Index, even if that security generally is underperforming. Additionally, the Fund rebalances its portfolio in accordance
with the Underlying Index, and, therefore, any changes to the Underlying Index’s rebalance schedule will result in corresponding changes to the Fund’s rebalance schedule.
Blockchain Company Investments Risk. Companies engaged in the development, enablement and acquisition of blockchain technologies are subject to a number of risks. Blockchain
technology is new and many of its uses may be untested. The mechanics of using distributed ledger
technology to transact in other types of assets, such as securities or derivatives, is less clear. There is
no assurance that widespread adoption will occur. Furthermore, the development and acceptance of competing
platforms or technologies may cause consumers or investors to use an alternative to blockchains. A lack of
expansion in the usage of blockchain technology could adversely affect the underlying holdings of the Fund.
Moreover, the extent to which companies held by the Fund utilize blockchain technology may vary, and it is
possible that even widespread adoption of blockchain technology may not result in a material impact on the stock price of such companies.
Furthermore, companies that are developing applications of blockchain technology applications may not in fact do so or may not be able to capitalize on those blockchain technologies. A
proliferation of recent startups attempting to apply blockchain technology in different contexts means the
possibility of conflicting intellectual property claims could be a risk to an issuer, its operations or its business. This could also pose a risk to blockchain platforms that permit transactions in digital securities. Regardless of the merit of any intellectual
property or other legal action, any threatened action that reduces confidence in the viability of blockchain may adversely affect an investment in the Fund. Additionally, blockchain technology is new, and as such may be subject to
future laws or regulations. Any such regulatory changes affecting blockchain technology may adversely
impact an investment in companies utilizing this technology.
Transacting on a blockchain depends in part specifically on the use of cryptographic keys that are
required to access a user’s account (or “wallet”). The theft, loss or destruction of these keys impairs the value of ownership claims users have over the relevant assets being represented by the ledger (whether “smart
contracts,” securities, currency or other digital assets). The theft, loss or destruction of private or public keys needed to transact on a blockchain could also adversely affect a company’s business or operations if it were dependent on
the ledger.
In addition, because blockchain functionality relies on the Internet, a significant disruption of
Internet connectivity affecting large numbers of users or geographic areas could impede the functionality of blockchain technologies and adversely affect the Fund. In addition, certain features of blockchain technology, such as
decentralization, open source protocol, and reliance on peer-to-peer connectivity, may increase the risk of fraud or cyber-attack by potentially reducing the likelihood of a coordinated response.
Equity Risk. Equity risk is the risk that the value of equity securities, including common stocks, may fall due to both changes in general economic conditions that impact the market as a whole,
as well as factors that directly relate to a specific company or its industry. Such general economic
conditions include changes in interest rates, periods of market turbulence or instability, or general and prolonged periods of economic decline and cyclical change. It is possible that a drop in the stock market may depress the price of most or all of the
common stocks that the Fund holds. In addition, equity risk includes the risk that investor sentiment
toward one or more industries will become negative, resulting in those investors exiting their investments
in those industries, which could cause a reduction in the value of companies in those industries more broadly. The value of a company's common stock may fall solely because of factors, such as an increase in production costs, that
negatively impact other companies in the same region, industry or sector of the market. A company's common
stock also may decline significantly in price over a short period of time due to factors specific to that company, including
decisions made by its management
or lower demand for the company's products or services. For example, an adverse event, such as an
unfavorable earnings report or the failure to make anticipated dividend payments, may depress the value of
common stock.
Small- and Mid-Capitalization Company Risk. Investing in securities of small- and mid-capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies' securities may be more
volatile and less liquid than those of more established companies. These securities may have returns that
vary, sometimes significantly, from the overall securities market. Often small- and mid-capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
Micro-Capitalization Company Risk. Investments in the securities of micro-capitalization companies involve substantially greater risks of loss and price fluctuations than other securities with larger capitalizations. Micro-capitalization companies carry additional
risks because their earnings and revenues tend to be less predictable (and some companies may be experience
significant losses), their share prices tend to be more volatile and their markets less liquid than companies with larger market capitalizations. Micro-capitalization companies may be newly formed or in the early stages of development, with limited
product lines, markets or financial resources, and they may lack management depth or may be overly reliant
on specific key individuals. In addition, less public information may be available about these companies. The shares of micro-capitalization companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the
pricing of these securities and the future ability to sell these securities.
Industry Concentration Risk. In following its methodology, the Underlying Index will be concentrated to a significant degree in securities of issuers operating in a single industry or industry
group. As a result, the Fund will also concentrate its investments in such industries or industry groups to
approximately the same extent. By concentrating its investments in an industry or industry group, the Fund
faces more risks than if it were diversified broadly over numerous industries or industry groups. Such
industry-based risks, any of which may adversely affect the companies in which the Fund invests, may
include, but are not limited to, the following: general economic conditions or cyclical market patterns that could negatively affect supply and demand in a particular industry, competition for resources; adverse labor relations,
political or world events, obsolescence of technologies, and increased competition or new product introductions that may affect the profitability or viability of companies in an industry. In addition, at times, such industry or industry
group may be out of favor and underperform other industries or the market as a whole.
Information Technology Sector Risk. Factors such as the failure to obtain, or delays in obtaining, financing or regulatory approval, intense competition, product compatibility, consumer preferences, corporate capital expenditure, rapid obsolescence, competition
from alternative technologies, and research and development of new products may significantly affect the
market value of securities of issuers in the information technology sector.
Foreign Investment Risk. Investments in the securities of non-U.S. issuers involve risks beyond those associated with investments in U.S. securities. Foreign securities may have
relatively low market liquidity, greater market volatility, decreased publicly available information and less reliable financial information about issuers, and inconsistent and potentially less stringent accounting, auditing and financial
reporting requirements and standards of practice, including recordkeeping standards, comparable to those
applicable to domestic issuers. Foreign securities also are subject to the risks of expropriation, nationalization, political instability or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in
foreign securities also may be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions and higher transactional costs.