ETF Series Solutions
11/12/2024 | Press release | Distributed by Public on 11/12/2024 11:21
Semi Annual Report by Investment Company Form N CSRS
2024-09-04193422_HoyaCapitalHighDividendYieldETF_TF_TSRSemiAnnual
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22668
ETF Series Solutions
(Exact name of registrant as specified in charter)
615 East Michigan Street
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)
Kristina R. Nelson
ETF Series Solutions
615 East Michigan Street
Milwaukee, WI 53202
(Name and address of agent for service)
414-516-1645
Registrant's telephone number, including area code
Date of fiscal year end: February 28
Date of reporting period: August 31, 2024
Item 1. Reports to Stockholders.
| (a) |
|
Hoya Capital High Dividend Yield ETF
|
||
|
RIET(Principal U.S. Listing Exchange: NYSE)
|
||
|
Semi-Annual Shareholder Report | August 31, 2024
|
This semi-annual shareholder reportcontains important information about the Hoya Capital High Dividend Yield ETF for the period of March 1, 2024, to August 31, 2024. You can find additional information about the Fund at https://www.hoyaetfs.com/riet. You can also request this information by contacting us at 1-833-HOYA-CAP.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS? (based on a hypothetical $10,000 investment)
|
Fund Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
Hoya Capital High Dividend Yield ETF
|
$27
|
0.50%
|
KEY FUND STATISTICS (as of August 31, 2024)
|
Net Assets
|
$85,146,579
|
|
Number of Holdings
|
102
|
|
Portfolio Turnover
|
15%
|
|
30-Day SEC Yield
|
8.56%
|
|
30-Day SEC Yield Unsubsidized
|
8.56%
|
Visit https://www.hoyaetfs.com/rietfor more recent performance information.
WHAT DID THE FUND INVEST IN? (as of August 31, 2024)
|
Top 10 Issuers
|
(%)
|
|
Chimera Investment Corporation
|
2.3%
|
|
Global Net Lease, Inc.
|
2.2%
|
|
AGNC Investment Corporation
|
2.0%
|
|
Annaly Capital Management, Inc.
|
2.0%
|
|
Two Harbors Investment Corporation
|
1.8%
|
|
Rithm Capital Corporation
|
1.8%
|
|
National Storage Affiliates Trust
|
1.8%
|
|
PennyMac Mortgage Investment Trust
|
1.7%
|
|
BXP, Inc.
|
1.7%
|
|
Omega Healthcare Investors, Inc.
|
1.7%
|
Industry Breakdown (%)
For additional information about the Fund; including its prospectus, financial information, holdings and proxy information, scan the QR code or visit https://www.hoyaetfs.com/riet.
| Hoya Capital High Dividend Yield ETF | PAGE 1 | TSR-SAR-26922B840 |
HOUSEHOLDING
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). If you would prefer that your Hoya Capital Real Estate documents not be householded, please contact Hoya Capital Real Estate at 1-833-HOYA-CAP, or contact your financial intermediary. Your instructions will typically be effective within 30 days of receipt by Hoya Capital Real Estate or your financial intermediary.
| Hoya Capital High Dividend Yield ETF | PAGE 2 | TSR-SAR-26922B840 |
|
Hoya Capital Housing ETF
|
||
|
HOMZ(Principal U.S. Listing Exchange: NYSE)
|
||
|
Semi-Annual Shareholder Report | August 31, 2024
|
This semi-annual shareholder reportcontains important information about the Hoya Capital Housing ETF for the period of March 1, 2024, to August 31, 2024. You can find additional information about the Fund at https://www.hoyaetfs.com/homz. You can also request this information by contacting us at 1-833-HOYA-CAP.
WHAT WERE THE FUND COSTS FOR THE LAST SIX MONTHS? (based on a hypothetical $10,000 investment)
|
Fund Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment
|
|
Hoya Capital Housing ETF
|
$16
|
0.30%
|
KEY FUND STATISTICS (as of August 31, 2024)
|
Net Assets
|
$45,278,935
|
|
Number of Holdings
|
101
|
|
Portfolio Turnover
|
13%
|
|
30-Day SEC Yield
|
2.13%
|
|
30-Day SEC Yield Unsubsidized
|
2.13%
|
Visit https://www.hoyaetfs.com/homzfor more recent performance information.
WHAT DID THE FUND INVEST IN? (as of August 31, 2024)
|
Top 10 Issuers
|
(%)
|
|
Lowe's Companies, Inc.
|
3.0%
|
|
Home Depot, Inc.
|
3.0%
|
|
Ventas, Inc.
|
1.7%
|
|
DR Horton, Inc.
|
1.7%
|
|
UMH Properties, Inc.
|
1.7%
|
|
NexPoint Residential Trust, Inc.
|
1.7%
|
|
M/I Homes, Inc.
|
1.7%
|
|
Public Storage
|
1.7%
|
|
Independence Realty Trust, Inc.
|
1.6%
|
|
Extra Space Storage, Inc.
|
1.6%
|
Industry Breakdown (%)
For additional information about the Fund; including its prospectus, financial information, holdings and proxy information, scan the QR code or visit https://www.hoyaetfs.com/homz.
| Hoya Capital Housing ETF | PAGE 1 | TSR-SAR-26922A230 |
HOUSEHOLDING
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). If you would prefer that your Hoya Capital Real Estate documents not be householded, please contact Hoya Capital Real Estate at 1-833-HOYA-CAP, or contact your financial intermediary. Your instructions will typically be effective within 30 days of receipt by Hoya Capital Real Estate or your financial intermediary.
| Hoya Capital Housing ETF | PAGE 2 | TSR-SAR-26922A230 |
| (b) | Not applicable. |
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Investments.
| (a) | Schedule of Investments is included within the financial statements filed under Item 7 of this Form. |
| (b) | Not Applicable. |
Item 7. Financial Statements and Financial Highlights for Open-End Investment Companies.
| (a) |
Hoya Capital High Dividend Yield ETF(Ticker: RIET)
Hoya Capital Housing ETF(Ticker: HOMZ)
Core Financial Statements
August 31, 2024 (Unaudited)
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
Page
|
|
|
Schedule of Investments
|
|
|
|
|
Hoya Capital High Dividend Yield ETF
|
|
|
1
|
|
Hoya Capital Housing ETF
|
|
|
5
|
|
Statements of Assets and Liabilities
|
|
|
9
|
|
Statements of Operations
|
|
|
10
|
|
Statements of Changes in Net Assets
|
|
|
11
|
|
Financial Highlights
|
|
|
12
|
|
Notes to Financial Statements
|
|
|
14
|
|
Approval of Advisory Agreements & Board Considerations
|
|
|
20
|
|
Additional Information
|
|
|
23
|
|
|
|
|
|
TABLE OF CONTENTS
Hoya Capital High Dividend Yield ETF
Schedule of Investments
August 31, 2024 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
COMMON STOCKS - 89.7%
|
|
|
|
|
||
|
Dividend Champions - 13.9%
|
|
|
|
|
||
|
Apple Hospitality REIT, Inc.
|
|
|
79,216
|
|
|
$ 1,143,879
|
|
BXP, Inc.
|
|
|
19,247
|
|
|
1,447,760
|
|
Crown Castle, Inc.
|
|
|
11,695
|
|
|
1,310,074
|
|
Equity Residential
|
|
|
17,416
|
|
|
1,304,110
|
|
Extra Space Storage, Inc.
|
|
|
8,009
|
|
|
1,417,593
|
|
Gaming and Leisure Properties, Inc.
|
|
|
25,705
|
|
|
1,337,174
|
|
Realty Income Corporation
|
|
|
21,966
|
|
|
1,364,308
|
|
Simon Property Group, Inc.
|
|
|
7,643
|
|
|
1,279,056
|
|
WP Carey, Inc.
|
|
|
20,097
|
|
|
1,206,222
|
|
|
|
|
|
11,810,176
|
||
|
Large-Cap REITs - 16.5%
|
|
|
|
|
||
|
AGNC Investment Corporation
|
|
|
119,078
|
|
|
1,215,787
|
|
Annaly Capital Management, Inc.
|
|
|
58,839
|
|
|
1,186,194
|
|
Blackstone Mortgage Trust, Inc. - Class A
|
|
|
52,954
|
|
|
977,531
|
|
Healthcare Realty Trust, Inc.
|
|
|
73,319
|
|
|
1,305,078
|
|
Healthpeak Properties, Inc.
|
|
|
60,073
|
|
|
1,338,427
|
|
Kilroy Realty Corporation
|
|
|
35,274
|
|
|
1,279,388
|
|
National Storage Affiliates Trust
|
|
|
31,972
|
|
|
1,494,371
|
|
Omega Healthcare Investors, Inc.
|
|
|
36,370
|
|
|
1,438,070
|
|
Rithm Capital Corporation
|
|
|
104,062
|
|
|
1,242,500
|
|
Starwood Property Trust, Inc.
|
|
|
60,500
|
|
|
1,260,820
|
|
VICI Properties, Inc.
|
|
|
40,548
|
|
|
1,357,547
|
|
|
|
|
|
14,095,713
|
||
|
Mid-Cap REITs - 27.8%(a)
|
|
|
|
|
||
|
Apollo Commercial Real Estate Finance, Inc.
|
|
|
90,295
|
|
|
956,224
|
|
Arbor Realty Trust, Inc.
|
|
|
68,655
|
|
|
933,708
|
|
Broadstone Net Lease, Inc.
|
|
|
60,799
|
|
|
1,112,622
|
|
Claros Mortgage Trust, Inc.
|
|
|
126,280
|
|
|
1,010,240
|
|
Easterly Government Properties, Inc.
|
|
|
78,678
|
|
|
1,032,255
|
|
Ellington Financial, Inc.
|
|
|
76,434
|
|
|
1,005,107
|
|
EPR Properties
|
|
|
22,602
|
|
|
1,072,917
|
|
Franklin BSP Realty Trust, Inc.
