 %     0.80 %(5)

Expenses after fees waived

    0.26 %(5)(6)     0.40% (7)      0.48 %(8)     0.58 %(9)     0.80 %     0.80 %(5)

Net investment income (loss) before fees waived

    2.88 %(5)     2.97 %     2.84 %     1.43 %     3.83 %     2.13 %(5)

Net investment income (loss) after fees waived

    3.42% (5)(6)      3.37% (7)      3.16 %(8)     1.65 %(9)     3.83 %     2.13 %(5)

Portfolio turnover rate (10)

    72 %(4)     97 %     126 %     201 %     206 %     62 %(4)

 

The accompanying notes are an integral part of these financial statements.

 

9

 

 

Deep Value ETF

 

Financial Highlights (Continued)
For a capital share outstanding throughout the period/year

 

 

(1)

Commencement of operations on September 22, 2014.

(2)

Calculated based on average shares outstanding during the period/year.

(3)

Represents less than $0.005 per share.

(4)

Not annualized.

(5)

Annualized.

(6)

Effective January 1, 2020 the Adviser contractually agreed to waive 21 basis points (0.21%) of its management fees for the Fund until at least December 31, 2020. The Adviser voluntarily waived an additional 33 basis points (0.33%) of its management fee during the period from September 1, 2019 through February 29, 2020.

(7)

Effective January 1, 2019 the Adviser contractually agreed to waive 21 basis points (0.21%) of its management fees for the Fund until at least December 31, 2019. The Adviser voluntarily waived an additional 33 basis points (0.33%) of its management fee during the period from March 6, 2019 through August 31, 2019.

(8)

Effective January 1, 2018 the Adviser contractually agreed to waive 21 basis points (0.21%) of its management fees for the Fund until at least December 31, 2018. The Adviser voluntarily waived an additional 8 basis points (0.08%) during the year and voluntarily reimbursed the Fund an additional $30,758.

(9)

Effective January 1, 2017 the Adviser contracutally agreed to waive 21 basis points (0.21%) of its management fees for the Fund until at least December 31, 2017. The Adviser voluntarily waived an additional 10 basis points (0.10%) of its management fees during the period from January 1, 2017 through August 31, 2017.

(10)

Excludes the impact of in-kind transactions.

 

The accompanying notes are an integral part of these financial statements.

 

10

 

 

Deep Value ETF

 

Notes to Financial Statements

February 29, 2020 (Unaudited)

 

 

NOTE 1 – ORGANIZATION

 

Deep Value ETF (the “Fund”) is a non-diversified series of ETF Series Solutions (“ESS” or the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on February 9, 2012. The Trust is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Fund’s shares is registered under the Securities Act of 1933, as amended (the “Securities Act”). The investment objective of the Fund is to seek investment results that, before expenses and fees, track the Deep Value Index (the “Index”). The Fund commenced operations on September 22, 2014.

 

The end of the reporting period for the Fund is February 29, 2020, and the period covered by these Notes to Financial Statements is the six-month period ended February 29, 2020 (the “current fiscal period”).

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 Financial Services – Investment Companies.

 

The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

 

A.

Security Valuation. All equity securities, including domestic and foreign common stocks, preferred stocks, and exchange traded funds that are traded on a national securities exchange, except those listed on the Nasdaq Global Market®, Nasdaq Global Select Market®, and the Nasdaq Capital Market® exchanges (collectively, “Nasdaq”) are valued at the last reported sale price on the exchange on which the security is principally traded. Securities traded on Nasdaq will be valued at the Nasdaq Official Closing Price (“NOCP”). If, on a particular day, an exchange-traded or Nasdaq security does not trade, then the mean between the most recent quoted bid and asked prices will be used. All equity securities that are not traded on a listed exchange are valued at the last sale price in the over-the counter market. If a non-exchange traded security does not trade on a particular day, then the mean between the last quoted closing bid and asked price will be used. Prices denominated in foreign currencies are converted to U.S. dollar equivalents at the current exchange rate, which approximates fair value.

 

11

 

 

Deep Value ETF

 

NOTES TO FINANCIAL STATEMENTS
February 29, 2020 (Unaudited) (Continued)

 

 

Investments in mutual funds, including money market funds, are valued at their net asset value (“NAV”) per share.

 

Securities for which quotations are not readily available are valued at their respective fair values in accordance with pricing procedures adopted by the Fund’s Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Board. The use of fair value pricing by the Fund may cause the NAV of its shares to differ significantly from the NAV that would be calculated without regard to such considerations.

