Breakwave$Dry$Bulk$Shipping$ETF NYSE:$BDRY Shipping$Is$A$Global$Industry$And$A$Vital$Economic$Sector

Dry$Bulk$Market: A$Primer

Breakwave$Dry$Bulk$Shipping$ETF NYSE:$BDRY Shipping$is$a$Global$Industry$and$a$Vital$Economic$Sector

“God%must%have%been%a%shipowner.%He%placed%the%raw% materials%far%from%where%they%were%needed%and%covered% two%thirds%of%the%earth%with%water.”%%%%Erling%Naess,%Shipowner%1901C1993

• Shipping$is$a$vital$part$of$the$global$economy$and$an$integrated$ part$of$commodity$trading

• Crude$Oil,$Iron$Ore$and$Coal$are$the$three$major$commodiMes$ shipped$around$the$world

• China$dominates$the$demand$side,$with$more$than$80%$of$ incremental$seaborne$volumes$going$to$China$over$the$last$decade

• The$source$of$commodiMes$is$quite$disperse,$with$both$the$AtlanMc$ basin$and$the$Paciﬁc$basin$supplying$cargoes$to$the$market Shipping$Overview:$Ships$&$Sizes

CAPESIZE NUMBER$OF$ PRIMARY$SHIP$ MAIN$USE SHIP$SIZES FEATURE SHIPS USERS

Dry$Bulk Capesize:$ Largest$dry$bulk$ship;$Mainly$used$ ~180,000$tons for$long]haul$iron$ore$ Commodity$ Producers:$Vale,$ The$“workhorse”$of$the$industry;$ Rio$Tinto,$BHP Panamax:$ Mainly$used$for$coal$and$grains;$Can$ ~75,000$tons ~11,100$ Commodity$ use$Panama$Canal worldwide Traders:$Cargill,$ SUPRAMAX Largest$ship$with$onboard$cranes;$ Louis$Dreyfus Supramax:$ Most$versaMle$due$to$ability$to$ ~55,000$tons End$Users:$$ access$small$ports Iron$Ore Coal ED&F$Man,$RWE Grains Other Handysize:$ Smallest$category$of$ship;$Carries$ ~32,000$tons various$cargoes

Tankers Largest$cargo$ship;$Mainly$used$for$ VLCC:$$ transporMng$crude$oil$to$US$and$Asia$ Oil$Majors:$ ~300,000$tons from$Middle$East ExxonMobil,$BP,$ VLCC Shell Half]size$of$VLCCs;$Mainly$used$in$ Suezmax:$ the$AtlanMc;$Largest$tanker$that$can$ ~150,000$tons ~6,600$ Commodity$ use$the$Suez$Canal worldwide Traders:$VItol,$ Trafigura Aframax:$ Most$versaMle$crude$oil$tanker;$Can$ ~105,000$tons access$most$ports Crude$Oil End$Users:$ Refined$Products Valero,$CNOC MR:$ Mainly$used$for$refined$oil$product$ Chemicals ~45,000$tons trading Dry$Bulk$Shipping

• Dry$bulk$vessels$are$involved$in$the$seaborne$transport$of$major$ commodiMes$such$as$iron$ore,$coal,$grain,$and$other$commodiMes$ such$as$bauxite$and$phosphate,$minerals,$ferMlizers$and$forestry$ products

• Dry$bulk$carriers$are$ships$that$have$cargo$loaded$directly$into$the$ ship's$storage$holds.$$As$a$result,$bulk$carriers$provide$economies$ of$scale$that$enable$users$to$save$on$transportaMon$costs

• For$dry$bulk$shipping$to$be$economically$viable,$the$cargo$must$be$ homogenous$so$that$it$can$be$loaded$directly$into$the$ship’s$holds,$ and$available$in$large$quanMMes$to$enable$economies$of$scale

• Dry$bulk$carriers$load$and$unload$cargo$at$ports$using$either$the$ port$equipment$or$on]board$self]unloading$cranes

• Presently,$there$are$approximately$11,100$such$vessels$in$the$ world’s$dry$bulk$ﬂeet,$generally$ranging$in$size$from$10,000$ deadweight$tons$(Dwt)$to$400,000$Dwt

• The$total$dry$bulk$ﬂeet$capacity$is$approximately$820m$dwt

• Dry$bulk$carriers$have$an$average$useful$life$of$about$25$years Major$Dry$Bulk$Trade$Routes