|
|
|
72,609
|
|
|
988,935
|
|
Global Net Lease, Inc.
|
|
|
123,498
|
|
|
1,064,553
|
|
Highwoods Properties, Inc.
|
|
|
35,968
|
|
|
1,158,889
|
|
Innovative Industrial Properties, Inc.
|
|
|
8,306
|
|
|
1,032,270
|
|
Ladder Capital Corporation
|
|
|
83,260
|
|
|
1,029,094
|
|
LTC Properties, Inc.
|
|
|
26,705
|
|
|
980,875
|
|
Medical Properties Trust, Inc.
|
|
|
182,193
|
|
|
819,868
|
|
MFA Financial, Inc.
|
|
|
85,859
|
|
|
1,074,955
|
|
NNN REIT, Inc.
|
|
|
27,707
|
|
|
1,301,952
|
|
Outfront Media, Inc.
|
|
|
64,269
|
|
|
1,095,786
|
|
PennyMac Mortgage Investment Trust
|
|
|
67,557
|
|
|
959,985
|
|
Ready Capital Corporation
|
|
|
109,941
|
|
|
911,411
|
|
Sabra Health Care REIT, Inc.
|
|
|
63,583
|
|
|
1,083,454
|
|
Service Properties Trust
|
|
|
164,766
|
|
|
772,752
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
1
|
|
|
TABLE OF CONTENTS
Hoya Capital High Dividend Yield ETF
Schedule of Investments
August 31, 2024 (Unaudited)(Continued)
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
COMMON STOCKS - (Continued)
|
|
|
|
|
||
|
Mid-Cap REITs - (Continued)
|
|
|
|
|
||
|
Two Harbors Investment Corporation
|
|
|
72,951
|
|
|
$ 1,032,986
|
|
Uniti Group, Inc.
|
|
|
283,412
|
|
|
1,235,676
|
|
|
|
|
|
23,666,514
|
||
|
Small-Cap REITs - 31.5%(a)
|
|
|
|
|
||
|
AFC Gamma, Inc.
|
|
|
73,467
|
|
|
768,466
|
|
Alexander's, Inc.
|
|
|
4,299
|
|
|
985,159
|
|
Ares Commercial Real Estate Corporation
|
|
|
140,185
|
|
|
989,706
|
|
Armada Hoffler Properties, Inc.
|
|
|
81,035
|
|
|
997,541
|
|
ARMOUR Residential REIT, Inc.
|
|
|
48,363
|
|
|
989,023
|
|
Brandywine Realty Trust
|
|
|
198,723
|
|
|
1,039,321
|
|
BrightSpire Capital, Inc.
|
|
|
150,492
|
|
|
895,427
|
|
Cherry Hill Mortgage Investment Corporation
|
|
|
249,467
|
|
|
880,618
|
|
Chimera Investment Corporation
|
|
|
78,385
|
|
|
1,213,400
|
|
City Office REIT, Inc.
|
|
|
192,476
|
|
|
1,131,759
|
|
Clipper Realty, Inc.
|
|
|
239,762
|
|
|
1,179,629
|
|
Community Healthcare Trust, Inc.
|
|
|
40,502
|
|
|
758,602
|
|
CTO Realty Growth, Inc.
|
|
|
52,551
|
|
|
999,520
|
|
Dynex Capital, Inc.
|
|
|
75,185
|
|
|
947,331
|
|
Gladstone Commercial Corporation
|
|
|
64,775
|
|
|
990,410
|
|
Global Medical REIT, Inc.
|
|
|
103,112
|
|
|
959,973
|
|
Granite Point Mortgage Trust, Inc.
|
|
|
299,086
|
|
|
786,596
|
|
Invesco Mortgage Capital, Inc.
|
|
|
100,369
|
|
|
880,236
|
|
KKR Real Estate Finance Trust, Inc.
|
|
|
96,092
|
|
|
1,146,378
|
|
Nexpoint Real Estate Finance, Inc.
|
|
|
65,639
|
|
|
1,091,576
|
|
One Liberty Properties, Inc.
|
|
|
39,730
|
|
|
1,062,777
|
|
Orchid Island Capital, Inc.
|
|
|
107,072
|
|
|
877,990
|
|
Orion Office REIT, Inc.
|
|
|
260,117
|
|
|
1,066,480
|
|
Postal Realty Trust, Inc. - Class A
|
|
|
68,785
|
|
|
996,695
|
|
Sachem Capital Corporation
|
|
|
300,032
|
|
|
735,078
|
|
Sunrise Realty Trust, Inc.(b)
|
|
|
23,857
|
|
|
336,145
|
|
TPG RE Finance Trust, Inc.
|
|
|
109,486
|
|
|
991,943
|
|
Universal Health Realty Income Trust
|
|
|
24,520
|
|
|
1,100,947
|
|
|
|
|
|
26,798,726
|
||
|
TOTAL COMMON STOCKS
(Cost $73,875,049)
|
|
|
|
|
76,371,129
|
|
|
PREFERRED STOCKS - 9.2%
|
|
|
|
|
||
|
Preferred Issued by U.S. REITs - 9.2%
|
|
|
|
|
||
|
AGNC Investment Corporation
|
|
|
|
|
||
|
Series C, 10.67% (3 mo. Term SOFR + 5.37%), Perpetual
|
|
|
9,807
|
|
|
250,275
|
|
Series D, 9.89% (3 mo. Term SOFR + 4.59%), Perpetual
|
|
|
10,149
|
|
|
255,247
|
|
Annaly Capital Management, Inc.
|
|
|
|
|
||
|
Series F, 10.59% (3 mo. Term SOFR + 5.25%), Perpetual
|
|
|
9,853
|
|
|
248,985
|
|
Series G, 9.45% (3 mo. Term SOFR + 4.43%), Perpetual
|
|
|
9,912
|
|
|
247,899
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
2
|
|
|
TABLE OF CONTENTS
Hoya Capital High Dividend Yield ETF
Schedule of Investments
August 31, 2024 (Unaudited)(Continued)
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
PREFERRED STOCKS - (Continued)
|
|
|
|
|
||
|
Preferred Issued by U.S. REITs - (Continued)
|
|
|
|
|
||
|
Arbor Realty Trust, Inc. Series D, 6.38%, Perpetual
|
|
|
14,041
|
|
|
$ 251,193
|
|
ARMOUR Residential REIT, Inc. Series C, 7.00%, Perpetual
|
|
|
12,230
|
|
|
271,017
|
|
Chimera Investment Corporation
|
|
|
|
|
||
|
Series B, 11.38% (3 mo. Term SOFR + 6.05%), Perpetual
|
|
|
10,204
|
|
|
255,202
|
|
Series C, 7.75% to 9/30/2025 then 3 mo. LIBOR US + 4.74%, Perpetual(c)
|
|
|
11,436
|
|
|
264,172
|
|
Series D, 10.93% (3 mo. Term SOFR +76371131+ 5.60%), Perpetual
|
|
|
10,249
|
|
|
255,200
|
|
DiamondRock Hospitality Company 8.25%, Perpetual
|
|
|
9,781
|
|
|
248,437
|
|
Global Net Lease, Inc.
|
|
|
|
|
||
|
Series A, 7.25%, Perpetual
|
|
|
12,476
|
|
|
277,217
|
|
Series B, 6.88%, Perpetual
|
|
|
13,056
|
|
|
290,627
|
|
Series D, 7.50%, Perpetual
|
|
|
12,195
|
|
|
270,851
|
|
Granite Point Mortgage Trust, Inc., Series A, 7.00% to 01/15/2027 then SOFR + 5.83%, Perpetual
|
|
|
15,775
|
|
|
252,400
|
|
Hudson Pacific Properties, Inc. Series C, 4.75%, Perpetual
|
|
|
18,116
|
|
|
230,073
|
|
Invesco Mortgage Capital, Inc., Series C, 7.50% to 09/27/2027 then 3 mo. LIBOR US + 5.29%, Perpetual(c)
|
|
|
11,051
|
|
|
274,286
|
|
KKR Real Estate Finance Trust, Inc. Series A, 6.50%, Perpetual
|
|
|
13,318
|
|
|
266,893
|
|
MFA Financial, Inc. Series B, 7.50%, Perpetual
|
|
|
12,210
|
|
|
270,818
|
|
New York Mortgage Trust, Inc.
|
|
|
|
|
||
|
Series D, 8.00% to 10/15/2027 then 3 mo. LIBOR US + 5.70%, Perpetual(c)
|
|
|
12,176
|
|
|
271,890
|
|
Series E, 7.88% to 1/15/2025 then 3 mo. LIBOR US + 6.43%, Perpetual(c)
|
|
|
10,631
|
|
|
257,483
|
|
PennyMac Mortgage Investment Trust
|
|
|
|
|
||
|
Series B, 8.00% (3 mo. LIBOR US + 599.00%), Perpetual(c)
|
|
|
10,651
|
|
|
260,097
|
|
Series C, 6.75%, Perpetual
|
|
|
13,033
|
|
|
263,006
|
|
Rithm Capital Corporation, Series D, 7.00% to 11/15/2026 then 5 yr. CMT Rate + 6.22%, Perpetual
|
|
|
11,037
|
|
|
260,032
|
|
RLJ Lodging Trust Series A, 1.95%, Perpetual(e)
|
|
|
10,294
|
|
|
266,512
|
|
SL Green Realty Corporation Series I, 6.50%, Perpetual
|
|
|
11,349
|
|
|
262,162
|
|
Summit Hotel Properties, Inc. Series E, 6.25%, Perpetual
|
|
|
12,043
|
|
|
246,881
|
|
Two Harbors Investment Corporation
|
|
|
|
|
||
|
Series B, 7.63% to 7/27/2027 then 3 mo. LIBOR US + 5.35%, Perpetual(c)
|
|
|
11,130
|
|
|
269,235
|
|
Series C, 7.25% to 1/27/2025 then 3 mo. LIBOR US + 5.01%, Perpetual(c)
|
|
|
10,661
|
|
|
260,555
|
|
Vornado Realty Trust
|
|
|
|
|
||
|
Series M, 5.25%, Perpetual
|
|
|
16,685
|
|
|
287,649
|
|
Series N, 5.25%, Perpetual
|
|
|
16,526
|
|
|
286,891
|
|
TOTAL PREFERRED STOCKS
(Cost $7,137,551)
|
|
|
|
|
7,873,185
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
3
|
|
|
TABLE OF CONTENTS
Hoya Capital High Dividend Yield ETF
Schedule of Investments
August 31, 2024 (Unaudited)(Continued)
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
SHORT-TERM INVESTMENTS - 1.0%
|
|
|
|
|
||
|
Money Market Funds - 1.0%
|
|
|
|
|
||
|
First American Government Obligations Fund - Class X, 5.23%(d)
|
|
|
820,765
|
|
|
$820,765
|
|
TOTAL SHORT-TERM INVESTMENTS
(Cost $820,765)
|
|
|
|
|
820,765
|
|
|
TOTAL INVESTMENTS - 99.9%
(Cost $81,833,365)
|
|
|
|
|
$85,065,079
|
|
|
Other Assets in Excess of Liabilities - 0.1%
|
|
|
|
|
81,500
|
|
|
TOTAL NET ASSETS - 100.0%
|
|
|
|
|
$85,146,579
|
|
|
|
|
|
|
|
|
|
Percentages are stated as a percent of net assets.
