Vident Financial
Index Repurposing Announcement

Effective at the close of business on January 6, 2016, the funds will begin tracking the following indices: Vident Core International Equity Index (VIEQX), Vident Core U.S. Stock Index (VCUSX), and Vident Core U.S. Bond Index (VUBDX). Each new index continues to employ Vident’s fundamental principles-based investment framework, but each provides material enhancements over the existing indices.

The Vident International Equity ETF’s underlying index, Vident International Equity Index (VIDIX), will be replaced with the Vident Core International Equity Index (VIEQX) and effective January 6, 2016 Vident International Equity Fund (VIDI) will begin tracking VIEQX. The new index (VIEQX), seeks to enhance principle expression through country allocation and stock selection. It aims to provide investors with a well-diversified set of global equities exposures across countries, regions and stocks, emphasizing countries with more favorable conditions for investment as well as economic and financial market resilience. At the individual stock level, the new index also seeks to enhance investors’ stock exposures, systematically selecting higher quality stocks with more favorable valuations and with a confirming price trend. The index is designed to be fully investable and fully replicable, with explicit consideration given to turnover, trading costs and liquidity.

The Vident Core U.S. Equity ETF’s underlying index, Vident Core U.S. Equity Index (VIUSX), will be replaced with the Vident Core U.S. Stock Index (VCUSX) and effective January 6, 2016 the Vident Core U.S. Equity Fund (VUSE) will begin tracking VCUSX. The new index (VCUSX), seeks to enhance principle expression through improved stock selection. It achieves this by systematically selecting higher quality stocks with more favorable valuations and with a confirming price trend. The index is designed to be fully investable and fully replicable, with explicit additional consideration given to turnover, trading costs and liquidity.

The Vident Core Bond Strategy ETF’s underlying index, Vident Core Bond Strategy Index (VBNDX), will be replaced with the Vident Core U.S. Bond Index (VUBDX) and effective January 6, 2016 the Vident Core U.S. Bond Strategy Fund (VBND) will begin tracking VUBDX.


Disclosure:

The Funds’ investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus and summary prospectus contains this and other important information about the investment company and may be obtained by calling 1-800-617-0004.

Investments involve risk. Principal loss is possible. The Funds have the same risks as the underlying securities traded on the exchange throughout the day at market price. Redemptions are limited and often commissions are charged on each trade. VIDI is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater for investments in emerging markets. A fund that concentrates its investments in the securities of a particular industry or geographic area may be more volatile than a fund that invests in a broader range of industries. VIDI and VBND may invest in illiquid or thinly traded securities which involve additional risks such as limited liquidity and greater volatility. VBND may make investments in debt securities. The Fund's investments in high yield securities expose it to a substantial degree of credit risk. These investments are considered speculative under traditional investment standards. Debt issuers and other counterparties may not honor their obligations or may have their debt downgraded by ratings agencies. An increase in interest rates may cause the value of fixed-income securities held by the Fund to decline. During periods of rising interest rates, certain debt obligations will be paid off substantially more slowly than originally anticipated and the value of those securities may fall sharply, resulting in a decline in the Fund's income and potentially in the value of the Fund's investments. VBND may also invest in asset backed and mortgage backed securities which include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. The performance of the funds may diverge from that of the Index. Because the Funds employ a representative sampling strategy and may also invest up to 20% of its assets in securities that are not included in the Index, the Funds may experience tracking error to a greater extent than a fund that seeks to replicate an index. The Funds are not actively managed and may be affected by a general decline in market segments related to the index. The Funds invest in securities included in, or representative of securities included in, the index, regardless of their investment merits. Small and medium-capitalization companies tend to have more limited liquidity and greater price volatility than large-capitalization companies. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value.

The Vident Core International Equity Index (Bloomberg Symbol: VIEQX) is a strategy seeking to balance risk across developed and emerging countries and emphasize those with favorable conditions for growth. The Vident Core US Stock Index (Bloomberg Symbol: VCUSX) is a strategy which seeks to apply principles-based reasoning, expressed through innovative risk design to address the risks and opportunities of US equity investing. It is not possible to invest directly in an index. The Vident Core US Bond Index (Bloomberg Symbol: VUBDX) is a strategy which seeks to utilize time-tested principles to improve corporate bond exposures by screening for companies with strong leadership, governance and creditworthiness factors. You cannot invest directly in an Index.

The Vident International Equity Index (Bloomberg Symbol: VIDIX) is a strategy seeking to balance risk across developed and emerging countries and emphasize those with favorable conditions for growth. The Vident Core US Equity Index (Bloomberg Symbol: VIUSX) is a strategy which seeks to apply principles-based reasoning, expressed through innovative risk design to address the risks and opportunities of US equity investing. It is not possible to invest directly in an index. The Vident Core US Bond Strategy Index (Bloomberg Symbol: VBNDX) is a strategy which seeks to utilize time-tested principles to improve corporate bond exposures by screening for companies with strong leadership, governance and creditworthiness factors. You cannot invest directly in an Index.

