N-CSR 1 fp0083070-1_ncsr.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 811-22894

 

INVESTMENT MANAGERS SERIES TRUST II

(Exact name of registrant as specified in charter)

 

235 W. Galena Street

Milwaukee, WI 53212

(Address of principal executive offices) (Zip code)

 

Diane J. Drake

Mutual Fund Administration, LLC

2220 E. Route 66, Suite 226

Glendora, CA 91740

(Name and address of agent for service)

 

(626) 385-5777

Registrant's telephone number, including area code

 

Date of fiscal year end: March 31

 

Date of reporting period: March 31, 2023

 

 

Item 1. Report to Stockholders.

 

The registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), is as follows:

 

 

 

AXS Astoria Inflation Sensitive ETF
(ppi)

 

AXS Change Finance ESG ETF
(chgx)

 

AXS First Priority CLO Bond ETF
(aaa)

 

AXS Green Alpha ETF
(nxte)

 

AXS Brendan Wood TopGun Index ETF
(tgn)

 

AXS Esoterica NextG Economy ETF
(wugi)

 

ANNUAL REPORT

MARCH 31, 2023

 
 

AXS ETFs

Each a series of Investment Managers Series Trust II

 

Table of Contents

 

Shareholder Letter 1
Fund Performance 20
Schedule of Investments 28
Statements of Assets and Liabilities 51
Statements of Operations 53
Statements of Changes in Net Assets 59
Statement of Cash Flows 65
Financial Highlights 66
Notes to Financial Statements 72
Report of Independent Registered Public Accounting Firm  89
Supplemental Information 91
Expense Examples 104

 

This report and the financial statements contained herein are provided for the general information of the shareholders of the AXS ETFs. This report is not authorized for distribution to prospective investors in the ETFs unless preceded or accompanied by an effective prospectus.

 

www.axsinvestments.com

 
 

 

 

March 31, 2023

 

Dear Fellow Shareholders:

 

The AXS Astoria Inflation Sensitive ETF (PPI) returned -9.06% during the 1-year period ending 3/31/2023, while its benchmark (70% MSCI All Country World Index, 20% Bloomberg Commodity Index, and 10% Bloomberg US TIPS 1-3 Year) Index returned -7.45%. The ETF was incepted on 12/29/2021 and is an actively managed strategy.

 

Relevant Indicators: 1-Year Period Ending 3/31/2023

 

The S&P 500 Index returned -7.73% during the 1-year period ending 3/31/2023 and the MSCI All Country World Index was down 7.44%.

 

While the S&P Energy Select Sector Index increased by 13.15%, the Bloomberg Commodity Index fell 12.49% and the Bloomberg Composite Crude Oil Index decreased by 10.75%.

 

Longer duration assets such as the growth heavy NASDAQ-100 Index was down 10.35% while the S&P U.S. Government Bond 20+ Year Index declined 17.50%.

 

The bond market fell as interest rates rose with the Bloomberg US Aggregate Bond Index decreasing by 4.78%.

 

The yield on the US 10-year Treasury increased from 2.32% on 3/31/2022, to 3.49% on 3/31/2023, and the Bloomberg US Corporate Investment Grade Index was down 5.55%.

 

The VIX Index declined 9.06% for the period.

 

Inflation Readings

 

The CPI (Consumer Price Index) was up 6.0% year over year in February, printing level with the forecast and softening from January's 6.4% increase. Month over month, February CPI rose by 0.4%, matching expectations and slightly below the prior month's 0.5% print.

 

The Producer Price Index (commonly referred to as "PPI") gained 4.6% year over year in February, coming well below both the 5.4% estimate and January's 5.7% reading. Month over month, the February figure fell by 0.1%, printing below the forecasted 0.3% increase and down from the previous month's 0.3% measure.

 

Fed Actions

 

As banks typically lend long and borrow short, they acquired vast amounts of bonds back when interest rates were pegged near zero. Given the Federal Reserve has hiked rates by nearly 500 bps over the past year, these securities have significantly declined in value given their interest rate risk, and the overall banking system is sitting on nearly $620 billion of unrealized losses according to data compiled by the FDIC.

 

Many clients in both Silicon Valley Bank and Signature Bank had deposits well above the $250,000 insured by the FDIC, and vast amounts of customers simultaneously attempted to withdraw their funds. The banks' investments were then sold to meet these unexpected liquidity needs, ultimately causing the losses to be realized and the banks to fail.

 

www.astoriaadvisors.com March 31, 2023 212.381.6185 | Twitter: @AstoriaAdvisors

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Investors feared the same might happen to other banks, and in response, the Fed created the Bank Term Funding Program, which provides additional funds to meet deposit needs. This program allowed the Fed to go through with the 25 bps rate hike at the March FOMC meeting amid heightened inflation data.

 

The Committee feels the “U.S. banking system is sound and resilient,” and that the recent bank failures will result in “tighter credit conditions" that will likely slow the economy.

 

Performance as of 3/31/2023

 

(%) Q1 2023 YTD 1 YR SINCE INCEPTION
NAV -0.06 -0.06 -8.72 3.20
Market Price -0.30 -0.30 -9.06 3.06
Blended Benchmark* 4.18 4.18 -7.45 -5.52

 

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 than the performance data quoted. One cannot invest in an index. Inception date is 12/29/2021. *Since Inception returns are annualized. Benchmark represents 70% MSCI All Country World Index, 20% Bloomberg Commodity Total Return Index and 10% Bloomberg US TIPS 1-3 Year Index.

 

Performance Analysis: Q1 2023

 

The Fund returned -0.30% for the quarter. Equities negatively contributed to the lion share of the ETF's return, while both commodities and our fixed income positions positively contributed to the ETF's performance.

 

Cyclicals

 

Below are the largest contributors and detractors to Fund performance from equities. Builders FirstSource, Inc. (2.50% of PPI as of 3/31/2023) gained 36.84% for the period overall and accounted for 0.81% of the ETF's performance.

 

 LARGEST CONTRIBUTORS Contribution % of PPI
Builders FirstSource, Inc. 0.81% 2.50%
Commerzbank AG 0.49% 0%1
Steel Dynamics, Inc. 0.40% 2.50%
Nucor Corporation 0.29% 2.56%
Olin Corporation 0.26% 2.66%

 

1Commerzbank AG was sold completely on March 1, 2023. Please see the Portfolio Changes section below for more details on the changes in reference to this security.

 

www.astoriaadvisors.com March 31, 2023 212.381.6185 | Twitter: @AstoriaAdvisors

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The largest detractor was Western Alliance Bancorp (0% of PPI as of 3/31/20232), which fell 40.04% for the period overall and detracted 0.80% of the ETF's performance.

 

LARGEST DETRACTORS Contribution % of PPI
Western Alliance Bancorp -0.80% 0%2
Comerica Incorporated -0.76% 0%3
Zions Bancorporation, N.A. -0.69% 0%4
Ovintiv Inc -0.61% 2.38%
APA Corporation -0.51% 2.26%

 

2-4Western Alliance Bancorp, Comerica Incorporated, and Zions Bancorporation, N.A. were sold partially on March 13th and March 14, 2023. Please see the Portfolio Changes section below for more details on the changes in reference to these securities.

 

Commodities

 

For the period, the SPDR Gold MiniShares Trust (GLDM; 3.46% of PPI as of 3/31/2023) was up 8.07% and contributed 0.35% to the ETF's performance. Additionally, the Aberdeen Physical Precious Metals Basket Shares ETF (GLTR; 3.31% of PPI as of 3/31/2023) rose 2.22%, adding 0.16% to the ETF's return.

 

Fixed Income

 

TIPS (Treasury Inflation-Protected Securities) produced positive returns as both the Vanguard Short-Term Inflation-Protected Securities ETF (VTIP; 3.21% of PPI as of 3/31/2023) and the iShares 0-5 Year TIPS Bond ETF (STIP; 3.33% of PPI as of 3/31/2023) were up for the period (+2.38% and +2.34%, respectively), positively contributing to the ETF's performance (adding 0.09% and 0.08%, respectively).

 

Portfolio Changes: Q1 2023

 

On March 1, 2023, we executed a rebalance in which our stock selection and screening process was reviewed.

 

Positions Sold

 

Given their quantitative ranking scores declined, we sold completely out of the following stocks (0% in PPI as of 3/31/2023):

 

ANZ Group Holdings Limited Hitachi, Ltd.
ArcelorMittal SA Mitsui & Co., Ltd.
BAE Systems plc National Australia Bank Limited
Commerzbank AG Popular, Inc.
ConocoPhillips Teck Resources Limited Class B
Devon Energy Corporation West Fraser Timber Co. Ltd.

 

www.astoriaadvisors.com March 31, 2023 212.381.6185 | Twitter: @AstoriaAdvisor

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Positions Purchased

 

As their quantitative ranking scores were superior, the following stocks were purchased (% represents weighting in PPI as of 3/31/2023):

 

BHP Group Ltd. (1.87%) Mitsubishi UFJ Financial Group, Inc. (1.62%)
Comerica Incorporated (0%; see below) NatWest Group Plc (1.62%)
Glencore plc (1.69%) Ovintiv Inc. (2.38%)
Holcim Ltd. (1.87%) PDC Energy, Inc. (2.64%)
Marubeni Corporation (1.90%) Toronto-Dominion Bank (1.61%)
Mitsubishi Heavy Industries, Ltd. (1.79%) Whitehaven Coal Limited (1.66%)

 

Other stocks already in PPI were bought or sold to bring our sector weights, as well as our US and Non-US exposures, in accordance with their target ranges.

 

Over the course of several days in March, we diligently monitored our US mid-cap/regional banks stocks that were exposed to financial system contagion. In an effort to de-risk ahead of an amplification of the regional banking crisis, we sold completely out of the following stocks: Capital One Financial Corp, Comerica Incorporated, Regions Financial Corporation, Western Alliance Bancorp, and Zions Bancorporation, N.A. (all 0% of PPI as of 3/31/2023).

 

Using a portion of the proceeds, we established smaller positions in the following larger investment banks/brokers and asset managers as they are generally more stable and not exposed to the same risks as regional banks: Ameriprise Financial, Inc. (0.42% of PPI as of 3/31/2023), Interactive Brokers Group, Inc. Class A (0.41% of PPI as of 3/31/2023), LPL Financial Holdings Inc. (0.38% of PPI as of 3/31/2023), Raymond James Financial, Inc. (0.41% of PPI as of 3/31/2023), and State Street Corporation (0.40% of PPI as of 3/31/2023).

 

Furthermore, we've reduced the ETF's exposure to the financials sector until bank fears further subdue.

 

Current and Prospective Economic Outlook

 

We are skeptical about Q1's rally and whether or not it will continue. Why?

 

1)Q1 was more liquidity driven as opposed to fundamental.
2)China's reopening released trillions of dollars in pent-up demand into the global economy.
3)Mean reversion was heavy at play as 2022's biggest losers were up the most in 2023.
4)Japan's yield curve control also led to additional liquidity.
5)Market breadth was poor as only a handful of stocks drove the S&P 500's return in Q1.
6)Given many indicators remain in contractionary territory and forecasts for the upcoming earnings season are weak, it's hard to get excited about buying the S&P 500 Index when its P/E ratio is 18.

 

Once the yield curve un-inverts further and leading indicators inflect higher, we'd aim to re-risk the fund. Remember, we're still in a bear market, and bull markets don't typically start with the S&P 500 Index trading at such expensive valuations.

 

www.astoriaadvisors.com March 31, 2023 212.381.6185 | Twitter: @AstoriaAdvisors

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We are grateful for your continued trust and support.

 

Sincerely, The Investment Team at Astoria Portfolio Advisors LLC.

 

The views in this letter were as of March 31, 2023, and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund's investment methodology and do not constitute investment advice.

 

Commentary provided by Astoria Portfolio Advisors, who serves as the Sub-Adviser for AXS Astoria Inflation Sensitive ETF and is not affiliated with AXS Investments. Holdings are subject to change and should not be considered investment advice.

 

Disclosures

 

This material must be preceded or accompanied by a prospectus

 

There is no guarantee the sectors or asset classes the advisor identifies will benefit from inflation. Fund may invest a larger portion of its assets in one or more sectors than many other funds, and thus will be more susceptible to negative events affecting those sectors.

 

Equity Securities Risk: Equity securities may be particularly sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase. Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or in only a particular country, company, industry or sector of the market.

 

Commodities Risk: Commodity prices can have significant volatility, and exposure to commodities can cause the value of the Fund's shares to decline or fluctuate in a rapid and unpredictable manner. The values of commodities may be affected by changes in overall market movements, real or perceived inflationary trends, commodity index volatility, changes in interest rates or currency exchange rates, population growth and changing demographics, international economic, political and regulatory developments, and factors affecting a particular region, industry or commodity.

 

Futures Contracts Risk: The Fund expects that certain of the Underlying ETFs in which it invests will utilize futures contracts for its commodities investments. The risk of a position in a futures contract may be very large compared to the relatively low level of margin the Underlying ETF is required to deposit. In many cases, a relatively small price movement in a futures contract may result in immediate and substantial loss or gain to the investor relative to the size of a required margin deposit. The prices of futures contracts may not correlate perfectly with movements in the securities or index underlying them.

 

TIPS Risk: Principal payments for Treasury Inflation-Protection Securities are adjusted according to changes in the Consumer Price Index (CPI). While this may provide a hedge against inflation, the returns may be relatively lower than those of other securities. Similar to other issuers, changes to the financial condition or credit rating of the U.S. government may cause the value of the Fund's exposure to U.S. Treasury obligations to decline.

 

Index descriptions

 

The following descriptions, while believed to be accurate, are in some cases abbreviated versions of more detailed or comprehensive definitions available from the sponsors or originators of the respective indices. Please refer to each such sponsor's website for more detailed index information.

 

The past performance of an index is not a guarantee of future results.

 

www.astoriaadvisors.com March 31, 2023 212.381.6185 | Twitter: @AstoriaAdvisors

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Each index reflects an unmanaged universe of securities without any deduction for advisory fees or other expenses that would reduce actual returns, as well as the reinvestment of all income and dividends. An actual investment in the securities included in the index would require an investor to incur transaction costs, which would lower the performance results.

 

Indices are not actively managed, and investors cannot invest directly in the indices.

 

NASDAQ-100 Index: The Nasdaq 100 Index is a basket of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks.

 

S&P 500® Index: The S&P 500® Index is an unmanaged, capitalization-weighted index designed to measure the performance of the broad US economy through changes in the aggregate market value of 500 stocks representing all major industries.

 

S&P 500® Energy: The S&P 500® Energy index comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.

 

MSCI All Country World Index: The MSCI All Country World Index is designed to represent performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 24 emerging markets. As of June 2021, it covers more than 2,900 constituents across 11 sectors and approximately 85% of the free float-adjusted market capitalization in each market. The index is built using MSCI's Global Investable Market Index (GIMI) methodology, which is designed to take into account variations reflecting conditions across regions, market cap sizes, sectors, style segments and combinations.

 

MSCI Brazil: The MSCI Brazil Index is designed to measure the performance of the large and mid cap segments of the Brazilian market. The index covers about 85% of the Brazilian equity universe.

 

Bloomberg Commodity Index: The Bloomberg Commodity Index (“BCOM” or the “Index”) is designed to be a highly liquid and diversified benchmark for commodity investments. BCOM provides broad-based exposure to commodities and no single commodity or sector dominates the Index. The indices use a consistent, systematic process to represent the commodity markets. A commodity index should fairly represent the importance of a diversified group of commodities to the world economy. To achieve a fair representation, BCOM uses both liquidity data and U.S. -dollar-weighted production data in determining the relative quantities of included commodities. BCOM Index purports to provide diversified exposure to commodities as an asset class.

 

Bloomberg Composite Crude Oil Index: The Bloomberg Composite Crude Oil Index Formerly known as Dow Jones-UBS Composite Crude Oil Subindex (DJUBSCR), the index is composed of futures contracts on WTI and Brent Crude Oil.

 

Bloomberg US Aggregate Bond Index: The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency).

 

Bloomberg U.S. 1-3 Year Treasury Bond Index: The Bloomberg U.S. 1-3 Year Treasury Bond Index measures the performance of the US government bond market and includes public obligations of the U.S. Treasury with a maturity between 1 and up to (but not including) 3 years.

 

S&P U.S. Government Bond 20+ Year Index: The S&P U.S. Treasury Bond 20+ Year Index is designed to measure the performance of U.S. Treasury bonds maturing in 20 or more years.

 

Bloomberg US Corporate Investment Grade Index: The Index measures the performance of the long-dated, investment grade U.S. corporate bond market. Only bonds that have a maturity of more than ten years are included. Securities must be fixed rate, U.S. dollar denominated, taxable and rated investment grade as defined by the Index methodology.

www.astoriaadvisors.com March 31, 2023 212.381.6185 | Twitter: @AstoriaAdvisors

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VIX® Index: Cboe Global Markets revolutionized investing with the creation of the Cboe Volatility Index® (VIX® Index), the first benchmark index to measure the market's expectation of future volatility. The VIX Index is based on options of the S&P 500® Index, considered the leading indicator of the broad U.S. stock market. The VIX Index is recognized as the world's premier gauge of U.S. equity market volatility. The VIX Index is used as a barometer for market uncertainty, providing market participants and observers with a measure of constant, 30-day expected volatility of the broad U.S. stock market. The VIX Index is not directly tradable, but the VIX methodology provides a script for replicating volatility exposure with a portfolio of SPX options, a key innovation that led to the creation of tradable VIX futures and options.

 

Glossary

 

Price to Earnings Ratio (P/E): The price-to-earnings ratio (P/E ratio) is a ratio used by analysts for valuing a company. The P/E ratio measures a company's current share price relative to its earnings per share (EPS). The P/E ratio is also referred to as the price multiple or the earnings multiple.

 

Consumer Price Index (CPI): This index is an inflation measure that calculates the weighted average of prices of a basket of consumer goods and services. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. The CPI measures items such as food, beverages, housing, apparel, transportation, medical care, recreation, education, communication, and other personal goods and services, such as tobacco and smoking products, and haircuts.

 

Producer Price Index (PPI): This index is an inflation measure that looks at the prices that producers pay and measures changes in the sale prices for the entire domestic market of raw goods and services. These goods and services are bought by consumers from their primary producers, bought indirectly from retail sellers, or purchased by producers themselves. The industries that comprise the PPI include mining, manufacturing, agriculture, fishing, forestry, natural gas, electricity, construction, waste, and scrap materials

 

 www.astoriaadvisors.com March 31, 2023  212.381.6185 | Twitter: @AstoriaAdvisors

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Dear Shareholders,

 

Welcome to our FY 22-23 Annual Report covering August 1, 2022 through March 31, 2023. As we closed the last fiscal year, approximately 4.5 years after launch, we reported $117 million in assets under management (AUM) in the AXS Change Finance ESG ETF (CHGX, the “Fund”). Over the recent fiscal year, the fund stayed level at $116.9 million in AUM despite market volatility.

 

CHGX continues to track the Change Finance Diversified Impact US Large Cap Fossil Fuel Free Index (the “Index”), composed of the common stock of 100 U.S. large cap companies. The Index utilizes Change Finance's proprietary Isolated ESG Risk-Factor Methodology which applies industry screens of more than 100 individual factors related to people, planet, and profit to ensure that we invest in the most responsible and sustainable companies.

 

Third-party analysis continues to validate that CHGX is one of the cleanest funds on the market. Morningstar continues to give the Fund its top 5 Globes rating for sustainability.1 CHGX continues to receive an A rating from As You Sow on Fossil Fuel Exposure and Weapons Exposure as of 3/31/2023 and its carbon footprint is 129% below that of the S&P 5002 as of the same date.