The Fund's security classifications are defined by the Fund's Adviser.
CMT - Constant Maturity Treasury Rate
LIBOR - London Interbank Offered Rate
REIT - Real Estate Investment Trust
SOFR - Secured Overnight Financing Rate
|
(a)
|
To the extent that the Fund invests more heavily in a particular industry or sector of the economy, its performance will be especially sensitive to developments that significantly affect those industries or sectors.
|
|
(b)
|
Non-income producing security.
|
|
(c)
|
Securities referencing LIBOR are expected to transition to an alternative reference rate by the security's next scheduled coupon reset date.
|
|
(d)
|
The rate shown represents the 7-day annualized effective yield as of August 31, 2024.
|
|
(e)
|
Convertible security.
|
The accompanying notes are an integral part of these financial statements.
|
|
|
4
|
|
|
TABLE OF CONTENTS
Hoya Capital Housing ETF
Schedule of Investments
August 31, 2024 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
COMMON STOCKS - 99.7%
|
|
|
|
|
||
|
Home Building Products & Materials - 14.0%
|
|
|
|
|
||
|
A.O. Smith Corporation
|
|
|
3,492
|
|
|
$ 292,350
|
|
Beacon Roofing Supply, Inc.(a)
|
|
|
3,046
|
|
|
275,968
|
|
Builders FirstSource, Inc.(a)
|
|
|
1,731
|
|
|
301,194
|
|
Cavco Industries, Inc.(a)
|
|
|
851
|
|
|
351,735
|
|
Century Communities, Inc.
|
|
|
3,529
|
|
|
353,147
|
|
Champion Homes, Inc.(a)
|
|
|
4,130
|
|
|
385,783
|
|
Eagle Materials, Inc.
|
|
|
1,244
|
|
|
320,641
|
|
Installed Building Products, Inc.
|
|
|
1,395
|
|
|
310,122
|
|
Leggett & Platt, Inc.
|
|
|
27,821
|
|
|
351,657
|
|
Lennox International, Inc.
|
|
|
589
|
|
|
347,622
|
|
LGI Homes, Inc.(a)
|
|
|
3,119
|
|
|
336,478
|
|
Louisiana-Pacific Corporation
|
|
|
3,293
|
|
|
319,586
|
|
Masco Corporation
|
|
|
4,285
|
|
|
340,915
|
|
Owens Corning
|
|
|
1,632
|
|
|
275,367
|
|
PotlatchDeltic Corporation
|
|
|
6,924
|
|
|
300,917
|
|
Rayonier, Inc.
|
|
|
10,037
|
|
|
309,240
|
|
Simpson Manufacturing Company, Inc.
|
|
|
1,711
|
|
|
313,216
|
|
TopBuild Corporation(a)
|
|
|
724
|
|
|
284,547
|
|
Watsco, Inc.
|
|
|
605
|
|
|
287,629
|
|
Weyerhaeuser Company
|
|
|
9,802
|
|
|
298,863
|
|
|
|
|
|
6,356,977
|
||
|
Home Furnishings & Home Goods - 12.5%
|
|
|
|
|
||
|
Amazon.com, Inc.(a)
|
|
|
1,700
|
|
|
303,450
|
|
American Woodmark Corporation(a)
|
|
|
3,448
|
|
|
308,975
|
|
AZEK Company, Inc.(a)
|
|
|
6,477
|
|
|
276,114
|
|
Carrier Global Corporation
|
|
|
4,676
|
|
|
340,319
|
|
Costco Wholesale Corporation
|
|
|
380
|
|
|
339,104
|
|
Floor & Decor Holdings, Inc. - Class A(a)
|
|
|
2,693
|
|
|
302,801
|
|
La-Z-Boy, Inc.
|
|
|
8,563
|
|
|
347,401
|
|
Masterbrand, Inc.(a)
|
|
|
18,890
|
|
|
302,996
|
|
Mohawk Industries, Inc.(a)
|
|
|
2,637
|
|
|
409,104
|
|
PPG Industries, Inc.
|
|
|
2,336
|
|
|
303,049
|
|
RH(a)
|
|
|
1,207
|
|
|
306,216
|
|
Sherwin-Williams Company
|
|
|
1,008
|
|
|
372,325
|
|
Sleep Number Corporation(a)
|
|
|
22,755
|
|
|
346,104
|
|
Tempur Sealy International, Inc.
|
|
|
6,158
|
|
|
322,864
|
|
Trex Company, Inc.(a)
|
|
|
3,478
|
|
|
221,688
|
|
Wayfair, Inc. - Class A(a)
|
|
|
5,018
|
|
|
213,516
|
|
Whirlpool Corporation
|
|
|
3,550
|
|
|
356,029
|
|
Williams-Sonoma, Inc.
|
|
|
2,136
|
|
|
286,929
|
|
|
|
|
|
5,658,984
|
||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
5
|
|
|
TABLE OF CONTENTS
Hoya Capital Housing ETF
Schedule of Investments
August 31, 2024 (Unaudited)(Continued)
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
COMMON STOCKS - (Continued)
|
|
|
|
|
||
|
Home Improvement Retailers - 6.0%
|
|
|
|
|
||
|
Home Depot, Inc.
|
|
|
3,643
|
|
|
$ 1,342,445
|
|
Lowe's Companies, Inc.
|
|
|
5,503
|
|
|
1,367,496
|
|
|
|
|
|
2,709,941
|
||
|
Homebuilders - 15.6%
|
|
|
|
|
||
|
DR Horton, Inc.
|
|
|
4,094
|
|
|
772,783
|
|
KB Home
|
|
|
8,398
|
|
|
702,997
|
|
Lennar Corporation - Class A
|
|
|
3,787
|
|
|
689,461
|
|
M/I Homes, Inc.(a)
|
|
|
4,744
|
|
|
756,051
|
|
Meritage Homes Corporation
|
|
|
3,391
|
|
|
671,655
|
|
NVR, Inc.(a)
|
|
|
80
|
|
|
733,797
|
|
PulteGroup, Inc.
|
|
|
5,181
|
|
|
682,079
|
|
Taylor Morrison Home Corporation(a)
|
|
|
10,262
|
|
|
690,941
|
|
Toll Brothers, Inc.
|
|
|
4,817
|
|
|
693,985
|
|
Tri Pointe Homes, Inc.(a)
|
|
|
15,449
|
|
|
686,554
|
|
|
|
|
|
7,080,303
|
||
|
Mortgage Lenders & Servicers - 10.6%
|
|
|
|
|
||
|
AGNC Investment Corporation
|
|
|
27,294
|
|
|
278,672
|
|
Annaly Capital Management, Inc.
|
|
|
13,506
|
|
|
272,281
|
|
Arbor Realty Trust, Inc.
|
|
|
19,680
|
|
|
267,648
|
|
Bank of America Corporation
|
|
|
6,627
|
|
|
270,050
|
|
Chimera Investment Corporation
|
|
|
22,489
|
|
|
348,130
|
|
Citizens Financial Group, Inc.
|
|
|
7,443
|
|
|
320,421
|
|
JPMorgan Chase & Company
|
|
|
1,312
|
|
|
294,938
|
|
PennyMac Mortgage Investment Trust
|
|
|
19,388
|
|
|
275,503
|
|
PNC Financial Services Group, Inc.
|
|
|
1,706
|
|
|
315,764
|
|
Rithm Capital Corporation
|
|
|
23,875
|
|
|
285,068
|
|
Rocket Cos., Inc. - Class A(a)
|
|
|
19,012
|
|
|
373,586
|
|
Starwood Property Trust, Inc.
|
|
|
13,891
|
|
|
289,488
|
|
Truist Financial Corporation
|
|
|
6,852
|
|
|
304,640
|
|
Two Harbors Investment Corporation
|
|
|
20,932
|
|
|
296,397
|
|
UWM Holdings Corporation
|
|
|
36,241
|
|
|
340,665
|
|
Wells Fargo & Company
|
|
|
4,370
|
|
|
255,514
|
|
|
|
|
|
4,788,765
|
||
|
Property, Title & Mortgage Insurance - 5.4%
|
|
|
|
|
||
|
Allstate Corporation
|
|
|
1,596
|
|
|
301,548
|
|
Fidelity National Financial, Inc.
