DFSI

About DFSI

To achieve the International Sustainability ETF’s investmentobjective, the Advisor implements an integrated investment approach that combines research, portfoliodesign, portfolio management, and trading functions. As further described below, the Portfolio’s designemphasizes long-term drivers of expected returns identified by the Advisor’s research, while balancingrisk through broad diversification across companies and sectors. The Advisor’s portfolio managementand trading processes further balance those long-term drivers of expected returns with shorter-term driversof expected returns and trading costs.The Portfolio is designed topurchase a broad and diverse group of securities within a market capitalization weighted universe (e.g.,the larger the company, the greater the proportion of the universe it represents) of non-U.S. companiesassociated with developed markets that have been authorized for investment by the Advisor’s Investment Committee (the “International Universe”). The Portfolio investsin companies of all sizes and seeks to moderately increase the Portfolio’s exposure to smaller capitalization,lower relative price, and higher profitability companies as compared to their representation in the InternationalUniverse, while adjusting the composition of the Portfolio based on sustainability considerations. ThePortfolio may seek to achieve a moderately increased exposure to smaller capitalization, lower relativeprice, and higher profitability companies by decreasing the allocation of the Portfolio’s assets tolarger capitalization, higher relative price, or lower profitability companies relative to their weightin the International Universe. An equity issuer is considered to have a high relative price (i.e., agrowth stock) primarily because it has a high price in relation to its book value. An equity issuer isconsidered to have a low relative price (i.e., a value stock) primarily because it has a low price inrelation to its book value. In assessing relative price, the Advisor may consider additional factorssuch as price to cash flow or price to earnings ratios. An equity issuer is considered to have high profitabilitybecause it has high earnings or profits from operations in relation to its book value or assets. Thecriteria the Advisor uses for assessing relative price and profitability are subject to change from timeto time. Additionally, the representation of securities in the Portfolio as compared to their representationin the International Universe may be affected by the Portfolio's sustainability considerations.ThePortfolio intends to purchase securities of companies associated with developed market countries thatthe Advisor has designated as approved markets. As a non-fundamental policy, under normal circumstances,the Portfolio will invest at least 80% of its net assets in equity securities. The Advisor determinescompany size on a country or region specific basis and based primarily on market capitalization. Thepercentage by which the Portfolio’s allocation to securities of the largest high relative price companiesis reduced will change due to market movements, sustainability considerations and other factors. TheAdvisor may also increase or reduce the Portfolio’s exposure to an eligible company, or exclude a company,based on shorter-term considerations, such as a company’s price momentum, short-run reversals, andinvestment characteristics. In assessing a company’s investment characteristics, the Advisor considersratios such as recent changes in assets divided by total assets. The criteria the Advisor uses for assessinga company’s investment characteristics are subject to change from time to time. In addition, the Advisorseeks to reduce trading costs using a flexible trading approach that looks for opportunities to participatein the available market liquidity, while managing turnover and explicit transaction costs.ThePortfolio may gain exposure to companies associated with approved markets by purchasing equity securitiesin the form of depositary receipts, which may be listed or traded outside the issuer’s domicile country.The Portfolio may purchase or sell futures contracts and options on futures contracts for foreign orU.S. equity securities and indices, to increase or decrease equity market exposure based on actual orexpected cash inflows to or outflows from the Portfolio. Because many of the Portfolio’s investmentsmay be denominated in foreign currencies, the Portfolio may enter into foreign currency exchange transactions,including foreign currency forward contracts, in connection with the settlement of foreign securitiesor to transfer cash balances from one currency to another currency. The above-referenced investmentsare not subject to, although they may incorporate, the Portfolio’s sustainability considerations.ThePortfolio may lend its portfolio securities to generate additional income.TheAdvisor intends to take into account certain sustainability considerations when making investment decisionsfor the Portfolio. Relative to a fund without these considerations that otherwise has the same investmentobjective, strategies, and policies as the Portfolio, the Portfolio will generally have excluded, andhave less overall weight in, securities of companies that, according to the Portfolio’s sustainabilityconsiderations, may be less sustainable as compared to other companies in the Portfolio’s investmentuniverse. Similarly, relative to such a fund, the Portfolio will generally have more overall weight insecurities of companies that, according to the Portfolio’s sustainability considerations, may be moresustainable as compared to other companies in the Portfolio’s investment universe. In particular, theAdvisor ranks companies (i) relative to the broader equity market based on potential emissions from reservesand scaled potential emissions from reserves and the securities of the worst-ranking companies are generallyunderweighted or excluded, (ii) relative to the applicable universe of securities based on carbon intensityand the securities of the worst-ranking companies are generally underweighted or excluded and (iii) relativeto their sector peers based primarily on carbon intensity, but also considering several other factors,including controversies related to land use and biodiversity, toxic spills and releases, operationalwaste, and water management, and the securities of the worst-ranking companies are generally underweightedor excluded and the securities of the remaining companies are generally overweighted or neutral-weighted.In addition, the Advisor seeks to exclude securities of companies based on sustainability considerationsrelating to coal, factory farming, palm oil, cluster munitions and landmines, tobacco, child labor, civilian firearms, private prisons,and material involvement in severe environmental, social, or governance controversies that indicate operationsinconsistent with responsible business conduct standards (such as those defined by the United NationsGlobal Compact Principles and the Organization for Economic Co-operation and Development Guidelines forMultinational Enterprises). For a more detailed description of these sustainability considerations, see“Applying the Portfolios’ Sustainability Considerations”. The Advisor engages third party serviceproviders to provide research information relating to the Portfolio’s sustainability considerationswith respect to securities in the Portfolio, where information is available from such providers. TheAdvisor also may use, or supplement third party service providers’ data with, proprietary researchrelating to certain sustainability considerations where information is not available or has not beenobtained from third party service providers engaged by the Advisor.TheAdvisor periodically reviews the Portfolio’s sustainability considerations and the Portfoliomay periodically modify, add, or remove sustainability considerations.ThePortfolio is an actively managed exchange traded fund and does not seek to replicate the performanceof a specific index and may have a higher degree of portfolio turnover than such index funds.