 

The unusual market circumstances which saw on-going supply-chain challenges, continued pandemic-fueled challenges, and significant inflation, coupled with Russia's invasion of Ukraine made performance a challenge for the Fund during the period with the Fund returning -6.86% as compared to its benchmark, the S&P 500 which returned -7.73%. One of the most significant drivers of the performance gap was the extraordinary rise in oil and gas prices fueled by the war in Ukraine just as all other market sectors were down considerably. Change Finance continues to believe that fossil fuel free investing is a sound long-term strategy. Specifically in the first quarter of 2023 our equal-weighted portfolio struggled as investors flocked to large names like Apple, Microsoft, and NVidia. The portfolio also underperformed due to missing names like Tesla, Amazon, and Meta (Facebook). A quarter ago (Q4 2022), these same exclusions led to dramatic outperformance, demonstrating the significant volatility of this market environment. The rest of the performance story is positive.

 

Change Finance continues to lead the way in sustainable investing. As of March 31, 2023 CHGX was the first Certified Carbon Neutral ETF. CHGX is certified carbon neutral by EthosESG and has sequestered 1,815 tonnes of carbon emissions from its holdings through the end of Q1 2023. This process with our partner, Grassroots Carbon, has a tangible effect through regenerative agriculture that enhances biodiversity and restores grassland ecosystems. Grassroots Carbon also supports marginalized communities ensuring that as good stewards of the land, they are compensated fairly for the service they provide. Change Finance, a certified B Corp, continues to support causes and companies that benefit people and the planet.

 

 

1Out of 3,363 US Equity Large Cap Blend funds as of 2/28/2022. Based on 98.96% of AUM. A measure of how well the portfolio holdings are managing their ESG Risk relative to the portfolio's Global Category peer group. Data is based on long positions only. Sustainalytics provides company level analysis used in the calculation of Morningstar's Historical Sustainability Score, which is a weighted average of the trailing 12 months of Morningstar Portfolio Sustainability Scores.
2Carbon Footprint Relative to S&P 500 is calculated using S&P 500 ETF Trust (SPY) as a proxy in tonnes Co2/million invested. Information on carbon intensity is from VettaFi

 

 

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Change Finance exists to create an economy in service to life. With your continued support, we will continue to do that through our investment methodology, our advocacy program, and more.

 

In gratitude,

 

The Change Finance Team

 

The views in this letter were as of March 31, 2023, and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund's investment methodology and do not constitute investment advice.

 

Performance  Average Annualized 
   ytd   Quarter   1 Year   3 Year   5 Year   Since Inception
(10/9/17)
 
CHGX NAV   6.45%   6.45%   -6.86%%   16.81%   9.98%   9.94%
CHGX Market Price   6.45%   6.45%   -7.77%%   16.71%   10.02%   9.93%
S&P 500   7.50%   7.50%   -7.73%   18.60%   11.19%   11.10%
Expense Ratio: 0.49%                        As of 3/31/23

 

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 than the performance data quoted. For the most recent month-end performance, please call 833.AXS.ALTS or visit the Fund's website at www.axsinvestments.com. The Fund adopted the performance of the Predecessor Fund following the Reorganization of the Predecessor Fund which occurred on March 21, 2022. The Predecessor Fund has substantially similar investment objectives, strategies and policies, portfolio management team and contractual arrangements, including the same contractual fees and expenses, as the Fund as of the date of the Reorganization. The quoted performance data includes the performance of the Prior Account for periods before the fund's registration became effective.

 

 

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IMPORTANT RISK INFORMATION

 

ETFs involve risk including possible loss of principal. There is no assurance that the Fund will achieve its investment objective. Fund holdings are subject to risk and should not be considered recommendations to buy or sell any security.

 

The Fund may invest a larger portion of its assets in one or more sectors than many other funds, and thus will be more susceptible to negative events affecting those sectors. Market and Equity Risk: The value and market price of an equity security may decline due to general market conditions that may or may not be specifically related to a particular company or industry. Passive investment risk: The Fund invests in securities included in the Index regardless of investment merit. It is not actively managed and generally will not attempt to take defensive positions in declining markets. ESG Investing Risk: The Fund's ESG policy could cause it to make or avoid investments that could result in the portfolio underperforming similar funds that do not have such policies. Market Cap Risks: Companies with larger capitalization may be unable to attain the high growth rates of successful, smaller companies during periods of economic expansion. The securities of mid-capitalization companies may be subject to more abrupt or erratic market movements and may have lower trading volumes or more erratic trading than securities of larger, more established companies. Real Estate Risk: Investments in Real Estate Investment Trusts (REITs) involve risks such as declines in the value of real estate and increased susceptibility to adverse economic or regulatory developments.

 

Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns. NAVs are calculated using prices as of 4:00 PM Eastern Time. The closing price is the midpoint between the bid and ask price as of the close of exchange. Closing price returns do not represent the returns you would receive if you traded shares at other times.

 

Investors should carefully consider the investment objectives, risks, charges and expenses of AXS Change Finance ESG ETF. This and other important information about the Fund is contained in the Prospectus, which can be obtained by visiting www.axsinvestments.com. The Prospectus should be read carefully before investing.

 

Distributed by ALPS Distributors, Inc, which is not affiliated with AXS Investments.

 

Carbon Neutral Certification: Ethos performs an independent analysis of a fund's carbon footprint and carbon credits (offsets) to verify whether the fund is carbon neutral during a specified period. The carbon footprint consists of verified Scope 1 and Scope 2 emissions of every holding of the fund. Ethos defines the carbon footprint of a fund as the total tons of Scope 1 and Scope 2 CO2 emissions of its holdings multiplied by the fund's percentage ownership of those holdings. Percentage ownership is based on the market value of the fund's shares divided by the total market value of the holdings.

 

While Ethos researches and models Scope 3 emissions for every fund holding, the company does not consider Scope 3 for fund-level certification. This is due to limitations with Scope 3 data, including: lack of standardized reporting methodology by companies: low coverage of companies reporting Scope 3 emissions; and, likely overlap of Scope 3 emissions across company value chains.

 

As part of the Carbon Neutral Certification, Ethos requires funds to submit proof of purchase of carbon credits from a list of approved providers of carbon credits. When information is not available the following modeling formula used is: Expected emissions = peer-average carbon intensity (CO2 per $M revenue) * $M revenue.

 

EthosESG audits this estimation and will address discrepancies should they arise. Emissions data is limited by the voluntary disclosure by individual companies and is not independently audited. Change Finance and EthosESG make every effort to ensure data is accurate but cannot guarantee absolute carbon neutrality.

 

  

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Carbon Sequestration: Change Finance utilizes Grassroots Carbon to purchase Carbon Sequestration Credits for its Carbon Neutral Certification. Carbon sequestration numbers are updated quarterly and reflect carbon offset credits purchased year to date. Verity analyzes the funds carbon footprint quarterly and that analysis is used to purchase credits. Grassroots Carbon certifies and audits carbon capture by taking measurements performed by an unaffiliated third party based on actual 3 feet deep measurements conducted after rigorous stratification in accordance with Verra VMD0021. More information available from buildgrassroots.com

 

Environmental, Social and Governance (ESG): Environmental criteria considers how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers and the communities where it operates. Governance deals with a company's leadership, executive pay, audits, internal controls, and shareholder rights.

 

Fossil Fuels Exposure: Fossil Fuel Exposure is calculated at least quarterly by Fossil Free Funds and measures the percentage of a fund's net assets invested in companies which own, extract, process, or burn fossil fuels for electricity generation as determined by inclusion in the Carbon Underground 200; the Macroclimate 30; Morningstar industry classifications Thermal Coal, Coking Coal, Oil and Gas Drilling, Oil and Gas Extraction, Oil and Gas Production, Oil and Gas Equipment and Services, Oil and Gas Integrated, Oil and Gas Midstream, Oil and Gas Refining and Marketing; the Global Coal Exit List marked as Mining or Services for the Coal Industry Sector or Power for the Coal Industry Sector; or the Global Oil/Gas Exit List upstream and midstream companies. Fossil Free Funds sources financial data on equities and mutual funds from Morningstar. Our database contains information on thousands of U.S. open-end and exchange traded mutual funds, some of the most common funds held in 401(k)s, 403(b)s, and other retirement plans. This information is updated at least quarterly and is as of 5/30/2022. More information available from.fossilfreefunds.org

 

Carbon Footprint: The Carbon Footprint of a fund measures the Scope 1 & 2 emissions of a fund in tonnes per $1 million invested as calculated by Fossil Free Funds. The Carbon Footprint is calculated utilizing emissions data for each company provided by yourSRI. The Carbon Footprint as calculated by Fossil Free Funds is equal to the sum of each portfolio constituent's Scope 1 and scope 2 carbon emissions multiplied by the percentage of ownership (position size/market capitalization) divided by the fund's AUM in millions. The SPDR S&P 500 ETF Trust (SPY) is used as a proxy for the S&P 500 benchmark. Scope 3 information is utilized when available. Fossil Free Funds uses AI to estimate any non-disclosed emissions comparative to its peers in revenue and industry for Scope 1 and 2. Information is disclosed by companies and is not independently audited and its accuracy cannot be guaranteed.

 

S&P 500 Index is a market-capitalization-weighted index of the 500 largest publicly-traded companies in the U.S. Investors cannot invest directly in an index.

 

Weapon Exposure: Weapon Exposure is calculated at least quarterly by Weapon Free Funds and Gun Free Funds and measures the percentage of a fund's net assets invested in companies that manufacture or sell civilian firearms, manufacture or service nuclear weapons, manufacture cluster munitions or land mines, or are among the 100 largest military contractors using data from the Stockholm International Peace Research Institute Arms Industry Database; PAX; and Gun Free Funds' lists of the largest firearms manufacturers and retailers. Information is updated at least quarterly. Gun Free Funds sources financial data from Morningstar, an investment research company. They use Morningstar's mutual fund and stock data to analyze funds and find civilian firearm investments. Current CHGX rating as of 5/30/2022. More information is available from weaponfreefunds.org and gunfreefunds.org.

 

 

 11 

 

 

 

 

Dear Shareholders,

 

On behalf of the entire team, we want to express our appreciation for the confidence you have placed in the AXS First Priority CLO Bond ETF (“AAA” or the “Fund”). The following information pertains to the period from August 1, 2022, through March 31, 2023 (the “current period” or “the period”).

 

The Fund is an actively managed exchange-traded fund (“ETF”) that pursues its investment objective by investing in AAA rated priority debt tranches of U.S. dollar-dominated collateralized loan obligations (“CLOs”). The Fund is actively managed and does not seek to track the performance of any particular index. The Fund seeks capital preservation and income.

 

The Fund had positive performance during the current period ended on March 31, 2023. Total return at NAV for AAA was a positive 4.02% and the total return at market price was a positive 4.28%.

 

Positive impact to performance was derived from 3 sources; a) Income derived from interest paid on CLO bonds net of management fees (“Distributable Income”), b) principal appreciation, and c) the market price premium or discount to NAV. Income derived from interest paid on CLO bonds net of management fees contributed 3.50% to the Fund's total return. Principal appreciation increased the Fund's NAV by 0.52%. The market price premium or discount to NAV increased the Fund's total return by 0.26%.

 

NAV Total Return (4.02%) = Distributed Income (3.50%) + Principal Appreciation (0.52%).

 

Market Price Total Return (4.28%) = Distributed Income (3.50%) + Principal Appreciation (0.52%) + the Market Price Premium or Discount (0.26%).

 

The largest impact on the Fund during the current period was the rapid rise in interest rates. The federal funds overnight target rate rose 250 basis points during the period ending March 31, 2023. The federal funds overnight target rate began the period at 2.25% and ended at 4.75%.

 

Despite negative implications for many risk assets in the broader market, the change in interest rates had an overall positive impact on the Fund. The Fund solely invests in floating rate coupon bonds whose quarterly payments are tied to the Secured Overnight Financing Rate (“SOFR”). (NB: historically the coupons for floating rate products were tied to the London Interbank Offered Rate (“LIBOR”) and are now transitioning to SOFR). Both LIBOR and SOFR are largely dependent upon the absolute rate of the federal funds overnight target rate. The increase in these overnight rates has increased the coupons on AAA-rated CLO bonds and in turn increased the coupons of the assets of the Fund. The average coupon for AAA-rated CLOs rose from 4.66% in August 2022 to 5.96% at the end of March 2023. At the end of the period the average coupon of the Fund was 5.90%.

 

The increase in coupon payments for the Fund greatly outweighed any mark to market changes in the assets prices due to changing credit spreads for AAA-rated CLO bonds. Changes in interest rates had a profound effect on the broader market and caused the risk premiums of many asset classes to increase dramatically. AAA-rated CLO bonds were relatively unchanged and spreads for these bonds started the period at 177 basis points and ended the period at 176 basis points.

 

Upon its launch, AAA was one of the first CLO ETFs on the market. The Fund commenced operations on September 8, 2020, with outstanding shares of 200,000. As of March 31, 2023, the Fund's shares outstanding were 300,000.

 

We appreciate your investment in AAA.

 12 

 

 

 

 

Sincerely,

 

/s/ Peter Coppa

 

Peter Coppa

Founder and Managing Partner

Alternative Access Funds, Sub-Adviser to the Fund

 

The views in this letter were as of March 31, 2023 and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund's investment methodology and do not constitute investment advice.

 13 

 

 

 

 

AXS Green Alpha ETF

Management's Discussion of Fund Performance

FYE March 31, 2023

 

Dear Fellow Shareholders,

 

The AXS Green Alpha ETF (NXTE) was launched on September 27, 2022, resulting in the first fiscal year of operations spanning the period September 27, 2022 to March 31, 2023. This six-month span was characterized by a fast-evolving world and economy, and the resulting market volatility. In Green Alpha's signature investing style—combining macro trajectory analysis, identification of risk-mitigating companies, fundamental data, and active, benchmark-agnostic portfolio construction—we benefitted from upside volatility, took advantage of downside volatility, and helped our clients gain market exposure to the Next Economy.

 

In the first quarter of 2023, the global economy continued to be characterized by the key challenges of 2022, including the ongoing COVID-19 pandemic, war in Ukraine, rising inflation, and interest rate increases. These challenges have had a significant impact on economic growth, trade, and investment, which has led to continued market volatility. For NXTE, January 2023 provided double-digit performance gains as some of the above-listed concerns seemed to be easing, and then tougher markets in February and early March as some issues seemed to reassert themselves, followed by a quarter-end rally. And yet, in context, inflation, interest rate concerns, and even geopolitical conflicts have historically been short-to-medium term sources of market volatility. As always, we endeavor to think about the longer term, and position our portfolios to preserve and grow our clients' purchasing power over multi-cycle periods.

 

The global economy is facing long-term challenges, such as the climate crisis, inequality, and technological change. These challenges will require governments, businesses, and individuals to work together to find solutions, and, in enacting them, the world will make significant—it is not an exaggeration to say unprecedented—investments in the best of these solutions. The patient, forward-looking investor therefore stands to benefit. Green Alpha believes that sectors likely to grow faster than underlying GDP in coming years include renewable energies, the entire semiconductor value chain, AI and machine learning, select biotechs, and sustainable and regenerative agriculture and REITs.

 

For the September 27, 2022 to March 31, 2023 period the AXS Green Alpha ETF returned 6.57% vs the MSCI ACWI Investable Market Index return of 16.40%. However, for the quarter ended March 31, 2023, the AXS Green Alpha ETF returned 9.25% vs the benchmark return of 6.95%. At the fund level, overall returns for the six-month period were affected by inflation, recession fears and continued interest rate increases, leading to s secular rotation to value stocks, and a general rotation away from growth. NXTE is a blend of value and growth, but there is sufficient weight in growth areas that this overall sentiment has led to the Q4 and cumulative underperformance vs the benchmark.

 

On a sector basis, Fund returns were most negatively impacted by Real Estate and Health Care. Within the Real Estate sector, Real Estate Investment Trusts (REITs) generally underperformed in 2022 and Q1 2023, in the face of unprecedented Federal Reserve rate hikes and the ongoing phenomenon of work-from-home catalyzed by COVID- 19. This pair of headwinds has caused even some of the highest quality REITs to be down more than 70% in the trailing year at the end of Q1 '23, and, clearly with some justification. The Fund's holdings in office REITS were the primary detractor for the period, however gains in data center REITs partially offset the impact of the office REITs.

 

 

 

287 Century Circle, Suite 201

Louisville, CO 80027

303.993.7856

www.greenalphaadvisors.com

 14 

 

Health Care was affected by losses in biotech, particularly the companies Crisper Therapeutics, Editas Medicine, Caribou Biosciences, and other gene-editing-based therapeutics developers. This was primarily driven by less interest in growth names over the period, and not by intrinsic company news or results; these names are among the leaders and top intellectual property holders in transformative medicine. These losses were partially offset by holdings in other areas of biotech, such as equipment makers.

 

The Fund benefited from investments in Technology and Energy. Within Technology, the semiconductor value chain contributed the most to returns, including gains from front-end capital equipment makers, chip designers, and foundry manufacturing. Catalysts for Semis in the period included early implementation of the CHIPS Act, growing recognition of the importance of semis to the global economy, and multiple announcements related to expansion of global production capacity. Gains were also provided by exposure to security software.

 

Within Energy, returns were derived from renewable energy equipment makers, with wind turbine manufacturing and service, and solar equipment manufacturing representing the lion's share of upside contribution. Specifically, the world's leading thin-film solar PV maker had an outstanding first quarter of 2023, as it announced benefits from the Inflation Reduction Act ("IRA”) and capacity expansion plans. In wind energy, Vestas Wind Systems, the world's leading wind turbine manufacturer and servicing company was the fund's top overall contributor.

 

In descending order, the top contributors by name were Vestas Wind Systems, Infineon Technologies, a global leader in diversified semiconductor products, and Pacific Biosciences of California, a leader in advanced gene sequencing devices and technologies for the biotech industry. The biggest detractors from performance were Crispr Therapeutics, Editas Medicine, and SunPower Corp.

 

Green Alpha Investments in 2023 and Beyond

For 2023, Green Alpha is evaluating economic conditions based on, first, clear evidence that innovation (in select areas) is increasing both economic productivity and environmental sustainability, and second, the sober awareness that the world is in many ways still failing to affect energy and sustainability transitions rapidly enough to prevent irreversible, deleterious outcomes. Within those dynamics and our thesis, we look for opportunities to invest for long-term growth and maximum impact.

 

Stocks benefitting from multiple tailwinds, and trading at reasonable prices, will continue to be our focus, even though—and even because—this does not correlate with today's short-term market orientation. The time horizon mismatch between our investment approach and the markets' is ultimately beneficial: we are simultaneously disappointed in a year of underperformance and excited by the opportunity to invest in compelling Next Economy companies at steep discounts, relative to the future results we expect from them.

 

Sincerely,

 

Garvin Jabusch Jeremy Deems
Chief Investment Officer Portfolio Manager, CFO, CCO
Green Alpha In vestments Green Alpha Investments

 

The views in this letter were as of March 31, 2023 and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund's investment methodology and do not constitute investment advice.

 15 

 

 

 

Dear Shareholders,

 

On behalf of the entire team, we want to express our appreciation for the confidence you have placed in The AXS Brendan Wood Top Gun ETF (“TGN” or the “Fund”). The following information pertains to the period from inception on November 8, 2022, through fiscal year end on March 31, 2023. The Fund seeks to track the investment results, before fees and expenses, of the performance of the Brendan Wood Top Gun Index (“Index”).

 

The Index is comprised of 25 U.S. and Canadian companies that meet Brendan Wood International's highest standards of quality. These large and midcap companies are selected and periodically updated by Brendan Wood International based on 2,000 in-depth interviews with institutional investment professionals.

 

The Fund had negative performance during the fiscal period ending on March 31, 2023. The market price for TGN decreased 0.69% and the NAV decreased 0.86%, while the Brendan Wood Top Gun Index lost 0.95%.