|
|
|
5,185
|
|
|
305,708
|
|
First American Financial Corporation
|
|
|
4,793
|
|
|
305,793
|
|
MGIC Investment Corporation
|
|
|
12,803
|
|
|
325,580
|
|
Old Republic International Corporation
|
|
|
8,354
|
|
|
299,658
|
|
Progressive Corporation
|
|
|
1,293
|
|
|
326,095
|
|
Radian Group, Inc.
|
|
|
8,406
|
|
|
303,877
|
|
Travelers Companies, Inc.
|
|
|
1,234
|
|
|
281,438
|
|
|
|
|
|
2,449,697
|
||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
6
|
|
|
TABLE OF CONTENTS
Hoya Capital Housing ETF
Schedule of Investments
August 31, 2024 (Unaudited)(Continued)
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
COMMON STOCKS - (Continued)
|
|
|
|
|
||
|
Real Estate Technology, Brokerage & Services - 4.4%
|
|
|
|
|
||
|
Anywhere Real Estate, Inc.(a)
|
|
|
58,601
|
|
|
$286,559
|
|
Compass, Inc. - Class A(a)
|
|
|
64,489
|
|
|
330,828
|
|
CoStar Group, Inc.(a)
|
|
|
3,063
|
|
|
236,770
|
|
RE/MAX Holdings, Inc. - Class A
|
|
|
32,009
|
|
|
362,342
|
|
Redfin Corporation(a)
|
|
|
43,778
|
|
|
408,886
|
|
Zillow Group, Inc. - Class C(a)
|
|
|
6,632
|
|
|
366,750
|
|
|
|
|
|
1,992,135
|
||
|
Residential REITs & Real Estate Operators - 31.2%(b)
|
|
|
|
|
||
|
American Homes 4 Rent - Class A
|
|
|
16,386
|
|
|
651,671
|
|
AvalonBay Communities, Inc.
|
|
|
3,033
|
|
|
684,639
|
|
Camden Property Trust
|
|
|
5,716
|
|
|
715,643
|
|
Centerspace
|
|
|
8,739
|
|
|
653,677
|
|
CubeSmart
|
|
|
14,061
|
|
|
728,782
|
|
Elme Communities
|
|
|
37,683
|
|
|
665,482
|
|
Equity LifeStyle Properties, Inc.
|
|
|
9,573
|
|
|
696,053
|
|
Equity Residential
|
|
|
9,012
|
|
|
674,818
|
|
Essex Property Trust, Inc.
|
|
|
2,283
|
|
|
688,987
|
|
Extra Space Storage, Inc.
|
|
|
4,152
|
|
|
734,904
|
|
Independence Realty Trust, Inc.
|
|
|
35,857
|
|
|
745,108
|
|
Invitation Homes, Inc.
|
|
|
17,169
|
|
|
632,506
|
|
Mid-America Apartment Communities, Inc.
|
|
|
4,445
|
|
|
721,735
|
|
NexPoint Residential Trust, Inc.
|
|
|
16,202
|
|
|
766,355
|
|
Public Storage
|
|
|
2,175
|
|
|
747,591
|
|
Sun Communities, Inc.
|
|
|
5,054
|
|
|
683,503
|
|
UDR, Inc.
|
|
|
15,195
|
|
|
676,329
|
|
UMH Properties, Inc.
|
|
|
39,414
|
|
|
766,996
|
|
Ventas, Inc.
|
|
|
12,464
|
|
|
774,139
|
|
Welltower, Inc.
|
|
|
5,870
|
|
|
708,392
|
|
|
|
|
|
14,117,310
|
||
|
TOTAL COMMON STOCKS
(Cost $36,027,070)
|
|
|
|
|
45,154,112
|
|
|
SHORT-TERM INVESTMENTS - 0.2%
|
|
|
|
|
||
|
Money Market Funds - 0.2%
|
|
|
|
|
||
|
First American Government Obligations Fund - Class X, 5.23%(c)
|
|
|
93,860
|
|
|
93,860
|
|
TOTAL SHORT-TERM INVESTMENTS
(Cost $93,860)
|
|
|
|
|
93,860
|
|
|
TOTAL INVESTMENTS - 99.9%
(Cost $36,120,930)
|
|
|
|
|
$45,247,972
|
|
|
Other Assets in Excess of Liabilities - 0.1%
|
|
|
|
|
30,963
|
|
|
TOTAL NET ASSETS - 100.0%
|
|
|
|
|
$45,278,935
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
7
|
|
|
TABLE OF CONTENTS
Hoya Capital Housing ETF
Schedule of Investments
August 31, 2024 (Unaudited)(Continued)
Percentages are stated as a percent of net assets.
The Fund's security classifications are defined by the Fund's Adviser.
REIT - Real Estate Investment Trust
|
(a)
|
Non-income producing security.
|
|
(b)
|
To the extent that the Fund invests more heavily in a particular industry or sector of the economy, its performance will be especially sensitive to developments that significantly affect those industries or sectors.
|
|
(c)
|
The rate shown represents the 7-day annualized effective yield as of August 31, 2024.
|
The accompanying notes are an integral part of these financial statements.
|
|
|
8
|
|
|
TABLE OF CONTENTS
HOYA CAPITAL ETFs
Statements of Assets and Liabilities
August 31, 2024 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Hoya Capital High
Dividend Yield ETF
|
|
|
Hoya Capital
Housing ETF
|
|
|
ASSETS:
|
|
|
|
|
||
|
Investments, at value
|
|
|
$85,065,079
|
|
|
$45,247,972
|
|
Dividends receivable
|
|
|
111,292
|
|
|
41,914
|
|
Interest receivable
|
|
|
3,448
|
|
|
526
|
|
Total assets
|
|
|
85,179,819
|
|
|
45,290,412
|
|
LIABILITIES:
|
|
|
|
|
||
|
Payable to adviser
|
|
|
33,240
|
|
|
11,477
|
|
Total liabilities
|
|
|
33,240
|
|
|
11,477
|
|
NET ASSETS
|
|
|
$85,146,579
|
|
|
$45,278,935
|
|
Net Assets Consists of:
|
|
|
|
|
||
|
Paid-in capital
|
|
|
$86,658,582
|
|
|
$37,183,843
|
|
Total distributable earnings/(accumulated losses)
|
|
|
(1,512,003)
|
|
|
8,095,092
|
|
Total net assets
|
|
|
$85,146,579
|
|
|
$45,278,935
|
|
Net assets
|
|
|
$85,146,579
|
|
|
$45,278,935
|
|
Shares issued and outstanding(a)
|
|
|
7,780,000
|
|
|
925,000
|
|
Net asset value per share
|
|
|
$10.94
|
|
|
$48.95
|
|
Cost:
|
|
|
|
|
||
|
Investments, at cost
|
|
|
$81,833,365
|
|
|
$36,120,930
|
|
|
|
|
|
|
|
|
|
(a)
|
Unlimited shares authorized without par value.
|
The accompanying notes are an integral part of these financial statements.
|
|
|
9
|
|
|
TABLE OF CONTENTS
HOYA CAPITAL ETFs
Statements of Operations
For the Period Ended August 31, 2024 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Hoya Capital High
Dividend Yield ETF
|
|
|
Hoya Capital
Housing ETF
|
|
|
INVESTMENT INCOME:
|
|
|
|
|
||
|
Dividend income
|
|
|
$3,335,057
|
|
|
$530,534
|
|
Less: Dividend withholding taxes
|
|
|
-
|
|
|
(379)
|
|
Interest income
|
|
|
13,861
|
|
|
2,692
|
|
Total investment income
|
|
|
3,348,918
|
|
|
532,847
|
|
EXPENSES:
|
|
|
|
|
||
|
Investment advisory fee
|
|
|
166,998
|
|
|
64,087
|
|
Total expenses
|
|
|
166,998
|
|
|
64,087
|
|
NET INVESTMENT INCOME
|
|
|
3,181,920
|
|
|
468,760
|
|
REALIZED AND UNREALIZED GAIN
|
|
|
|
|
||
|
Net realized gain/(loss) from:
|
|
|
|
|
||
|
Investments
|
|
|
(2,046,835)
|
|
|
(154,246)
|
|
In-kind redemptions
|
|
|
-
|
|
|
772,319
|
|
Net realized gain/(loss)
|
|
|
(2,046,835)
|
|
|
618,073
|
|
Net change in unrealized appreciation on:
|
|
|
|
|
||
|
Investments
|
|
|
8,553,610
|
|
|
5,647,161
|
|
Net change in unrealized appreciation
|
|
|
8,553,610
|
|
|
5,647,161
|
|
Net realized and unrealized gain
|
|
|
6,506,775
|
|
|
6,265,234
|
|
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS
|
|
|
$9,688,695
|
|
|
$6,733,994
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
10
|
|
|
TABLE OF CONTENTS
Statements of Changes in Net Assets
|
|
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|
|
|
|
|
||||||
|
|
|
Hoya Capital High Dividend Yield ETF
|
|
|
Hoya Capital Housing ETF
|
|||||||
|
|
|
Period Ended
August 31, 2024
(Unaudited)
|
|
|
Year Ended
February 29, 2024
|
|
|
Period Ended
August 31, 2024
(Unaudited)
|
|
|
Year Ended
February 29, 2024
|
|
|
OPERATIONS:
|
|
|
|
|
|
|
|
|
||||
|
Net investment income
|
|
|
$3,181,920
|
|
|
$2,452,041
|
|
|
$468,760
|
|
|
$687,124
|
|
Net realized gain/(loss)
|
|
|
(2,046,835)
|
|
|
(1,699,009)
|
|
|
618,073
|
|
|
(532,384)
|
|
Net change in unrealized appreciation/(depreciation)
|
|
|
8,553,610
|
|
|
(189,699)
|
|
|
5,647,161
|
|
|
7,661,525
|
|
Net increase in net assets from operations
|
|
|
9,688,695
|
|
|
563,333
|
|
|
6,733,994
|
|
|
7,816,265
|
|
DISTRIBUTIONS TO SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
||||
|
Distributions to shareholders
|
|
|
(3,306,285)
|
|
|
(2,452,041)
|
|
|
(435,000)
|
|
|
(687,124)
|
|
Return of capital
|
|
|
-
|
|
|
(1,711,809)
|
|
|
-
|
|
|
(167,226)
|
|
Total distributions to shareholders
|
|
|
(3,306,285)
|
|
|
(4,163,850)
|
|
|
(435,000)
|
|
|
(854,350)
|
|
CAPITAL TRANSACTIONS:
|
|
|
|
|
|
|
|
|
||||
|
Subscriptions
|
|
|
24,941,152
|
|
|
25,660,576
|
|
|
1,049,445
|
|
|
-
|
|
Redemptions
|
|
|
-
|
|
|
(621,996)