 

As described above, the Fund utilizes various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuations methods. The three levels of inputs are:

 

 

Level 1 –

Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

 

 

Level 2 –

Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

 

 

Level 3 –

Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

 

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

 

12

 

 

Deep Value ETF

 

NOTES TO FINANCIAL STATEMENTS
February 29, 2020 (Unaudited) (Continued)

 

 

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

 

The following is a summary of the inputs used to value the Fund’s investments as of the end of the current fiscal period:

 

Assets^

 

Level 1

   

Level 2

   

Level 3

   

Total

 

Common Stocks

  $ 260,802,684     $     $     $ 260,802,684  

Short-Term Investments

    1,249,363                   1,249,363  

Total Investments in Securities

  $ 262,052,047     $     $     $ 262,052,047  

 

^

See Schedule of Investments for breakout of investments by sector classification.

 

During the current fiscal period, the Fund did not recognize any transfers to or from Level 3.

 

 

B.

Federal Income Taxes. The Fund’s policy is to comply with the provisions of Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all net taxable investment income and net capital gains to shareholders. Therefore, no federal income tax provision is required. The Fund plans to file U.S. Federal and various state and local tax returns.

 

The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months. Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits on uncertain tax positions as income tax expense in the Statement of Operations. During the current fiscal period, the Fund did not incur any interest or penalties.

 

13

 

 

Deep Value ETF

 

NOTES TO FINANCIAL STATEMENTS
February 29, 2020 (Unaudited) (Continued)

 

 

 

C.

Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Withholding taxes on foreign dividends, if any, have been provided for in accordance with the Fund’s understanding of the applicable tax rules and regulations.

 

 

D.

Distributions to Shareholders. Distributions to shareholders from net investment income are declared and paid by the Fund on a quarterly basis and distributions from net realized gains on securities are declared and paid by the Fund on an annual basis. Distributions are recorded on the ex-dividend date.

 

 

E.

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the current fiscal period. Actual results could differ from those estimates.

 

 

F.

Share Valuation. The NAV per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding of the Fund, rounded to the nearest cent. The Fund’s shares will not be priced on the days on which the New York Stock Exchange (“NYSE”) is closed for trading. The offering and redemption price per share of the Fund is equal to the Fund’s NAV per share.

 

 

G.

Guarantees and Indemnifications. In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.

 

 

H.

Reclassification of Capital Accounts. U.S. GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share.

 

14

 

 

Deep Value ETF

 

NOTES TO FINANCIAL STATEMENTS
February 29, 2020 (Unaudited) (Continued)

 

 

The permanent differences primarily relate to redemptions in kind. For the year ended August 31, 2019, the following table shows the reclassifications made:

 

Distributable
Earnings
(Accumulated
Deficit)

Paid-In Capital

$(4,497,394)

$4,497,394

 

During the year ended August 2019, the Fund realized $4,497,394 in net capital gains resulting from in-kind redemptions, in which shareholders exchanged Fund shares for securities held by the Fund rather than for cash. Because such gains are not taxable to the Fund, and are not distributed to shareholders, they have been reclassified from distributable earnings (accumulated deficit) to paid-in capital.

 

 

I.

Subsequent Events. In preparing these financial statements, management has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Effective March 31, 2020, Foreside Financial Group, LLC (“Foreside”) acquired Quasar Distributors, LLC (“Quasar”), the Fund’s distributor, from U.S. Bancorp. As a result of the acquisition, Quasar became a wholly-owned broker-dealer subsidiary of Foreside and is no longer affiliated with U.S. Bancorp. The Board of Trustees of the Fund’s has approved a new Distribution Agreement to enable Quasar to continue serving as the Fund’s distributor. Additionally, the recent global outbreak of COVID-19 has disrupted economic markets and the prolonged economic impact is uncertain. The operational and financial performance of the issuers of securities in which the Fund invests depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn impact the value of the Fund’s investments. There were no other events or transactions that occurred during the period subsequent to the end of the current fiscal period, that materially impacted the amounts or disclosures in the Fund’s financial statements.

 

 

J.

New Accounting Pronouncements. In August 2018, FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The primary focus of ASU 2018-13 is to improve the effectiveness of the disclosure requirements for fair value measurements. The changes affect all companies that are required to include fair value measurement disclosures. In general, the amendments in ASU 2018-

 

15

 

 

Deep Value ETF

 

NOTES TO FINANCIAL STATEMENTS
February 29, 2020 (Unaudited) (Continued)

 

 

13 are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. An entity is permitted to early adopt the removed or modified disclosures upon the issuance of ASU 2018-13 and may delay adoption of the additional disclosures, which are required for public companies only, until their effective date. Management has evaluated the impact of these changes and has adopted the disclosure framework.