 

The Fund invests directly in the index holdings at the prescribed weights. The Fund met its investment objectives, with daily Fund returns showing a 99.67% correlation and 1.008 beta to daily Index returns for the period.

 

Looking forward, we continue strive to improve Fund NAV tracking of the Brendan Wood Top Gun Index return. We appreciate your investment in TGN.

 

The views in this letter were as of March 31, 2023, and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund's investment methodology and do not constitute investment advice.

 

Faithfully yours,

 

Parker B. Binion

Head of Investments, AXS Investments LLC

 

IMPORTANT RISK DISCLOSURE

ETFs involve risk including possible loss of principal. There is no assurance that the Fund will achieve its investment objective.

 

Equity Risk: The value of the equity securities held by the Fund may fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or factors relating to specific companies in which the Fund invests.

 

Sector Focus Risk: While the Fund's sector exposure is expected to vary over time based on the composition of the Index, it may invest a significant portion of its assets in one or more sectors and thus will be more susceptible to the risks affecting those sectors.

 

Passive Investment Risk: The Fund is not actively managed and invests in securities included in or representative of the Index regardless of investment merit. The Fund generally will not attempt to take defensive positions in declining markets.

 16 

 

 

 

Index Provider Risk: There is no assurance that Brendan Wood, the Fund's index provider, will compile or maintain the Index accurately.

 

Tracking Error Risk: The performance of the Fund and the Index may differ from each other. For example, the Fund may not be fully invested in the securities of the Index at all times and may incur operating expenses and transaction costs not incurred by the Index.

 

Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns. NAVs are calculated using prices as of 4:00 PM Eastern Time. The closing price is the midpoint between the bid and ask price as of the close of exchange. Closing price returns do not represent the returns you would receive if you traded shares at other times.

 

Investors should carefully consider the investment objectives, risks, charges and expenses of the AXS Brendan Wood TopGun Index ETF. This and other important information about the Fund is contained in the Prospectus, which can be obtained by visiting www.axsinvestments.com. The Prospectus should be read carefully before investing.

 

Distributed by ALPS Distributors, Inc, which is not affiliated with AXS Investments.

 

 17 

 

 

During the period ending March 31, 2023, WUGI returned 20.41% (NAV) and delivered an annualized return of 15.63% since inception. The fund is benchmark agnostic but underperformed the broad equity market S&P 500 Index (-7.73%) and the growth-focused Nasdaq 100 Index (-10.35%) during the year.

 

As of March 31, 2023, the semiconductor exposure accounted for 41.7% of the Fund's total net assets, contributing 3.60% of the total loss during the fiscal year. Despite the second-largest dollar allocation in the Fund (28.0% as of March 31, 2023), software's contribution to the performance was significantly lagging (-10.91%). Internet companies weighed 18.2% of the Fund but contributed -5.71% of the total loss. Auto Manufacturers, Commercial Services and Computers accounted for 3.9%, 1.4%, and 1.4% of the Fund's total net assets, respectively. It's also worth noting that, through the fiscal year, the Fund held an average of 11.21% of the portfolio in Cash. Cash accounted for 5.4% of the Fund's total net assets at the fiscal year-end.

 

Considering the Federal Reserve's determined fight against soaring inflation during the first half of the year, we reduced the Fund's equity exposure meaningfully and held close-to-maximum Cash (20%) to defend the portfolio. Within the equity exposure, we were positioned towards the large-cap, high-quality growth companies that we believe could weather the market volatilities relatively better. Later in the year, after a series of significant interest rate hikes from the Federal Reserve, we believed that the valuations of the growth companies had reached the bottom. We gradually put the cash back to work while still staying closer to our large-size and high-quality bias.

 

We continue to position the Fund to capture the investment opportunities presented by LLM/GPT as well as broader digital transformation. We anticipate a gradual recovery of hyper-growth technologies equities after a rough fiscal year while recognizing that the macro headwinds could be persistent. Having a reasonable amount allocation to cash leaves the fund great flexibility to navigate the macro uncertainty in the near term.

 

Signature: Date: 05/10/2023

 

The views in this letter were as of March 31, 2023 and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund's investment methodology and do not constitute investment advice.

 

DEFINITIONS OF INDEXES

Nasdaq 100 Index is a stock market index made up of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange.

S&P 500 Index is a market-capitalization-weighted index of the 500 largest publicly-traded companies in the U.S. Investors cannot invest directly in an index.

 18 

 

 

IMPORTANT RISK INFORMATION

 

You could lose money by investing in the Fund. There can be no assurance that the Fund's investment objectives will be achieved.

 

Market and Equity Risk: The market price of an equity security may decline due to market conditions not specifically related to a particular company, such as real or perceived adverse economic or political conditions, or factors that affect a particular industry. 5G and Emerging Technologies Investment Risk: The revenues of the companies held by the Fund are generally expected to be significantly tied to 5G technologies, and the extent of the technologies' versatility has not yet been fully explored. Currently, there are few public companies for which 5G technologies represent significant revenue, and such technologies may not ultimately have a material effect on the economic returns of companies in which the Fund invests. Active Management Risk: The Fund is actively managed and there is no guarantee that the Fund's investment views will produce the desired results, which may cause the Fund to underperform its benchmark index. Concentration Risk: To the extent the Fund's investments are concentrated in a particular group of industries, including computer software, Internet and semiconductors, the Fund may be susceptible to loss due to adverse occurrences affecting that industry or group of industries. Foreign Risk: The prices of foreign securities may be more volatile than the prices of securities of U.S. issuers because of economic and social conditions abroad, political developments, and changes in the regulatory environments of foreign countries. Non-Diversification Risk: Although the Fund intends to invest in a variety of securities and instruments, the Fund is considered to be non-diversified, which means it may invest more of its assets in the securities of a single issuer or smaller number of issuers than if it were diversified.

 

Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns. NAVs are calculated using prices as of 4:00 PM Eastern Time. The closing price is the midpoint between the bid and ask price as of the close of exchange. Closing price returns do not represent the returns you would receive if you traded shares at other times.

 

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund. This and other important information about the Fund are contained in the Prospectus, which can be obtained by visiting www.axsinvestments.com. The Prospectus should be read carefully before investing.

 

Distributed by ALPS Distributors, Inc, which is not affiliated with AXS Investments.

 19 

 

AXS Astoria Inflation Sensitive ETF

ETF PERFORMANCE at March 31, 2023 (Unaudited)

 

 

 

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the AXS Astoria Blended Benchmark Index, Bloomberg Commodity Total Return Index, Bloomberg U.S. TIPS 1-3 Year Index, and MSCI ACWI Index. Results include the reinvestment of all dividends and capital gains.

 

The AXS Astoria Blended Benchmark Index is composed of 70% MSCI ACWI Index, 20% Bloomberg Commodity Total Return Index, and 10% Bloomberg U.S. TIPS 1-3 Year Index. The Bloomberg Commodity Total Return index is composed of futures contracts and reflects the returns on a fully collateralized investment in the BCOM. The Bloomberg U.S. TIPS 1-3 Year Index measures the performance of the US government bond market and includes public obligations of the U.S. Treasury with a maturity between 1 and up to (but not including) 3 years. The MSCI ACWI Index is a stock index designed to track broad global equity-market performance. The indexes do not reflect expenses, fees, or sales charge, which would lower performance. The indexes are unmanaged and are not available for investment.

 

Average Annual Total Returns as of March 31, 2023  1 Year   Since Inception   Inception Date
AXS Astoria Inflation Sensitive ETF (Net Asset Value)   -8.72%   3.20%  12/29/21
AXS Astoria Inflation Sensitive ETF (Market Price)   -9.06%   3.06%  12/29/21
AXS Astoria Blended Benchmark Index   -7.45%   -5.52%  12/29/21
Bloomberg Commodity Total Return Index   -12.49%   6.93%  12/29/21
Bloomberg U.S. TIPS 1-3 Year Index   -0.20%   0.15%  12/29/21
MSCI ACWI Index   -7.44%   -10.17%  12/29/21

 

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value 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 than the performance information quoted. The most recent month end performance may be obtained by calling (866) 984-2510.

 

The ETF's shares are listed on an exchange. The price of the ETF's shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

 

The expense ratio was 0.75% which was stated in the current prospectus dated August 1, 2022. For the ETF's current one year expense ratios, please refer to the Financial Highlights section of this report.

 

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

 20 

 

AXS Change Finance ESG ETF

ETF PERFORMANCE at March 31, 2023 (Unaudited)

 

 

 

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the S&P 500 Index and Change Finance U.S. Large Cap Fossil Fuel Free Index. Results include the reinvestment of all dividends and capital gains.

 

The S&P 500 Index is a broad unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. The Change Finance U.S. Large Cap Fossil Fuel Free Index is the underlying index for CHGX, it measures the performance of an equal-weighted portfolio of approximately 100 large to mid-cap equity securities of U.S. listed companies that meet a diverse set of ESG standards. The indexes do not reflect expenses, fees, or sales charge, which would lower performance. The indexes are unmanaged and are not available for investment.

 

Average Annual Total Returns as of March 31, 2023  8 Months*   1 Year   5 Years   Since Inception   Inception Date
AXS Change Finance ESG ETF (Net Asset Value)   1.78%   -6.86%   9.98%   9.94%  10/9/17
AXS Change Finance ESG ETF (Market Price)   1.74%   -7.77%   10.02%   9.93%  10/9/17
S&P 500 Index   0.69%   -7.73%   11.19%   11.10%  10/9/17
Change Finance U.S. Large Cap Fossil Fuel Free Index   2.10%   -6.53%   10.58%   10.57%  10/9/17

*For the period August 1, 2022 through March 31, 2023. Not annualized.

 

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value 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 than the performance information quoted. The most recent month end performance may be obtained by calling (866) 984-2510.

 

The ETF acquired the assets and liabilities of the Change Finance U.S. Large Cap Fossil Fuel Free ETF, a series of the ETF Series Solutions Trust (the “Predecessor ETF") at the close of business on March 18, 2022. As a result of the reorganization, the ETF is the accounting successor of the Predecessor ETF. Performance results shown in the graph and the performance table above for the periods prior to March 19, 2022, reflect the performance of the Predecessor ETF.

 

The ETF's shares are listed on an exchange. The price of the ETF's shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

 21 

 

AXS Change Finance ESG ETF

ETF PERFORMANCE at March 31, 2023 (Unaudited) - Continued

 

 

The expense ratio was 0.49% which was stated in the current prospectus dated December 1, 2022. For the ETF's current one year expense ratios, please refer to the Financial Highlights section of this report.

 

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

 22 

 

AXS First Priority CLO Bond ETF

ETF PERFORMANCE at March 31, 2023 (Unaudited)

 

 

 

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the Bloomberg Floating Rate Note <5 Years Index. Results include the reinvestment of all dividends and capital gains.

 

The Bloomberg Floating Rate Note <5 Years Index is a subset of the US Floating-Rate Note (FRN) Index, which measures the performance of USD denominated, investment-grade, floating-rate notes across corporate and government-related sectors. The index does not reflect expenses, fees, or sales charge, which would lower performance. The index is unmanaged and is not available for investment.

 

Average Annual Total Returns as of March 31, 2023  8 Months*   1 Year   Since Inception   Inception Date
AXS First Priority CLO Bond ETF (Net Asset Value)   4.02%   2.78%   1.39%  9/8/20
AXS First Priority CLO Bond ETF (Market Price)   4.28%   2.63%   1.35%  9/8/20
Bloomberg Floating Rate Note <5 Years Index   3.27%   3.13%   1.44%  9/8/20

*For the period August 1, 2022 through March 31, 2023. Not annualized.

 

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value 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 than the performance information quoted. The most recent month end performance may be obtained by calling (866) 984-2510.

 

The ETF acquired the assets and liabilities of the AAF First Priority CLO Bond ETF, a series of the Listed Funds Trust (the “Predecessor ETF") at the close of business on October 14, 2022. As a result of the reorganization, the ETF is the accounting successor of the Predecessor ETF. Performance results shown in the graph and the performance table above for the periods prior to October 15, 2022, reflect the performance of the Predecessor ETF.

 

The ETF's shares are listed on an exchange. The price of the ETF's shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

 

The expense ratio was 0.25% which was stated in the current prospectus dated December 1, 2022. For the ETF's current one year expense ratios, please refer to the Financial Highlights section of this report.

 

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

 23 

 

AXS Green Alpha ETF

ETF PERFORMANCE at March 31, 2023 (Unaudited)

 

 

 

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the MSCI ACWI IMI Index. Results include the reinvestment of all dividends and capital gains.

 

The MSCI ACWI IMI Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The index does not reflect expenses, fees, or sales charge, which would lower performance. The index is unmanaged and is not available for investment.

 

Total Returns as of March 31, 2023  3 Months (Actual)   6 Months (Actual)   Since Inception (Cumulative)   Inception Date
AXS Green Alpha ETF (Net Asset Value)   9.16%   7.57%   6.57%  9/27/22
AXS Green Alpha ETF (Market Price)   9.25%   7.70%   6.80%  9/27/22
MSCI ACWI IMI Index   6.95%   17.48%   16.40%  9/27/22

 

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value 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 than the performance information quoted. The most recent month end performance may be obtained by calling (866) 984-2510.

 

The ETF's shares are listed on an exchange. The price of the ETF's shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

 

The expense ratio was 1.00% which was stated in the current prospectus dated January 3, 2023. For the ETF's current period ended March 31, 2023 expense ratios, please refer to the Financial Highlights section of this report.

 

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

 24 

 

AXS Brendan Wood TopGun Index ETF

ETF PERFORMANCE at March 31, 2023 (Unaudited)

 

 

 

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the Brendan Wood TopGun Index. Results include the reinvestment of all dividends and capital gains.

 

The Brendan Wood TopGun Index is a group of companies consisting of the highest rated investment targets selected through +/- 2000 personal consultations with institutional investment professionals (“The BW Panel”), conducted daily throughout each year. The index does not reflect expenses, fees, or sales charge, which would lower performance. The index is unmanaged and is not available for investment.

 

Total Returns as of March 31, 2023  3 Months (Actual)   Since Inception (Cumulative)   Inception Date
AXS Brendan Wood TopGun Index ETF (Net Asset Value)   0.27%   -0.86%  11/8/22
AXS Brendan Wood TopGun Index ETF (Market Price)   0.20%   -0.69%  11/8/22
Brendan Wood TopGun Index   0.72%   -0.95%  11/8/22

 

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value 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 than the performance information quoted. The most recent month end performance may be obtained by calling (866) 984-2510.

 

The ETF's shares are listed on an exchange. The price of the ETF's shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

 

The expense ratio was 0.98% which was stated in the current prospectus dated October 10, 2022, as amended October 27, 2022. For the ETF's current period ended March 31, 2023 expense ratios, please refer to the Financial Highlights section of this report.

 

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

 25 

 

AXS Esoterica NextG Economy ETF

ETF PERFORMANCE at March 31, 2023 (Unaudited)

 

 

 

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the MSCI All Country World Index and S&P 500 Index. Results include the reinvestment of all dividends and capital gains.

 

The MSCI All Country World Index is a market-cap-weighted global equity index that tracks emerging and developed markets. It currently monitors nearly 3,000 large-and mid-cap stocks in 49 countries. The S&P 500 Index is a broad unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. The indexes do not reflect expenses, fees, or sales charge, which would lower performance. The indexes are unmanaged and are not available for investment.

 

Average Annual Total Returns as of March 31, 2023  5 Months*   1 Year   Since Inception   Inception Date
AXS Esoterica NextG Economy ETF (Net Asset Value)   20.41%   -23.53%   15.63%  3/30/20
AXS Esoterica NextG Economy ETF (Market Price)   20.26%   -23.61%   15.49%  3/30/20
MSCI All Country World Index   11.08%   -7.44%   15.11%  3/30/20
S&P 500 Index   6.96%   -7.73%   17.95%  3/30/20

*For the period November 1, 2022 through March 31. 2023.

 

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value 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 than the performance information quoted. The most recent month end performance may be obtained by calling (866) 984-2510.

 

The ETF acquired the assets and liabilities of the Esoterica NextG Economy ETF, a series of the Listed Funds Trust (the “Predecessor ETF”) at the close of business on December 16, 2022. As a result of the reorganization, the ETF is the accounting successor of the Predecessor ETF. Performance results shown in the graph and the performance table above for the periods prior to December 17, 2022, reflect the performance of the Predecessor ETF.

 

The ETF's shares are listed on an exchange. The price of the ETF's shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

 26 

 

AXS Esoterica NextG Economy ETF

ETF PERFORMANCE at March 31, 2023 (Unaudited) - Continued

 

 

Gross and net expense ratios were 1.23% and 0.75%, respectively, which were stated in the current prospectus dated December 13, 2022. For the ETF's current period ended March 31, 2023 expense ratios, please refer to the Financial Highlights section of this report. The ETF's Advisor has contractually agreed to waive its fees and/or pay for operating expenses (excluding any taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired ETF fees and expenses (as determined in accordance with SEC Form N-1A), other fees related to underlying investments, (such as option fees and expenses or swap fees and expenses), expenses incurred in connection with any merger or reorganization, and extraordinary expenses such as litigation expenses) does not exceed 0.75% of the ETF's average daily net assets. This agreement is in effect until December 16, 2024, and it may be terminated before that date only by the Trust's Board of Trustees. In the absence of such waivers, the ETF's returns would be lower.

