Exchange Traded Concepts and North Shore Indices Launches the North Shore Dual Share Class ETF

NEW YORK, Aug. 12, 2020 /PRNewswire/ -- Exchange Traded Concepts (ETC) is pleased to announce that, in conjunction with North Shore Indices, it is launching the North Shore Dual Share Class ETF (NYSE:DUAL).  The Fund began trading on the New York Stock Exchange on 8/12/20.

"We are proud to expand our relationship with North Shore by offering a second ETF with the firm," said J. Garrett Stevens, CEO of Exchange Traded Concepts.  ETC and North Shore launched the North Shore Global Uranium Mining ETF (NYSE:URNM) during December 2019.  "We believe that DUAL offers investors exposure to a non-traditional source of alpha¹ that is not readily available in other investment products," Mr. Stevens went on to note.

DUAL seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the North Shore Dual Share Class Index.  The Index is designed to track the performance of dual-class companies listed in the United States.  Dual-class companies issue at least two shares to the public – one to the general public with either limited or no voting rights and one for the company's founders and executives which possess most, if not all, of the voting rights.

"Visionary founders of young, innovative companies may utilize the dual-class structure so as to gain access to the public markets without giving up control of their companies," noted Tim Rotolo, Founder of North Shore Indices.  Mr. Rotolo goes on to note that, "the dual-class structure may reduce the pressure on company founders and management exerted by outside shareholders that may have short-term objectives, such as profits or share price maximization."

The index which underlies the Fund emphasizes younger companies where the potential benefits of the dual-class structure may be the greatest and reduces that emphasis as the company matures.

The domain expert developing the Index is Panos N. Patatoukas, PhD, a tenured Associate Professor and the L.H. Penney Chair in Accounting at U.C. Berkeley, Haas School of Business.  Dr. Patatoukas notes that, "the dual-class equity structure may allow companies to pursue strategies and goals that have a potential long-term payout with less outside pressure for short-term performance." A key feature of the Index is that it targets dual-class companies during the time in their corporate history when we believe that the net benefits of the dual-class equity structure are still positive.

"While dual-class companies may represent attractive investment opportunities, investors lack pure-play investment vehicles to gain exposure to these companies," says Mr. Rotolo, who further notes that "an important part of our thesis is that major index providers have reduced the weighting of, or totally eliminated, dual-class companies from their indices."

DUAL may provide an attractive investment vehicle for investors seeking alternatives to traditional US equity exposure as well as exposure to the potential growth of dual-class companies.

About Exchange Traded Concepts
Exchange Traded Concepts is a private-label ETF advisor with passive and active exemptive relief from the SEC under the Investment Company Act of 1940 to launch custom domestic and international equity and fixed income exchange traded funds through a complete turnkey solution. ETC's ETF-In-A-Box™ Solution provides an efficient and cost-effective method to bring exchange-traded funds to market with the operational and regulatory experience necessary to manage the complexities of launching and managing an ETF. By developing strategic partnerships with veteran ETF service providers, ETC assists investment managers, independent advisors, foreign asset managers, research and index providers and others in navigating the exchange-traded fund launch and ongoing management process with the time-sensitivity and professional guidance essential for maintaining regulatory compliance. Additional information can be found on the Exchange Traded Concepts' website

About North Shore Indices
North Shore Indices is an investor-led, index development business.  The firm's objective is the creation of opportunistic, thematic indices whose construction is overseen by domain experts.

The company creates pure-play indices on novel and/or out-of-favor contrarian ideas. 

Disclosures

Exchange Traded Concepts, LLC serves as the investment advisor. The Fund is distributed by SEI Investments Distribution Co. (1 Freedom Valley Drive, Oaks, PA 19456), which is not affiliated with Exchange Traded Concepts, LLC, North Shore Indices, or any affiliates.

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 full or summary prospectus, which may be obtained by visiting dualetf.com. Investors should read it carefully before investing or sending money.

Investing involves risk, including possible loss of principal. The Fund's return may not match or achieve a high degree of correlation with the return of the Index. To the extent the Fund's investments are concentrated in or have significant exposure to a particular issuer, industry or group of industries, or asset class, the Fund may be more vulnerable to adverse events affecting such issuer, industry or group of industries, or asset class than if the Fund's investments were more broadly diversified. Issuer-specific events, including changes in the financial condition of an issuer, can have a negative impact on the value of the Fund. The Fund is not actively managed and therefore the Fund would not sell shares of an equity security unless that security is removed from the Index or the selling of shares is otherwise required upon a rebalancing of the Index. Diversification may not protect against market risk. Holdings are subject to change.

Dual Share Class Companies create unique risks. Dual Share Class Companies allow for a concentration of voting power in the hands of company insiders through a disproportionate allocation of voting rights among stockholders, which may negatively affect common stockholders in a variety of ways. For example, a company's owners may use such power for personal benefit, while passing on financial risk to common stockholders. Further, Dual Share Class Companies allow entrenchment of management in the company, which may prevent common stockholders from being able to address issues relating to mismanagement of the company, such as share dilution, increased company debt, and financial underperformance relevant to the market. Investing only in a portfolio of Dual Share Class Companies may impact the Fund's relative investment performance depending on whether such investments are in or out of favor in the market. A portfolio of Dual Share Class Companies may underperform a portfolio that includes companies with traditional ownership structures.

There is no guarantee the fund will achieve its stated objective. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index.

Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Market price returns are based upon the midpoint of the bid/ask spread at 4:00 PM Eastern time and do not represent the returns you would receive if you traded shares at other times. The first trading date is typically several days after the fund inception date. Therefore, NAV is used to calculate market returns prior to the first trading date because there is no bid/ask spread until the fund starts trading.

¹ Alpha is a measure of the return of an investment above its benchmark return.

SOURCE Exchange Traded Concepts, LLC

Related Links

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