QRAFT AI Enhanced U.S. Large Cap ETF (QRFT) Exchange: NYSE ARCA

The Fund is an actively-managed exchange-traded fund ("ETF") that seeks to achieve its investment objective by investing at least 80% of its net assets, plus the amounts of any borrowings for investment purposes, in securities of U.S.-listed large capitalization companies. The Fund defines large capitalization companies as companies having a market capitalization in excess of $4 billion at the time of purchase. The Fund invests in equity securities of such companies, including common stock, American Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs"). The Fund's adviser, Exchange Traded Concepts, LLC (the "Adviser") uses an investment process based on a proprietary artificial intelligence security selection process that extracts patterns from analyzing data, as discussed below, developed by QRAFT Technologies, Inc. ("Qraft"). Qraft is a South Korea-based provider of artificial intelligence investment systems and currently offers services to various financial institutions in Korea. The Adviser has licensed Qraft's proprietary artificial intelligence security selection process for the management of the Fund.   In pursuing the Fund's investment objective, the Adviser consults a database generated by Qraft's AI Quantitative Investment System ("AQUA"), which automatically selects and weights portfolios of companies to provide a balanced exposure to five main factors affecting the U.S. market (the "Five Factors"): quality (generally, a company's profitability), size (market capitalization), value (comparison of a company's market value versus its book value), momentum (a security's recent price returns compared to the overall market over time), and volatility (a security's systematic risk as compared to the market as a whole) (the "U.S. Large Cap Database"). In creating the U.S. Large Cap Database, AQUA utilizes automated data feed and data processing using deep learning technologies (i.e., exposure to and processing of large amounts of data). First, on a monthly basis, AQUA automatically sends queries to and collects from various data vendors company fundamental data (such as historical stock prices and other financial information) of all companies listed on the New York Stock Exchange and NASDAQ as well as macroeconomic data. AQUA then processes and stores newly received data with stored historical data. AQUA processes such data first by creating five indices each representing one of the Five Factors of companies in the top 20% of U.S.-listed companies based on market capitalization. Then, AQUA compresses such data over the last 60 month period and, using deep learning technologies, evaluates how each individual factor would change and/or affect a company over time and identifies 300 to 350 companies that have the greatest potential to outperform their U.S. large cap peers over the next three-month period. AQUA estimates a weighting for each such company based on its potential for maximum return as compared to other companies, and the final portfolios are then delivered to the U.S. Large Cap Database for use by the Adviser. AQUA repeats such processes on the first business day of every month and the Adviser makes or changes investments in the Fund based on the newly generated information.   The Fund expects to hold 300 to 350 companies in its portfolio. While it is anticipated that the Adviser will purchase and sell securities based on recommendations by the U.S. Large Cap Database, the Adviser has full discretion over investment decisions for the Fund. Therefore, the Adviser has full decision-making power not only if it identifies a potential technical issue or error with the U.S. Large Cap Database, but also if it believes that the recommended portfolio does not further the Fund's investment objective or fails to take into account company events such as corporate actions, mergers and spin-offs. Additionally, the Adviser has discretion over the amount of cash maintained in the Fund's portfolio and the reinvestment of dividends in the Fund's portfolio, subject to the Fund's distribution requirements as a regulated investment company for federal income tax purposes. See "Federal Income Taxes" in the Fund's Statement of Additional Information ("SAI") for a more complete discussion. Notwithstanding the foregoing, the Fund limits the weighting of a single company to 10% and no more than 40% of the Fund's assets may be invested in securities with a more than 5% weighting in the Fund's portfolio. Because the U.S. Large Cap Database is adjusted on a monthly basis, the Adviser expects that the Fund will frequently purchase and sell shares of securities.   While investing in a particular market sector is not a strategy of the Fund, its portfolio may be significantly invested in one or more sectors as a result of the security selection decisions made pursuant to its strategy. As of July 31, 2020, a significant portion of the Fund's assets consisted of securities of companies in the information technology sector, although this may change from time to time. The Fund is non-diversified and may invest a greater percentage of its assets in a particular issuer than a diversified fund.