 

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

 27 

 

AXS Astoria Inflation Sensitive ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2023

 

 

Number of Shares      Value 
     COMMON STOCKS — 70.7%     
     AEROSPACE/DEFENSE — 1.8%     
 9,450   Airbus S.E.  $1,265,710 
     BANKS — 8.3%     
 13,076   Bank of Montreal   1,163,105 
 174,000   Mitsubishi UFJ Financial Group, Inc.   1,108,533 
 340,468   NatWest Group PLC   1,109,681 
 131,082   Standard Chartered PLC   995,473 
 3,590   State Street Corp.   271,727 
 18,451   Toronto-Dominion Bank   1,103,638 
         5,752,157 
     BUILDING MATERIALS — 4.3%     
 19,261   Builders FirstSource, Inc.*   1,709,992 
 19,867   Holcim Ltd. *   1,280,900 
         2,990,892 
     CHEMICALS — 4.3%     
 15,948   Nutrien Ltd.   1,176,170 
 32,801   Olin Corp.   1,820,456 
         2,996,626 
     COAL — 1.7%     
 252,755   Whitehaven Coal Ltd.   1,139,272 
     COMMERCIAL SERVICES — 4.1%     
 7,499   Avis Budget Group, Inc.*   1,460,805 
 3,522   United Rentals, Inc.   1,393,867 
         2,854,672 
     DISTRIBUTION/WHOLESALE — 1.9%     
 96,612   Marubeni Corp.   1,303,380 
     DIVERSIFIED FINANCIAL SERVICES — 1.6%     
 935   Ameriprise Financial, Inc.   286,577 
 3,437   Interactive Brokers Group, Inc. - Class A   283,759 
 1,299   LPL Financial Holdings, Inc.   262,918 
 2,983   Raymond James Financial, Inc.   278,224 
         1,111,478 
     ELECTRONICS — 1.9%     
 37,289   ABB Ltd.   1,280,451 
     IRON/STEEL — 10.8%     
 69,569   Cleveland-Cliffs, Inc.*   1,275,200 
 85,981   Fortescue Metals Group Ltd.   1,295,104 

 28 

 

AXS Astoria Inflation Sensitive ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS (Continued)    
    IRON/STEEL (Continued)    
 11,328   Nucor Corp.  $1,749,836 
 15,108   Steel Dynamics, Inc.   1,708,110 
 53,265   United States Steel Corp.   1,390,217 
         7,418,467 
     MACHINERY-CONSTRUCTION & MINING — 1.8%     
 33,500   Mitsubishi Heavy Industries Ltd.   1,227,335 
           
     MACHINERY-DIVERSIFIED — 4.5%     
 11,621   AGCO Corp.   1,571,159 
 99,829   CNH Industrial N.V.   1,524,389 
         3,095,548 
     MINING — 5.3%     
 40,431   BHP Group Ltd.   1,278,925 
 200,889   Glencore PLC*   1,154,016 
 17,925   Rio Tinto PLC   1,214,109 
         3,647,050 
     OIL & GAS — 18.4%     
 42,862   APA Corp.   1,545,604 
 21,913   Canadian Natural Resources Ltd.   1,210,975 
 59,132   Coterra Energy, Inc.   1,451,099 
 65,179   Marathon Oil Corp.   1,561,689 
 45,185   Ovintiv, Inc.   1,630,275 
 28,158   PDC Energy, Inc.   1,807,181 
 40,668   Shell PLC   1,160,805 
 36,800   Suncor Energy, Inc.   1,140,967 
 28,257   Tourmaline Oil Corp.   1,175,922 
         12,684,517 
     TOTAL COMMON STOCKS     
     (Cost $48,571,181)   48,767,555 
     EXCHANGE-TRADED FUNDS — 28.5%     
 46,162   Aberdeen Bloomberg All Commodity Strategy K-1 Free ETF   958,785 
 24,813   Aberdeen Standard Physical Precious Metals Basket Shares ETF*   2,263,194 
 41,309   GraniteShares Bloomberg Commodity Broad Strategy No. K-1 ETF   877,816 
 82,863   Invesco PureBeta 0-5 Year U.S. TIPS ETF   2,067,755 
 22,961   iShares 0-5 Year TIPS Bond ETF   2,278,420 
 41,941   iShares Floating Rate Bond ETF   2,113,407 
 77,144   SPDR Bloomberg 1-10 Year TIPS ETF   1,468,050 
 60,603   SPDR Gold MiniShares Trust*   2,370,183 
 45,871   Vanguard Short-Term Inflation-Protected Securities ETF   2,193,551 
 53,458   WisdomTree Enhanced Commodity Strategy Fund   955,295 

 29 

 

AXS Astoria Inflation Sensitive ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    EXCHANGE-TRADED FUNDS (Continued)    
 42,320   WisdomTree Floating Rate Treasury Fund  $2,127,426 
     TOTAL EXCHANGE-TRADED FUNDS     
     (Cost $20,139,496)   19,673,882 
     TOTAL INVESTMENTS — 99.2%     
     (Cost $68,710,677)   68,441,437 
     Other Assets in Excess of Liabilities — 0.8%   546,638 
     TOTAL NET ASSETS — 100.0%  $68,988,075 

 

PLC - Public Limited Company

ETF - Exchange-Traded Fund

 

*Non-income producing security.

 

See accompanying Notes to Financial Statements.

 30 

 

AXS Astoria Inflation Sensitive ETF

SUMMARY OF INVESTMENTS

As of March 31, 2023

 

 

Security Type/Industry  Percent of Total Net Assets 
Common Stocks    
Oil & Gas   18.4%
Iron/Steel   10.8%
Banks   8.3%
Mining   5.3%
Machinery-Diversified   4.5%
Building Materials   4.3%
Chemicals   4.3%
Commercial Services   4.1%
Distribution/Wholesale   1.9%
Electronics   1.9%
Aerospace/Defense   1.8%
Machinery-Construction & Mining   1.8%
Coal   1.7%
Diversified Financial Services   1.6%
Total Common Stocks   70.7%
Exchange-Traded Funds   28.5%
Total Investments   99.2%
Other Assets in Excess of Liabilities   0.8%
Total Net Assets   100.0%

 

See accompanying Notes to Financial Statements.

 31 

 

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS — 99.6%    
    APPAREL — 2.0%    
 2,719   Deckers Outdoor Corp.*  $1,222,326 
 9,531   NIKE, Inc. - Class B   1,168,882 
         2,391,208 
     BANKS — 1.7%     
 22,253   Bank of New York Mellon Corp.   1,011,176 
 12,768   State Street Corp.   966,410 
         1,977,586 
     BUILDING MATERIALS — 1.9%     
 25,142   Carrier Global Corp.   1,150,247 
 6,259   Vulcan Materials Co.   1,073,794 
         2,224,041 
     CHEMICALS — 2.0%     
 7,104   Ecolab, Inc.   1,175,925 
 8,574   PPG Industries, Inc.   1,145,315 
         2,321,240 
     COMMERCIAL SERVICES — 5.8%     
 5,151   Automatic Data Processing, Inc.   1,146,767 
 14,756   Block, Inc.*   1,012,999 
 5,590   Equifax, Inc.   1,133,876 
 3,902   Moody's Corp.   1,194,090 
 15,382   PayPal Holdings, Inc.*   1,168,109 
 3,318   S&P Global, Inc.   1,143,947 
         6,799,788 
     COMPUTERS — 4.2%     
 4,264   Accenture PLC - Class A1   1,218,694 
 7,680   Apple, Inc.   1,266,432 
 19,048   Fortinet, Inc.*   1,265,930 
 8,757   International Business Machines Corp.   1,147,955 
         4,899,011 
     COSMETICS/PERSONAL CARE — 1.0%     
 4,658   Estee Lauder Cos., Inc. - Class A   1,148,011 
     DISTRIBUTION/WHOLESALE — 2.0%     
 21,959   Fastenal Co.   1,184,469 
 1,693   W.W. Grainger, Inc.   1,166,155 
         2,350,624 
     DIVERSIFIED FINANCIAL SERVICES — 7.4%     
 6,507   American Express Co.   1,073,330 

 32 

 

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS (Continued)    
    DIVERSIFIED FINANCIAL SERVICES (Continued)    
 3,302   Ameriprise Financial, Inc.  $1,012,063 
 1,643   BlackRock, Inc.   1,099,364 
 14,531   Charles Schwab Corp.   761,134 
 6,108   CME Group, Inc.   1,169,804 
 11,122   Intercontinental Exchange, Inc.   1,159,913 
 3,186   Mastercard, Inc. - Class A   1,157,824 
 5,148   Visa, Inc. - Class A   1,160,668 
         8,594,100 
     ENERGY-ALTERNATE SOURCES — 0.8%     
 47,097   Sunrun, Inc.*   949,005 
     FOOD — 2.0%     
 21,557   Campbell Soup Co.   1,185,204 
 15,183   Sysco Corp.   1,172,583 
         2,357,787 
     HAND/MACHINE TOOLS — 0.9%     
 13,226   Stanley Black & Decker, Inc.   1,065,751 
     HEALTHCARE-PRODUCTS — 5.1%     
 11,131   Abbott Laboratories   1,127,125 
 4,935   Intuitive Surgical, Inc.*   1,260,745 
 13,674   Medtronic PLC1   1,102,398 
 4,307   Stryker Corp.   1,229,519 
 2,089   Thermo Fisher Scientific, Inc.   1,204,037 
         5,923,824 
     HEALTHCARE-SERVICES — 1.9%     
 16,553   Centene Corp.*   1,046,315 
 4,650   HCA Healthcare, Inc.   1,226,112 
         2,272,427 
     HOME BUILDERS — 1.0%     
 20,709   PulteGroup, Inc.   1,206,920 
     HOUSEHOLD PRODUCTS/WARES — 2.1%     
 13,513   Church & Dwight Co., Inc.   1,194,684 
 9,053   Kimberly-Clark Corp.   1,215,094 
         2,409,778 
     INSURANCE — 3.7%     
 18,527   American International Group, Inc.   933,020 
 3,724   Aon PLC - Class A1   1,174,140 
 6,983   Marsh & McLennan Cos., Inc.   1,163,018 

 33 

 

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS (Continued)    
    INSURANCE (Continued)    
 6,117   Travelers Cos., Inc.  $1,048,515 
         4,318,693 
     INTERNET — 4.3%     
 12,571   Alphabet, Inc. - Class A*   1,303,990 
 12,537   Alphabet, Inc. - Class C*   1,303,848 
 3,516   Netflix, Inc.*   1,214,708 
 6,011   Palo Alto Networks, Inc.*   1,200,637 
         5,023,183 
     MACHINERY-DIVERSIFIED — 1.0%     
 2,702   Deere & Co.   1,115,602 
     MEDIA — 2.0%     
 30,461   Comcast Corp. - Class A   1,154,776 
 11,367   Walt Disney Co.*   1,138,178 
         2,292,954 
     PHARMACEUTICALS — 8.8%     
 7,279   AmerisourceBergen Corp.   1,165,441 
 4,827   Becton Dickinson & Co.   1,194,876 
 16,418   Bristol-Myers Squibb Co.   1,137,932 
 3,876   Cigna Group   990,434 
 3,637   Eli Lilly & Co.   1,249,018 
 7,387   Johnson & Johnson   1,144,985 
 3,237   McKesson Corp.   1,152,534 
 10,657   Merck & Co., Inc.   1,133,798 
 27,906   Pfizer, Inc.   1,138,565 
         10,307,583 
     REITS — 3.9%     
 1,644   Equinix, Inc.   1,185,390 
 9,176   Prologis, Inc.   1,144,889 
 3,787   Public Storage Real Estate Investment Trust   1,144,204 
 9,274   Simon Property Group, Inc.   1,038,410 
         4,512,893 
     RETAIL — 5.8%     
 456   AutoZone, Inc.*   1,120,916 
 1,363   O'Reilly Automotive, Inc.*   1,157,160 
 10,243   Ross Stores, Inc.   1,087,090 
 14,781   TJX Cos., Inc.   1,158,239 
 2,181   Ulta Beauty, Inc.*   1,190,106 
 31,867   Walgreens Boots Alliance, Inc.   1,101,961 
         6,815,472 

 34 

 

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS (Continued)    
    SEMICONDUCTORS — 11.7%    
 14,408   Advanced Micro Devices, Inc.*  $1,412,128 
 6,170   Analog Devices, Inc.   1,216,848 
 1,905   Broadcom, Inc.   1,222,134 
 45,414   Intel Corp.   1,483,675 
 2,984   KLA Corp.   1,191,123 
 25,077   Marvell Technology, Inc.   1,085,834 
 13,972   Microchip Technology, Inc.   1,170,574 
 19,582   Micron Technology, Inc.   1,181,578 
 4,876   NVIDIA Corp.   1,354,407 
 9,166   QUALCOMM, Inc.   1,169,398 
 6,603   Texas Instruments, Inc.   1,228,224 
         13,715,923 
     SOFTWARE — 12.5%     
 3,495   Adobe, Inc.*   1,346,868 
 5,698   Autodesk, Inc.*   1,186,096 
 5,867   Cadence Design Systems, Inc.*   1,232,598 
 17,867   Fidelity National Information Services, Inc.   970,714 
 2,780   Intuit, Inc.   1,239,407 
 4,539   Microsoft Corp.   1,308,594 
 2,167   MSCI, Inc.   1,212,848 
 12,955   Oracle Corp.   1,203,779 
 2,631   Roper Technologies, Inc.   1,159,455 
 6,920   Salesforce, Inc.*   1,382,478 
 2,620   ServiceNow, Inc.*   1,217,566 
 3,112   Synopsys, Inc.*   1,202,010 
        14,662,413 
     TELECOMMUNICATIONS — 3.1%     
 59,874   AT&T, Inc.   1,152,575 
 23,382   Cisco Systems, Inc.   1,222,294 
 4,308   Motorola Solutions, Inc.   1,232,648 
         3,607,517 

 35 

 

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS (Continued)    
    WATER — 1.0%    
 8,066   American Water Works Co., Inc.  $1,181,588 
     TOTAL COMMON STOCKS     
     (Cost $115,894,229)   116,444,922 
     TOTAL INVESTMENTS — 99.6%     
     (Cost $115,894,229)   116,444,922 
     Other Assets in Excess of Liabilities — 0.4%   512,092 
     TOTAL NET ASSETS — 100.0%  $116,957,014 

PLC - Public Limited Company

 

*Non-income producing security.
1Foreign security denominated in U.S. Dollars.

 

See accompanying Notes to Financial Statements.

 36 

 

AXS Change Finance ESG ETF

SUMMARY OF INVESTMENTS

As of March 31, 2023

 

 

Security Type/Industry  Percent of Total Net Assets 
Common Stocks    
Software   12.5%
Semiconductors   11.7%
Pharmaceuticals   8.8%
Diversified Financial Services   7.4%
Commercial Services   5.8%
Retail   5.8%
Healthcare-Products   5.1%
Internet   4.3%
Computers   4.2%
REITS   3.9%
Insurance   3.7%
Telecommunications   3.1%
Household Products/Wares   2.1%
Media   2.0%
Distribution/Wholesale   2.0%
Apparel   2.0%
Food   2.0%
Chemicals   2.0%
Healthcare-Services   1.9%
Building Materials   1.9%
Banks   1.7%
Cosmetics/Personal Care   1.0%
Home Builders   1.0%
Machinery-Diversified   1.0%
Water   1.0%
Hand/Machine Tools   0.9%
Energy-Alternate Sources   0.8%
Total Common Stocks   99.6%
Total Investments   99.6%
Other Assets in Excess of Liabilities   0.4%
Total Net Assets   100.0%

 

See accompanying Notes to Financial Statements.

 37 

 

AXS First Priority CLO Bond ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2023

 

 

Principal Amount      Value 
    COLLATERALIZED MORTGAGE OBLIGATIONS — 97.8%    
    AIMCO CLO Series    
$350,000   Series 2017-AA, 5.858%, (3-Month USD Libor+105 basis points), 4/20/20341,2'3  $342,937 
     AMMC CLO XI Ltd.     
 350,000   Series 2012-11A, 5.812%, (3-Month USD Libor+101 basis points), 4/30/20311,2,3   346,309 
     AMMC CLO XVIII Ltd.     
 248,783   Series 2016-18A, 6.058%, (3-Month USD Libor+110 basis points), 5/26/20311,2,3   246,175 
     Bain Capital Credit CLO     
 250,000   Series 2018-1A, 5.775%, (3-Month USD Libor+96 basis points), 4/23/20311,2,3   246,951 
     Barings CLO Ltd.     
 291,452   Series 2015-2A, 5.998%, (3-Month USD Libor+119 basis points), 10/20/20301,2,3   288,771 
     Battalion CLO XX Ltd.     
 250,000   Series 2021-20A, 5.972%, (3-Month USD Libor+118 basis points), 7/15/20341,2,3   243,817 
     Burnham Park CLO Ltd.     
 295,235   Series 2016-1A, 5.958%, (3-Month USD Libor+115 basis points), 10/20/20291,2,3   293,501 
     Cedar Funding VII CLO Ltd.     
 375,000   Series 2018-7A, 5.808%, (3-Month USD Libor+100 basis points), 1/20/20311,2,3   371,431 
     CIFC Funding Ltd.     
 290,000   Series 2021-4A, 5.842%, (3-Month USD Libor+105 basis points), 7/15/20331,2,3   286,104 
 250,000   Series 2014-4RA, 5.962%, (3-Month USD Libor+117 basis points), 1/17/20351,2,3   244,040 
     Elmwood CLO IV Ltd.     
 250,000   Series 2020-1A, 6.032%, (3-Month USD Libor+124 basis points), 4/15/20331,2,3   246,571 
     Generate CLO IV Ltd.     
 375,000   Series 4A, 5.898%, (3-Month USD Libor+109 basis points), 4/20/20321,2,3   370,619 
     LCM XIX LP     
 34,476   Series 19A, 6.032%, (3-Month USD Libor+124 basis points), 7/15/20271,2,3   34,480 
     LCM XVIII LP     
 375,000   Series 18A, 5.828%, (3-Month USD Libor+102 basis points), 4/20/20311,2,3   370,049 
     LCM XX LP     
 86,695   Series 20A, 5.848%, (3-Month USD Libor+104 basis points), 10/20/20271,2,3   86,448 
     Madison Park Funding XLI Ltd.     
 147,332   Series 12A, 5.645%, (3-Month USD Libor+83 basis points), 4/22/20271,2,3   146,373 
     Magnetite XII Ltd.     
 375,000   Series 2015-12A, 5.892%, (3-Month USD Libor+110 basis points), 10/15/20311,2,3   369,772 

 38 

 

AXS First Priority CLO Bond ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Principal
Amount
      Value 
    COLLATERALIZED MORTGAGE OBLIGATIONS (Continued)    
    Palmer Square CLO Ltd.    
$250,000   Series 2014-1A, 5.922%, (3-Month USD Libor+113 basis points), 1/17/20311,2,3  $248,276 
     Recette CLO Ltd.     
 250,000   Series 2015-1A, 5.888%, (3-Month USD Libor+108 basis points), 4/20/20341,2,3   243,903 
     Rockford Tower CLO Ltd.     
 300,000   Series 2021-1A, 5.978%, (3-Month USD Libor+117 basis points), 7/20/20341,2,3   292,802 
     Shackleton CLO IV Ltd.     
 350,000   Series 2013-4RA, 5.815%, (3-Month USD Libor+100 basis points), 4/13/20311,2,3   345,998 
     Symphony CLO XXII Ltd.     
 375,000   Series 2020-22A, 6.085%, (3-Month USD Libor+129 basis points), 4/18/20331,2,3   369,128 
     Thompson Park CLO Ltd.     
 250,000   Series 2021-1A, 5.792%, (3-Month USD Libor+100 basis points), 4/15/20341,2,3   243,544 
     TICP CLO IX Ltd.     
 250,000   Series 2017-9A, 5.948%, (3-Month USD Libor+114 basis points), 1/20/20311,2,3   247,804 
     Vibrant CLO XI Ltd.     
 300,000   Series 2019-11A, 5.928%, (3-Month USD Libor+112 basis points), 7/20/20321,2,3   293,894 
     Voya CLO Ltd.     
 375,000   Series 2018-3A, 5.942%, (3-Month USD Libor+115 basis points), 10/15/20311,2,3   371,119 
     TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS     
     (Cost $7,252,798)   7,190,816 
           
     TOTAL INVESTMENTS — 97.8%     
     (Cost $7,252,798)   7,190,816 
           
     Other Assets in Excess of Liabilities — 2.2%   160,491 
     TOTAL NET ASSETS — 100.0%  $7,351,307 

LP - Limited Partnership

 

1Callable.
2Floating rate security.
3Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are restricted and may be resold in transactions exempt from registration normally to qualified institutional buyers. The total value of these securities is $7,190,816, which represents 97.8% of total net assets of the Fund.

 

See accompanying Notes to Financial Statements.

 39 

 

AXS First Priority CLO Bond ETF

SUMMARY OF INVESTMENTS

As of March 31, 2023

 

 

Security Type  Percent of Total Net Assets 
Collateralized Mortgage Obligations   97.8%
Total Investments   97.8%
Other Assets in Excess of Liabilities   2.2%
Total Net Assets   100.0%

 

See accompanying Notes to Financial Statements.