Asia

Major$ImporMng$NaMons Major$ExporMng$NaMons

Source:$Breakwave$Internal$Research Dry$Bulk$Trade

Dry$Bulk$Trade$by$Cargo$Type,$2017

Other Iron$Ore 23% 29%

Forrest$Products 7%

Steel 8% Grains Coal 10% 23%

Source:$Breakwave$Internal$Research$and$Clarksons$Research Dry$Bulk$Trade

• China$dominates$dry$bulk$trade,$accounMng$for$~40%$of$total$ Percentage$of$Dry$Bulk$Trade,$2017$Imports major$dry$bulk$goods$trade$and$more$than$70%$of$iron$ore$trade

• In$2017,$the$great$majority$of$dry$bulk$demand$growth$came$from$ China,$with$smaller$growth$coming$from$all$other$major$regions

• Japan$and$South$Korea$remain$strong$in$terms$of$coal$imports,$ accounMng$for$more$than$25%$of$total$coal$trade Other 23% • India$has$recently$experienced$considerable$coal$demand$growth,$ with$total$volumes$up$almost$fourfold$in$the$last$10$years China India 43% 7% • EU$volumes$have$remained$relaMvely$stable,$as$coal$demand$has$ been$steadily$declining,$partly$oﬀset$by$small$increases$in$iron$ore$ S$Korea trade 7% EU Japan • Distance$plays$an$equally$important$factor$when$it$comes$to$ 9% 11% demand,$as$far$away$sourced$goods$increase$demand$for$dry$bulk$ ships

• The$Brazil$to$China$route$remains$the$most$important$one,$as$it$ takes$almost$3x$the$days$for$a$vessel$to$transport$cargo$compared$ to$Australia$to$China

Source:$Breakwave$Internal$Research$and$Clarksons$Research Dry$Bulk$Demand

• Dry$bulk$demand$is$driven$by$global$economic$growth,$ Dry$Bulk$Trade emerging$markets$growth$infrastructure$spending$ and,$to$a$lesser$extend,$populaMon$growth$ $6,000$

• Since$2000,$seaborne$dry$bulk$trade$has$increased$at$ $5,000$ a$Compound$Annual$Growth$Rate$(CAGR)$of$4.6% 4.6%$CAGR • China’s$admirance$into$the$World$Trade$OrganizaMon$ $4,000$ (WTO)$in$2001$and$demand$growth$for$dry$bulk$goods$ in$the$Far$East,$has$been$the$main$drivers$behind$the$ strong$growth$over$the$past$15$years $3,000$ million$tons • India’s$coal$demand$has$also$played$a$increasing$role$ $2,000$ in$the$market$growth$since$2010

• Iron$ore$and$coal$account$for$the$majority$of$the$ $1,000$ incremental$demand$over$the$period$as$grain$trade$ has$seen$a$more$steadier$increase $]$$$ 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source:$Breakwave$Internal$Research$and$Clarksons$Research Iron$Ore$Trade

Iron$Ore$Trade Global$Steel$ProducMon$&$China's$Market$Share 1,600 60% $1,800$

1,400 4%$CAGR $1,600$ 50% $1,400$ 1,200 7.3%$CAGR 40% $1,200$ 1,000 $1,000$ 800 30% $800$ million$tons million$tons 600 20% $600$

400 $400$ 10% 200 $200$

0 0% $]$$$

Steel$ProducMon China$%

• Iron$ore$is$unreﬁned$iron$and$the$main$ingredient$in$steel$making$process • Iron$ore$deposits$are$found$across$the$globe,$but$the$main$exporMng$regions$are$Brazil,$Australia$and$South$Africa • Infrastructure$and$construcMon$spending$and,$as$a$result,$global$steel$producMon$are$the$main$drivers$for$iron$ore$trade • Steel$demand$has$been$steadily$increasing$in$the$last$two$decades,$albeit$at$a$slower$pace$over$the$last$few$years • China$dominates$the$steel$market$with$half$of$the$world’s$steelmaking$capacity$ • China’s$share$of$global$steel$producMon$has$increased$considerably$since$the$early$2000s

Source:$Breakwave$Internal$Research$and$Clarksons$Research Brazil$and$Australia$Iron$Ore$Trade