 

NOTE 3 – COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS

 

Exchange Traded Concepts, LLC (the “Adviser”), serves as the investment adviser to the Fund. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Fund, and the Adviser, the Adviser provides investment advice to the Fund and oversees the day-to-day operations of the Fund, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Adviser has agreed to pay all expenses of the Fund, except for: the fee paid to the Adviser pursuant to the Advisory Agreement, interest charges on any borrowings, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses, and distribution (12b-1) fees and expenses. For services provided to the Fund, the Fund pays the Adviser 0.80% at an annual rate based on the Fund’s average daily net assets with a fee waiver of 0.21% through December 31, 2020. The contractual waiver agreement may be terminated only by, or with the consent of, the Board. The adviser additionally voluntarily waived 0.33% of its adviser fees during the current fiscal period, and neither of the waivers are recoupable in future fiscal periods.

 

U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services” or “Administrator”), acts as the Fund’s Administrator and, in that capacity, performs various administrative and accounting services for the Fund. The Administrator prepares various federal and state regulatory filings, reports and returns for the Fund, including regulatory compliance monitoring and financial reporting; prepares reports and materials to be supplied to the Board and monitors the activities of the Fund’s Custodian, transfer agent and fund accountant. Fund Services also serves as the transfer agent and fund accountant to the Fund. U.S. Bank N.A. (the “Custodian”), an affiliate of Fund Services, serves as the Fund’s Custodian.

 

Quasar Distributors, LLC, (the “Distributor”) acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. Until March 31, 2020, the Distributor was an affiliate of the Administrator.

 

A Trustee and all officers of the Trust are affiliated with the Administrator, Distributor (until March 31, 2020), and Custodian.

 

16

 

 

Deep Value ETF

 

NOTES TO FINANCIAL STATEMENTS
February 29, 2020 (Unaudited) (Continued)

 

 

NOTE 4 – PURCHASES AND SALES OF SECURITIES

 

During the current fiscal period, purchases and sales of securities by the Fund, excluding short-term securities and in-kind transactions, were $208,859,742 and $209,732,672, respectively.

 

During the current fiscal period, there were no purchases or sales of U.S. Government securities.

 

During the current fiscal period, in-kind transactions associated with creations and redemptions were $152,990,883 and $148,117,012, respectively.

 

NOTE 5 – INCOME TAX INFORMATION

 

The components of distributable earnings (accumulated deficit) and cost basis of investments for federal income tax purposes at August 31, 2019 were as follows:

 

Tax cost of investments

  $ 320,095,151  

Gross tax unrealized appreciation

  $ 9,652,517  

Gross tax unrealized depreciation

    (60,563,432 )

Total unrealized appreciation (depreciation)

    (50,910,915 )

Undistributed ordinary income

    2,905,252  

Undistributed long-term capital gains

     

Accumulated gain (loss)

    2,905,252  

Other accumulated gain(loss)

    (12,608,394 )

Distributable earnings (accumulated deficit)

  $ (60,614,057 )

 

The difference between the cost basis for financial statement and federal income tax purposes is due primarily to timing differences in recognizing wash sales.

 

A regulated investment company may elect for any taxable year to treat any portion of any qualified late year loss as arising on the first day of the next taxable year. Qualified late year losses are certain capital and ordinary losses which occur during the portion of the Fund’s taxable year subsequent to October 31 and December 31, respectively. For the taxable year ended August 31, 2019, the Fund did not elect to defer any post-October capital losses or late-year ordinary losses.

 

As of August 31, 2019, the Fund had a short-term capital loss carryforward of $12,608,394. This amount does not have an expiration date. During the year ended August 31, 2019, the Fund utilized $16,421,651 of its capital loss carryforward.

