The Board of Trustees of Exchange Listed Funds Trust has been asked to consider the termination and liquidation of the Tactile Analytics ETF.
Exchange Traded Concepts, the investment adviser to the fund, in consultation with Eve Capital, the fund’s sponsor, recommends the termination and liquidation of the fund. At the last meeting of the Board of Trustees of Exchange Listed Funds Trust on 21 September 2018, the Board was asked to approve a lower expense ratio for the Fund and was advised that the fund sponsor was considering liquidation since the fund was not gathering assets.
Since that date, the adviser has had multiple telephone conversations with the fund sponsor regarding finding potential buyers to take over sponsorship of the fund, but ultimately, no buyers have been found. In light of this, on 26 November 2018, the fund sponsor and adviser agreed to ask the Board of Trustees for approval to liquidate the fund.
Based on the foregoing, the adviser believes that it is appropriate to cease the fund’s operations and distribute the Fund’s net assets to its shareholders on or about 28 December, 2018 or such other date as determined by the officers of the Trust. To assist in the orderly liquidation and distribution of the Fund’s assets, the Adviser is recommending that the Board approve 24 December 2018 as the last day of trading of the Fund’s shares on the Cboe BZX Exchange (or such other date as determined by the officers of the Trust).
Article VIII, Section 2 of the Trust’s Declaration of Trust permits the termination of a series of the Trust at any time by the Trustees upon prior written notice to Fund shareholders. The termination of a series of the Trust does not require shareholder approval. The costs of this proposal will be borne by Eve Capital, LLC.
Upon approval by the Board, a supplement to the Fund’s prospectus notifying shareholders of the pending liquidation of the Fund will be filed with the SEC. The Cboe BZX Exchange will also be notified, which will begin the delisting process. Following the notifications, the Fund will distribute its assets to shareholders on the Liquidation Date. The orderly liquidation of the Fund and distribution of Fund assets to shareholders will be completed as soon as practicable.
The Adviser believes that the liquidation of the Fund is appropriate given that the Fund Sponsor is unable to find a buyer to take over Sponsorship of the Fund. The Board is being asked to approve the following resolutions relating to the proposed Plan of Liquidation, the Liquidation Date, creation of an expense reserve and any other actions related to the Fund liquidation.
Investing involves risk, including possible loss of principal. Investments in foreign securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. The Fund may invest a relatively large percentage of its assets in securities denominated in non-US currencies, the values of which may be affected by changes in the currency rates or exchange control regulations.
Information technology companies may be smaller and less experienced companies, with limited product lines, markets or financial resources and fewer experienced management or marketing personnel. Information technology company stocks, especially those which are Internet related, have experienced extreme price and volume fluctuations that are often unrelated to their operating performance. The fund is non-diversified which means it may be invested in a limited number of issuers and susceptible to any economic, political and regulatory events than a more diversified fund. Diversification may not protect against market risk.