Australia$Iron$Ore$Exports Brazil$Iron$Ore$Exports $90$ $45$

$80$ $40$ 3%$CAGR 12%$CAGR $70$ $35$

$60$ $30$

$50$ $25$

$40$ $20$ million$tons million$tons

$30$ $15$

$20$ $10$

$10$ $5$

$]$ $]$ Jul]10 Jul]11 Jul]12 Jul]13 Jul]14 Jul]15 Jul]17 Jul]16 Jan]10 Jan]11 Jan]12 Jan]13 Jan]14 Jan]15 Jan]16 Jan]17 Oct]10 Oct]11 Oct]12 Oct]13 Oct]14 Oct]15 Oct]17 Apr]10 Apr]11 Apr]12 Apr]13 Apr]14 Apr]15 Apr]17 Oct]16 Apr]16 Jul]10 Jul]11 Jul]12 Jul]13 Jul]14 Jul]15 Jul]16 Jul]17 Jan]10 Jan]11 Jan]12 Jan]13 Jan]14 Jan]15 Jan]17 Oct]10 Oct]11 Oct]12 Oct]13 Oct]14 Oct]15 Oct]17 Apr]10 Apr]11 Apr]12 Apr]13 Apr]14 Apr]15 Apr]17 Jan]16 Oct]16 Apr]16

• Brazil$and$Australia$are$the$two$major$countries$in$terms$of$iron$ore$exports • Combined,$they$account$for$82%$of$global$iron$ore$exports,$based$on$2017$ﬁgures • Australia$has$seen$iron$ore$exports$increasing$by$about$11%$per$year$since$2009,$as$major$projects$in$the$Pilbara$region$begun$producMon • Brazil$has$experienced$slower$growth,$with$exports$increasing$at$less$than$5%$per$year$since$2009 • Going$forward,$major$new$projects$in$the$Carajás$region$should$provide$most$of$the$growth$coming$from$Brazil Source:$Breakwave$Internal$Research$and$Clarksons$Research China$Iron$Ore$Imports

China$Iron$Ore$Imports $120$

$100$ 7%$CAGR

$80$

$60$ million$tons

$40$

$20$

$]$ Jul]10 Jul]11 Jul]12 Jul]13 Jul]14 Jul]15 Jul]16 Jul]17 Jan]10 Jan]11 Jan]12 Jan]13 Jan]14 Jan]15 Jan]16 Jan]17 Oct]10 Oct]14 Oct]11 Oct]12 Oct]13 Oct]15 Oct]16 Oct]17 Apr]10 Apr]11 Apr]12 Apr]13 Apr]14 Apr]15 Apr]16 Apr]17

• China$is$the$main$desMnaMon$when$it$comes$to$iron$ore • China$accounts$for$more$than$70%$of$the$global$iron$ore$trade$and$more$than$75%$of$the$iron$ore$trade$growth$since$2009 • Iron$ore$imports$are$closely$Med$to$the$country’s$steel$industry,$which$is$highly$dependent$on$infrastructure$spending • The$long$term$“One$Belt$One$Road”$iniMaMve$should$support$demand$for$steel$products,$and$as$a$result,$iron$ore

Source:$Breakwave$Internal$Research$and$Clarksons$Research Coal$Trade

$4,500$ 1,400 Coal$ConsumpMon Coal$Trade $4,000$ 1,200 $3,500$ 5.0$%$CAGR 1,000 $3,000$

$2,500$ 800

$2,000$ million$tons 600 million$tons

$1,500$ 400 $1,000$ 200 $500$

$]$$$ 0

• Coal$consumpMon$has$been$in$a$steady$decline$over$the$last$few$years,$due$to$global$environmental$policies,$relaMve$pricing$and$new$ renewable$energy$sources • Coal$trade$has$seen$sizable$growth$since$the$early$2000s,$but$has$remained$fairly$ﬂat$recently,$$as$relaMve$pricing$has$kept$physical$coal$trading$ acMve$partly$oﬀset$by$steady$demand • China$conMnues$to$dominate$the$coal$trade$market,$accounMng$for$about$20%$of$thermal$coal$import$volumes;$Japan$is$second,$while$India$ has$recently$seen$import$volumes$increasing

Source:$Breakwave$Internal$Research$and$Clarksons$Research Grains$Trade

Grains$Trade Soybeans$Trade

$400$ $180$

$350$ $160$ 5.5$%$CAGR 3.0$%$CAGR $140$ $300$ $120$ $250$ $100$ $200$ $80$ million$tons million$tons $150$ $60$