 40 

 

AXS Green Alpha ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS — 98.2%    
    AUTO MANUFACTURERS — 3.6%    
 105,840   Proterra, Inc.*  $160,877 
 15,560   Rivian Automotive, Inc. - Class A*   240,869 
 6,907   Tesla, Inc.*   1,432,926 
 58,816   XPeng, Inc. - ADR*,1   653,446 
         2,488,118 
     AUTO PARTS & EQUIPMENT — 1.1%     
 93,861   QuantumScape Corp.*   767,783 
     BIOTECHNOLOGY — 12.4%     
 27,179   Arcturus Therapeutics Holdings, Inc.*   651,481 
 77,805   Caribou Biosciences, Inc.*   413,144 
 48,625   CRISPR Therapeutics A.G.*'1   2,199,309 
 109,035   Editas Medicine, Inc.*   790,504 
 3,533   Illumina, Inc.*   821,599 
 18,454   Intellia Therapeutics, Inc.*   687,781 
 16,140   Moderna, Inc.*   2,478,781 
 34,900   Prime Medicine, Inc.*   429,270 
 13,279   Verve Therapeutics, Inc.*   191,483 
         8,663,352 
     BUILDING MATERIALS — 0.8%     
 11,622   Trex Co., Inc.*   565,643 
     CHEMICALS — 1.2%     
 18,117   Daqo New Energy Corp. - ADR*'1   848,600 
     COMPUTERS — 7.0%     
 4,519   Apple, Inc.   745,183 
 13,760   Fortinet, Inc.*   914,490 
 17,472   International Business Machines Corp.   2,290,404 
 21,378   Rapid7, Inc.*   981,464 
         4,931,541 
     DIVERSIFIED FINANCIAL SERVICES — 2.5%     
 60,705   Hannon Armstrong Sustainable Infrastructure Capital, Inc.   1,736,163 
     ELECTRIC — 3.9%     
 78,943   Brookfield Renewable Corp. - Class A1   2,759,058 
     ELECTRONICS — 1.8%     
 25,564   ABB Ltd. - ADR1   876,845 
 4,169   Advanced Energy Industries, Inc.   408,562 
         1,285,407 

 41 

 

AXS Green Alpha ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS (Continued)    
    ENERGY-ALTERNATE SOURCES — 19.6%    
 37,529   Canadian Solar, Inc.*'1  $1,494,030 
 3,645   Enphase Energy, Inc.*   766,471 
 9,106   First Solar, Inc.*   1,980,555 
 37,965   JinkoSolar Holding Co., Ltd. - ADR*,1   1,936,974 
 31,697   Maxeon Solar Technologies Ltd.*,1   841,238 
 1,972   SolarEdge Technologies, Inc.*   599,389 
 66,085   SunPower Corp.*   914,616 
 23,173   Sunrun, Inc.*   466,936 
 96,064   TPI Composites, Inc.   1,253,635 
 118,219   Vestas Wind Systems   3,431,111 
         13,684,955 
     ENVIRONMENTAL CONTROL — 0.9%     
 118,657   Li-Cycle Holdings Corp.*,1   668,039 
     FOOD — 2.9%     
 7,171   Danone SA   446,498 
 62,398   Natural Grocers by Vitamin Cottage, Inc.   733,177 
 24,124   Sprouts Farmers Market, Inc.*   845,064 
         2,024,739 
     HEALTHCARE-PRODUCTS — 2.4%     
 144,404   Pacific Biosciences of California, Inc.*   1,672,198 
     HEALTHCARE-SERVICES — 1.0%     
 275,237   Invitae Corp.*   371,570 
 112,630   Personalis, Inc.*   310,859 
         682,429 
     INVESTMENT COMPANIES — 1.9%     
 116,021   Horizon Technology Finance Corp.   1,308,717 
     OFFICE FURNISHINGS — 1.0%     
 35,942   Interface, Inc.   291,849 
 45,591   Steelcase, Inc. - Class A   383,876 
         675,725 
     REITS — 10.1%     
 9,567   Alexandria Real Estate Equities, Inc.   1,201,519 
 11,259   Boston Properties, Inc.   609,337 
 11,596   Digital Realty Trust, Inc.   1,140,003 
 1,773   Equinix, Inc.   1,278,404 
 127,556   Hudson Pacific Properties, Inc.   848,247 
 20,649   Kilroy Realty Corp.   669,028 
 29,923   SL Green Realty Corp.   703,789 

 42 

 

AXS Green Alpha ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS (Continued)    
    REITS (Continued)    
 37,907   Vornado Realty Trust  $582,631 
         7,032,958 
     SEMICONDUCTORS — 22.7%     
 3,500   Analog Devices, Inc.   690,270 
 23,329   Applied Materials, Inc.   2,865,501 
 3,465   ASML Holding N.V.1   2,358,660 
 50,826   Infineon Technologies A.G.   2,080,686 
 3,889   Lam Research Corp.   2,061,636 
 14,198   QUALCOMM, Inc.   1,811,381 
 38,439   Taiwan Semiconductor Manufacturing Co., Ltd. - ADR1   3,575,596 
 7,124   Wolfspeed, Inc.*   462,704 
         15,906,434 
     TELECOMMUNICATIONS — 1.4%     
 48,379   SK Telecom Co., Ltd. - ADR1   992,253 
     TOTAL COMMON STOCKS     
     (Cost $64,919,808)   68,694,112 
           
     TOTAL INVESTMENTS — 98.2%     
     (Cost $64,919,808)   68,694,112 
           
     Other Assets in Excess of Liabilities — 1.8%   1,240,854 
     TOTAL NET ASSETS — 100.0%  $69,934,966 

ADR - American Depository Receipt

 

*Non-income producing security.
1Foreign security denominated in U.S. Dollars.

 

See accompanying Notes to Financial Statements.

 43 

 

AXS Green Alpha ETF

SUMMARY OF INVESTMENTS

As of March 31, 2023

 

 

Security Type/Industry  Percent of Total Net Assets 
Common Stocks    
Semiconductors   22.7%
Energy-Alternate Sources   19.6%
Biotechnology   12.4%
REITS   10.1%
Computers   7.0%
Electric   3.9%
Auto Manufacturers   3.6%
Food   2.9%
Diversified Financial Services   2.5%
Healthcare-Products   2.4%
Investment Companies   1.9%
Electronics   1.8%
Telecommunications   1.4%
Chemicals   1.2%
Auto Parts & Equipment   1.1%
Office Furnishings   1.0%
Healthcare-Services   1.0%
Environmental Control   0.9%
Building Materials   0.8%
Total Common Stocks   98.2%
Total Investments   98.2%
Other Assets in Excess of Liabilities   1.8%
Total Net Assets   100.0%

 

See accompanying Notes to Financial Statements.

 44 

 

AXS Brendan Wood TopGun Index ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS — 99.6%    
    BANKS — 8.0%    
 534   JPMorgan Chase & Co.  $69,586 
 764   Royal Bank of Canada1   73,023 
         142,609 
     COMPUTERS — 4.6%     
 598   Crowdstrike Holdings, Inc. - Class A*   82,081 
     DIVERSIFIED FINANCIAL SERVICES — 8.5%     
 205   Mastercard, Inc. - Class A   74,499 
 342   Visa, Inc. - Class A   77,107 
         151,606 
     ELECTRIC — 3.7%     
 851   NextEra Energy, Inc.   65,595 
     ENVIRONMENTAL CONTROL — 4.2%     
 536   Waste Connections, Inc.1   74,541 
     HEALTHCARE-PRODUCTS — 3.8%     
 268   Danaher Corp.   67,547 
     HEALTHCARE-SERVICES — 3.6%     
 134   UnitedHealth Group, Inc.   63,327 
     INSURANCE — 4.0%     
 494   Intact Financial Corp.   70,699 
     INTERNET — 3.8%     
 643   Alphabet, Inc. - Class A*   66,698 
     MINING — 8.2%     
 1,368   Agnico Eagle Mines Ltd.1   69,727 
 521   Franco-Nevada Corp.1   75,962 
         145,689 
     OIL & GAS — 11.3%     
 1,281   Canadian Natural Resources Ltd.1   70,903 
 520   Diamondback Energy, Inc.   70,288 
 1,453   Tourmaline Oil Corp.   60,550 
         201,741 
     PIPELINES — 4.2%     
 474   Cheniere Energy, Inc.   74,702 

 45 

 

AXS Brendan Wood TopGun Index ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS (Continued)    
    REITS — 3.6%    
 515   Prologis, Inc.  $64,257 
     RETAIL — 3.7%     
 132   Costco Wholesale Corp.   65,587 
     SEMICONDUCTORS — 8.1%     
 785   Advanced Micro Devices, Inc.*   76,938 
 99   ASML Holding N.V.1   67,390 
         144,328 
     SOFTWARE — 4.3%     
 262   Microsoft Corp.   75,535 
           
     TELECOMMUNICATIONS — 3.8%     
 471   T-Mobile US, Inc.*   68,220 
           
     TRANSPORTATION — 4.1%     
 954   Canadian Pacific Railway Ltd.1   73,401 
           
     VENTURE CAPITAL — 4.1%     
 2,263   Brookfield Corp.1   73,751 
     TOTAL COMMON STOCKS     
     (Cost $1,788,068)   1,771,914 
           
     TOTAL INVESTMENTS — 99.6%     
     (Cost $1,788,068)   1,771,914 
     Other Assets in Excess of Liabilities — 0.4%   7,866 
     TOTAL NET ASSETS — 100.0%  $1,779,780 
*Non-income producing security.
1Foreign security denominated in U.S. Dollars

 

See accompanying Notes to Financial Statements.

 46 

 

AXS Brendan Wood TopGun Index ETF

SUMMARY OF INVESTMENTS

As of March 31, 2023

 

 

Security Type/Industry  Percent of Total Net Assets 
Common Stocks    
Oil & Gas   11.3%
Diversified Financial Services   8.5%
Mining   8.2%
Semiconductors   8.1%
Banks   8.0%
Computers   4.6%
Software   4.3%
Pipelines   4.2%
Environmental Control   4.2%
Venture Capital   4.1%
Transportation   4.1%
Insurance   4.0%
Internet   3.8%
Healthcare-Products   3.8%
Telecommunications   3.8%
Retail   3.7%
Electric   3.7%
Healthcare-Services   3.6%
REITS   3.6%
Total Common Stocks   99.6%
Total Investments   99.6%
Other Assets in Excess of Liabilities   0.4%
Total Net Assets   100.0%

 

See accompanying Notes to Financial Statements.

 47 

 

AXS Esoterica NextG Economy ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2023

 

 

Number of Shares      Value 
     COMMON STOCKS — 94.6%     
     AUTO MANUFACTURERS — 3.9%     
 3,759   Tesla, Inc.*  $779,842 
           
     COMMERCIAL SERVICES — 1.4%     
 113   Adyen N.V.*,1   179,144 
 1,337   Block, Inc.*   91,785 
           
         270,929 
     COMPUTERS — 1.4%     
 2,438   Zscaler, Inc.*   284,832 
           
     INTERNET — 18.2%     
 3,553   Airbnb, Inc. - Class A*   441,993 
 3,189   Alphabet, Inc. - Class C*   331,656 
 9,010   Amazon.com, Inc.*   930,643 
 3,996   JD.com, Inc. – ADR   175,384 
 409   JD.com, Inc. - Class A   8,961 
 41,597   Meituan - Class B*,1   760,409 
 1,091   Netflix, Inc.*   376,919 
 3,352   Sea Ltd. - ADR*   290,116 
 5,892   Tencent Holdings Ltd.   289,573 
           
         3,605,654 
     SEMICONDUCTORS — 41.7%     
 20,626   Advanced Micro Devices, Inc.*   2,021,554 
 3,000   Applied Materials, Inc.   368,490 
 32,492   Marvell Technology, Inc.   1,406,904 
 9,496   NVIDIA Corp.   2,637,704 
 5,873   QUALCOMM, Inc.   749,277 
 782   Synaptics, Inc.*   86,919 
 9,400   Taiwan Semiconductor Manufacturing Co., Ltd. – ADR   874,388 
 1,753   Wolfspeed, Inc.*  113,858 
           
         8,259,094 
     SOFTWARE — 28.0%     
 1,374   Atlassian Corp. - Class A*   235,188 
 4,428   Cloudflare, Inc. - Class A*   273,030 
 11,474   Datadog, Inc. - Class A*   833,701 
 5,503   Gitlab, Inc. - Class A*   188,698 
 5,290   Microsoft Corp.   1,525,107 
 1,834   MongoDB, Inc.*   427,542 
 1,151   ServiceNow, Inc.*   534,893 
 6,729   Snowflake, Inc. - Class A*   1,038,217 

 

 48 

 

AXS Esoterica NextG Economy ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2023

 

 

Number of Shares      Value 
    COMMON STOCKS (Continued)    
    SOFTWARE (Continued)    
 2,411   Workday, Inc. - Class A*  $497,968 
         5,554,344 
     TOTAL COMMON STOCKS     
     (Cost $22,157,140)   18,754,695 
           
     TOTAL INVESTMENTS — 94.6%     
     (Cost $22,157,140)   18,754,695 
     Other Assets in Excess of Liabilities — 5.4%   1,072,471 
     TOTAL NET ASSETS — 100.0%  $19,827,166 

ADR - American Depository Receipt

 

*Non-income producing security.
1Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are restricted and may be resold in transactions exempt from registration normally to qualified institutional buyers. The total value of these securities is $939,553, which represents 4.74% of Net Assets.

 

See accompanying Notes to Financial Statements.

 49 

 

AXS Esoterica NextG Economy ETF

SUMMARY OF INVESTMENTS

As of March 31, 2023

 

 

Security Type/Industry  Percent of Total Net Assets 
Common Stocks    
Semiconductors   41.7%
Software   28.0%
Internet   18.2%
Auto Manufacturers   3.9%
Commercial Services   1.4%
Computers   1.4%
Total Common Stocks   94.6%
Total Investments   94.6%
Other Assets in Excess of Liabilities   5.4%
Total Net Assets   100.0%

 

See accompanying Notes to Financial Statements.

 50 

 

AXS Funds

STATEMENTS OF ASSETS AND LIABILITIES

As of March 31, 2023

 

 

    AXS Astoria Inflation Sensitive ETF     AXS Change Finance ESG ETF*    

AXS

First Priority CLO Bond ETF*

 
Assets:                  
Investments, at value (cost $68,710,677, $115,894,229 and $7,252,798, respectively)   $ 68,441,437     $ 116,444,922     $ 7,190,816  
Foreign currency, at value (cost $4,175, $0 and $0, respectively)     4,175       -       -  
Cash     243,296       439,015       111,583  
Receivables:                        
Investment securities sold     -       -       -  
Dividends and interest     253,513       63,609       84,488  
Reclaims receivable     72,922       2,840       -  
Due from Advisor     -       -       936  
Prepaid expenses     -       -       -  
Other receivable (Note 3)     -       22,000       -  
Total assets     69,015,343       116,972,386       7,387,823  
                         
Liabilities:                        
Foreign currency due to custodian, at value (proceeds $0, $0 and $0, respectively)     -       -       -  
Payables:                        
Advisory fees     27,268       15,372       -  
Fund administration fees     -       -       -  
Transfer agent fees and expenses     -       -       -  
Custody fees     -       -       -  
Due to custodian     -       -       -  
Fund accounting fees     -       -       -  
Auditing fees     -       -       -  
Chief Compliance Officer fees     -       -       -  
Legal fees     -       -       -  
Trustees' fees and expenses     -       -       -  
Trustees' deferred compensation (Note 3)     -       -       -  
Shareholder reporting fees     -       -       -  
Distribution payable     -       -       36,516  
Accrued other expenses     -       -       -  
Total liabilities     27,268       15,372       36,516  
                         
Net Assets   $ 68,988,075     $ 116,957,014     $ 7,351,307  
                         
Components of Net Assets:                        
Paid-in capital (par value of $0.01 per share with an unlimited number of shares authorized)   $ 79,881,211     $ 135,331,105     $ 7,564,824  
                         
Total distributable earnings (accumulated deficit)     (10,893,136 )     (18,374,091 )     (213,517 )
Net Assets     68,988,075       116,957,014       7,351,307  
                         
Shares of beneficial interest issued and outstanding     2,750,000       4,050,000       300,000  
Net asset value per share   $ 25.09     $ 28.88     $ 24.50  

*Fiscal year end changed to March 31, effective February 1, 2023.

 

See accompanying Notes to Financial Statements.

 51 

 

AXS Funds

STATEMENTS OF ASSETS AND LIABILITIES - Continued

As of March 31, 2023

 

 

  

AXS

Green Alpha ETF

  

AXS

Brendan Wood TopGun Index ETF

  

AXS

Esoterica NextG Economy ETF*

 
Assets:            
Investments, at value (cost $64,919,808, $1,788,068 and $22,157,140, respectively)  $68,694,112   $1,771,914   $18,754,695 
Foreign currency, at value (cost $0, $163,773 and $731,185, respectively)   -    164,606    748,896 
Cash   1,156,648    -    363,498 
Receivables:               
Investment securities sold   -    10,522    - 
Dividends and interest   115,969    1,245    6,909 
Reclaims receivable   9,280    605    - 
Due from Advisor   -    4,014    3,608 
Prepaid expenses   -    -    48 
Other receivable (Note 3)   -    -    - 
Total assets   69,976,009    1,952,906    19,877,654 
                
Liabilities:               
Foreign currency due to custodian, at value (proceeds $139, $0 and $0, respectively)   139    -    - 
Payables:               
Advisory fees   40,904    -    - 
Fund administration fees   -    -    5,089 
Transfer agent fees and expenses   -    -    1,933 
Custody fees   -    -    3,876 
Due to custodian   -    173,126    - 
Fund accounting fees   -    -    11,097 
Auditing fees   -    -    15,500 
Chief Compliance Officer fees   -    -    2,248 
Legal fees   -    -    3,399 
Trustees' fees and expenses   -    -    3,062 
Trustees' deferred compensation (Note 3)   -    -    271 
Shareholder reporting fees   -    -    1,172 
Distribution payable   -    -    - 
Accrued other expenses   -    -    2,841 
Total liabilities   41,043    173,126    50,488 
                
Net Assets  $69,934,966   $1,779,780   $19,827,166 
                
Components of Net Assets:               
Paid-in capital (par value of $0.01 per share with an unlimited number of shares authorized)  $66,010,524   $1,818,436   $27,654,803 
Total distributable earnings (accumulated deficit)   3,924,442    (38,656)   (7,827,637)
Net Assets   69,934,966    1,779,780    19,827,166 
                
Shares of beneficial interest issued and outstanding   2,190,000    60,000    500,754 
Net asset value per share  $31.93   $29.66   $39.59 
*Fiscal year end changed to March 31, effective February 1, 2023.

 

See accompanying Notes to Financial Statements.

 52 

 

AXS Astoria Inflation Sensitive ETF

STATEMENTS OF OPERATIONS

 

 

   For the Year Ended March 31, 2023 
Investment Income:    
Dividends (net of foreign withholding taxes of $128,523)  $2,754,573 
Interest   14,653 
Total investment income   2,769,226 
      
Expenses:     
Advisory fees   461,040 
Interest expense   850 
Total expenses   461,890 
Net investment income (loss)   2,307,336 
      
Realized and Unrealized Gain (Loss) on:     
Net realized gain (loss) on:     
Investments   (10,662,504)
Investments in-kind   4,932,235 
Foreign currency transactions   (17,873)
Net realized gain (loss)   (5,748,142)
Net change in unrealized appreciation/depreciation on:     
Investments   (4,392,305)
Foreign currency translations   659 
Net change in unrealized appreciation/depreciation   (4,391,646)
Net realized and unrealized gain (loss)   (10,139,788)
      
Net Increase (Decrease) in Net Assets from Operations  $(7,832,452)

 

See accompanying Notes to Financial Statements.

 53 

 

AXS Change Finance ESG ETF

STATEMENTS OF OPERATIONS

 

 

   For the Period Ended March 31, 2023*   For the Year Ended July31, 2022 
Investment Income:        
Dividends (net of foreign withholding taxes of $0 and $608, respectively)  $1,165,148   $1,500,772 
Interest   13,065    - 
Total investment income   1,178,213    1,500,772 
           
Expenses:          
Advisory fees   348,093    515,075 
Total expenses   348,093    515,075 
Net investment income (loss)   830,120    985,697 
           
Realized and Unrealized Gain (Loss) on:          
Net realized gain (loss) on:          
Investments   (4,944,138)   (2,957,970)
Investments in-kind   215,696    - 
Net realized gain (loss)   (4,728,442)   (2,957,970)
Net change in unrealized appreciation/depreciation on:          
Investments   6,017,674    (16,901,094)
Net change in unrealized appreciation/depreciation   6,017,674    (16,901,094)
Net increase from payments by non-affiliate (Note 3)   72,000    - 
Net realized and unrealized gain (loss)   1,361,232    (19,859,064)
           
Net Increase (Decrease) in Net Assets from Operations $  $2,191,352   $(18,873,367)
*Fiscal year end changed to March 31, effective February 1, 2023.