|
|
|
(2,392,660)
|
|
|
(1,707,718)
|
|
Net increase (decrease) in net assets from capital transactions
|
|
|
24,941,152
|
|
|
25,038,580
|
|
|
(1,343,215)
|
|
|
(1,707,718)
|
|
NET INCREASE IN NET ASSETS
|
|
|
31,323,562
|
|
|
21,438,063
|
|
|
4,955,779
|
|
|
5,254,197
|
|
NET ASSETS:
|
|
|
|
|
|
|
|
|
||||
|
Beginning of the period
|
|
|
53,823,017
|
|
|
32,384,954
|
|
|
40,323,156
|
|
|
35,068,959
|
|
End of the period
|
|
|
$85,146,579
|
|
|
$53,823,017
|
|
|
$45,278,935
|
|
|
$40,323,156
|
|
SHARES TRANSACTIONS
|
|
|
|
|
|
|
|
|
||||
|
Subscriptions
|
|
|
2,430,000
|
|
|
2,540,000
|
|
|
25,000
|
|
|
-
|
|
Redemptions
|
|
|
-
|
|
|
(60,000)
|
|
|
(50,000)
|
|
|
(50,000)
|
|
Total increase/(decrease) in shares outstanding
|
|
|
2,430,000
|
|
|
2,480,000
|
|
|
(25,000)
|
|
|
(50,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
|
|
11
|
|
|
TABLE OF CONTENTS
Hoya Capital High Dividend Yield ETF
Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended
August 31,
2024
(Unaudited)
|
|
|
Year Ended
February 29,
2024
|
|
|
Year Ended
February 28,
2023
|
|
|
Period Ended
February 28,
2022(a)
|
|
|
PER SHARE DATA:
|
|
|
|
|
|
|
|
|
||||
|
Net asset value, beginning of period
|
|
|
$10.06
|
|
|
$11.28
|
|
|
$14.26
|
|
|
$14.92
|
|
INVESTMENT OPERATIONS:
|
|
|
|
|
|
|
|
|
||||
|
Net investment income(b)
|
|
|
0.49
|
|
|
0.61
|
|
|
0.62
|
|
|
0.23
|
|
Net realized and unrealized gain (loss) on investments(g)
|
|
|
0.90
|
|
|
(0.80)
|
|
|
(2.59)
|
|
|
(0.41)
|
|
Total from investment operations
|
|
|
1.39
|
|
|
(0.19)
|
|
|
(1.97)
|
|
|
(0.18)
|
|
LESS DISTRIBUTIONS FROM:
|
|
|
|
|
|
|
|
|
||||
|
From net investment income
|
|
|
(0.51)
|
|
|
(0.61)
|
|
|
(0.62)
|
|
|
(0.30)
|
|
From net realized gains
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(0.01)
|
|
Return of capital
|
|
|
-
|
|
|
(0.42)
|
|
|
(0.39)
|
|
|
(0.17)
|
|
Total distributions
|
|
|
(0.51)
|
|
|
(1.03)
|
|
|
(1.01)
|
|
|
(0.48)
|
|
Net asset value, end of period
|
|
|
$10.94
|
|
|
$10.06
|
|
|
$11.28
|
|
|
$14.26
|
|
Total return(d)
|
|
|
14.39%
|
|
|
−1.33%
|
|
|
−14.20%
|
|
|
−1.35%
|
|
SUPPLEMENTAL DATA AND RATIOS:
|
|
|
|
|
|
|
|
|
||||
|
Net assets, end of period (in thousands)
|
|
|
$85,147
|
|
|
$53,823
|
|
|
$32,385
|
|
|
$21,821
|
|
Ratio of expenses to average net assets:
|
|
|
|
|
|
|
|
|
||||
|
Before expense reimbursement(e)(c)
|
|
|
0.50%
|
|
|
0.50%
|
|
|
0.50%
|
|
|
0.50%
|
|
After expense reimbursement(e)(c)
|
|
|
0.50%
|
|
|
0.50%
|
|
|
0.36%
|
|
|
0.25%
|
|
Ratio of net investment income to average net assets
|
|
|
|
|
|
|
|
|
||||
|
Before expense reimbursement(e)(c)
|
|
|
9.54%
|
|
|
5.94%
|
|
|
4.92%
|
|
|
3.17%
|
|
After expense reimbursement(e)(c)
|
|
|
9.54%
|
|
|
5.94%
|
|
|
5.06%
|
|
|
3.42%
|
|
Portfolio turnover rate(d)(f)
|
|
|
15%
|
|
|
34%
|
|
|
33%
|
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Inception date of the Fund was September 21, 2021.
|
|
(b)
|
Net investment income per share has been calculated based on average shares outstanding during the year.
|
|
(c)
|
The Fund's 0.25% management fee waiver expired on September 30, 2022.
|
|
(d)
|
Not annualized for periods less than one year.
|
|
(e)
|
Annualized for periods less than one year.
|
|
(f)
|
Portfolio turnover rate excludes in-kind transactions.
|
|
(g)
|
Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the period.
|
The accompanying notes are an integral part of these financial statements.
|
|
|
12
|
|
|
TABLE OF CONTENTS
Hoya Capital Housing ETF
Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Period Ended
August 31,
2024
(Unaudited)
|
|
|
Year Ended
February 29,
2024
|
|
|
Year Ended February 28,
|
|
|
Period Ended
February 29,
2020(a)
|
|||||||
|
|
|
2023
|
|
|
2022
|
|
|
2021
|
|
|||||||||
|
PER SHARE DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net asset value, beginning
of period
|
|
|
$42.45
|
|
|
$35.07
|
|
|
$39.64
|
|
|
$35.07
|
|
|
$26.78
|
|
|
$25.00
|
|
INVESTMENT OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net investment income(b)
|
|
|
0.49
|
|
|
0.72
|
|
|
0.63
|
|
|
0.42
|
|
|
0.49
|
|
|
0.43
|
|
Net realized and unrealized gain (loss) on investments(h)
|
|
|
6.46
|
|
|
7.55
|
|
|
(4.46)
|
|
|
4.71
|
|
|
8.82
|
|
|
1.80
|
|
Total from investment
operations
|
|
|
6.95
|
|
|
8.27
|
|
|
(3.83)
|
|
|
5.13
|
|
|
9.31
|
|
|
2.23
|
|
LESS DISTRIBUTIONS FROM:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
From net investment income
|
|
|
(0.45)
|
|
|
(0.72)
|
|
|
(0.64)
|
|
|
(0.42)
|
|
|
(0.87)
|
|
|
(0.45)
|
|
From net realized gains
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(0.01)
|
|
|
-
|
|
|
-
|
|
Return of capital
|
|
|
-
|
|
|
(0.17)
|
|
|
(0.10)
|
|
|
(0.13)
|
|
|
(0.15)
|
|
|
-
|
|
Total distributions
|
|
|
(0.45)
|
|
|
(0.89)
|
|
|
(0.74)
|
|
|
(0.56)
|
|
|
(1.02)
|
|
|
(0.45)
|
|
ETF transaction fees per share
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.00(c)
|
|
Net asset value, end of period
|
|
|
$48.95
|
|
|
$42.45
|
|
|
$35.07
|
|
|
$39.64
|
|
|
$35.07
|
|
|
$26.78
|
|
Total return(e)
|
|
|
16.51%
|
|
|
23.94%
|
|
|
−9.62%
|
|
|
14.60%
|
|
|
35.54%
|
|
|
8.88%
|
|
SUPPLEMENTAL DATA AND RATIOS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net assets, end of period
(in thousands)
|
|
|
$45,279
|
|
|
$40,323
|
|
|
$35,069
|
|
|
$63,423
|
|
|
$59,625
|
|
|
$11,381
|
|
Ratio of expenses to average
net assets(f)
|
|
|
0.30%
|
|
|
0.30%
|
|
|
0.30%
|
|
|
0.30%
|
|
|
0.33%(d)
|
|
|
0.45%
|
|
Ratio of net investment income to average net assets(f)
|
|
|
2.20%
|
|
|
1.92%
|
|
|
1.80%
|
|
|
1.03%
|
|
|
1.67%
|
|
|
1.60%
|
|
Portfolio turnover rate(e)(g)
|
|
|
13%
|
|
|
18%
|
|
|
18%
|
|
|
13%
|
|
|
19%
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Inception date of the Fund was March 19, 2019.
|
|
(b)
|
Net investment income per share has been calculated based on average shares outstanding during the year.
|
|
(c)
|
Amount represents less than $0.005 per share.
|
|
(d)
|
Effective August 1, 2020, the management fee for the Fund was reduced from 0.45% to 0.30%.
|
|
(e)
|
Not annualized for periods less than one year.
|
|
(f)
|
Annualized for periods less than one year.
|
|
(g)
|
Portfolio turnover rate excludes in-kind transactions.
|
|
(h)
|
Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the period.
|
The accompanying notes are an integral part of these financial statements.
|
|
|
13
|
|
|
TABLE OF CONTENTS
Hoya Capital ETFs
Notes to Financial Statements
August 31, 2024 (Unaudited)
NOTE 1 - ORGANIZATION
Hoya Capital High Dividend Yield ETF and Hoya Capital Housing ETF (individually each a "Fund" or collectively the "Funds") are each a diversified series of ETF Series Solutions ("ESS" or the "Trust"), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on February 9, 2012. The Trust is registered with the U.S. Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company and the offering of the Funds' shares is registered under the Securities Act of 1933, as amended (the "Securities Act"). The investment objective of the Hoya Capital High Dividend Yield ETF is to track the performance, before fees and expenses, of the Hoya Capital High Dividend Yield Index (the "Index"). The investment objective of the Hoya Capital Housing ETF is to track the performance, before fees and expenses, of the Hoya Capital Housing 100™ Index (the "Index"). Hoya Capital High Dividend Yield ETF commenced operations on September 21, 2021 and Hoya Capital Housing ETF commenced operations on March 19, 2019.