$100$ $40$

$50$ $20$

$]$$$ $]$$$

• Wheat,$coarse$grains$(barley,$oats,$corn)$and$soybeans,$and$oil$seeds$are$the$main$types$of$grains$shipped$by$dry$bulk$vessels • Australia,$Brazil,$ArgenMna,$Canada,$the$US$and$the$European$Union$are$the$major$grain]exporMng$regions • The$Asian$region$is$$the$world’s$largest$importer,$accounMng$for$about$a$third$of$global$imports • China$currently$stands$as$the$world’s$largest$importer$of$soybeans,$primarily$used$as$livestock$feed

Source:$Breakwave$Internal$Research$and$Clarksons$Research Dry$Bulk$Vessel$Types

Capesize Panamax Handymax Handysize • Largest$standard$dry$bulk$vessel$ • Largest$dry$bulk$vessel$able$to$ • Medium$size$dry$bulk$vessel$with$ • Small$size$dry$bulk$vessel$with$ mainly$used$in$iron$ore$trade transit$the$Panama$canal onboard$cranes onboard$cranes • Capacity:$100kdwt$+ • Capacity:$65kdwt$]100kdwt • Capacity:$40kdwt$–$65kdwt • Capacity:$10kdwt$–$40kdwt • Average$length:$~300$meters • Average$length:$~225$meters • Average$length:$~190$meters • Average$length:$~170$meters • Average$max$speed:$~15$knots • Average$max$speed:$~14.5$knots • Average$max$speed:$~14.5$knots • Average$max$speed:$~14$knots • Average$consumpMon:$60$tons/day • Average$consumpMon:$35$tons/day • Average$consumpMon:$31$tons/day • Average$consumpMon:$23$tons/day • Subcategories:$ • Subcategories:$ • Subcategories:$ • In$the$last$five$years,$the$price$of$a$ • Newcastlemax%(190C250%kdwt) • Kamsarmax%(80C85%kdwt) • Supramax%(50C60%kdwt) 5]year$old$Handymax$has$varied$ • Valemax%(320+kdwt) • PostCKamsarmax%(85+kdwt) • Ultramax%(60C65%kdwt) between$9m$and$21m • In$the$last$five$years,$the$price$of$a$ • In$the$last$five$years,$the$price$of$a$ • In$the$last$five$years,$the$price$of$a$ 5]year$old$Capesize$has$varied$ 5]year$old$Panamax$has$varied$ 5]year$old$Handymax$has$varied$ between$23m$and$53m between$13m$and$28m between$12m$and$27m

Source:$Breakwave$Internal$Research$and$Clarksons$Research Global$Dry$Bulk$Fleet

Fleet$ComposiMon,$by$Dwt

Handysize 12%

Capesize 39% Handymax 24%

Panamax 25%

Source:$Breakwave$Internal$Research$and$Clarksons$Research Vessel$Supply

• Shipbuilding,$ship$demoliMon$and$ﬂeet$uMlizaMon$usually$determine$the$supply$of$ships

• It$takes$roughly$two$years$to$build$a$new$ship,$while$the$useful$life$of$a$ship$is$approximately$25$years

• Ship$ordering$and$ship$scrapping$is$relaMvely$dynamic:$prevailing$freight$rates,$future$freight$rate$expectaMons$and$ship$operaMng$$ economics$are$the$main$determinates$of$such$acMviMes

• Speed,$waiMng$Mme,$weather,$port$maintenance,$congesMon$are$also$factors$aﬀecMng$ship$supply$over$shorter$periods$of$Mme

Ship$Building Ship$DemoliMon Fleet$CharacterisMcs

Shipbuilding$Countries Shipowning$Countries

Others 7% Greece China 22% 17% China S.$Korea 41% 30% Japan 20%

Others 35% Japan S.$Korea 22% 6%

• The$major$shipbuilding$countries$are$concentrated$in$the$Far$East,$with$China$accounMng$for$more$than$40%$of$the$global$shipbuilding$market • Japan$and$South$Korea$account$for$most$of$the$remaining$share • Ship]owning$is$more$fragmented,$with$Greece$and$Japan$accounMng$for$one]ﬁwh$of$the$market,$each,$and$China$accounMng$for$about$17%.$ • There$are$more$than$100$shipbuilders$worldwide$and$more$than$20,000$shipowners$globally$(including$all$types$of$ships)