 

See accompanying Notes to Financial Statements.

 54 

 

AXS First Priority CLO Bond ETF

STATEMENTS OF OPERATIONS

 

 

   For the Period Ended March 31, 2023*   For the Year Ended July31, 2022 
Investment Income:        
Interest  $248,559   $151,886 
Total investment income   248,559    151,886 
           
Expenses:          
Advisory fees   12,201    24,697 
Total expenses   12,201    24,697 
Net investment income (loss)   236,358    127,189 
           
Realized and Unrealized Gain (Loss) on:          
Net realized gain (loss) on:          
Investments   (15,473)   (136,062)
Net realized gain (loss)   (15,473)   (136,062)
Net change in unrealized appreciation/depreciation on:          
Investments   69,786    (160,596)
Net change in unrealized appreciation/depreciation   69,786    (160,596)
Net realized and unrealized gain (loss)   54,313    (296,658)
           
Net Increase (Decrease) in Net Assets from Operations  $290,671   $(169,469)
*Fiscal year end changed to March 31, effective February 1, 2023.

 

See accompanying Notes to Financial Statements.

 55 

 

AXS Green Alpha ETF

STATEMENTS OF OPERATIONS

 

 

   For the Period Ended March31, 2023* 
Investment Income:    
Dividends (net of foreign withholding taxes of $23,784)  $459,481 
Interest   23,350 
Total investment income   482,831 
      
Expenses:     
Advisory fees   287,249 
Interest expense   142 
Total expenses   287,391 
Net investment income (loss)   195,440 
      
Realized and Unrealized Gain (Loss) on:     
Net realized gain (loss) on:     
Investments   21,066 
Investments in-kind   313,536 
Foreign currency transactions   (24)
Net realized gain (loss)   334,578 
Net change in unrealized appreciation/depreciation on:     
Investments   3,774,304 
Foreign currency translations   36 
Net change in unrealized appreciation/depreciation   3,774,340 
Net realized and unrealized gain (loss)   4,108,918 
      
Net Increase (Decrease) in Net Assets from Operations  $4,304,358 
*The Fund commenced operations on September 27, 2022.

 

See accompanying Notes to Financial Statements.

 56 

 

AXS Brendan Wood TopGun Index ETF

STATEMENTS OF OPERATIONS

 

 

   For the Period Ended March 31, 2023* 
Investment Income:     
Dividends (net of foreign withholding taxes of $1,407)  $14,992 
Interest   548 
Total investment income   15,540 
      
Expenses:     
Advisory fees   6,127 
Interest expense   4,709 
Total expenses   10,836 
Net investment income (loss)   4,704 
      
Realized and Unrealized Gain (Loss) on:     
Net realized gain (loss) on:     
Investments   (23,410)
Foreign currency transactions   (626)
Net realized gain (loss)   (24,036)
Net change in unrealized appreciation/depreciation on:     
Investments   (16,154)
Foreign currency translations   833 
Net change in unrealized appreciation/depreciation   (15,321)
Net realized and unrealized gain (loss)   (39,357)
      
Net Increase (Decrease) in Net Assets from Operations  $(34,653)
*The Fund commenced operations on November 8, 2022.

 

See accompanying Notes to Financial Statements.

 57 

 

AXS Esoterica NextG Economy ETF

STATEMENTS OF OPERATIONS

 

 

   For the Period Ended March 31, 2023*   For the Year Ended October 31, 2022 
Investment Income:        
Dividends (net of foreign withholding taxes of $1,769 and $7,042, respectively)  $26,559   $100,666 
Interest   10,505    17,722 
Total investment income   37,064    118,388 
Expenses:          
Advisory fees   54,196    228,643 
Fund administration fees   11,069    70,500 
Fund accounting fees   15,299    32,656 
Transfer agent fees and expenses   2,791    10,000 
Custody fees   3,462    15,193 
Shareholder reporting fees   4,332    7,549 
Legal fees   10,210    92,500 
Auditing fees   15,500    17,000 
Trustees' fees and expenses   7,343    45,575 
Insurance fees   3,694    6,309 
Chief Compliance Officer fees   11,277    36,219 
Miscellaneous   14,784    51,860 
Total expenses   153,957    614,004 
Advisory fees (waived) recovered   (54,196)   (228,643)
Other expenses absorbed   (45,551)   (156,109)
Net expenses   54,210    229,252 
Net investment income (loss)   (17,146)   (110,864)
           
Realized and Unrealized Gain (Loss) on:          
Net realized gain (loss) on:          
Investments   (770,745)   (2,753,596)
Investments in-kind   -    (702,413)
Foreign currency transactions   -    (2,933)
Net realized gain (loss)   (770,745)   (3,458,942)
Net change in unrealized appreciation/depreciation on:          
Investments   4,130,066    (16,174,608)
Foreign currency translations   17,711    - 
Net change in unrealized appreciation/depreciation   4,147,777    (16,174,608)
Net realized and unrealized gain (loss)   3,377,032    (19,633,550)
           
Net Increase (Decrease) in Net Assets from Operations  $3,359,886   $(19,744,414)
*Fiscal year end changed to March 31, effective February 1, 2023.

 

See accompanying Notes to Financial Statements.

 58 

 

AXS Astoria Inflation Sensitive ETF

STATEMENTS OF CHANGES IN NET ASSETS

 

 

   For the Year Ended March 31, 2023   For the Period Ended March 31, 2022* 
Increase (Decrease) in Net Assets from:        
Operations:        
Net investment income (loss)  $2,307,336   $221,525 
Net realized gain (loss) on investments, investments in kind and foreign currency transactions   (5,748,142)   (89,723)
Net change in unrealized appreciation/depreciation on investments and foreign currency translations   (4,391,646)   4,123,316 
Net increase (decrease) in net assets resulting from operations   (7,832,452)   4,255,118 
           

 Distributions to Shareholders:

          
Total distributions to shareholders   (2,383,576)   - 
           
Capital Transactions:          
Net proceeds from shares sold   57,132,883    57,707,500 
Cost of shares redeemed   (39,891,398)   - 
Net increase (decrease) in net assets from capital transactions   17,241,485    57,707,500 
           
Total increase (decrease) in net assets   7,025,457    61,962,618 
           
Net Assets:          
Beginning of period   61,962,618    - 
End of period  $68,988,075   $61,962,618 
           
Capital Share Transactions:          
Shares sold   2,175,000    2,175,000 
Shares redeemed   (1,600,000)   - 
Net increase (decrease) in capital share transactions   575,000    2,175,000 
*The Fund commenced operations on December 29, 2021.

 

See accompanying Notes to Financial Statements.

 59 

 

AXS Change Finance ESG ETF^

STATEMENTS OF CHANGES IN NET ASSETS

 

 

   For the Period Ended March 31, 2023*   For the Year Ended July 31, 2022   For the Year Ended July31, 2021 
Increase (Decrease) in Net Assets from:            
Operations:            
Net investment income (loss)  $830,120   $985,697   $353,347 
Net realized gain (loss) on investments and investments in kind   (4,728,442)   (2,957,970)   5,637,094 
Net change in unrealized appreciation/depreciation on investments   6,017,674    (16,901,094)   8,595,178 
Net increase from payment by non-affiliate (Note 3)   72,000    -    - 
Net increase (decrease) in net assets resulting from operations   2,191,352    (18,873,367)   14,585,619 
                
Distributions to Shareholders:               
Total distributions to shareholders   (1,153,807)   (637,137)   (192,961)
                
Capital Transactions:               
Net proceeds from shares sold   18,498,011    98,740,402    77,499,860 
Cost of shares redeemed   (5,859,190)   (55,991,155)   (31,401,565)
Net increase (decrease) in net assets from capital transactions   12,638,821    42,749,247    46,098,295 
                
Total increase (decrease) in net assets   13,676,366    23,238,743    60,490,953 
                
Net Assets:               
Beginning of period   103,280,648    80,041,905    19,550,952 
End of period  $116,957,014   $103,280,648   $80,041,905 
                
Capital Share Transactions:               
Shares sold   675,000    2,975,000    2,600,000 
Shares redeemed   (225,000)   (1,725,000)   (1,050,000)
Net increase (decrease) in capital share transactions   450,000    1,250,000    1,550,000 

 

^With the Plan of Reorganization with respect to the AXS Change Finance ESG ETF (formerly, Change Finance U.S. Large Cap Fossil Fuel Free ETF), shareholders received shares of the AXS Change Finance ESG ETF effective as of the close of business on March 18, 2022. See Note 1 in the accompanying Notes to Financial Statements.
*Fiscal year end changed to March 31, effective February 1, 2023.

 

See accompanying Notes to Financial Statements.

 60 

 

AXS First Priority CLO Bond ETF^

STATEMENTS OF CHANGES IN NET ASSETS

 

 

   For the Period Ended March 31, 2023*   For the Year Ended July 31, 2022   For the Period Ended July 31, 2021** 
Increase (Decrease) in Net Assets from: Operations:            
Net investment income (loss)  $236,358   $127,189   $96,472 
Net realized gain (loss) on investments   (15,473)   (136,062)   643 
Net change in unrealized appreciation/depreciation on investments   69,786    (160,596)   28,828 
Net increase (decrease) in net assets resulting from operations   290,671    (169,469)   125,943 
                
Distributions to Shareholders:               
Total distributions to shareholders   (256,072)   (118,047)   (86,767)
                
Capital Transactions:               
Net proceeds from shares sold   -    -    9,980,905 
Cost of shares redeemed   -    (2,434,390)   - 
Transactions fees (Note 2c)   -    6,086    12,447 
Net increase (decrease) in net assets from capital transactions   -    (2,428,304)   9,993,352 
                
Total increase (decrease) in net assets   34,599    (2,715,820)   10,032,528 
                
Net Assets:               
Beginning of period   7,316,708    10,032,528    - 
End of period  $7,351,307   $7,316,708   $10,032,528 
                
Capital Share Transactions:               
Shares sold   -    -    400,000 
Shares redeemed   -    (100,000)   - 
Net increase (decrease) in capital share transactions   -    (100,000)   400,000 
^With the Plan of Reorganization with respect to the AXS First Priority CLO Bond ETF (formerly, AAF First Priority CLO Bond ETF), shareholders received shares ofthe AXS First Priority CLO Bond ETF effective as of the close of business on October 14, 2022. See Note 1 in the accompanying Notes to Financial Statements.

*Fiscal year end changed to March 31, effective February 1, 2023.
**The Fund commenced operations on September 8, 2020.

 

See accompanying Notes to Financial Statements.

 61 

 

AXS Green Alpha ETF

STATEMENTS OF CHANGES IN NET ASSETS

 

 

    For the Period Ended March 31, 2023*  
Increase (Decrease) in Net Assets from:      
Operations:      
Net investment income (loss)   $ 195,440  
Net realized gain (loss) on investments, investments in kind and foreign currency transactions     334,578  
Net change in unrealized appreciation/depreciation on investments and foreign currency translations     3,774,340  
Net increase (decrease) in net assets resulting from operations     4,304,358  
         

 Distributions to Shareholders:

       
Total distributions to shareholders     (66,380 )
         
Capital Transactions:        
Net proceeds from shares sold     67,035,896  
Cost of shares redeemed     (1,338,908 )
Net increase (decrease) in net assets from capital transactions     65,696,988  
         
Total increase (decrease) in net assets     69,934,966  
         
Net Assets:        
Beginning of period     -  
End of period   $ 69,934,966  
         
Capital Share Transactions:        
Shares sold     2,230,000  
Shares redeemed     (40,000 )
Net increase (decrease) in capital share transactions     2,190,000  

*The Fund commenced operations on September 27, 2022.

 

See accompanying Notes to Financial Statements.

 62 

 

AXS Brendan Wood TopGun Index ETF

STATEMENTS OF CHANGES IN NET ASSETS

 

 

   For the Period Ended March 31, 2023* 
Increase (Decrease) in Net Assets from:    
Operations:     
Net investment income (loss)  $4,704 
Net realized gain (loss) on investments and foreign currency transactions   (24,036)
Net change in unrealized appreciation/depreciation on investments and foreign currency translations   (15,321)
Net increase (decrease) in net assets resulting from operations   (34,653)
      
Distributions to Shareholders:     
Total distributions to shareholders   (4,003)
      
Capital Transactions:     
Net proceeds from shares sold   1,818,436 
Net increase (decrease) in net assets from capital transactions   1,818,436 
      
Total increase (decrease) in net assets   1,779,780 
      
Net Assets:     
Beginning of period   - 
End of period  $1,779,780 
      
Capital Share Transactions:     
Shares sold   60,000 
Net increase (decrease) in capital share transactions   60,000 

* The Fund commenced operations on November 8, 2022.

 

See accompanying Notes to Financial Statements.

 63 

 

AXS Esoterica NextG Economy ETF^

STATEMENTS OF CHANGES IN NET ASSETS

 

 

   For the Period Ended March 31, 2023*   For the Year Ended October31, 2022   For the Year Ended October 31, 2021 
Increase (Decrease) in Net Assets from: Operations:            
Net investment income (loss)  $(17,146)  $(110,864)  $(147,190)
Net realized gain (loss) on investments   (770,745)   (3,458,942)   3,678,612 
Net change in unrealized appreciation/depreciation on investments and foreign currency translations   4,147,777    (16,174,608)   6,728,938 
Net increase (decrease) in net assets resulting from operations   3,359,886    (19,744,414)   10,260,360 
                
Capital Transactions:               
Net proceeds from shares sold1   -    1,671,569    38,854,282 
Cost of shares redeemed1   -    (11,425,487)   (15,090,555)
Transactions fees (Note 2c)   -    3,371    20,182 
Net increase (decrease) in net assets from capital transactions   -    (9,750,547)   23,783,909 
                
Total increase (decrease) in net assets   3,359,886    (29,494,961)   34,044,269 
                
Net Assets:               
Beginning of period   16,467,280    45,962,241    11,917,972 
End of period  $19,827,166   $16,467,280   $45,962,241 
Capital Share Transactions:               
Shares sold   -    25,000    725,000 
Shares redeemed   -    (250,000)   (275,000)
Net increase (decrease) in capital share transactions   -    (225,000)   450,000 
^With the Plan of Reorganization with respect to the AXS Esoterica NextG Economy ETF (formerly, Esoterica NextG Economy ETF), shareholders received shares ofthe AXS Esoterica NextG Economy ETF effective as ofthe close of business on December 16, 2022. See Note linthe accompanying Notes to Financial Statements.
*Fiscal year end changed to March 31, effective February 1, 2023.
1For the year ended October 31, 2022, the Fund had 250,000 Shares redeemed in-kind with total cost in the amount of $11,425,487. For the year ended October 31, 2021, the Fund had 725,000 Shares contributed in-kind with total proceeds in the amount of $38,854,252 and 275,000 Shares redeemed in-kind with total cost in the amount of $15,090,555.

 

See accompanying Notes to Financial Statements.

 64 

 

AXS Brendan Wood TopGun Index ETF

STATEMENT OF CASH FLOWS

For the Period Ended March 31, 2023*

 

 

Increase (Decrease) in Cash:    
Cash flows provided by (used for) operating activities:    
Net increase (decrease) in net assets resulting from operations  $(34,653)
Adjustments to reconcile net increase (decrease) in net assets from operations to     
net cash provided by (used for) operating activities:     
Purchases of long-term investments   (2,660,180)
Sales of long-term investments   848,686 
Return of capital dividends received   16 
(Increase) Decrease in Assets:     
Foreign currency   (164,606)
Investment securities sold receivable   (10,522)
Due from Advisor   (4,014)
Dividends and interest receivables   (1,245)
Reclaims receivable   (605)
Increase (Decrease) in Liabilities:     
Due to Custodian   173,126 
Net realized (gain)/loss   23,410 
Net change in unrealized appreciation/depreciation   16,154 
Net cash provided by (used for) operating activities   (1,814,433)
      
Cash flows provided by (used for) financing activities:     
Proceeds from shares sold   1,818,436 
Dividends paid to shareholders, net of reinvestments   (4,003)
Net cash provided by (used for) financing activities   1,814,433 
      
Net Increase (Decrease) in cash   - 
      
Cash and cash equivalents     
Beginning cash balance   - 
Beginning cash held at broker   - 
Total beginning cash and cash equivalents   - 
      
Ending cash balance   - 
Ending cash held at broker   - 
Total ending cash and cash equivalents  $- 
Supplemental disclosure of interest expense paid  $4,709 
*The Fund commenced operations on November 8, 2022.

 

See accompanying Notes to Financial Statements.

 65 

 

AXS Astoria Inflation Sensitive ETF

FINANCIAL HIGHLGHTS

 

 

Per share operating performance.

Fora capital share outstanding throughout each period.

 

   For the Year Ended March 31, 2023   For the Period Ended March 31, 2022* 
Net asset value, beginning of period  $28.49   $25.00 
Income from Investment Operations:          
Net investment income (loss)1   0.90    0.17 
Net realized and unrealized gain (loss)   (3.45)   3.32 
Total from investment operations   (2.55)   3.49 
           
Less Distributions:          
From net investment income   (0.85)   - 
Total distributions   (0.85)   - 
Net asset value, end of period  $25.09   $28.49 
           
Total return2,3   (8.72)%   13.96%4
           
Total return at market price2,5   (9.06)%   14.20%4
           
Ratios and Supplemental Data:          
Net assets, end of period (in thousands)  $68,988   $61,963 
Ratio of expenses to average net assets6   0.70%   0.70%7
Ratio of net investment income (loss) to average net assets   3.50%   2.51%7
           
Portfolio turnover rate8   81%   11%4

 

*

The Fund commenced operations on December 29, 2021.
1Based on average shares outstanding during the period.
2Total returns do not reflect the deduction of taxes that a shareholder would pay on the Fund distributions or redemption of Fund shares.
3Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning ofthe period, reinvestment of all dividends and distributions at net asset value during the period, ifany,and redemption on the last day ofthe period at net asset value. This percentage is not an indication of the performance of a shareholder's investment in the Fund based on market value due to the differences between the market price of the shares and the net asset value per share of the Fund.
4Not annualized.
5Market value total return is calculated assuming an initial investment made at market value at the beginning ofthe period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at market value. Market value is determined by the composite closing price. Composite closing security price is defined as the last reported sale price on the NYSE Arca. The composite closing price is the last reported sale, regardless of volume, and not an average price, and may have occurred on a date prior to the close of the reporting period. Market value may be greater or less than net asset value, depending on the Fund's closing price on the NYSE Arca.
6If interest expense had been excluded, the expense ratios would have remained unchanged for year ended March 31, 2023. For the period ended March 31, 2022, the ratios would have remained unchanged.
7Annualized.
8Excludes the impact of in-kind transactions related to the processing of capital share transactions in Creation Units.

 

See accompanying Notes to Financial Statements.

 66 

 

AXS Change Finance ESG ETF^

FINANCIAL HIGHLGHTS

 

 

Per share operating performance.

Fora capital share outstanding throughout each period.

