SAN DIEGO–(BUSINESS WIRE)–After careful consideration, and at the recommendation of Reality Shares Advisors, LLC, the investment adviser to the Reality Shares DIVS ETF (the “Fund”), the Board of Trustees (the “Board”) of Reality Shares ETF Trust (the “Trust”) approved the closing and subsequent liquidation of the Fund pursuant to the terms of a Plan of Liquidation (the “Liquidation”). Accordingly, the Fund is expected to cease operations, liquidate its assets, and distribute the liquidation proceeds to shareholders of record on or about September 25, 2020 (the “Liquidation Date”).
The last day of trading of Fund shares on the NYSE Arca, Inc. (the “Exchange”) is expected to be September 21, 2020. The Exchange will halt trading in the Fund’s shares before the open of trading on September 22, 2020. On or about September 15, 2020, the Fund will be closed to new investments and shareholders may only be able to sell their shares to certain broker-dealers. There is no assurance that there will continue to be a market for the Fund’s shares during this time period. Prior to the close of trading on September 21, 2020, shareholders may continue to purchase and sell Fund shares through a broker in the standard manner. Customary brokerage charges may apply to such transactions.
Beginning on September 8, 2020 and continuing through the Liquidation Date, the Fund will liquidate its portfolio assets. As a result, during this period, the Fund will increase its cash holdings and deviate from its investment objective, investment strategies, and investment policies as stated in the Fund’s Prospectuses and SAI.
If no action is taken by a Fund shareholder prior to the Liquidation Date, the Fund will distribute to such shareholder, on or promptly after the Liquidation Date, a liquidating cash distribution equal to the net asset value of the shareholder’s Fund shares as of the close of business on the Liquidation Date. This amount will include any accrued capital gains and dividends. Shareholders remaining in the Fund on the Liquidation Date will not be charged any transaction fees by the Fund. However, the net asset value of the Fund on the Liquidation Date will reflect the costs of closing the Fund. The liquidating cash distribution to shareholders will be treated as payment in exchange for their shares. The liquidation of your shares may be treated as a taxable event. Shareholders should contact their tax adviser to discuss the income tax consequences of the liquidation.
About Reality Shares
At Reality Shares, we strive to deliver ETFs based on innovative investment methodologies. Ranging from disruptive fintech to a proprietary dividend health rating system called DIVCON™, Reality Shares is focused on offering investors access to innovative market segments.
Carefully consider the investment objective, risks, charges and expenses before investing in Reality Shares ETFs. This and other important information can be found in the Fund’s prospectus, which may be obtained by calling 855-595-0240 or by visiting us at realityshares.com. Please read the prospectus carefully before investing.
Investing involves risks, including the risk of loss of principal. For DIVY, the Fund may be more susceptible to a single adverse economic or other occurrence and may therefore be more volatile than a more diversified fund. Fund risks include Authorized Participant Concentration Risk, Blockchain Technology Risk, Depositary Receipt Risk, Emerging Markets Risk, Equity Risk, Non-Blockchain Technology Business Line Risk, Index Performance Risk, Index Tracking Error Risk, Sector Risk, Industry Concentration Risk, Market Risk, and Non-Diversification Risk. See prospectus for full description of risks, which may negatively impact the Fund’s investment strategy and could cause the Fund to lose money, cause the value of an investment in the Fund to decline over short- and long-term periods. The principal value of debt securities typically decrease when interest rates rise. This risk is usually greater for longer-term debt securities.
For DIVY, Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The fund is subject to large-cap risk and may underperform other segments of the equity market or the equity market as a whole. The prices of equity securities in which the fund invests rise and fall daily. The fund’s net value will generally decline when the market value of its targeted index declines. Although the Fund’s shares are listed on an exchange, there can be no assurance that an active, liquid or otherwise orderly trading market for shares will be established or maintained. The Fund may have portfolio turnover, which may cause an adverse cost impact. There may be additional portfolio turnover risk as active market trading of the fund’s shares may cause more frequent creation or redemption activities that could, in certain circumstances, increase the number of portfolio transactions as well as tracking error to the Index and as high levels of transactions increase brokerage and other transaction costs and may result in increased taxable capital gains. The fund’s use of leverage allows for investment exposure in excess of net assets, thereby magnifying volatility of returns and risk of loss. Swaps, futures, forwards and options investments may be affected by the overall market and industry- and specific factors, and may be more volatile and less liquid than other investments. Investing in derivatives is a specialized activity that involves special risks that subject the fund to significant loss potential, including when used as leverage, and may result in greater fluctuation in fund value. The Fund will invest at least 80% of its assets, other than collateral held from securities lending, if any, in component securities of the Index. The Fund may also invest up to 20% of its assets in swaps, futures, forwards, options, exchange-traded funds As a non-diversified fund, fewer investments could have a greater effect on performance. The fund is passively managed and seeks to track the performance of an index. The fund may not sell a poorly performing security unless it was removed from the index. There is no guarantee that the index will achieve positive returns. Risk exists that the index provider may not follow its methodology for index construction. Errors may result in a negative fund performance. This fund is newly organized and has limited operating history. Shares are not FDIC insured.
ETF shares are bought and sold at market price (not NAV) and are not individually redeemable. Investors buy and sell shares on a secondary market. Shares may trade at a premium or discount to the NAV. Only market makers or “authorized participants” may trade directly with the Fund(s), typically in blocks of 25,000 shares. Shares are not FDIC insured and may lose value.
Reality Shares Advisors, LLC is the Investment Advisor. ALPS Distributors, Inc. is the Distributor for the Fund and is not affiliated with Reality Shares Advisors, LLC
RLT001158 Ex. 9/7/2021
Eric Ervin, Reality Shares