The end of the reporting period for the Funds is August 31, 2024. The period covered by these Notes to Financial Statements is the period from March 1, 2024 through August 31, 2024 (the "current fiscal period").
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The Funds are investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946 Financial Services-Investment Companies.
The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").
|
A.
|
Security Valuation. All equity securities, including domestic and foreign common stocks, preferred stocks and exchange traded funds that are traded on a national securities exchange, except those listed on the Nasdaq Global Market®, Nasdaq Global Select Market® and the Nasdaq Capital Market® exchanges (collectively, "Nasdaq") are valued at the last reported sale price on the exchange on which the security is principally traded. Securities traded on Nasdaq will be valued at the Nasdaq Official Closing Price ("NOCP"). If, on a particular day, an exchange-traded or Nasdaq security does not trade, then the mean between the most recent quoted bid and asked prices will be used. All equity securities that are not traded on a listed exchange are valued at the last sale price in the over-the-counter market. If a non-exchange traded security does not trade on a particular day, then the mean between the last quoted closing bid and asked price will be used. Prices denominated in foreign currencies are converted to U.S. dollar equivalents at the current exchange rate, which approximates fair value.
|
Investments in mutual funds, including money market funds, are valued at their net asset value ("NAV") per share.
Securities for which quotations are not readily available are valued at their respective fair values in accordance with pricing procedures adopted by the Fund's Board of Trustees (the "Board"). When a security is "fair valued," consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Board. The use of fair value pricing by the Funds may cause the NAV of their shares to differ significantly from the NAV that would be calculated without regard to such considerations.
As described above, the Funds utilize various methods to measure the fair value of their investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
|
Level 1 -
|
Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
|
|
|
|
14
|
|
|
TABLE OF CONTENTS
Hoya Capital ETFs
Notes to Financial Statements
August 31, 2024 (Unaudited)(Continued)
|
Level 2 -
|
Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
|
|
Level 3 -
|
Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds' own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
|
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following is a summary of the inputs used to value the Funds' investments as of the end of the current fiscal period:
Hoya Capital High Dividend Yield ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets^
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Common Stocks
|
|
|
$76,371,129
|
|
|
$-
|
|
|
$-
|
|
|
$76,371,129
|
|
Preferred Stocks
|
|
|
7,873,185
|
|
|
-
|
|
|
-
|
|
|
7,873,185
|
|
Short-Term Investments
|
|
|
820,765
|
|
|
-
|
|
|
-
|
|
|
820,765
|
|
Total Investments in Securities
|
|
|
$85,065,079
|
|
|
$-
|
|
|
$-
|
|
|
$85,065,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hoya Capital Housing ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets^
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Common Stocks
|
|
|
$45,154,112
|
|
|
$-
|
|
|
$-
|
|
|
$45,154,112
|
|
Short-Term Investments
|
|
|
93,860
|
|
|
-
|
|
|
-
|
|
|
93,860
|
|
Total Investments in Securities
|
|
|
$45,247,972
|
|
|
$-
|
|
|
$-
|
|
|
$45,247,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
^
|
Refer to the Schedule of Investments for further disaggregation of investment categories.
|
During the current fiscal period, the Funds did not recognize any transfers to or from Level 3.
|
B.
|
Federal Income Taxes. The Funds' policy is to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of their net investment income and net capital gains to shareholders. Therefore, no federal income tax provision is required. Each Fund plans to file U.S. Federal and applicable state and local tax returns.
|
Each Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed each Fund's uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months. Income and capital gain distributions are determined in accordance
|
|
|
15
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TABLE OF CONTENTS
Hoya Capital ETFs
Notes to Financial Statements
August 31, 2024 (Unaudited)(Continued)
with federal income tax regulations, which may differ from U.S. GAAP. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits on uncertain tax positions as income tax expense in the Statement of Operations. During the current fiscal period, the Funds did not incur any interest or penalties.
|
C.
|
Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Dividend income is recorded on the ex-dividend date. Non-cash dividends included in dividend income or separately disclosed, if any, are recorded at the fair value of the security received. Interest income is recorded on an accrual basis. Withholding taxes on foreign dividends, if any, have been provided for in accordance with the Funds' understanding of the applicable tax rules and regulations.
|
Distributions received from investments in Real Estate Investment Trusts ("REITs") may be characterized as ordinary income, net capital gain, or a return of capital. The proper characterization of REIT distributions is generally not known until after the end of each calendar year. As such, the Funds must use estimates in reporting the character of income and distributions received during the current calendar year for financial statement purposes. The actual character of distributions to the Funds' shareholders will be reflected on the Form 1099 received by shareholders after the end of the calendar year. Due to the nature of REIT investments, a portion of the distributions received by the Funds' shareholders may represent a return of capital.
|
D.
|
Distributions to Shareholders. Distributions to shareholders from net investment income, if any, are declared and paid monthly by the Funds. Distributions to shareholders from net realized gains on securities are declared and paid by the Funds on, at least, an annual basis. Distributions are recorded on the ex-dividend date.
|
|
E.
|
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the current fiscal period. Actual results could differ from those estimates.
|
|
F.
|
Share Valuation. The NAV per share of each Fund is calculated by dividing the sum of the value of the securities held by each Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of outstanding shares of each Fund, rounded to the nearest cent. The Funds' shares will not be priced on the days on which the New York Stock Exchange ("NYSE") is closed for trading. The offering and redemption price per share of each Fund is equal to each Fund's NAV per share.
|
|
G.
|
Guarantees and Indemnifications. In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
|
|
H.
|
Reclassifications of Capital Accounts. U.S. GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share.
|
These timing differences are primarily due to differing book and tax treatments for in-kind transactions. For the fiscal year ended February 29, 2024, the following table shows the reclassifications made:
|
|
|
|
|
|
|
|
|
|
|
Distributable
Earnings
(Accumulated
Losses)
|
|
|
Paid-In
Capital
|
|
|
Hoya Capital High Dividend Yield ETF
|
|
|
$(72,655)
|
|
|
$72,655
|
|
Hoya Capital Housing ETF
|
|
|
(79,132)
|
|
|
79,132
|
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|
TABLE OF CONTENTS
Hoya Capital ETFs
Notes to Financial Statements
August 31, 2024 (Unaudited)(Continued)
|
I.
|
Subsequent Events. In preparing these financial statements, management has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. There were no events or transactions that occurred during the period subsequent to the end of the current fiscal period that materially impacted the amounts or disclosures in the Funds' financial statements.
|
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
Hoya Capital Real Estate, LLC (the "Adviser"), serves as the investment adviser to the Funds. An affiliate of the Adviser, Hoya Capital Index Innovations (the "Index Provider"), serves as index provider to the Funds. Pursuant to an Investment Advisory Agreement ("Advisory Agreement") between the Trust, on behalf of the Funds, and the Adviser, the Adviser provides investment advice to the Funds and oversees the day-to-day operations of the Funds, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Adviser is also responsible for arranging, in consultation with Penserra Capital Management, LLC, (the "Sub-Adviser"), transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Funds to operate. Under the Advisory Agreement, the Adviser has agreed to pay all expenses of the Funds, except for: the fee paid to the Adviser pursuant to the Advisory Agreement, interest charges on any borrowings, dividends and other expenses on securities sold short, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses and distribution (12b-1) fees and expenses. For the services it provides to the Funds, the Funds pay the Adviser a unified management fee, which is calculated daily and paid monthly, at the annual rates of each Fund's average daily net assets listed below. The Adviser is responsible for paying the Sub-Adviser.
|
|
|
|
|
|
Hoya Capital High Dividend Yield ETF
|
|
|
0.50%
|
|
Hoya Capital Housing ETF
|
|
|
0.30%
|
|
|
|
|
|
U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services ("Fund Services" or "Administrator"), acts as the Funds' Administrator and, in that capacity, performs various administrative and accounting services for the Funds. The Administrator prepares various federal and state regulatory filings, reports and returns for the Funds, including regulatory compliance monitoring and financial reporting; prepares reports and materials to be supplied to the Board; monitors the activities of the Funds' Custodian, transfer agent, and fund accountant. Fund Services also serves as the transfer agent and fund accountant to the Funds. U.S. Bank N.A. (the "Custodian"), an affiliate of Fund Services, serves as the Funds' Custodian.
All officers of the Trust are affiliated with the Administrator and Custodian.
NOTE 4 - PURCHASES AND SALES OF SECURITIES
During the current fiscal period, purchases and sales of securities by the Funds, excluding short-term securities and in-kind transactions were as follows:
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
|
Sales
|
|
|
Hoya Capital High Dividend Yield ETF
|
|
|
$10,384,576
|
|
|
$10,240,671
|
|
Hoya Capital Housing ETF
|
|
|
11,853,654
|
|
|
5,538,582
|
|
|
|
|
|
|
|
|
During the current fiscal period, there were no purchases or sales of U.S. Government securities.
