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A Gold ETF (Ticker:GOLY) That Has Paid a Consistent 3.5% Annualized Distribution Monthly PLUS the Returns of Gold

Strategy Shares Gold Hedged Bond ETF seeks to track the returns of the Solactive Gold Backed Bond Index1
2 3.5% is the current monthly distribution. The fund pays monthly distributions on Fund shares at a specific target rate to be determined at the discretion of management. A portion of the distribution consists of a return of capital which is a return of your original investment. Note that a return of capital could reduce the tax basis of shares and potentially increase capital gains upon disposition of your shares.

(Ticker:GOLY) Help Fight Inflation with a Gold ETF That Has Paid a Consistent 3.5% Annualized Distribution Monthly PLUS the Returns of Gold

Strategy Shares Gold Hedged Bond ETF seeks to track the returns of the Solactive Gold Backed Bond Index1
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2 3.5% is the current monthly distribution. The fund pays monthly distributions on Fund shares at a specific target rate to be determined at the discretion of management. A portion of the distribution consists of a return of capital which is a return of your original investment. Note that a return of capital could reduce the tax basis of shares and potentially increase capital gains upon disposition of your shares.

Fund Details

As of 10/9/2024
TickerGOLY
CUSIP86280R878
Inception5/17/2021
ExchangeCBOE
Total Annual Operating Expense Ratio0.79%
Distribution FrequencyMonthly
Investment AdvisorRational Advisors, Inc.
Portfolio ManagerDavid Miller
Portfolio ManagerCharlie Ashley

Fund Documents

Fact Sheet
Prospectus
Summary Prospectus
Objective Sticker
SAI
Annual Report
Semi-annual Report
Supplemental Information

Fund Description and Objective

The strategy was designed on the belief that the best way for investors to generate income that maintains its purchasing power is to combine bonds and a gold overlay within one portfolio.The Fund seeks to offer a distinct strategy that efficiently combines an investment grade bond portfolio with a gold hedge overlay in one strategy. The Fund’s investment strategy is premised on the proposition that an investment in gold can potentially provide a hedge against inflation for a bond investment.

The Fund’s investment objective is to seek investment results that correlate, before fees and expenses, to the performance of the Solactive Gold-Backed Bond Index (the “Index”).

The Index seeks to provide 100% exposure to the U.S. dollar-denominated investment grade corporate bond sector (the “Bond Component”) plus a gold inflation hedge with a notional value designed to correspond to the value of the Bond Component, with such notional value reset on a monthly basis (the “Gold Hedge Component”).

The Bond Index aims to mirror the performance of investment grade corporate bonds issued in U.S. dollars.

The Gold Hedge Index tracks the performance of the near month gold futures contracts listed on the Chicago Mercantile Exchange.

Daily NAV and Market Price

As of 10/9/2024

Ticker

GOLY

Exchange

BATS

NAV2

Market Price3

130-Day Median Bid/Ask Percentage Spread Calculation: Based on Rule 6c-11(c)(1)(v), to calculate the median bid-ask spread the fund, (i) identifies the ETF’s NBBO as of the end of each 10-second interval during each trading day of the last 30 calendar days; (ii) divides the difference between each such bid and offer by the midpoint of the NBBO; and (iii) identify the median of those values.
2Net asset value” or “NAV” is determined by adding up the value of all the assets in the fund, including assets and cash, subtracting any liabilities, and then dividing that value by the number of outstanding shares in the ETF.
3Market Price is defined as the official closing price of the ETF share.

GOLY Performance

. Cumulative (%) as of 8/31/2024 (1 YR or Less).  Annualized (%) as of 6/30/2024 (Greater than 1 YR)
GOLYYTD1M3M6M1 Yr3 Yrs5 YrsSince Inception
NAV 18.72 2.88 10.37 23.92 15.69 -0.28 -1.39
Market Price 18.76 3.54 10.76 24.01 16.42 -0.15 -1.32

The performance data quoted above represents past performance. Past performance is not a guarantee of future results. Investment return and value of the ETF shares will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Shares are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Total Returns are calculated using the daily 4:00pm net asset value (NAV). Market returns are based on the composite closing price and do not represent the returns you would receive if you traded the shares at other times. The first trading date is typically several days after the fund inception date. Therefore, NAV is used to calculate market returns prior to the first trade date.

