FAQs

Frequently Asked Questions about ETFs and DIP Intermediate

A:

DIP is a long-only (meaning, it is not betting that its holdings will decline in value, rather that they will rise) equity ETF that trades on the New York Stock Exchange. DIP offers investors the opportunity to capitalize on short-term market dip events of large-cap U.S. stocks (i.e., those of companies with market capitalization values of more than $10 billion). DIP uses proprietary artificial intelligence (AI) technology to identify true dips and perform what is commonly known as a “buy the dip” trading strategy.

A:

A market dip event is defined as a short-term oversell in an otherwise uptrending stock (meaning, enough shares of the stock have been sold in a short period that it depresses the price, despite not correlating to the stock’s actual value). As a consequence, the selloff temporarily reduces the stock’s value. The event is then followed by a buying rally that reverts the price to its original level, or higher.

A:

“Buy the dip” is a long-only trading strategy (meaning, it is not betting that its holdings will decline in value, rather that they will rise) that seeks to buy a stock at the bottom of the selling trend in a dip event and sell the same stock at the end of the buying rally. When done successfully, a profit is realized from the stock’s bottom-to-top movement.

A:

In the course of a trading day, the AI system driving DIP gathers data from multiple proprietary indicators for more than 1,000 US stocks. DIP’s AI analyzes this data and generates buy signals for stocks it determines are at the bottom of a dip and sell signals for those it determines have recovered some of their value.

A:

DIP is designed to hold between 20 and 40 stocks at a time.

A:

If DIP’s AI determines that fewer than 20 stocks are identifiably in a dip at a given time, it will automatically direct allocation of excess capital to a bespoke portfolio of four index-based ETFs. The specific weightings of each ETF in this portfolio varies according to DIP’s AI-based predictions and risk management. This mechanism allows the investment strategy to remain long-only (meaning, it is not betting that its holdings will decline in value, rather that they will rise), to seek to diversify risk as required by the Investment Company Act of 1940, and to allocate all capital.

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Important disclosures

Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (800) 617-0004 or visit our website at dipetf.com. Read the prospectus or summary prospectus carefully before investing.

The Fund is distributed by Quasar Distributors, LLC. Exchange Traded Concepts, LLC (the “Adviser”) serves as the Fund’s investment adviser. Kaiju ETF Advisors, LLC (the “Sub-Adviser”) serves as the Fund’s investment sub-adviser.

Investing involves risk, including loss of principal. The Fund is subject to numerous risks including but not limited to: Equity Risk, Large Cap Risk, Management Risk, and Trading Risk. The Fund is actively managed and may not meet its investment objective based on the Sub-Adviser’s success or failure to implement investment strategies for the Fund. The Fund’s principal investment strategies are dependent on the Sub-Adviser’s understanding of artificial intelligence. The Fund relies heavily on a proprietary artificial intelligence selection model as well as data and information supplied by third parties that are utilized by such a model. Specifically, the Fund relies on the Kaiju Algorithm to implement its principal investment strategies. To the extent the model does not perform as designed or as intended, the Fund’s strategy may not be successfully implemented and the Fund may lose value. A “value” style of investing could produce poor performance results relative to other funds, even in a rising market, if the methodology used by the Fund to determine a company’s “value” or prospects for exceeding earnings expectations or market conditions is wrong. In addition, “value stocks” can continue to be undervalued by the market for long periods of time. The Fund is expected to actively and frequently trade securities or other instruments in its portfolio to carry out its investment strategies. A high portfolio turnover rate increases transaction costs, which may increase the Fund’s expenses. Frequent trading may also cause adverse tax consequences for investors in the Fund due to an increase in short-term capital gains. The fund is new, with a limited operating history.

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