During the current fiscal period, in-kind transactions associated with creations and redemptions were as follows:
|
|
|
|
|
|
|
|
|
|
|
In-Kind
Purchases
|
|
|
In-Kind
Sales
|
|
|
Hoya Capital High Dividend Yield ETF
|
|
|
$24,352,550
|
|
|
$-
|
|
Hoya Capital Housing ETF
|
|
|
1,039,054
|
|
|
2,372,367
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
TABLE OF CONTENTS
Hoya Capital ETFs
Notes to Financial Statements
August 31, 2024 (Unaudited)(Continued)
NOTE 5 - INCOME TAX INFORMATION
The amount and character of tax basis distributions and composition of net assets, including distributable earnings (accumulated losses) are finalized at fiscal year-end: accordingly, tax basis balances have not been determined for the current fiscal period.
The components of distributable earnings (accumulated losses) and cost basis of investments for federal income tax purposes at February 29, 2024 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Hoya Capital
High Dividend
Yield ETF
|
|
|
Hoya Capital
Housing ETF
|
|
|
Tax cost of investments
|
|
|
$60,780,294
|
|
|
$36,948,480
|
|
Gross tax unrealized appreciation
|
|
|
$3,996,847
|
|
|
$8,483,345
|
|
Gross tax unrealized depreciation
|
|
|
(11,107,460)
|
|
|
(5,136,085)
|
|
Net tax unrealized appreciation (depreciation)
|
|
|
(7,110,613)
|
|
|
3,347,260
|
|
Undistributed ordinary income
|
|
|
-
|
|
|
-
|
|
Undistributed long-term capital gains
|
|
|
-
|
|
|
-
|
|
Other accumulated gain (loss)
|
|
|
(783,800)
|
|
|
(1,551,162)
|
|
Distributable earnings (accumulated losses)
|
|
|
$(7,894,413)
|
|
|
$1,796,098
|
|
|
|
|
|
|
|
|
The difference between the cost basis for financial statement and federal income tax purposes is primarily due to timing differences in recognizing wash sales.
A regulated investment company may elect for any taxable year to treat any portion of any qualified late year loss as arising on the first day of the next taxable year. Qualified late year losses are certain capital and ordinary losses which occur during the portion of the Funds' taxable year subsequent to October 31 and December 31, respectively. For the taxable year ended February 29, 2024, the Funds did not elect to defer any post-October capital losses or late-year losses.
As of February 29, 2024, the Funds had the following capital loss carryforwards with an indefinite expiration:
|
|
|
|
|
|
|
|
|
|
|
Short-Term
|
|
|
Long-Term
|
|
|
Hoya Capital High Dividend Yield ETF
|
|
|
$148,175
|
|
|
$635,625
|
|
Hoya Capital Housing ETF
|
|
|
294,623
|
|
|
1,256,539
|
|
|
|
|
|
|
|
|
The tax character of distributions paid by the Funds during the year ended February 29, 2024 were as follows:
|
|
|
|
|
|
|
|
|
Fund
|
|
|
Ordinary
Income
|
|
|
Return of
Capital
|
|
Hoya Capital High Dividend Yield ETF
|
|
|
$2,452,041
|
|
|
$1,711,809
|
|
Hoya Capital Housing ETF
|
|
|
687,124
|
|
|
167,226
|
|
|
|
|
|
|
|
|
The tax character of distributions paid by the Funds during the year ended February 28, 2023 were as follows:
|
|
|
|
|
|
|
|
|
Fund
|
|
|
Ordinary
Income
|
|
|
Return of
Capital
|
|
Hoya Capital High Dividend Yield ETF
|
|
|
$1,272,217
|
|
|
$803,578
|
|
Hoya Capital Housing ETF
|
|
|
743,084
|
|
|
119,159
|
|
|
|
|
|
|
|
|
NOTE 6 - SHARE TRANSACTIONS
Shares of the Funds are listed and trade on the New York Stock Exchange Arca, Inc. ("NYSE Arca"). Market prices for the shares may be different from their NAV. The Funds issue and redeem shares on a continuous basis at NAV generally in large blocks of shares, called "Creation Units." Creation Units are issued and redeemed principally in-kind for securities included in a specified universe. Once created, shares generally trade in the secondary market at market
|
|
|
18
|
|
|
TABLE OF CONTENTS
Hoya Capital ETFs
Notes to Financial Statements
August 31, 2024 (Unaudited)(Continued)
prices that change throughout the day. Except when aggregated in Creation Units, shares are not redeemable securities of the Funds. Creation Units may only be purchased or redeemed by certain financial institutions ("Authorized Participants"). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a Depository Trust Company participant and, in each case, must have executed a Participation Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem shares directly from the Funds. Rather, most retail investors may purchase shares in the secondary market with the assistance of a broker and are subject to customary brokerage commissions or fees.
The Funds currently offer one class of shares, which has no front-end sales load, no deferred sales charge, and no redemption fee. A fixed transaction fee is imposed for the transfer and other transaction costs associated with the purchase or sale of Creation Units. The standard fixed transaction fee for the Funds is $300, payable to the Custodian. The fixed transaction fee may be waived on certain orders if the Funds' Custodian has determined to waive some or all of the costs associated with the order or another party, such as the Adviser, has agreed to pay such fee. In addition, a variable fee, payable to the Funds, may be charged on all cash transactions or substitutes for Creation Units of up to a maximum of 2% as a percentage of the value of the Creation Units subject to the transaction. Variable fees received by the Funds, if any, are displayed in the Capital Shares Transactions section of the Statements of Changes in Net Assets. The Funds may issue an unlimited number of shares of beneficial interest, with no par value. All shares of the Funds have equal rights and privileges.
NOTE 7 - RISKS
Concentration Risk. The Funds' investments will be concentrated in an industry or group of industries to the extent the Indexes are so concentrated, and the Indexes are expected to be concentrated in housing and real estate-related industries. When the Funds focus their investments in a particular industry or sector, they thereby present a more concentrated risk and their performance will be especially sensitive to developments that significantly affect that industry or group of industries. In addition, the value of shares may change at different rates compared to the value of shares of a fund with investments in a more diversified mix of industries. An industry may have above-average performance during particular periods, but may also move up and down more than the broader market. The several industries that constitute a sector may all react in the same way to economic, political or regulatory events. The Funds' performance could also be affected if the sectors, industries, or sub-sectors do not perform as expected. Alternatively, the lack of exposure to one or more sectors or industries may adversely affect performance.
Construction and Housing Risk. The construction and housing industry can be significantly affected by the national, regional and local real estate markets. This industry is also sensitive to interest rate fluctuations which can cause changes in the availability of mortgage capital and directly affect the purchasing power of potential homebuyers. The building industry can be significantly affected by changes in government spending, consumer confidence, demographic patterns and the level of new and existing home sales.
|
|
|
19
|
|
|
TABLE OF CONTENTS
Hoya Capital ETFs
APPROVAL OF ADVISORY AGREEMENTS & BOARD CONSIDERATIONS (Unaudited)
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the "1940 Act"), at a meeting held on April 10-11, 2024 (the "Meeting"), the Board of Trustees (the "Board") of ETF Series Solutions (the "Trust") approved the continuance of the Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement") by and among Hoya Capital Real Estate, LLC (the "Adviser"), Penserra Capital Management, LLC (the "Sub-Adviser"), and the Trust, on behalf of the Hoya Capital Housing ETF (the "Housing ETF") and the Hoya Capital High Dividend Yield ETF (the "RIET ETF") (each, a "Fund" and, together, the "Funds").
Prior to the Meeting, the Board, including the Trustees who are not parties to the Sub-Advisory Agreement or "interested persons" of any party thereto, as defined in the 1940 Act (the "Independent Trustees"), reviewed written materials (the "Materials"), including information from the Sub-Adviser regarding, among other things: (i) the nature, extent, and quality of the services provided to the Funds by the Sub-Adviser; (ii) the historical performance of the Funds; (iii) the cost of the services provided and the profits realized by the Sub-Adviser from services rendered to the Funds; (iv) comparative performance, fee, and expense data for the Funds and other investment companies with similar investment objectives, including a report prepared by Barrington Partners, an independent third party, that compares the Fund's investment performance, fees, and expenses to relevant market benchmarks and peer groups (the "Barrington Report"); (v) the extent to which any economies of scale realized by the Sub-Adviser in connection with its services to the Funds are shared with Fund shareholders; (vi) any other financial benefits to the Sub-Adviser and its affiliates resulting from services rendered to the Funds; and (vii) other factors the Board deemed to be relevant.
The Board also considered that the Sub-Adviser, along with other service providers of the Funds, had provided written and oral updates on the firm over the course of the year with respect to its role as investment sub-adviser to the Funds, and the Board considered that information alongside the Materials in its consideration of whether the Sub-Advisory Agreement should be continued. The Board also noted that the Sub-Adviser provides investment sub-advisory services to other series of the Trust, and, over the course of the year, the Sub-Adviser provided written and oral updates to the Board with respect to its sub-advisory services to those funds. Additionally, at the Meeting, a Sub-Adviser representative provided an oral overview of the services provided to the Funds by the Sub-Adviser and additional information about the Sub-Adviser's personnel and business operations. The Board then discussed the Materials and the Sub-Adviser's oral presentation, as well as any other relevant information received by the Board at the Meeting and at prior meetings, including the Adviser's 15(c) presentation at the January 17-18, 2024, quarterly Board meeting, and deliberated on the approval of the continuation of the Sub-Advisory Agreement in light of this information.
Approval of the Continuation of the Sub-Advisory Agreement with the Sub-Adviser
Nature, Extent, and Quality of Services Provided.The Trustees considered the scope of services provided under the Sub-Advisory Agreement, noting that the Sub-Adviser had provided and would continue to provide investment management services to the Funds. In considering the nature, extent, and quality of the services provided by the Sub-Adviser, the Board considered the quality of the Sub-Adviser's compliance program and past reports from the Trust's Chief Compliance Officer ("CCO") regarding the CCO's review of the Sub-Adviser's compliance program. The Board also considered its previous experience with the Sub-Adviser providing investment management services to the Funds, as well as other series of the Trust. The Board noted that it had received a copy of the Sub-Adviser's registration form and financial statements, as well as the Sub-Adviser's response to a detailed series of questions that included, among other things, information about the Sub-Adviser's decision-making process, the background and experience of the firm's key personnel, and the firm's compliance policies, marketing practices, and brokerage information.