Top 10 Holdings

Holdings as of 10/10/2024*
HoldingNameTickerMarketValue%MarketValueSharesQuantityNotionalValue%NotionalValue
CASH AND CASH EQUIVALENTS1.61609197%139918.38139918.381.616092%139918.38
ABBVIE IN 3.2% 11/21/292.90307752%251343.31266000.00002.903078%251343.31
AMAZON.CO 1.5% 06/03/302.92972452%253650.36294000.00002.929725%253650.36
AMGEN INC 2.2% 02/21/272.30857264%199872.13210000.00002.308573%199872.13
ANHEUSER- 4.7% 02/01/363.65749305%316659.27322000.00003.657493%316659.27
APPLE INC 3.35% 02/09/272.54599942%220428.12224000.00002.545999%220428.12
BAT CAPIT 3.557% 08/15/272.83235882%245220.61252000.00002.832359%245220.61
BOEING CO 5.15% 05/01/303.19310575%276453.44280000.00003.193106%276453.44
BROADCOM 3.875% 01/15/272.55257659%220997.56224000.00002.552577%220997.56
CAPITAL O 3.8% 01/31/281.10064518%95291.9198000.00001.100645%95291.91
CHEVRON C 2.236% 05/11/302.46251792%213200.44238000.00002.462518%213200.44
CITIGROUP VRN 03/31/313.64600517%315664.67322000.00003.646005%315664.67
COCA-COLA 1.375% 03/15/312.56783320%222318.45266000.00002.567833%222318.45
COSTCO WH 1.6% 04/20/302.38801547%206750.15238000.00002.388015%206750.15
CVS HEALT 4.3% 03/25/282.86577438%248113.67252000.00002.865774%248113.67
DOW CHEMI 3.6% 11/15/501.42572979%123437.16168000.00001.425730%123437.16
EQUINIX I 3.2% 11/18/293.47239755%300634.03322000.00003.472398%300634.03
FISERV IN 3.5% 07/01/292.47095480%213930.89224000.00002.470955%213930.89
GENERAL E 5.875% 01/14/382.26333482%195955.52182000.00002.263335%195955.52
GOLDMAN S VRN 01/27/323.14644702%272413.81322000.00003.146447%272413.81
HOME DEPO 5.875% 12/16/362.66141792%230420.85210000.00002.661418%230420.85
JPMORGAN VRN 03/24/313.36366849%291220.46294000.00003.363668%291220.46
METLIFE I 4.55% 03/23/302.93134964%253791.06252000.00002.931350%253791.06
MPLX LP 2.65% 08/15/302.16122578%187115.10210000.00002.161226%187115.10
NEXTERA E 2.25% 06/01/302.85142978%246871.74280000.00002.851430%246871.74
NORTHERN 1.95% 05/01/301.13466585%98237.36112000.00001.134666%98237.36
ORACLE CO 5.375% 07/15/402.58701007%223978.75224000.00002.587010%223978.75
PACIFIC G 4.55% 07/01/302.69198935%233067.67238000.00002.691989%233067.67
SHERWIN-W 2.95% 08/15/291.35280291%117123.28126000.00001.352803%117123.28
SOUTHWEST 5.125% 06/15/272.45532789%212577.94210000.00002.455328%212577.94
VERIZON C 4.522% 09/15/483.62565722%313902.98350000.00003.625657%313902.98
WALT DISN 2.65% 01/13/313.49598212%302675.94336000.00003.495982%302675.94
WELLS FAR 3.% 10/23/263.45388459%299031.21308000.00003.453885%299031.21
SSGH FUND LTD CFC7.14550053%618644.7833800.00007.145501%618644.78
ORANGE SA 9.% 03/01/312.96326402%256554.15210000.00002.963264%256554.15
SHELL INT 6.375% 12/15/382.77616825%240355.73210000.00002.776168%240355.73
CASH AND CASH EQUIVALENTS115.25477312%713016.90713016.90115.254773%713016.90
PAYB ISHARES GOLD TRUST0.00000000%0.00-8904445.74000.000000%0.00
PAYB ISHARES IBOXX TRS0.00000000%0.00-941547.64000.000000%0.00
RECV ISHARES GOLD TRUST-12.10515952%-74887.868904445.7400-12.105160%-74887.86
RECV ISHARES IBOXX TRS-3.14961361%-19484.90941547.6400-3.149614%-19484.90

On March 23rd, Neel Kashkari the president of the Federal Reserve Bank of Minneapolis said “there’s an infinite amount of cash in the Federal Reserve and they will do anything they need to make sure there’s enough cash in the banking system.”

The Federal Reserve has increased the money supply by over 30% since 2020 and it continues to do another $120 Billion of quantitative easing each month. However, the Federal Reserve can’t print gold.

Source: FRED, July 2021

On March 23rd, Neel Kashkari the president of the Federal Reserve Bank of Minneapolis said “there’s an infinite amount of cash in the Federal Reserve and they will do anything they need to make sure there’s enough cash in the banking system.”

The Federal Reserve has increased the money supply by over 30% since 2020 and it continues to do another $120 Billion of quantitative easing each month. However, the Federal Reserve can’t print gold.

Source: FRED, July 2021

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Inflation Can Potentially Sabotage the Purchasing Power of Your Investments.