 

17

 

 

Deep Value ETF

 

NOTES TO FINANCIAL STATEMENTS
February 29, 2020 (Unaudited) (Continued)

 

 

The tax character of distributions paid by the Fund during the years ended August 31, 2019 and August 31, 2018 were as follows:

 

 

Year Ended
August 31, 2019

Year Ended
August 31, 2018

Ordinary Income

$5,981,799

$3,254,314

 

NOTE 6 – SHARE TRANSACTIONS

 

Shares of the Fund are listed and traded on New York Stock Exchange Arca, Inc. (“NYSE Arca”). Market prices for the shares may be different from their NAV. The Fund issues and redeems shares on a continuous basis at NAV generally in blocks of 50,000 shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in a specified universe. Once created, shares generally trade in the secondary market at market prices that change throughout the day. Except when aggregated in Creation Units, shares are not redeemable securities of the Fund. Creation Units may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a Depository Trust Company participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the shares directly from the Fund. Rather, most retail investors may purchase shares in the secondary market with the assistance of a broker and are subject to customary brokerage commissions or fees.

 

The Fund currently offers one class of shares, which has no front end sales load, no deferred sales charge, and no redemption fee. A fixed transaction fee is imposed for the transfer and other transaction costs associated with the purchase or sale of Creation Units. The standard fixed transaction fee for the Fund is $250, payable to the Custodian. The fixed transaction fee may be waived on certain orders if the Fund’s Custodian has determined to waive some or all of the costs associated with the order or another party, such as the Adviser, has agreed to pay such fee. In addition, a variable fee may be charged on all cash transactions or substitutes for Creation Units of up to a maximum of 2% as a percentage of the value of the Creation Units subject to the transaction. Variable fees are imposed to compensate the Fund for the transaction cost associated with cash transaction. Variable fees received by the Fund, if any, are displayed in the capital shares transactions section of the Statement of Changes in Net Assets. The Fund may issue an unlimited number of shares of beneficial interest, with no par value. All shares of the Fund have equal rights and privileges.

 

18

 

 

Deep Value ETF

 

NOTES TO FINANCIAL STATEMENTS
February 29, 2020 (Unaudited) (Continued)

 

 

NOTE 7 – PRINCIPAL RISKS

 

Non-Diversification Risk. Because the Fund is “non-diversified,” it may invest a greater percentage of its assets in the securities of a single issuer or a small number of issuers than if it was a diversified fund. As a result, a decline in the value of an investment in a single issuer could cause the Fund’s overall value to decline to a greater degree than if the Fund held a more diversified portfolio. This may increase the Fund’s volatility and cause the performance of a relatively smaller number of issuers to have a greater impact on the Fund’s performance.

 

Sector Risk. To the extent that the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors.

 

 

19

 

 

Deep Value ETF

 

Expense Example

For the Six-Months Ended February 29, 2020 (Unaudited)

 

 

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) ongoing costs, including management fees and 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 funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below in the Expense Example table.

 

Actual Expenses

 

The first line of the table provides information about actual account values based on actual returns 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 Period’’ to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes

 

The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.

 

 

Beginning
Account Value
September 1, 2019

Ending
Account Value
February 29, 2020

Expenses Paid
During the Period
(1)

Actual

$1,000.00

$ 976.20

$1.28

Hypothetical (5% annual return before expenses)

$1,000.00

$1,023.57

$1.31

 

(1)

The dollar amounts shown as expenses paid during the period are equal to the annualized six-month net expense ratio, 0.26%, multiplied by the average account value during the period, multiplied by 182/366 to reflect the one-half year period.

 

20

 

 

Deep Value ETF

 

Approval of Advisory Agreement and Board Consideration

 

 

Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a meeting held on October 2–3, 2019 (the “Meeting”), the Board of Trustees (the “Board”) of ETF Series Solutions (the “Trust”) considered the approval of the continuation of the Investment Advisory Agreement (the “Advisory Agreement”) between Exchange Traded Concepts, LLC (“ETC” or the “Adviser”) and the Trust on behalf of the Deep Value ETF (“DVP” or the “Fund”).

 

Prior to the Meeting, the Board, including the Trustees who are not parties to the Agreement or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), reviewed written materials from the Adviser regarding, among other things: (i) the nature, extent, and quality of the services provided by the Adviser; (ii) the historical performance of the Fund; (iii) the cost and profits realized from providing such services, including any fall-out benefits enjoyed by the Adviser or its affiliates; (iv) comparative fee and expense data for the Fund; (v) the extent to which the advisory fee for the Fund reflects economies of scale shared with Fund shareholders; and (vi) other factors the Board deemed to be relevant.

 

Prior to the Meeting, the Adviser, along with representatives of other service providers of the Fund, presented written information to help the Board evaluate the Adviser’s fees and other aspects of the Agreement. Additionally, the Adviser’s Chief Executive Officer provided an oral overview of the Fund’s strategy, the services provided to the Fund by the Adviser, and additional information about the Adviser’s personnel and other clients. The Board then discussed the written materials that it had received, the Adviser’s oral presentation, and any other information that the Board received at the Meeting and deliberated on the approval of the Agreement in light of this information. In its deliberations, the Board did not identify any single piece of information discussed below that was all-important or controlling.

