Under normal circumstances,
the Fund will invest at least 80% of its net assets in the securities of small capitalization companies included in the Benchmark
Index, and generally expects to be substantially invested at such times, with at least 95% of its net assets invested in these
securities. The Fund defines small capitalization companies as companies that are included in the Benchmark Index at the time
of purchase.
The Fund’s intention
is to replicate the constituent securities of the Underlying Index as closely as possible. When a replication strategy could have
adverse consequences to Fund shareholders, however, the Fund may utilize a “representative sampling” strategy whereby
the Fund would hold a significant number of the component securities of the Underlying Index, but may not track that index with
the same degree of accuracy as would an investment vehicle replicating the entire index. The Fund does not seek temporary defensive
positions when equity markets decline or appear to be overvalued.
Principal Risks
Like all investments, investing
in the Fund entails risks, including the risk that you may lose part or all of the money you invest.
Investment Approach Risk
The alternate weighting approach employed by the Underlying Index and the Fund, while designed to enhance potential returns
compared to the Benchmark Index, may not produce the desired results. Using revenues as a weighting measure is no guarantee that
the Underlying Index or the Fund will outperform the Benchmark Index, and may even cause the Underlying Index or the Fund to underperform
the Benchmark Index.
Stock Market Risk
Stock
market risk is the risk that broad movements in financial markets will adversely affect the price of the Fund’s investments,
regardless of how well the companies in which the Fund invests perform. There is also a risk that the price of one or more of
the securities or other instruments in the Fund’s portfolio will fall.
Market Trading Risk
There
can be no assurance that an active trading market for Shares will develop or be maintained. Although it is expected that Shares
will remain listed for trading on the NYSE Arca, Inc. (the “Exchange”), it is possible that an active trading market
may not be maintained.
Premium/Discount Risk
As
an ETF, Shares generally trade in the secondary market on the Exchange at market prices that change throughout the day. Although
it is expected that the market price of Fund Shares will approximate the Fund’s NAV, there may be times when the market
price and the NAV vary significantly. You may pay more than NAV when you buy Shares of the Fund on the Exchange, and you may receive
less than NAV when you sell those Shares on the Exchange.
Non-Correlation Risk
The
Fund’s return may not match the return of the Underlying Index. The Fund incurs a number of operating expenses that are
not reflected in the Underlying Index, including the cost of buying and selling securities.
Increased Volatility Risk
Increased volatility may result from increased cash flows to the Fund and other market participants that continuously or systematically
buy large holdings of small and medium capitalization companies, which can drive prices up and down more dramatically. Additionally,
the announcement that a security has been added to a widely followed index or benchmark may cause the price of that security to
increase. Conversely, the announcement that a security has been deleted from a widely followed index or benchmark may cause the
price of that security to decrease.
Small Capitalization Stock
Risk
Small capitalization companies may have an unproven or narrow technological base and limited product lines, distribution
channels, markets and financial resources. Small capitalization companies also may be dependent on entrepreneurial management,
making the companies more susceptible to certain setbacks and reversals, and may also be more sensitive to changes in the economy,
such as changes in the level of interest rates. As a result, the securities of small capitalization companies may be subject to
more abrupt or erratic price movements than securities of larger companies, may have limited marketability, and may be less liquid
than securities of companies with larger capitalizations.