CHAT

About CHAT

TheFund is an actively managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective by investingin the equity securities of exchange-listed companies globally, including those in emerging markets, which are involved in theinvestment theme of artificial intelligence (“AI”), focused on generative AI and related technologies. Undernormal circumstances, the Fund will invest at least 80% of its net assets, plus borrowings for investment purposes, in equitysecurities of AI and Technology Companies (defined below). The Fund’s 80% policy is non-fundamental and can be changed withoutshareholder approval. However, Fund shareholders would be given at least 60 days notice prior to any such change. Overviewof Generative AI: AIrefers to computer simulation of human intelligence in computers that are programmed to think and learn like humans. It is a branchof computer science that deals with the creation of intelligent machines that work and react like humans. Some of the key techniquesused in AI include: ● machine learning - learning a new task without being specifically programmed to do it, ● deep learning - learning by example, ● natural language processing - understanding human language text or speech, ● computer vision - interpreting and understanding the visual world (e.g., distinguishing faces), and ● expert systems - which simulate the judgment and behavior of humans with expertise in a particular field (e.g., medicine). AIhas a wide range of applications, such as self-driving cars, speech recognition, image recognition, natural language understanding,decision-making, and many more. With the advancement of technology and the increasing amount of data available, AI is becomingincreasingly important in many industries. Morespecifically, generative AI refers to a set of technologies where computer systems can generate original content based on thedata they have been trained in response to prompts from a user. It uses a type of deep learning called generative adversarialnetworks and has a wide range of applications, including creating images, text, and audio. AIand Technology Companies. For purposes of the Fund’s 80% requirement, the Fund considers a company to be an AI Companyor a Technology Company if it derives 50% or more of its revenue in one or more of the following proprietary sectors: (i) AI softwareand/or generative AI software, (ii) cloud infrastructure services (e.g., services that provide infrastructure-as-a-service tosupport the training of AI models), (iii) AI semiconductors (e.g., designing and manufacturing of key semiconductors for AI applications),(iv) network infrastructure (e.g., development of servers, storage, and networking equipment relevant for training and runninggenerative AI models), (v) AI services (e.g., consulting and implementation services for generative AI software), (vi) softwareand information technology services companies, (vii) manufacturers and distributors of technology hardware and equipment (e.g.,communications equipment, cellular phones, computers and peripherals, electronic equipment and related instruments), (viii) semiconductorsand semiconductor equipment, (ix) interactive media and services, and (x) diversified consumer services, broadline retail, andentertainment companies involved in the foregoing. PortfolioConstruction: TheFund’s sub-adviser, Roundhill Financial Inc. (the Sub-Adviser), uses a proprietary methodology in an attempt to assess companiesbest positioned to benefit from the anticipated growth of generative AI and related technologies. The Sub-Adviser utilizes a proprietaryexposure score (e.g., from 1 to 100) to assess the relevance of companies to generative AI, including a transcript score and sectorscore. Thetranscript score utilizes proprietary keyword analysis from publicly available documents including company filings, transcripts,presentations, and press releases to identify references to various AI and related technology terms. Thesector score utilizes a proprietary sector methodology to categorize companies related to AI, including AI software, cloud infrastructureservices, semiconductors, network infrastructure and AI services. The score assesses the materiality of generative AI and relatedtechnologies to the company’s expected financial performance, including revenue, profit and research and development (R&D)spending. Companies that are expected to derive 50% or more of their revenue or profit from generative AI and related technologiesor invest 50% or more of their R&D budget into these areas receive the highest score. Companies expected to derive at least10% and up to 50% of revenue and profit from generative AI and related technologies or invest at least 10% and up to 50% of theirR&D budget in these areas receive a lesser score. Companies expected to derive no more than 10% of revenue and profit or investno more than 10% of their R&D budget in generative AI and related technologies receive the lowest score. Thetranscript score and sector score are combined to create an aggregate exposure score and are weighted by their exposure to thescore subject to market capitalization (at least $250 million in market capitalization) and liquidity constraints (a minimum averagedaily trading volume of at least $500,000). As a result, the Fund’s investments may include micro-, small-, medium- andlarge-capitalization companies. TheFund’s portfolio will generally consist of between 25 and 50 securities. The Fund may invest in foreign securities directlyor indirectly via depositary receipts (e.g., American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs)). TheFund will operate as a non-diversified fund under the Investment Company Act of 1940, as amended (the 1940 Act), which means thatit may invest a greater percentage of its assets in the securities of a single issuer or a smaller number of issuers than if itwas a diversified fund. The Fund will concentrate its investments (i.e., hold 25% or more of its total assets) in securitiesof companies with principal business activities in groups of industries that comprise the technology sector.