 

Approval of the Continuation of the Advisory Agreement

 

Nature, Extent, and Quality of Services Provided. The Trustees considered the scope of services provided under the Advisory Agreement, noting that the Adviser would continue to provide investment management services to the Fund. In considering the nature, extent, and quality of the services provided by the Adviser, the Board considered the quality of the Adviser’s compliance infrastructure and past reports from the Trust’s Chief Compliance Officer. The Board also considered its previous experience with the Adviser providing investment management services to the Fund. The Board noted that it had received a copy of the Adviser’s registration form (“Form ADV”), as well as the response of the Adviser to a detailed series of questions which included, among other things, information about the background and experience of the firm’s CCO.

 

21

 

 

Deep Value ETF

 

Approval of Advisory Agreement and Board Consideration
(Continued)

 

 

The Board also considered other services to be provided to the Fund, such as the general management of the day-to-day investment and reinvestment of the assets of the Fund; determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of Fund shares conducted on a cash-in-lieu basis; oversight of general portfolio compliance with relevant law; responsibility for daily monitoring of tracking error and quarterly reporting to the Board; and implementation of Board directives as they relate to the Fund.

 

Historical Performance. The Board noted that it had received information regarding the Fund’s performance as of June 30, 2019 and August 31, 2019 in the Materials. Because the Fund is designed to track the performance of an index, the Board considered the extent to which the Fund tracked its index before fees and expenses, as well as its performance compared to the performance of other funds in its peer group.

 

The Board noted that for the one-year, three-year, and since inception periods ended June 30, 2019, DVP slightly underperformed its underlying index before fees and expenses. The Board also discussed DVP’s performance relative to its peer group, Mid-Cap Value ETFs as reported by Morningstar (the “Category Peer Group”). The Board noted that for the one-year period ended June 30, 2019, DVP significantly underperformed the median for the Category Peer Group, but outperformed the median for the three-year period. The Board also noted that the Fund had significantly underperformed the S&P 500 Index for the one-year periods ended June 30, 2019 and August 31, 2019 and underperformed such benchmark to a lesser extent for the same three-year periods. Additionally, the Board noted that DVP had underperformed its three most direct competitors as identified by the Adviser for the one-year period ended June 30, 2019 and outperformed such competitor group for the three-year period ended June 30, 2019.

 

Cost of Services Provided and Economies of Scale. The Board reviewed the expense ratio for the Fund and compared the Fund’s expense ratio to its “Category Peer Group. The Board noted that DVP’s management fee before waivers was significantly higher than the median for its Category Peer Group, but the Fund’s expense ratio net of the Fund’s contractual and voluntary fee waivers was only slightly higher than the median and significantly lower than some funds in the Category Peer Group. The Board also noted that, because the Category Peer Group included a number of significantly larger, low-cost ETFs, the peer group may not allow for an apt comparison by which to judge DVP’s expense ratio. The Board also noted that the Fund’s expense ratio was lower than the expense ratios of its most direct competitors as identified by the Adviser.

 

The Board took into consideration that the advisory fee for the Fund was a “unified fee,” meaning the Fund paid no expenses other than the advisory fee and certain other costs such as interest, brokerage, acquired fund fees and expenses, extraordinary

 

22

 

 

Deep Value ETF

 

Approval of Advisory Agreement and Board Consideration
(Continued)

 

 

expenses and, to the extent it is implemented, fees pursuant to a Distribution and/or Shareholder Servicing (12b-1) Plan. The Board noted that the Adviser continued to be responsible for compensating the Trust’s other service providers and paying the Fund’s other expenses out of its own fee and resources. The Board also evaluated the compensation and benefits received by the Adviser from its relationship with the Fund, taking into account analyses of the Adviser’s profitability with respect to the Fund.

 

The Board expressed the view that it currently appeared that the Adviser might realize economies of scale in managing the Fund as assets grow in size. The Board further determined that, based on the amount and structure of the Fund’s unitary fee, such economies of scale are currently shared with Fund shareholders, although the Board intends to monitor fees as the Fund grows in size and assess whether fee breakpoints may be warranted.

