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March 5, 2020

The Armor US Equity Index ETF (ARMR) began trading on 2/11/20. Since its inception to its first rebalance (3/3/20), the fund’s return on an NAV basis was -9.74% versus the -10.43 return of the S&P 500. [1]

Performance to the most recent month-end can be found by clicking here. Performance data quoted represents past performance and is no guarantee of future results.

Sector Positioning During February
During the month of February in which the fund was active, ARMR had a roughly equal weighting in nine of the 11 S&P 500 sectors. The fund did not have any exposure to the Energy and Materials sectors.

Positive Contributors to Performance
Energy was the worst performing sectors of the S&P 500 during February while Materials was in the bottom half of performers.[2] Not having exposure to these two sectors helped performance. Additionally, the fund’s exposure to defensive sectors, such as Communication Services and Real Estate, also helped performance.

Negative Contributors to Performance
Technology and healthcare were among the better performing sectors during the month. While ARMR had exposure to these sectors during the month, it was underweighted relative to the S&P 500, which acted as a drag on performance.

Shift to Technology for March
The index which underlies the ARMR ETF uses a proprietary Market Performance Indicator (MPI) to estimate which sectors may offer strong, long-term performance potential with lower expected downside risk. The MPI uses a sector’s moving average price as a basis for this factor. When a sector is trading above (below) its moving average, it is included (excluded) in the index.

The sharp market correction that occurred during February created an unusual market environment in which every sector in the S&P 500 experienced negative performance during the month. However, with its strong performance over the past twelve months, the technology sector is still ranked as attractive based on its MPI. Therefore, moving into March, the weighting of the technology sector in ARMR will be 100%.

We believe that technology stocks may be beneficiaries of the concerns surrounding the global outbreak of the coronavirus and its potential to spread further in the United States. More of the population may choose to work from home which may positively impact technology stocks that facilitate teleconferencing. Companies offering streaming services, food delivery, and grocery delivery may be positively impacted as people avoid public places like movie theaters, restaurants, and shopping centers.

What ARMR Is Built For
Certainly, we are in a unique market environment. The calm that was so indicative of the equity market through much of last year was wiped out by concerns about the coronavirus and the swift market correction. However, that is one of the environments for which ARMR was created. The index behind ARMR was designed with the goal of providing investors with downside protection during turbulent markets.

We believe that ARMR may be appropriate for investors seeking downside protection in a turbulent equity market.


[1] Source: Yahoo Finance
[2] S&P Dow Jones Indices, Index Dashboard, February 2020

Carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s prospectus and Summary Prospectus, which may be obtained by visiting https://armoretfs.com/documents. Read the prospectus and Summary Prospectus carefully before investing.

Foreside Fund Services, LLC, distributor.

Investing involves risk, including possible loss of principal. The Fund’s return may not match or achieve a high degree of correlation with the return of the Index. To the extent the Fund’s investments are concentrated in or have significant exposure to a particular issuer, industry or group of industries, or asset class, the Fund may be more vulnerable to adverse events affecting such issuer, industry or group of industries, or asset class than if the Fund’s investments were more broadly diversified. Issuer-specific events, including changes in the financial condition of an issuer, can have a negative impact on the value of the Fund.

A new or smaller fund is subject to the risk that its performance may not represent how the fund is expected to or may perform in the long term. In addition, new funds have limited operating histories for investors to evaluate and new and smaller funds may not attract sufficient assets to achieve investment and trading efficiencies.

Shares are bought and sold at market price (closing price) not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.