The Board noted the responsibilities that the Sub-Adviser has as the Funds' investment sub-adviser, including: responsibility for the general management of the day-to-day investment and reinvestment of the Funds' assets; determining the daily baskets of deposit securities and cash components; executing portfolio security trades for purchases and redemptions of the Funds' shares conducted on a cash-in-lieu basis; oversight of general portfolio compliance with applicable securities laws, regulations, and investment restrictions; responsibility for quarterly reporting to the Board; and implementation of Board directives as they relate to the Funds. The Board also considered the Sub-Adviser's resources and capacity with respect to portfolio management, compliance, and operations given the number of funds and/or accounts for which it provides sub-advisory services.
Historical Performance. The Trustees next considered each Fund's performance. Because each Fund is designed to track the performance of an index, the Board considered, among other things, the extent to which each Fund tracked
|
|
|
20
|
|
|
TABLE OF CONTENTS
Hoya Capital ETFs
APPROVAL OF ADVISORY AGREEMENTS & BOARD CONSIDERATIONS (Unaudited)(Continued)
its index before fees and expenses. The Board noted that, for each of the one-year, three-year, and since inception periods ended December 31, 2023, as applicable, each Fund's performance on a gross of fees basis (i.e., excluding the effect of fees and expenses on Fund performance) was generally consistent with the performance of its underlying index, indicating that each Fund tracked its underlying index closely and in an appropriate manner.
The Board then observed that additional information regarding each Fund's past investment performance, for periods ended December 31, 2023, had been included in the Materials, including the Barrington Report, which compared the performance results of each Fund with the returns of a group of ETFs selected by Barrington Partners as most comparable (each, a "Peer Group") as well as with funds in each Fund's Morningstar category - US Fund Mid-Cap Value (Housing ETF) and US Fund Real Estate (RIET ETF), respectively (each, a "Category Peer Group").
Housing ETF: The Board noted that the Fund significantly outperformed its benchmarks, the S&P 500 Index and S&P MidCap 400 Index, over the one-year period, and outperformed the same benchmarks over the three-year and since inception periods as well. The S&P 500 Index provides an indication of the performance of U.S. large-cap companies, while the S&P MidCap 400 Index provides an indication of the performance of U.S. mid-sized companies. In its consideration of the Fund's returns relative to its benchmarks, the Board noted that the Fund seeks to provide investors with exposure to companies in a very specific industry (i.e., companies involved in the U.S. housing industry), not broad exposure to the large-cap or mid-cap equity markets.
The Board noted that the Fund significantly outperformed the median return of its Peer Group and Category Peer Group over the one-year period, and the Fund outperformed the same peer groups over the three-year period as well. The Board took into consideration that although the Fund invests a significant portion of its assets in real estate investment trusts ("REITs"), the Fund is classified by Morningstar among mid-cap value ETFs, rather than real estate ETFs, given its significant allocation to companies that build homes or provide related products or services. Accordingly, the Board considered that the Housing ETF's Category Peer Group is comprised of ETFs that do not invest primarily in the real estate sector or real estate-related companies.
RIET ETF: The Board noted that the Fund slightly outperformed its benchmark, the Dow Jones U.S. Real Estate Index, for the one-year period, but slightly underperformed the same benchmark over the since inception period. The Dow Jones U.S. Real Estate Index is designed to track the performance of REIT and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies. In its consideration of the Fund's returns relative to its benchmark, the Board noted that the Fund's underlying index also seeks diversified exposure to U.S. listed real estate-related securities, including REITs; however, the Fund's underlying index uses screens to identify and select real estate investments that provide income through high dividend yields.
The Board noted that the Fund slightly outperformed the median return of its Peer Group and slightly underperformed the median return of its Category Peer Group over the one-year period. The Board took into consideration that although the Fund shares similar investment characteristics with the index-based funds included in its Peer Group and Category Peer Group, the Fund focuses more specifically on securities with high dividend yields. The Board also considered that the RIET ETF invests primarily in equity REITs; whereas, certain of its peer funds invest significantly in mortgage REITs.
The Board also considered that the RIET ETF commenced operations on September 21, 2021, just over two years prior to December 31, 2023, which was a relatively short period of time over which to evaluate the RIET ETF's performance and draw meaningful conclusions about its management.
Cost of Services Provided and Economies of Scale.The Board then reviewed the sub-advisory fees paid by the Adviser to the Sub-Adviser for its services to the Funds. The Board considered that the fees paid to the Sub-Adviser are paid by the Adviser and noted that the fee reflected an arm's-length negotiation between the Adviser and the Sub-Adviser. The Board further determined that the fees reflected an appropriate allocation of the advisory fee paid to each firm given the work performed by each firm and noted that the fees were generally in line with those charged by the Sub-Adviser in connection with other exchange-traded funds managed by the Sub-Adviser. The Board noted that the Sub-Adviser had provided its financial statements for the Board's review. The Board also evaluated the compensation and benefits received by the Sub-Adviser from its relationship with the Funds, taking into account analyses of the Sub-Adviser's profitability with respect to each Fund at various Fund asset levels.
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APPROVAL OF ADVISORY AGREEMENTS & BOARD CONSIDERATIONS (Unaudited)(Continued)
The Board expressed the view that it currently appeared that the Sub-Adviser might realize economies of scale in managing the Funds as assets grow in size. The Board further noted that although each Fund's sub-advisory fee includes asset-level breakpoints, because each Fund pays the Adviser a unified fee, any benefits from breakpoints in the sub-advisory fee schedule would accrue to the Adviser, rather than the Fund's shareholders. Consequently, the Board determined that it would monitor fees as the Funds grow to determine whether economies of scale were being effectively shared with the Funds and their shareholders.
Conclusion. No single factor was determinative of the Board's decision to approve the continuation of the Sub-Advisory Agreement; rather, the Board based its determination on the total mix of information available to it. Based on a consideration of all the factors in their totality, the Board, including the Independent Trustees, unanimously determined that the Sub-Advisory Agreement, including the compensation payable under the agreement, was fair and reasonable to each Fund. The Board, including the Independent Trustees, unanimously determined that the approval of the continuation of the Sub-Advisory Agreement was in the best interests of each Fund and its shareholders.
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Hoya Capital ETFs
ADDITIONAL INFORMATION (Unaudited)
1. FEDERAL TAX INFORMATION
For the fiscal year ended February 29, 2024, certain dividends paid by the Funds may be subject to the maximum tax rate of 23.8%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
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Hoya Capital High Dividend Yield ETF
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26.55%
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Hoya Capital Housing ETF
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65.82%
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For corporate shareholders, the percentage of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended February 29, 2024 was as follows:
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Hoya Capital High Dividend Yield ETF
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24.38%
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Hoya Capital Housing ETF
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63.09%
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The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871(k)(2)(C) for each Fund was as follows:
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Hoya Capital High Dividend Yield ETF
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0.00%
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Hoya Capital Housing ETF
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0.00%
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2. INFORMATION ABOUT PORTFOLIO HOLDINGS
The Funds file their complete schedules of portfolio holdings for their first and third fiscal quarters with the SEC on Part F of Form N-PORT. The Funds' Part F of Form N-PORT are available without charge, upon request, by calling toll-free at (800) 617-0004 or by accessing the Funds' website at hoyaetfs.com. Furthermore, you may obtain the Part F of Form N-PORT on the SEC's website at www.sec.gov. The Funds' portfolio holdings are posted on their website at hoyaetfs.com daily.
3. INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information ("SAI"). The SAI is available without charge, upon request, by calling tollfree at (800) 617-0004, by accessing the SEC's website at www.sec.gov, or by accessing the Funds' website at hoyaetfs.com.
When available, information regarding how the Funds voted proxies relating to portfolio securities during the twelve-months ending June 30 is available by calling tollfree at (800) 617-0004 or by accessing the SEC's website at www.sec.gov.
4. FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of the Funds trade on the exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Funds is available, without charge, on the Funds' website at hoyaetfs.com.
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| (b) | Financial Highlights are included within the financial statements filed under Item 7 of this Form. |
Item 8. Changes in and Disagreements with Accountants for Open-End Investment Companies.
There were no changes in or disagreements with accountants during the period covered by this report.
Item 9. Proxy Disclosure for Open-End Investment Companies.
There were no matters submitted to a vote of shareholders during the period covered by this report.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Investment Companies.
All fund expenses, including Trustee compensation is paid by the Investment Adviser pursuant to the Investment Advisory Agreement. Additional information related to those fees is available in the Fund's Statement of Additional Information.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
See Item 7(a).
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 15. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of trustees.
Item 16. Controls and Procedures.
| (a) | The Registrant's President (principal executive officer) and Treasurer (principal financial officer) have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant's service provider. |
| (b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 18. Recovery of Erroneously Awarded Compensation.
(a) Not Applicable.
(b) Not Applicable.
Item 19. Exhibits.
| (a) | (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not Applicable. |
(2) Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant's securities are listed. Not Applicable.
(3) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)). Filed herewith.
(4) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.
(5) Change in the registrant's independent public accountant. Not applicable to open-end investment companies and ETFs.
| (b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| (Registrant) | ETF Series Solutions |
| By (Signature and Title* | /s/ Kristina R. Nelson | ||
| Kristina R. Nelson, President (principal executive officer) |
| Date | 11/07/2024 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title)* | /s/ Kristina R. Nelson | ||
| Kristina R. Nelson, President (principal executive officer) |
| Date | 11/07/2024 |
| By (Signature and Title)* | /s/ Kristen M. Weitzel | ||
| Kristen M. Weitzel, Treasurer (principal financial officer) |
| Date | 11/07/2024 |
* Print the name and title of each signing officer under his or her signature.