 

   For the Period Ended March 31, 2023*   For the Year Ended July31, 2022   For the Year Ended July 31, 2021   For the Year Ended July 31, 2020   For the Year Ended July 31, 2019   For the Period Ended July 31, 2018** 
Net asset value, beginning of period  $28.69   $34.06   $24.44   $21.88   $19.66   $18.00 
Income from Investment Operations:                              
Net investment income (loss)1   0.22    0.29    0.25    0.29    0.30    0.17 
Net realized and unrealized gain (loss)   0.25    (5.46)   9.54    2.47    2.13    1.55 
Net increase from payments by non-affiliate (Note 3)   0.02    -    -    -    -    - 
Total from investment operations   0.49    (5.17)   9.79    2.76    2.43    1.72 
                               
Less Distributions:                              
From net investment income   (0.30)   (0.20)   (0.17)   (0.20)   (0.21)   (0.06)
Total distributions   (0.30)   (0.20)   (0.17)   (0.20)   (0.21)   (0.06)
Net asset value, end of period  $28.88   $28.69   $34.06   $24.44   $21.88   $19.66 
                               
Total return2,3   1.78%4,5   (15.29)%   40.19%   12.69%   12.63%   9.53%5
                               
Total return at market price2,6   1.74%5   (15.32)%   40.44%   12.34%   12.72%   10.26%5
                               
Ratios and Supplemental Data:                              
Net assets, end of period (in thousands)  $116,957   $103,281   $80,042   $19,551   $8,750   $3,932 
Ratio of expenses to average net assets   0.49%7   0.49%   0.49%   0.49%   0.49%   0.64%7,8
                              
Ratio of net investment income (loss) to average net assets   1.17%7   0.94%   0.82%   1.33%   1.48%   1.14%7
Portfolio turnover rate9   41%5   162%   85%   120%   46%   70%5
^Financial information from October 9, 2017 through March 18, 2022 is for the Change Finance ESG ETF, which was reorganized into the AXS Change Finance ESG ETF as ofthe close of business on March 18, 2022. See Note 1 in the accompanying Notes to Financial Statements.
*Fiscal year end changed to March 31, effective February 1, 2023.
**The Fund commenced operations on October 9, 2017.
1Based on average shares outstanding during the period.
2Total returns do not reflect the deduction of taxes that a shareholder would pay on the Fund distributions or redemption of Fund shares.
3Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at net asset value. This percentage is not an indication of the performance of a shareholder's investment in the Fund based on market value due to the differences between the market price ofthe shares and the net asset value per share ofthe Fund.
4Non-affiliate reimbursed the Fund $72,000 for errors during processing. The reimbursement had a 0.07% impact to the Fund's performance.
5Not annualized.
6Market value total return is calculated assuming an initial investment made at market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at market value. Market value is determined by the composite closing price. Composite closing security price is defined as the last reported sale price on the NYSE Arca. The composite closing price is the last reported sale, regardless of volume, and not an average price, and may have occurred on a date prior to the close of the reporting period. Market value may be greater or less than net asset value, depending on the Fund's closing price on the NYSE Arca.
7Annualized.
8Effective April 13, 2018, the adviser reduced its management fee from 0.75% to 0.49%.
9Excludes the impact of in-kind transactions related to the processing of capital share transactions in Creation Units.

 

See accompanying Notes to Financial Statements.

 67 

 

AXS First Priority CLO Bond ETF^

FINANCIAL HIGHLGHTS

 

 

Per share operating performance.

Fora capital share outstanding throughout each period.

 

   For the Period Ended March 31, 2023*   For the Year Ended July 31, 2022   For the Period Ended July 31, 2021** 
Net asset value, beginning of period  $24.39   $25.08   $25.00 
Income from Investment Operations:               
Net investment income (loss)1   0.79    0.32    0.25 
Net realized and unrealized gain (loss)   0.17    (0.74)   0.022 
Total from investment operations   0.96    (0.42)   0.27 
                
Less Distributions:               
From net investment income   (0.85)   (0.29)   (0.22)
From net realized gain   -    -3    - 
Total distributions   (0.85)   (0.29)   (0.22)
                
Transaction fees1   -    0.02    0.03 
Net asset value, end of period  $24.50   $24.39   $25.08 
                
Total return4,5   4.02%6   (1.60)%   1.21%6
                
Total return at market price4,7   4.28%6   (1.73)%   0.98%6
                
Ratios and Supplemental Data:               
Net assets, end of period (in thousands)  $7,351   $7,317   $10,033 
Ratio of expenses to average net assets   0.25%8   0.25%   0.25%8
Ratio of net investment income (loss) to average net assets   4.84%8   1.29%   1.11%8
                
Portfolio turnover rate9   8%6   73%   34%6

 

^Financial information from September 8, 2020 through October 14, 2022 is for the First Priority CLO Bond ETF, which was reorganized into the AXS First Priority CLO Bond ETF as ofthe close of business on October 14, 2022. See Note 1 in the accompanying Notes to Financial Statements.
*Fiscal year end changed to March 31, effective February 1, 2023.
**The Fund commenced operations on September 8, 2020.
1Based on average shares outstanding during the period.
2Due to timing of capital share transactions, the per share amount of net realized and unrealized gain (loss) on investments varies from the amounts shown in the Statement of Operations.
3Amount represents less than $0.01 per share.
4Total returns do not reflect the deduction of taxes that a shareholder would pay on the Fund distributions or redemption of Fund shares.
5Net asset valuetotal return is calculated assuming an initial investment made at the net asset value at the beginning ofthe period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at net asset value. This percentage is not an indication of the performance of a shareholder's investment in the Fund based on market value due to the differences between the market price ofthe shares and the net asset value per share of the Fund.
6Not annualized.
7Market value total return is calculated assuming an initial investment made at market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at market value. Market value is determined by the composite closing price. Composite closing security price is defined as the last reported sale price on NYSE Arca, Inc. The composite closing price is the last reported sale, regardless of volume, and not an average price, and may have occurred on a date prior to the close of the reporting period. Market value may be greater or less than net asset value, depending on the Fund's closing price on NYSE Arca, Inc.
8Annualized.
9Excludes the impact of in-kind transactions related to the processing of capital share transactions in Creation Units.

 

See accompanying Notes to Financial Statements.

 68 

 

AXS Green Alpha ETF

FINANCIAL HIGHLGHTS

 

 

Per share operating performance.

Fora capital share outstanding throughout each period.

 

   For the Period Ended March 31, 2023* 
Net asset value, beginning of period  $30.00 
Income from Investment Operations:     
Net investment income (loss)1   0.11 
Net realized and unrealized gain (loss)   1.86 
Total from investment operations   1.97 
      
Less Distributions:     
From net investment income   (0.04)
Total distributions   (0.04)
      
Net asset value, end of period  $31.93 
      
Total return2,3   6.57%4
      
Total return at market price2,5   6.80%4
      
Ratios and Supplemental Data:     
Net assets, end of period (in thousands)  $69,935 
Ratio of expenses to average net assets6   1.00%7
Ratio of net investment income (loss) to average net assets   0.68%7
Portfolio turnover rate8   2%4
*The Fund commenced operations on September 27, 2022.
1Based on average shares outstanding during the period.
2Total returns do not reflect the deduction of taxes that a shareholder would pay on the Fund distributions or redemption of Fund shares.
3Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning ofthe period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at net asset value. This percentage is not an indication of the performance of a shareholder's investment in the Fund based on market value due to the differences between the market price of the shares and the net asset value per share of the Fund.
4Not annualized.
5Market value total return is calculated assuming an initial investment made at market value at the beginning ofthe period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at market value. Market value is determined by the composite closing price. Composite closing security price is defined as the last reported sale price on the NYSE Arca. The composite closing price is the last reported sale, regardless of volume, and not an average price, and may have occurred on a date prior to the close of the reporting period. Market value may be greater or less than net asset value, depending on the Fund's closing price on the NYSE Arca.
6If interest expense had been excluded, the expense ratios would have remained unchanged for the period ended March 31, 2023.
7Annualized.
8Excludes the impact of in-kind transactions related to the processing of capital share transactions in Creation Units.

 

See accompanying Notes to Financial Statements.

 69 

 

AXS Brendan Wood TopGun Index ETF

FINANCIAL HIGHLGHTS

 

 

Per share operating performance.

For a capital share outstanding throughout each period.

 

   For the Period Ended March 31, 2023* 
Net asset value, beginning of period  $30.00 
Income from Investment Operations:     
Net investment income (loss)1   0.09 
Net realized and unrealized gain (loss)   (0.35)
Total from investment operations   (0.26)
      
Less Distributions:     
From net investment income   (0.08)
Total distributions   (0.08)
Net asset value, end of period  $29.66 
      
Total return2,3   (0.86)%4
      
Total return at market price2,5   (0.69)%4
Ratios and Supplemental Data:     
Net assets, end of period (in thousands)  $1,780 
Ratio of expenses to average net assets   1.73%6,7
Ratio of net investment income (loss) to average net assets   0.75%6
Portfolio turnover rate8   51%4
*The Fund commenced operations on November 8, 2022.
1Based on average shares outstanding during the period.
2Total returns do not reflect the deduction of taxes that a shareholder would pay on the Fund distributions or redemption of Fund shares.
3Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning ofthe period, reinvestment of all dividends and distributions at net asset value during the period, ifany,and redemption on the last day ofthe period at net asset value. This percentage is not an indication of the performance of a shareholder's investment in the Fund based on market value due to the differences between the market price of the shares and the net asset value per share of the Fund.
4Not annualized.
5Market value total return is calculated assuming an initial investment made at market value at the beginning ofthe period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at market value. Market value is determined by the composite closing price. Composite closing security price is defined as the last reported sale price on NYSE Arca, Inc. The composite closing price is the last reported sale, regardless of volume, and not an average price, and may have occurred on a date prior to the close of the reporting period. Market value may be greater or less than net asset value, depending on the Fund's closing price on NYSE Arca, Inc.
6Annualized.
7If interest expense had been excluded, the expense ratio would have been lowered by 0.75% for the period ended March 31, 2023.
8Excludes the impact of in-kind transactions related to the processing of capital share transactions in Creation Units.

 

See accompanying Notes to Financial Statements.

 70 

 

AXS Esoterica NextG Economy ETF^

FINANCIAL HIGHLGHTS

 

 

Per share operating performance.

Fora capital share outstanding throughout each period.

 

   For the Period Ended March 31, 2023*   For the Year Ended October 31, 2022   For the Year Ended October 31, 2021   For the Period Ended October 31, 2020** 
Net asset value, beginning of period  $32.88   $63.33   $43.22   $25.60 
Income from Investment Operations:                    
Net investment income (loss)1   (0.03)   (0.18)   (0.20)   (0.07)
Net realized and unrealized gain (loss)   6.74    (30.28)   20.28    17.69 
Total from investment operations   6.71    (30.46)   20.08    17.62 
                     
Transaction fees1   -    0.01    0.03    -2 
Net asset value, end of period  $39.59   $32.88   $63.33   $43.22 
                     
Total return3,4   20.41%5   (48.08)%   46.53%   68.85%5
                     
Total return at market price3,6   20.26%5   (48.05)%   46.27%   68.80%5
                     
Ratios and Supplemental Data:                    
Net assets, end of period (in thousands)  $19,827   $16,467   $45,962   $11,918 
                     
Ratio of expenses to average net assets:                    
Before fees waived and expenses absorbed/recovered   2.13%7   2.01%   1.55%   3.90%7
After fees waived and expenses absorbed/recovered   0.75%7   0.75%   0.75%   0.75%7
Ratio of net investment income (loss) to average net assets:                    
Before fees waived and expenses absorbed/recovered   (1.62)%7   (1.62)%   (1.16)%   (3.44)%7
After fees waived and expenses absorbed/recovered   (0.24)%7   (0.36)%   (0.36)%   (0.29)%7
                     
Portfolio turnover rate8   16%5   31%   29%   130%5
^Financial information from March 30, 2020through December 16, 2022 is forthe Esoterica NextG Economy ETF, which was reorganized into the AXS Esoterica NextG Economy ETF as of the close of business on December 16, 2022. See Note 1 in the accompanying Notes to Financial Statements.
*Fiscal year end changed to March 31, effective February 1, 2023.
**The Fund commenced operations on March 30, 2020.
1Based on average shares outstanding during the period.
2Amount represents less than $0.01 per share.
3Total return would have been lower had fees not been waived or absorbed by the Advisor. These returns do not reflect the deduction of taxes that a shareholder would pay on the Fund distributions or redemption of Fund shares.
4Net asset valuetotal return is calculated assuming an initial investment made at the net asset value at the beginning ofthe period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at net asset value. This percentage is not an indication of the performance of a shareholder's investment in the Fund based on market value due to the differences between the market price ofthe shares and the net asset value per share ofthe Fund.
5Not annualized.
6Market value total return is calculated assuming an initial investment made at market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at market value. Market value is determined by the composite closing price. Composite closing security price is defined as the last reported sale price on Cboe BZX Exchange, Inc. The composite closing price is the last reported sale, regardless of volume, and not an average price, and may have occurred on a date prior to the close of the reporting period. Market value may be greater or less than net asset value, depending on the Fund's closing price on Cboe BZX Exchange, Inc.
7Annualized.
8Excludes the impact of in-kind transactions related to the processing of capital share transactions in Creation Units.

 

See accompanying Notes to Financial Statements.

 71 

 

AXS Funds

NOTES TO FINANCIAL STATEMENTS

March 31, 2023

 

 

Note 1 – Organization

 

AXS Astoria Inflation Sensitive ETF (the “Astoria Inflation Sensitive ETF”), AXS Change Finance ESG ETF (the “Change Finance ESG ETF”), AXS First Priority CLO Bond ETF (the “First Priority CLO Bond ETF”), AXS Green Alpha ETF (the “Green Alpha ETF”), AXS Brendan Wood TopGun Index ETF (the “Brendan Wood TopGun Index ETF”) and AXS Esoterica NextG Economy ETF (the “Esoterica NextG Economy ETF”) (each a “Fund” and collectively the ‘‘Funds’’) are organized as a series of Investment Managers Series Trust II, a Delaware statutory trust (the “Trust”) which is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”).

 

The Astoria Inflation Sensitive ETF’s primary investment objective is to seek long-term capital appreciation in inflation-adjusted terms. The Astoria Inflation Sensitive ETF is classified as a non-diversified Fund. The Astoria Inflation Sensitive ETF is an actively managed exchange-traded fund (“ETF”). The Astoria Inflation Sensitive ETF commenced operations on December 29, 2021.

 

The Change Finance ESG ETF’s primary investment objective is to seek to track the performance, before fees and expenses, of the Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free Index. The Change Finance ESG ETF is classified as a diversified Fund. The Change Finance ESG ETF is a passively managed ETF. Effective February 1, 2023, the Change Finance ESG ETF changed fiscal and tax year ends from July 31st to March 31st.

 

The Change Finance ESG ETF commenced investment operations on March 21, 2022. Prior to that date, the Change Finance ESG ETF acquired the assets and assumed the liabilities of the Change Finance U.S. Large Cap Fossil Fuel Free ETF (the "Change Finance ESG ETF Predecessor Fund"), a series of ETF Series Solutions in a tax-free reorganization as set out in the Agreement and Plan of Reorganization. The proposed Plan of Reorganization was approved by the Trust’s Board on December 6, 2021, by the Board of ETF Series Solutions on December 13, 2021, and by beneficial owners of the Change Finance ESG ETF Predecessor Fund on March 15, 2022. The tax-free reorganization was accomplished on March 18, 2022. As a result of the reorganization, the Change Finance ESG ETF assumed the performance and accounting history of the Change Finance ESG ETF Predecessor Fund. Financial information included for the dates prior to the reorganization is that of the Change Finance ESG ETF Predecessor Fund.

 

The reorganization was accomplished by the following tax-free exchange in which each shareholder of the Change Finance ESG ETF Predecessor Fund received the same aggregate share net asset value in the corresponding classes as noted below:

 

  Shares Issued   Net Assets
   3,850,000 $ 120,130,454

 

The net unrealized appreciation of investments transferred was $2,026,619 as of the date of the acquisition.

 

The First Priority CLO Bond ETF’s primary investment objective is to seek capital preservation and income. The First Priority CLO Bond ETF is classified as a diversified Fund. The First Priority CLO Bond ETF is an actively managed ETF. Effective February 1, 2023, the First Priority CLO Bond ETF changed fiscal year end from July 31st to March 31st.

 

The First Priority CLO Bond ETF commenced investment operations on October 17, 2022. Prior to that date, the First Priority CLO Bond ETF acquired the assets and assumed the liabilities of the AAF First Priority CLO Bond ETF (the "First Priority CLO Bond ETF Predecessor Fund"), a series of Listed Funds Trust in a tax-free reorganization as set out in the Agreement and Plan of Reorganization. The proposed Plan of Reorganization was approved by the Trust’s Board on April 21, 2022, by the Board of Listed Funds Trust on April 13, 2022, and by beneficial owners of the First Priority CLO Bond ETF Predecessor Fund on June 21, 2022. The tax-free reorganization was accomplished on October 14, 2022. As a result of the reorganization, the First Priority CLO Bond ETF assumed the performance and accounting history of the First Priority CLO Bond ETF Predecessor Fund. Financial information included for the dates prior to the reorganization is that of the First Priority CLO Bond ETF Predecessor Fund.

 

 72 

 

AXS Funds

NOTES TO FINANCIAL STATEMENTS - Continued

March 31, 2023

 

 

The reorganization was accomplished by the following tax-free exchange in which each shareholder of the AAF First Priority CLO Bond ETF Predecessor Fund received the same aggregate share net asset value in the corresponding classes as noted below:

 

  Shares Issued   Net Assets
  300,000 $ 7,243,274

 

The net unrealized depreciation of investments transferred was $198,016 as of the date of the acquisition.

 

The Green Alpha ETF’s primary investment objective is to seek long-term capital appreciation. The Green Alpha ETF is classified as a diversified Fund. The Green Alpha ETF is an actively managed ETF. The Green Alpha ETF commenced operations on September 27, 2022.

 

The Brendan Wood TopGun Index ETF’s primary investment objective is to seek to track the performance, before fees and expenses, of the Brendan Wood TopGun Index. The Brendan Wood TopGun Index ETF is classified as a non-diversified Fund. The Brendan Wood TopGun Index ETF is a passively managed ETF. The Brendan Wood TopGun Index ETF commenced operations on November 8, 2022.

 

The Esoterica NextG Economy ETF’s primary investment objective is to seek capital appreciation. The Esoterica NextG Economy ETF is an actively managed ETF. The Esoterica NextG Economy ETF is a non-diversified fund. Effective February 1, 2023, the Esoterica NextG Economy ETF changed fiscal year end from October 31st to March 31st.

 

The Esoterica NextG Economy ETF commenced investment operations on December 19, 2022. Prior to that date, the Esoterica NextG Economy ETF acquired the assets and assumed the liabilities of the Esoterica NextG Economy ETF (the "Esoterica NextG Economy ETF Predecessor Fund"), a series of Listed Funds Trust in a tax-free reorganization as set out in the Agreement and Plan of Reorganization. The proposed Plan of Reorganization was approved by the Trust’s Board on October 18, 2022, by the Esoterica Thematic Trust on October 13, 2022, and by beneficial owners of the Esoterica NextG Economy ETF Predecessor Fund on December 15, 2022. The tax-free reorganization was accomplished on December 16, 2022. As a result of the reorganization, the Esoterica NextG Economy ETF assumed the performance and accounting history of the Esoterica NextG Economy ETF Predecessor Fund. Financial information included for the dates prior to the reorganization is that of the Esoterica NextG Economy ETF Predecessor Fund.

 

The reorganization was accomplished by the following tax-free exchange in which each shareholder of the Esoterica NextG Economy ETF Predecessor Fund received the same aggregate share net asset value in the corresponding classes as noted below:

 

  Shares Issued   Net Assets
  500,754 $ 16,579,393

 

 The net unrealized depreciation of investments transferred was $7,610,299 as of the date of the acquisition.

 

 73 

 

AXS Funds

NOTES TO FINANCIAL STATEMENTS - Continued

March 31, 2023

 

 

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

 

Note 2 – Accounting Policies

The following is a summary of the significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.