*Inflation—the rise in the price of goods and services—reduces the purchasing power each unit of currency can buy.

*Rising inflation has an insidious effect: input prices are higher, consumers can purchase fewer goods, revenues and profits decline, and the economy slows for a time until a measure of economic equilibrium is reached.

GoldPrice_vs_CPI2
3Gold Price in US Dollars % Change vs. US Consumer Price Index % Change from January 1, 1990 – March 31, 2022. Source: YCharts
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Did you know that inflation can potentially derail your investment goals if you don’t hedge against it??

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Media Coverage

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A Conversation with David Miller, Creator of Strategy Shares Gold-Hedged Bond ETF (GOLY)

September 1, 2021

Strategy Shares, the Huntington, New York-based family of ETFs, recently rolled out the Strategy Shares Gold-Hedged Bond ETF (GOLY), offering investors the potential to generate income from a portfolio of investment-grade corporate bonds while hedging against inflation with a 100% gold overlay.

Traded over the Chicago Board Options Exchange (CBOE), this innovative ETF ties to the performance of the Solactive Gold-Backed Bond Index.

Senior Portfolio Manager David Miller spoke with financial journalist Andrew Bloomenthal about the investment philosophy behind this offering, explaining the long-term potential benefits to investors.

ANDREW BLOOMENTHAL: Let’s begin by dissecting the fundamental principles behind the Strategy Shares Gold-Hedged Bond ETF (GOLY).
DAVID MILLER: GOLY invests in a portfolio of investment-grade corporate bonds that seeks to pay out a distribution of approximately 3.5%, which seems sufficient at first glance, but is actually problematic as a stand-alone component when you consider that the Consumer Price Index1 (CPI) over the past year has increased by 7.99% since 6/30/2020, which means your real yield is effectively -5.5%. One method of solving the dilemma of inflation eating into the principal is to simultaneously invest in the one hard asset class capable of keeping pace with inflation: gold. Consequently, GOLY hedges the bond portfolio 100% to the price of gold, so its value fluctuates with gold prices rather than the bond’s principal.

AB: Did the idea for GOLY come to you suddenly, or did it develop slowly over time?
DM: Both. I’ve consistently wondered why anyone would invest in a bond portfolio if the yield’s eaten away by inflation, but this wasn’t an acute knock-you-over-the-head issue for me. But the idea kicked into high gear in March of 2020, when Minneapolis Federal Reserve Chairman Neel Kashkari went on 60 Minutes and said, “There is an infinite amount of cash in the Federal Reserve. We will do whatever we need to do to make sure there’s enough cash in the banking system.”

This comment was noteworthy because Fed chairs rarely make such blatant public statements. But in doing so, Kashkari conceptually let the cat out of the bag. Sure, we always knew in theory that the Fed could print money out of thin air, but that TV appearance made it clear it has no qualms about actually doing it. And this creates an obvious problem. Because if you have a $100 bill in your pocket, you’d justifiably think it has a certain value attached to it because there’s only a finite number of other $100 bills in the world, where your $100 bill would be divided by the $15 trillion currently in circulation. But if the Fed suddenly announces that the denominator is now infinity, you’d begin doubting the US government’s ability to guard your nest egg, which can no longer be denominated in US dollars.

Contrarily, there’s currently only enough mined gold in the world to fill three Olympic-sized swimming pools, so its supply is far from unlimited, which has been gold’s inherent value for thousands of years. So, gold is clearly the solution, in the sense that it is sound money.

AB: Can you discuss how Solactive, the German index house, created an index specifically for GOLY?
DM: Solactive created the Solactive Gold-Backed Bond Index. The concept was to replicate bonds known as “sovereign gold bonds,” which are issued by the Indian Central Bank. But people aren’t exceptionally comfortable tying their net worth up in the Indian government’s bonds because they’d much rather invest in big companies they know and trust. So, Solactive’s index replicates the concept of gold bonds but comprises investment-grade corporate bonds from well-known blue-chip companies of the world.

AB: Are you concerned about inflation leveling off?
DM: No. Because you need to understand the broad pattern of M2, which is the governmental money supply pushed into circulation. If we look back to 1960, there was approximately $312 billion in the M2 money supply. By 1970, that figure jumped to approximately $627 billion, and by August of 2000, it spiked to $4.8 trillion. Today, it’s over $20 trillion. So, overall, the money supply has been increasing on average by 3% annually. Meanwhile, the price of gold has increased roughly 550% over the last 20 years. I’m not saying gold has to grow another 550% during the next 20 years to be a worthwhile inflation hedge in a bond portfolio, but as long as gold outpaces inflation, it’s done its job. And I believe it will continue to do so because there hasn’t been a time in recent memory where the dollar outperformed gold over a long cycle.