Source:$Breakwave$Internal$Research$and$Clarksons$Research Dry$Bulk$Orderbook

Orderbook$as$%$of$Fleet Orderbook$in$Dwt

90% 350

80% 300 70% 250 60%

50% 200

40% 150 million$dwt 30% 100 20% 50 10% 0 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

• The$dry$bulk$orderbook,$the$orders$for$the$construcMon$of$new$ships,$has$been$steadily$declining$since$peaking$in$2009 • Currently$it$stands$at$the$lowest$it$has$been$since$early$2000s$when$measured$as$a$percentage$of$the$ﬂeet • The$orderbook$is$dynamic,$subject$to$freight$rates,$newbuilding$prices$and$owners’$view$of$future$earnings$potenMal$ • It$takes$roughly$two$years$from$ordering$to$delivering$a$ship,$so$the$orderbook$provides$a$good$indicator$of$future$ﬂeet$growth

Source:$Breakwave$Internal$Research$and$Clarksons$Research Fleet$Development

Dry$Bulk$Deliveries$&$DemoliMon Dry$Bulk$Fleet$ 900 120 800 100 700 6.6%$CAGR 80 600

500 60 400 million$dwt million$dwt 40 300

20 200 100 0 0

Net$Fleet$Growth DemoliMon Deliveries

• Dry$bulk$deliveries$have$slowed$down$since$the$very$high$levels$earlier$in$the$decade$following$strong$ordering$in$the$2007]2011$period$$ • Ship$demoliMon$has$remained$relaMvely$steady,$subject$to$freight$rate$strength$and$global$steel$prices • Net$fleet$growth$has$also$been$relaMvely$steady,$but$is$at$the$lowest$level$as$a$percentage$of$the$fleet$since$the$early$2000s • The$global$fleet$average$age$stands$at$approximately$9.0$years,$while$9.0%$of$the$dry$bulk$fleet$is$20$years$or$older$

Source:$Breakwave$Internal$Research$and$Clarksons$Research Supply$and$Demand

Dry$Bulk$Trade$Growth$vs.$Dry$Bulk$Fleet$Growth

20%

Dry$Bulk$Trade Dry$Bulk$Fleet

15%

10% %$Change 5%

0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

]5%

• In$the$early$2000s,$demand$for$dry$bulk$shipping$exceeded$available$supply,$leading$to$strong$dry$bulk$rates$during$the$period • However,$a$combinaMon$a$strong$new$orders$for$dry$bulk$ships$and$the$Global$Financial$Crisis,$lead$to$a$sharp$decline$in$dry$bulk$rates • Since$2009,$supply$of$ships$has$exceeded$demand,$as$new$ship$deliveries$exceeded$slower$demand$growth • 2017$showed$a$Mghter$balance$between$supply$and$demand • Going$forward,$a$low$orderbook$combined$with$expected$increases$in$iron$ore$trade$out$of$Brazil$should$further$Mghten$the$balance

Source:$Breakwave$Internal$Research$and$Clarksons$Research BalMc$Dry$Index

$14,000$ BalMc$Dry$Index

• The$BalMc$Dry$Index$(BDI)$is$a$broad$measure$ of$spot$dry$bulk$freight$rates $12,000$

• The$BDI$is$calculated$daily$and$provided$by$the$ BalMc$Exchange,$reﬂecMng$average$spot$prices$ $10,000$ for$dry$bulk$ships$globally

$8,000$ • Over$the$last$15$years,$the$BDI$has$experienced$ considerable$volaMlity,$reﬂecMng$ship$supply$

and$demand$imbalances$over$Mme $6,000$

• Following$its$all$Mme$peak$in$mid]2008,$the$BDI$ has$ﬂuctuated$in$a$Mghter$range$over$the$last$ $4,000$ several$years,$reﬂecMng$a$berer$balanced$ market $2,000$ • The$BDI$reached$an$all]Mme$high$of$11,793$in$ May$2008$and$an$all]Mme$low$of$290$in$ February$2016;$the$2000]2017$average$is$ $]$$$ approximately$2,450