 

(a) Valuation of Investments

The Funds value equity securities at the last reported sale price on the principal exchange or in the principal over the counter (“OTC”) market in which such securities are traded, as of the close of regular trading on the NYSE on the day the securities are being valued or, if the last-quoted sales price is not readily available, the securities will be valued at the last bid or the mean between the last available bid and ask price. Securities traded on the NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). Investments in open-end investment companies are valued at the daily closing net asset value of the respective investment company. Debt securities are valued by utilizing a price supplied by independent pricing service providers. The independent pricing service providers may use various valuation methodologies including matrix pricing and other analytical pricing models as well as market transactions and dealer quotations. These models generally consider such factors as yields or prices of bonds of comparable quality, type of issue, coupon, maturity, ratings and general market conditions. If a price is not readily available for a portfolio security, the security will be valued at fair value (the amount which the Funds might reasonably expect to receive for the security upon its current sale). The Board of Trustees has designated the Advisor as the Funds’ valuation designee (the “Valuation Designee”) to make all fair value determinations with respect to the Funds’ portfolio investments, subject to the Board’s oversight. As the Valuation Designee, the Advisor has adopted and implemented policies and procedures to be followed when the Funds must utilize fair value pricing. Prior to September 8, 2022, security valued at fair value as determined in good faith by the Funds’ advisor, subject to review and approval by the Valuation Committee, pursuant to procedures adopted by the Board of Trustees. The actions of the Valuation Committee were subsequently reviewed by the Board at its next regularly scheduled board meeting. The Valuation Committee met as needed. The Valuation Committee was comprised of all the Trustees, but action may had been taken by any one of the Trustees.

 

Foreign securities traded in countries outside the U.S. are fair valued by utilizing the quotations of an independent pricing service. The pricing service uses statistical analyses and quantitative models to adjust local prices using factors such as subsequent movement and changes in the prices of indexes, securities and exchange rates in other markets in determining fair value as of the time the Funds calculate the NAVs. The Board reviews the independent third party fair valuation analysis report quarterly.

 

(b) Investment Transactions, Investment Income and Expenses

Investment transactions are accounted for on the trade date. Realized gains and losses on investments are determined on the identified cost basis. Dividend income is recorded net of applicable withholding taxes on the ex-dividend date and interest income is recorded on an accrual basis. Withholding taxes on foreign dividends, if applicable, are paid (a portion of which may be reclaimable) or provided for in accordance with the applicable country’s tax rules and rates and are disclosed in the Statement of Operations. Withholding tax reclaims are filed in certain countries to recover a portion of the amounts previously withheld. The Funds record a reclaim receivable based on a number of factors, including a jurisdiction’s legal obligation to pay reclaims as well as payment history and market convention. Discounts on debt securities are accreted or amortized to interest income over the lives of the respective securities using the effective interest method. Premiums for callable debt securities are amortized to the earliest call date, if the call price was less than the purchase price. If the call price was not at par and the security was not called, the security is amortized to the next call price and date.

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March 31, 2023

 

 

(c) Capital Share Transactions

Fund Shares are listed and traded on the Exchange on each day that the Exchange is open for business (“Business Day”). Individual Fund Shares may only be purchased and sold on the Exchange through a broker-dealer. Because the Funds’ Shares trade at market prices rather than at their NAV, Shares may trade at a price equal to the NAV, greater than NAV (premium) or less than NAV (discount).

 

The Funds offer and redeem Shares on a continuous basis at NAV only in large blocks of Shares, currently 25,000 Shares for the Astoria Inflation Sensitive ETF, Change Finance ESG ETF and Esoterica NextG Economy ETF, 100,000 Shares for the First Priority CLO Bond ETF and 10,000 Shares for the Green Alpha ETF and Brendan Wood TopGun Index ETF, respectively (“Creation Unit”). Except when aggregated in Creation Units, Shares are not redeemable securities of the Funds. Fund Shares may only be purchased from or redeemed to the Funds 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 (“DTC”) participant and, in each case, must have executed a Participant Agreement with the Distributor. Creation Units are available for purchase and redemption on each Business Day and are offered and redeemed on an in-kind basis, together with the specified cash amount, or for an all cash amount.

 

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 by the Distributor, on behalf of the Funds, 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 market value as set forth in the Participant Agreement. A participant agreement may permit the Funds 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 Funds acquiring such shares and the value of the collateral.

 

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 Funds. Rather, most retail investors will purchase Shares in the secondary market with the assistance of a broker, which will be subject to customary brokerage commissions or fees.

 

A fixed purchase (i.e., creation) transaction fee is imposed for the transfer and other transaction costs associated with the purchase of Creation Units, and investors will be required to pay a creation transaction fee regardless of the number of Creation Units created in the transaction. The Funds may adjust the creation transaction fee from time to time based upon actual experience. In addition, a variable fee may be imposed for cash purchases, non-standard orders, or partial cash purchases of Creation Units. The variable fee is primarily designed to cover non-standard charges, e.g., brokerage, taxes, foreign exchange, execution, market impact, and other costs and expenses, related to the execution of trades resulting from such transaction. The Funds may adjust the non-standard charge from time to time based upon actual experience. Investors who use the services of an Authorized Participant, broker or other such intermediary may be charged a fee for such services which may include an amount for the creation transaction fee and non-standard charges. Investors are responsible for the costs of transferring the securities constituting the deposit securities to the account of the Trust. The Adviser may retain all or a portion of the transaction fee to the extent the Adviser bears the expenses that otherwise would be borne by the Trust in connection with the issuance of a Creation Unit, which the transaction fee is designed to cover. The standard Creation Unit transaction fee for the Astoria Inflation Sensitive ETF, Change Finance ESG ETF, First Priority CLO Bond ETF, Green Alpha ETF, Brendan Wood TopGun Index ETF and Esoterica NextG Economy ETF is $350, $350, $100, $100, $100 and $500, respectively, regardless of the number of Creation Units created in the transaction.

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March 31, 2023

 

 

A fixed redemption transaction fee may be imposed for the transfer and other transaction costs associated with the redemption of Creation Units, and Authorized Participants will be required to pay a redemption transaction fee regardless of the number of Creation Units created in the transaction. The redemption transaction fee is the same no matter how many Creation Units are being redeemed pursuant to any one redemption request. The Funds may adjust the redemption transaction fee from time to time based upon actual experience. In addition, a variable fee, payable to the Funds, may be imposed for cash redemptions, non-standard orders, or partial cash redemptions for the Funds. The variable fee is primarily designed to cover non-standard charges, e.g., brokerage, taxes, foreign exchange, execution, market impact, and other costs and expenses, related to the execution of trades resulting from such transaction. Investors who use the services of an Authorized Participant, broker or other such intermediary may be charged a fee for such services which may include an amount for the redemption transaction fees and non-standard charges. Investors are responsible for the costs of transferring the securities constituting the Funds securities to the account of the Trust. The non-standard charges are payable to the Funds as it incurs costs in connection with the redemption of Creation Units, the receipt of Funds securities and the cash redemption amount and other transactions costs. The standard redemption transaction fee for the Astoria Inflation Sensitive ETF, Change Finance ESG ETF, First Priority CLO Bond ETF, Green Alpha ETF, Brendan Wood TopGun Index ETF and Esoterica NextG Economy ETF is $350, $350, $100, $100, $100 and $500, respectively, regardless of the number of Creation Units redeemed in the transaction.

 

(d) Foreign Currency Translation

The Funds’ records are maintained in U.S. dollars. The value of securities, currencies and other assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon foreign exchange rates prevailing at the end of the reporting period. The currencies are translated into U.S. dollars by using the exchange rates quoted as of 4:00 PM Eastern Standard Time. Purchases and sales of investment securities, income and expenses are translated on the respective dates of such transactions.

 

The Funds do not isolate that portion of its net realized and unrealized gains and losses on investments resulting from changes in foreign exchange rates from the impact arising from changes in market prices. Such fluctuations are included with net realized and unrealized gain or loss from investments and foreign currency.

 

Net realized foreign currency transaction gains and losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the differences between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency translation gains and losses arise from changes in the value of assets and liabilities, other than investments in securities, resulting from changes in the exchange rates.

 

(e) Federal Income Taxes

The Funds intend to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its net investment income and any net realized gains to its shareholders. Therefore, no provision is made for federal income or excise taxes. Due to the timing of dividend distributions and the differences in accounting for income and realized gains and losses for financial statement and federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains and losses are recorded by the Funds.

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March 31, 2023

 

 

Accounting for Uncertainty in Income Taxes (the “Income Tax Statement”) requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Funds’ tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations.

 

The Income Tax Statement requires management of the Funds to analyze tax positions taken in the prior three open tax years, if any, and tax positions expected to be taken in the Funds’ current tax year, as defined by the IRS statute of limitations for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of March 31, 2023, and during the prior open tax years, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examination in progress and are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

(f) Distributions to Shareholders

The Funds will make distributions of net investment income per the table below and net capital gains, if any, at least annually. Distributions to shareholders are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.

 

  Distribution Frequency of
  Net Investment Income
Astoria Inflation Sensitive ETF Quarterly
Change Finance ESG ETF Annually
First Priority CLO Bond ETF Monthly
Green Alpha ETF Quarterly
Brendan Wood TopGun Index ETF Annually
Esoterica NextG Economy ETF Annually

 

The character of distributions made during the year from net investment income or net realized gains may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expense and gain (loss) items for financial statement and tax purposes.

 

(g) Illiquid Securities

Pursuant to Rule 22e-4 under the 1940 Act, the Funds have adopted a Liquidity Risk Management Program (“LRMP”) that requires, among other things, that the Funds limit its illiquid investments that are assets to no more than 15% of net assets. An illiquid investment is any security which may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. If the Advisor, at any time, determines that the value of illiquid securities held by the Funds exceed 15% of its NAV, the Advisor will take such steps as it considers appropriate to reduce them as soon as reasonably practicable in accordance with the Funds’ written LRMP.

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March 31, 2023

 

 

(h) Exchange Traded Funds (ETFs)

ETFs typically trade on securities exchanges and their shares may, at times, trade at a premium or discount to their net asset values. In addition, an ETF may not replicate exactly the performance of the benchmark index it seeks to track for a number of reasons, including transaction costs incurred by the ETF, the temporary unavailability of certain index securities in the secondary market or discrepancies between the ETF and the index with respect to the weighting of securities or the number of securities held. Investing in ETFs, which are investment companies, may involve duplication of advisory fees and certain other expenses. As a result, Fund shareholders indirectly bear their proportionate share of these acquired expenses. Therefore, the cost of investing in the Funds will be higher than the cost of investing directly in ETFs and may be higher than other mutual funds that invest directly in securities.

 

Each ETF in which the Funds invest is subject to specific risks, depending on the nature of the ETF. Each ETF is subject to the risks associated with direct ownership of the securities comprising the index on which the ETF is based. These risks could include liquidity risk, sector risk as well as risks associated with fixed-income securities.

 

Note 3 – Investment Advisory and Other Agreements

The Trust, on behalf of each Fund, entered into an Investment Advisory Agreement (the “Agreement”) with AXS Investments LLC (the “Advisor”). Under the terms of the Agreement, the Funds pay a monthly investment advisory fee to the Advisor based on each Fund’s average daily net assets. The annual rates are listed in the table below:

 

  Investment Advisory Fees
Astoria Inflation Sensitive ETF 0.70%
Change Finance ESG ETF 0.49%
First Priority CLO Bond ETF  0.25%
Green Alpha ETF 1.00%
Brendan Wood TopGun Index ETF 0.98%
Esoterica NextG Economy ETF 0.75%

 

The Advisor has agreed to pay all expenses of the Astoria Inflation Sensitive ETF, Change Finance ESG ETF, First Priority CLO Bond ETF, Green Alpha ETF and Brendan Wood TopGun Index ETF except for the advisory fee, interest, dividends and other expenses on securities sold short, taxes, brokerage commissions and other expenses incurred in placing or settlement of 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 fees and expenses paid under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act.

 

Prior to the close of business on December 16, 2022, investment advisory services were provided to the Esoterica NextG Economy ETF Predecessor Fund by Esoterica Capital LLC (“Esoterica” or “Sub-Advisor”), which received investment management fees for its services pursuant to the terms of the investment advisory agreements for the Fund’s Predecessor Fund’s. The investment advisory fees, which were computed and accrued daily and paid monthly, at an annual rate of 0.75% of the Funds’ average daily net assets. For the period December 17, 2022 through March 31, 2023, the Esoterica NextG Economy ETF paid the Advisor $38,285. For the period November 1, 2022 through December 16, 2022, the NextG Economy ETF Predecessor Fund paid Esoterica $15,911.

 

The Advisor has contractually agreed to waive its fee and, if necessary, to absorb other operating expenses to ensure that total annual operating expenses (excluding any taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses as determined in accordance with Form N-1A, other fees related to underlying investments (such as option fees and expenses or swap fees and expenses), expenses incurred in connection with any merger or reorganization, and extraordinary expenses such as litigation expenses) in order to limit total annual operating expenses of each fund. This agreement is in effect until December 16, 2024 for the Esoterica NextG Economy ETF and it may be terminated before that date only by the Trust’s Board of Trustees. The table below contains the expense cap by Fund:

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NOTES TO FINANCIAL STATEMENTS - Continued

March 31, 2023

 

 

  Total Limit on Annual
  Operating Expenses
Esoterica NextG Economy ETF 0.75%

 

The Advisor is permitted to seek reimbursement from the Fund, subject to certain limitations, of fees waived or payments made to the Fund for a period of three years after the date of the waiver or payment. This reimbursement may be requested from the Fund if the reimbursement will not cause the Esoterica NextG Economy ETF’s annual expense ratio to exceed the lesser of (a) the expense limitation amount in effect at the time such fees were waived or payments made, or (b) the expense limitation amount in effect at the time of the reimbursement. The Advisor may recapture all or a portion of this amount no later than the years stated below:

 

   Esoterica NextG
Economy ETF
 
March 31, 2026  $51,804 
Total  $51,804 

 

For the period November 1, 2022 through December 16, 2022, Esoterica waived advisory fees and other expenses absorbed totaling $47,943 for the Esoterica NextG Economy ETF Predecessor Fund. These amounts are not recoupable.

 

The Advisor has engaged Astoria Portfolio Advisors LLC (“Astoria”) to manage the Astoria Inflation Sensitive ETF’s overall investment program and pays Astoria an annual sub-advisory fee based upon the Astoria Inflation Sensitive ETF’s average daily net assets. The Advisor is responsible for paying the entire amount of Astoria’s sub-advisory fee. The Astoria Inflation Sensitive ETF does not directly pay the Sub-Advisor.

 

The Advisor has engaged Change Finance, PBC (“Change Finance” or the “Sub-Advisor”) to manage the Change Finance ESG ETF’s overall investment program and pays Change Finance an annual sub-advisory fee based upon the Change Finance ESG ETF’s investment advisory fees. The Advisor is responsible for paying the entire amount of Change Finance’s sub-advisory fee. The Change Finance ESG ETF does not directly pay the Sub-Advisor.

 

The Advisor has engaged Alternative Access Funds, LLC (“AAF” or the “Sub-Advisor”) to manage the First Priority CLO Bond ETF’s overall investment program and pays AAF an annual sub-advisory fee based upon the First Priority CLO Bond ETF’s investment advisory fees. The Advisor is responsible for paying the entire amount of AAF’s sub-advisory fee. The First Priority CLO Bond ETF does not directly pay the Sub-Advisor.

 

The Advisor has engaged Green Alpha Advisors, LLC (“Green Alpha”) to manage the Green Alpha ETF’s overall investment program and pays Green Alpha an annual sub-advisory fee based upon the Green Alpha ETF’s investment advisory fees. The Advisor is responsible for paying the entire amount of Green Alpha’s sub-advisory fee. The Green Alpha ETF does not directly pay the Sub-Advisor.

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March 31, 2023

 

 

The Advisor has engaged Esoterica to manage the Esoterica NextG Economy ETF’s overall investment program and pays Esoterica an annual sub-advisory fee based upon the Esoterica NextG Economy ETF’s investment advisory fees. The Advisor is responsible for paying the entire amount of Esoterica’s sub-advisory fee. The Esoterica NextG Economy ETF does not directly pay the Sub-Advisor.

 

Brown Brothers Harriman & Co. (“BBH”) serves as the Funds’ fund accountant, transfer agent and custodian. UMB Fund Services (“UMBFS”) and Mutual Fund Administration, LLC (“MFAC”) serve as the Funds’ co-administrators. For the period December 17, 2022 through March 31, 2023, the Esoterica NextG Economy ETF paid BBH $15,133. For the period December 17, 2022 through March 31, 2023, the Esoterica NextG Economy ETF paid UMBFS and MFAC $2,184. Prior to the close of business on December 16, 2022, BBH served as the administrator, fund accountant, transfer agent and custodian to the Esoterica NextG Economy ETF Predecessor Fund. For the period November 1, 2022 through December 16, 2022, the Esoterica NextG Economy ETF Predecessor Fund paid BBH $15,304.

 

Prior to the close of business on October 14, 2022, U.S. Bank Global Fund Services (“Fund Services”) served as the administrator, fund accountant, and transfer agent to the First Priority CLO Bond ETF Predecessor Fund and U.S. Bank N.A. served as the First Priority CLO Bond ETF Predecessor Fund’s Custodian.

 

ALPS Distributors, Inc. serves as the Funds’ Distributor (the “Distributor”). Prior to January 1, 2023, IMST Distributors, LLC served as the Funds’ Distributor. The Distributor does not receive compensation from the Funds for its distribution services; the Advisor pays the Distributor a fee for its distribution-related services. Prior to the close of business on October 14, 2022, Quasar Distributors, LLC served as the First Priority CLO Bond ETF Predecessor Fund’s Distributor. Prior to the close of business on December 16, 2022, Foreside Fund Services, LLC served as the Esoterica NextG Economy ETF Predecessor Fund’s Distributor.

 

Certain trustees and officers of the Trust are employees of UMBFS or MFAC. The Funds do not compensate trustees and officers affiliated with the Funds’ co-administrators. For the periods ended March 31, 2023, the Funds’ allocated fees incurred to Trustees who are not affiliated with the Funds’ co-administrators are reported on the Statements of Operations. For the period December 17, 2022 through March 31, 2023, the Esoterica NextG Economy ETF paid trustees fees of $1,726. For the period November 1, 2022 through December 16, 2022, the Esoterica NextG Economy ETF Predecessor Fund paid trustees fees of $5,617.

 

The Funds’ Board of Trustees has adopted a Deferred Compensation Plan (the “Plan”) for the Independent Trustees that enables Trustees to elect to receive payment in cash or the option to select various Fund in the Trust in which their deferred accounts shall be deemed to be invested. If a trustee elects to defer payment, the Plan provides for the creation of a deferred payment account. The Funds’ liability for these amounts are adjusted for market value changes in the invested Fund and remains a liability to the Fund until distributed in accordance with the Plan. The Trustees Deferred compensation liability under the Plan constitutes a general unsecured obligation of the Funds and are disclosed in the Statements of Assets and Liabilities. Contributions made under the plan and the change in unrealized appreciation (depreciation) and income are included in the Trustees' fees and expenses in the Statements of Operations.

 

Dziura Compliance Consulting, LLC provides Chief Compliance Officer (“CCO”) services to the Trust. Prior to the close of business on October 14, 2022, Fund Services served as the First Priority CLO Bond ETF Predecessor Fund’s CCO. Prior to the close of business on December 16, 2022, Foreside Fund Officer Services, LLC (“Foreside”) served as the Esoterica NextG Economy ETF Predecessor Fund’s CCO. For the period December 17, 2022 through March 31, 2023, the Esoterica NextG Economy ETF paid the CCO $4,445. For the period November 1, 2022 through December 16, 2022, Esoterica NextG Economy ETF Predecessor Fund paid Foreside $6,832.