Lone Peak SMID Value ETF

Information about Risk

Investing in the securities of small-cap and mid-cap companies generally involves substantially greater risk than investing in larger, more established companies. Because the strategy invests primarily in value stocks (stocks that the manager believes are undervalued), the portfolio’s performance may at times be better or worse than the performance of strategies that focus on other types of stock strategies (e.g., growth stocks), or that have a broader investment style.

The strategy generally holds stocks of less than 50 companies. The strategy may invest a larger portion of its assets in the securities of a single issuer compared to a more diversified strategy. Focusing investments in a small number of companies may subject the strategy to greater volatility and therefore a greater risk of loss because a single security’s increase or decrease in value may have a greater impact on the portfolio’s value and total return.

Portfolio Characteristics

Price/Earnings Ratio (trailing): Sum of stock prices of the fund’s holdings divided by the aggregate earnings per share of those holdings for the past 12 months, calculated as a weighted harmonic average. Price/Book Ratio: weighted average of the stocks’ price divided by book value per share. Book value per share is defined as common equity, including intangibles, divided by shares outstanding times the adjustment factor. Price/Cash Flow Ratio: a ratio used to compare a company’s market value to its cash flow. It is calculated by dividing the company’s market cap by the company’ operating cash flow in the most recent fiscal year (or the most recent four fiscal quarters); or, equivalently, divide the per-share stock price by the per-share operating cash flow. Median Market Cap: the midpoint of market capitalization of the stocks in a portfolio. Half the stocks in the portfolio will have higher capitalizations; half will have lower.  Market Cap is the aggregate value of all of a company’s outstanding equity securities.  Dividend Yield: a financial ratio (dividend/price) that shows how much a company pays out in dividends each year relative to its stock price. Active Share is a measure of the percentage of stock holdings in a manager’s portfolio that differs from the benchmark index.

Performance Statistics

Alpha measures a portfolio’s risk/reward potential. A positive alpha means the fund outperformed the index. A negative alpha means the portfolio underperformed the index. Beta measures a portfolio’s risk in relation to the market. A beta of 0.8 means the portfolio’s total return is likely to move up or down 80% of the market change; 1.25 means total return is likely to move up or down 25% more than the market. R-Squared measures (from 0 to 1.0) how closely a portfolio’s movements are correlated with movements of its benchmark. An R-squared of 1.0 would mean that the portfolio’s movements are completely correlated with the movements of its benchmark. Standard Deviation measures the degree to which a portfolio’s performance has varied from its average performance over a particular time period. The greater the standard deviation, the greater a portfolio’s volatility (risk). Upside Capture explains how well a portfolio performs in time periods where the benchmark’s returns are greater than zero. Downside Capture explains how well a portfolio performs in time periods where the benchmark’s returns are less than zero. Sharpe Ratio calculates the amount of portfolio return in excess of the risk-free rate per unit of risk (standard deviation) taken by the portfolio. Sortino Ratio calculates the amount of portfolio return received in excess of the risk-free interest rate per unit of “downside” risk (standard deviation of negative returns) taken by the portfolio.  Information Ratio is used to evaluate the skill of a portfolio manager at generating returns in excess of a given benchmark. A higher information ratio result implies a better portfolio manager who’s achieving a higher return in excess of the benchmark, given the risk taken.

All rights in the Russell Indexes vest in the relevant London Stock Exchange Group plc (collectively, the “LSE Group”), which owns these indexes. Russell® is a trademark(s) of the relevant LSE Group company and is used by any other LSE Group company under license. These indexes are calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund or Separate Account. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or Separate Account or the suitability of these indexes for the purpose to which they are being put by Lone Peak Global Investors, formerly Clifford Capital Partners.