 

Conclusion. No single factor was determinative of the Board’s decision to approve the continuation of the Advisory Agreement; rather, the Board based its determination on the total mix of information available to it. Based on a consideration of all the factors in their totality, the Board, including a majority of the Independent Trustees, determined that the Advisory Agreement, including the compensation payable under the agreement, was fair and reasonable to the Fund. The Board, including a majority of the Independent Trustees, therefore determined that the approval of the continuation of the Advisory Agreement was in the best interests of the Fund and its shareholders.

 

23

 

 

Deep Value ETF

 

Federal Tax Information

(Unaudited)

 

 

For the fiscal year ended August 31, 2019, certain dividends paid by the Fund may be subject to a maximum rate of 23.8%, as provided for by the Jobs and Growth Tax relief Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was 100.00%.

 

For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividend received deduction for the fiscal year ended August 31, 2019 was 100.00%.

 

The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871(k)(2)(C) for the Fund were 0.00%.

 

Information About Portfolio Holdings
(Unaudited)

 

 

The Fund files its complete schedules of portfolio holdings for its first and third fiscal quarters with the SEC on Form N-Q or Part F of Form N-PORT (beginning with filings after March 31, 2020). The Fund’s Form N-Q or Part F of Form N-PORT is available without charge, upon request, by calling toll-free at (800) 617-0004. Furthermore, you may obtain the Form N-Q or Part F or Form N-PORT on the SEC’s website at www.sec.gov. The Fund’s portfolio holdings are posted on its website at www.dvpfund.com daily.

 

Information About Proxy Voting
(Unaudited)

 

 

A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge, upon request, by calling toll-free at (800) 617-0004, by accessing the SEC’s website at www.sec.gov, or by accessing the Fund’s website at www.dvpfund.com.

 

When available, information regarding how the Fund voted proxies relating to portfolio securities during the twelve-months ending June 30 is available by calling toll-free at (800) 617-0004 or by accessing the SEC’s website at www.sec.gov.

 

24

 

 

Deep Value ETF

 

Information About the Fund’s Trustees

(Unaudited)

 

 

The SAI includes additional information about the Fund’s Trustees and is available without charge, upon request, by calling toll free at (800) 617-0004, by accessing the SEC’s website at www.sec.gov, or by accessing the Fund’s website at www.dvpfund.com.

 

Frequency Distribution of Premiums and Discounts
(Unaudited)

 

 

Information regarding how often shares of the Fund trade on an exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund is available, without charge, on the Fund’s website at www.dvpfund.com.

 

25

 

 

Adviser

Exchange Traded Concepts, LLC
10900 Hefner Pointe Drive, Suite 207
Oklahoma City, Oklahoma 73120

 

Index Provider

DVP Holdings, LLC
520 Madison Avenue, 26th Floor
New York, New York 10022

 

Distributor

Quasar Distributors, LLC
111 East Kilbourn Avenue, Suite 1250
Milwaukee, Wisconsin 53202

 

Custodian

U.S. Bank National Association
1555 North Rivercenter Drive, Suite 302
Milwaukee, Wisconsin 53212

 

Transfer Agent

U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202

 

Independent Registered Public Accounting Firm

Cohen & Company Ltd.
342 North Water Street, Suite 830
Milwaukee, Wisconsin 53202

 

Legal Counsel

Morgan, Lewis, & Bockius, LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004

 

Deep Value ETF

Symbol – DVP
CUSIP – 26922A701

 

 

 

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.

 

Not applicable for semi-annual reports.

 

Item 6. Investments.

 

Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.

 

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.

 

Item 11. Controls and Procedures.

 

(a)The Registrant’s President (principal executive officer) and Assistant Treasurer (acting principal financial officer) have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.

 

 

 

(b)There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of 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 to open-end investment companies.

 

Item 13. Exhibits.

 

(a)(1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not Applicable.

 

(2) A separate certification for each principal executive officer and acting principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

 

(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.

 

(4) Change in the registrant’s independent public accountant. There was no change in the registrant’s independent public accountant for the period covered by this report.

 

(b)Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant) ETF Series Solutions    
       
By (Signature and Title)* /s/ Kristina R, Nelson  
    Kristina R, Nelson, President (principal executive officer)  
       
Date 4/28/2020    

 

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/ Kristina R, Nelson  
    Kristina R, Nelson, President (principal executive officer)  
       
Date 4/28/2020    
       
By (Signature and Title)* /s/ Kristen M, Weitzel  
    Kristen M, Weitzel, Treasurer (principal financial officer)  
       
Date 4/28/2020    

 

*Print the name and title of each signing officer under his or her signature.