Calendar Reset Leveraged ETFs

The Tradr Calendar Reset Leveraged ETFs provide a return based on the performance of the underlying reference security for one of the following specified reset periods:

• Weekly: A full calendar week is defined as the close of trading on the last business day of one calendar week to the close of trading on the last business day of the following calendar week.

• Monthly: A full calendar month is defined as the close of trading on the last business day of one calendar month to the close of trading on the last business day of the following calendar month.

• Quarterly: A full calendar quarter is defined as the close of trading on the last business day of one calendar quarter to the close of trading on the last business day of the following calendar quarter.

A key advantage of all Exchange Traded Funds, including Tradr ETFs, is that you can purchase and sell ETF shares during the U.S. market trading session, similar to stocks.

Let’s use a Weekly reset period as an example. The only way to precisely achieve the intended leverage is to buy the ETF as near to the market close on a Friday and sell it as near to the market close on the following Friday. Of course, you can hold the ETF for longer than a week but remember that it will only deliver the intended performance for one calendar week exactly and then the performance period will be reset.

If you purchase shares at a time other than the close of the last business day of a calendar week, month or quarter, you will generally receive more, or less, than the intended leverage (such as 200% for a 2X long fund or -200% for a 2X short fund) exposure to the underlying reference security from that point until the end of the period.

Investors who invest for periods longer than the period specified by the fund (whether daily or for a full calendar week, month or quarter) should not expect to achieve the intended leverage (e.g., 200%) of the performance of the underlying security. The return will be the compounded return over the holding period, which will very likely differ from 200% of the return of the underlying security over that same time.

The impact of compounding can be more pronounced the longer the shareholder holds the ETF. Additionally, higher price volatility for the reference security will increase the impact of compounding on an investor’s returns. The Fund can lose money if the security’s performance is flat and, in some cases, even when the performance increases.

Tradr ETFs are actively managed funds that use total return swaps to seek the leveraged performance of the underlying security. They are rebalanced daily, weekly, monthly or quarterly, based on their stated reset period, to maintain their long or short exposure and to pursue its performance target. There can be no assurance that the Funds will achieve their objectives.

The funds enter into one or more swaps with major global financial institutions for a specified period ranging from a day to more than one year whereby the fund and the global financial institution will agree to exchange the return (or differentials in rates of return) earned or realized on the underlying security. The gross return to be exchanged or “swapped” between the parties is calculated with respect to a “notional amount,” the return on or change in value of a particular dollar amount representing the security. We attempt to consistently apply leverage to maintain the fund’s exposure to that security’s return. We expect to rebalance the fund’s holdings daily, weekly, monthly or quarterly, based on their stated reset period, in an attempt to maintain such exposure.