AB: Can investors benefit from gold’s ability to maintain purchasing power?
DM: I believe so. Those people who don’t view gold as a source of capital appreciation may be surprised to learn that the price of gold grew from $283 in January of 2000 versus approximately $1800 today. Comparatively, the S&P is up just a few hundred percent for that same period. It’s an interesting observation because people think stocks had this amazing run, but in reality, they haven’t even kept pace with gold’s purchasing power.

AB: Finally, for what type of investor is GOLY ideally suited?
DM: Some may feel GOLY can most benefit retirees, middle-aged individuals, and any other investor who’s currently parking their money in cash, CDs, short-term bonds, T-bills, or commercial paper. Because even if your investment earns 3.2%, with 5% inflation, you’re effectively left with a -1.8% yield. So, GOLY is really for anybody trying to keep their money in a relatively liquid form who doesn’t want inflation potentially eating away at the principal.

Chart: Gold Price in US Dollars % Change

Source: YCharts

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1. The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to assess price changes associated with the cost of living. The CPI is one of the most frequently used statistics for identifying periods of inflation or deflation. It may be compared with the producer price index (PPI), which instead of considering prices paid by consumers looks at what businesses pay for inputs.

2. The S&P 500 Index, or the Standard & Poor’s 500 Index, is a market-capitalization-weighted index of the 500 largest publicly-traded companies in the U.S. It is not an exact list of the top 500 U.S. companies by market capitalization because there are other criteria to be included in the index. The index is widely regarded as the best gauge of large-cap U.S. equities.

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The GOLY Investing Report will help you understand

Key strategy highlights of the Strategy Shares Gold Hedged Bond ETF (Ticker GOLY)

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Let us show you how we can help you. Get your copy of "Strategy Shares Gold-Hedged Bond Investing Report” Today.

Disclosures

Shares of this ETF are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns.

For more complete information on Strategy Shares, download and view a prospectus or summary prospectus now or call (855) 477-3837 for a free prospectus or summary prospectus. You should consider the fund’s investment objectives, risks, charges, and expenses carefully before you invest. Information about these and other important subjects is in the fund’s prospectus or summary prospectus, which you should read carefully before investing. 

Investing involves risk, including loss of principal. There is no guarantee that this, or any investment strategy, will succeed. Shares of these ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce. 

*Alpha: A measure of the difference between a fund’s actual returns and its expected performance, given its level of risk as measured by beta. Beta: A measure of a fund’s sensitivity to market movements.

Investments involve risk including possible loss of principal. The Fund is classified as “non-diversified” to the extent that the Index concentrates in an industry so that a relative high percentage of the Fund’s assets may be invested in a limited number of issuers. The fund invests in the underlying constituents of the index that consists of a Bond and Gold component. The Fund may also invest in more aggressive investments such as foreign and emerging market securities (which may expose the fund to currency and exchange rate fluctuations), total return swaps and futures (which may involve leverage that could increase the volatility of the Fund and reduce its returns) and derivatives which may amplify volatility. Investing in bonds are subject to credit, prepayment and interest rate risk. An interest rates rise causes a decline in the value of fixed income securities owned by the fund.

The price of gold fluctuates over time. There is no guarantee that an investment in gold will increase or even maintain its value. Short-term, the price of gold has fluctuated widely. If gold markets continue to be characterized by wide fluctuations, the price may change in an unpredictable manner. Long-term, gold markets have historically experienced extended periods of flat or declining prices. There is no guarantee that the price of gold will move as expected relative to the U.S. dollar, nor is there any guarantee that gold will act as an effective inflation hedge. The Fund is a new fund with no history of operations as an ETF for investors to evaluate.

The Strategy Shares are distributed by Foreside Fund Services, LLC, which is not affiliated with Rational Advisors, Inc., or any of its affiliates.

1Solactive AG (“Solactive”) is the licensor of the Solactive Gold-Backed Bond Index (the “Index”). The financial instruments that are based on the Index are not sponsored, endorsed, promoted, or sold by Solactive in any way and Solactive makes no express or implied representation, guarantee, or assurance with regard to (a) the advisability in investing in the financial instruments; (b) the quality, accuracy and/or completeness of the Index; and/or (c) the results obtained or to be obtained by any person or entity from the use of the Index. Solactive does not guarantee the accuracy and/or the completeness of the Index and shall not have any liability for any errors or omissions with respect thereto. Notwithstanding Solactive’s obligations to its licensees, Solactive reserves the right to change the methods of calculation or publication with respect to the Index and Solactive shall not be liable for any miscalculation of or any incorrect, delayed, or interrupted publication with respect to the Index. Solactive shall not be liable for any damages, including, without limitation, any loss of profits or business, or any special, incidental, punitive, indirect, or consequential damages suffered or incurred as a result of the use (or inability to use) of the Index.