The$above$chart$displays$the$live$index$data$for$the$BalMc$Dry$Index$(BDI)$calculated$daily$since$January$2000.$The$BDI$is$ a$broad$and$publicly$available$measure$of$average$spot$dry$bulk$freight$rates.$The$chart$is$intended$for$illustraMve$ purposes$only$and$should$not$be$used$as$an$indicator$or$proxy$for$predicMng$the$performance$of$the$Breakwave$Dry$ Bulk$Shipping$ETF.$Past$performance$is$not$indicaMve$of$future$results.$

Source:$Breakwave$Internal$Research$and$Clarksons$Research Dry$Bulk$Spot$Freight$Indices

Capesize$4TC,$Panamax$4TC,$Supramax$6TC $250,000 • The$individual$components$of$the$Dry$Bulk$ Capesize$4TC Panamax$4TC Supramax$6TC Index$also$have$seen$considerable$volaMlity$in$ the$last$15$years $200,000 • Average$Capesize$rates,$being$the$most$ volaMle,$reached$an$all$Mme$high$of$more$than$ $200,000/day$in$mid$2008,$before$declining$ considerably $150,000

• In$2016,$Capesize$rates$reached$an$all$Mme$low$ of$less$than$$500/day $100,000 • Panamax$and$Supramax$rates$are$highly$ correlated$to$Capesize$rates,$but$exhibit$less$ volaMlity$throughout$the$cycles $50,000 • Spot$rate$volaMlity$has$remained$high,$although$ the$range$of$spot$rates$has$declined$in$the$last$ several$years $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

The$above$chart$displays$the$live$index$data$for$the$sub$components$of$the$BDI,$which$are$categorized$by$ship$type,$ since$January$2000.$The$chart$is$intended$for$illustraMve$purposes$only$and$should$not$be$used$as$an$indicator$or$proxy$ for$predicMng$the$performance$of$the$Breakwave$Dry$Bulk$Shipping$ETF.$Past$performance$is$not$indicaMve$of$future$ results.$ Source:$Breakwave$Internal$Research$and$Clarksons$Research Important%Risk%InformaVon%and%Disclosure

Inves&ng(in(freight(futures(can(be(vola&le(and(is(not(suitable(for(all(investors.(( (( Carefully(consider(the(Fund’s(investment(objec&ves,(risk(factors,(charges,(and(expenses(before(inves&ng.(This(material(must(be(accompanied(or(preceded(by(a( prospectus.(Please(read(the(prospectus(carefully(before(inves&ng.( (( The(Fund(is(not(a(registered(investment(company(so(shareholders(do(not(have(the(protec&ons(of(the(Investment(Company(Act(of(1940.( $ An$investment$in$the$Fund$involves$significant$risks.$You$could$lose$all$or$part$of$your$investment$in$the$Fund,$and$the$Fund’s$performance$could$trail$that$of$other$investments.$ $ The$value$of$the$Shares$of$the$Fund$relates$directly$to$the$value$of,$and$realized$profit$or$loss$from,$the$Freight$Futures$and$other$assets$held$by$the$Fund,$and$fluctuaMons$in$ price$could$materially$affect$the$Fund’s$shares.$Investments$in$freight$futures$typically$fluctuate$in$value$with$changes$in$spot$charter$rates.$Charter$rates$for$dry$bulk$vessels$are$ volaMle$and$have$declined$significantly$since$their$historic$highs$and$may$remain$at$low$levels$or$decrease$further$in$the$future. $$ The$Fund$will$not$take$defensive$posiMons$to$protect$against$declining$freight$rates,$which$could$cause$a$decline$to$the$value$of$the$Fund’s$shares. $ The$Trust$is$taxed$as$a$partnership$and$the$applicable$rules$are$complex$and$burdensome$on$investors. $ Although$the$Fund’s$shares$are$listed$and$traded$on$the$NYSE$Arca,$there$can$be$no$guarantee$that$an$acMve$trading$market$for$the$shares$will$be$maintained.$If$an$investor$ needs$to$sell$shares$at$a$Mme$when$no$acMve$trading$market$for$them$exists,$the$price$the$investor$receives$upon$sale$of$the$shares,$assuming$they$were$able$to$be$sold,$likely$ would$be$lower$than$if$an$acMve$market$existed. $ The$Fund$is$distributed$by$ETFMG$Financial$LLC,$which$is$not$affiliated$with$Breakwave$Advisors.

Source:$Breakwave$Internal$Research$and$Clarksons$Research BDRY

Breakwave$Dry$Bulk$Shipping$ETF