Innovation Shares focuses on themes that investors are talking about but have a hard time accessing. The real innovation behind its strategy is the AI powered natural language processing algorithm used to select stocks, which was developed at one of the world’s largest quantitative hedge funds. By harnessing the potential of textual analysis, companies are identified that might otherwise be overlooked by traditional analytical research.
Innovation Shares NextGen Protocol ETF (KOIN): Blockchain is a new digital protocol for authentication and authorization that allows parties to bypass a centralized administrator. To give this basket a more defined framework, stocks are placed in one of four custom stakeholder categories in terms of how they relate to the theme: Cryptocurrency as Payment 1, Mining Enablers 2, Solutions Providers 3 and Adopters 4.
By investing in the benchmark constituents, KOIN seeks to give investors access to companies that may benefit from a technology that has the potential to revolutionize the way global trade is conducted, data is secured, supply chains are managed, financial instruments are cleared and contracts are recorded.
The Innovation Shares NextGen Vehicles & Technology ETF (EKAR) tracks the Innovation Labs Next Generation Vehicles Index, which is comprised of a basket of global stocks that have exposure to the theme of electric and selfdriving/autonomous vehicles. Over the next decade, auto industry experts expect a dramatic production shift away from light vehicles powered by internal combustion engines to those propelled by electric batteries. Meanwhile, the world’s adoption of autonomous vehicles is being supported by a growing trend toward shared mobility, technological advancements and an evolving regulatory environment. To give this basket a more defined framework, stocks are placed in one of four custom stakeholder categories in terms of how they relate to the theme: Battery 5, OEMs 6, Suppliers 7 and Semis & Software 8.
Carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund's prospectus, which may be obtained by visiting innovationshares.com. Investors should read it carefully before investing or sending money.
Investing involves risk, including possible loss of principal. International investments may also involve risk from unfavorable fluctuations in currency values, differences in generally accepted accounting principles, and from economic or political instability. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments and investments in smaller companies typically exhibit higher volatility. There is no guarantee the fund will achieve its stated objective.
There is no assurance that stocks selected according to the natural language processing algorithm will outperform stocks of other companies. There is no guarantee that the Methodology will generate or produce the intended results.
[specific to KOIN] Currently, there are few public companies for which Blockchain technology represents an attributable and significant revenue stream, and companies eligible for inclusion in the index may have minimal ties to blockchain. In addition: cryptographic keys necessary to transact on a blockchain may be subject to theft, loss, or destruction; competing platforms and technologies may be developed that consumers use instead of blockchain; that companies that use blockchain technology may be subject to cybersecurity risk, and that such companies may not be able to develop applications or may not be able to capitalize on them; that there may be a lack of liquid markets and possible manipulation of blockchain-based assets; that there may be risks posed by the lack of regulation in this space; that blockchain systems built using third party products may be subject to technical defects or vulnerabilities beyond a company's control; and that blockchain is a new and untested technology which may never be implemented on a scale that provides identifiable benefits.
[specific to EKAR] Next Generation Vehicles are a relatively new development and there can be no assurance that they will be widely adopted by the general public. Companies may be subject to risks related to rapid changes in technology, worldwide competition, rapid obsolescence of products and services, loss of patent protections, evolving industry standards and frequent new product production, and changes in business cycle and government regulation. The fund will be subject to the risks of its underlying holdings, that may include, battery producers, mining companies, producers or distributors of parts and components, software, semiconductors, that the technologies may not succeed.
Shares are bought and sold at market price not net asset value (NAV) and are not individually redeemed from the Fund. Market performance is determined using the bid/ask midpoint at 4:00pm Eastern time when the NAV is typically calculated and do not represent the returns an investor would receive if shares were traded at other times. Brokerage commissions will reduce returns.
Exchange Traded Concepts, LLC serves as the investment advisor, and Penserra Capital Management LLC serves as the sub-advisor to the fund. The Funds are distributed by SEI Investments Distribution Co. (1 Freedom Valley Drive, Oaks, PA, 19456), which is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.