Diversification does not assure a profit or protect against loss in a declining market.

The Vident Funds are distributed by Quasar Distributors, LLC

A systematic & rules-based investment process

Applying timeless wisdom & established principles

A distinct philosophy & rigorous global research

VUSE

Vident Core U.S. Equity FundTM Overview

In its attempt to track the performance of the Vident Core U.S. Equity Fund Index (VCUSX), the Vident Core U.S. Equity FundTM (VUSE) seeks to represent a portfolio of US companies that adhere to higher standards of corporate governance and accounting, as measured by numerous research metrics. This research is integrated into a systematic, structured selection process that we believe offers an index of higher quality U.S. equities across small, medium and large-capitalization ranges. Many indices are weighted using other considerations such as market capitalization, but the VIUSX is represented by companies that exhibit higher principles expression. The index was established in 2013, is comprised of approximately 500 securities and is updated daily to reflect market prices. All allocations are subject to change. An optimized solution of the strategy is also available via Separately Managed (SMA) or Unified Managed Accounts (UMA) through Parametric.

As of 1/18/2019

Fund Details


Ticker VUSE
Primary Exchange NYSE
CUSIP 26922A503
Net Assets $497,057,912.39
Expense Ratio 0.50%
Total Annual Operating Expenses 0.55%
Inception Date 01/22/2014
Shares Outstanding 16,300,000.00
30 day SEC yield (as of 12.31.18) 1.66%
Market Price
NAV $30.49
Premium/Discount 0.08%
Distribution Frequency Quarterly





Fund Summary: The Vident Core U.S. Equity FundTM (VUSE) seeks to track the performance of the Vident Core U.S. Stock IndexTM (VCUSX), a principles-based U.S. equity strategy that we believe emphasizes companies with high-quality leadership and governance standards that trade at attractive valuations.

Talk to a Portfolio Manager


Fund Objectives: Vident Core U.S. Stock IndexTM (VCUSX) is a principles-based U.S. equity strategy emphasizing companies with high-quality leadership and governance standards and trading at attractive valuations. VCUSX seeks to emphasize companies that are believed to have high-quality leadership and governance corporate standards and lower fundamental risks, while seeking to reflect disciplined, factor-based portfolio construction and well diversified U.S. company exposure.


UNCERTAINTY & INSTABILITY

Broadly diversified company exposure within and across sectors helps to enhance the resilience of the portfolio.

HUMAN PRODUCTIVITY

Favors companies using capital efficiency and productivity with strong return on investments.


LEADERSHIP & GOVERNANCE

Companies with poor leadership and governance scores are removed from the investment universe.

VALUATION

Incorporates relative valuation in assessing and weight companies, seeking to acquire principles at favorable prices.





Premium Discount Chart

Total Returns

Month End Performance
(12/31/2018)
VUSE NAV Returns VUSE Market Price Returns
Cumulative
1 Month -11.62% -11.81%
3 Month -18.02% -18.31%
Last Quarter-end (12/31/2018) -18.02%
Year-to-date -14.75% -15.20%
Since Inception* 20.31% 19.81%
Average Annual
1 Year -14.75% -15.20%
3 Year 5.62% 5.43%
5 Year - -
Since Inception* 3.81% 3.73%

Quarter End Performance
(12/31/2018)
VUSE NAV Returns VUSE Market Price Returns
Cumulative
Quarter -18.02% -18.31%
Year To Date -14.75% -15.20%
Since Inception* 20.31% 19.81%
Average Annual
1 Year -14.75% -15.20%
3 Year 5.62% 5.43%
5 Year - -
10 Year - -
Since Inception* 3.81% 3.73%

*Fund Inception Date: 01/22/2014

Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted. Short term performance is not a good indication of the fund's future performance, and an investment should not be made based solely on returns. To obtain performance data current to the most recent month-end, please call 404-267-1501.


As of 12/31/2018

Sector Breakdown

Name Weight
1. Information Technology 20.38%
2. Consumer Discretionary 15.09%
3. Financials 14.91%
4. Health Care 11.59%
5. Industrials 11.20%
6. Consumer Staples 8.71%
7. Energy 4.98%
8. Utilities 4.46%
9. Materials 3.42%
10. Communication Services 2.92%
11. Real Estate 2.16%
12. Money Market Fund 0.18%
As of 1/17/2019

Top Holdings

Top Holdings will be made available momentarily after the first full day of trading has completed.

Name Weight
1. TELEPHONE & DATA SYS INC 0.85%
2. SPIRIT AIRLS INC 0.83%
3. AMEDISYS INC 0.77%
4. MOLINA HEALTHCARE INC 0.75%
5. FOOT LOCKER INC 0.7%
6. ARRIS INTL INC 0.68%
7. AES CORP 0.68%
8. SANDERSON FARMS INC 0.67%
9. T MOBILE US INC 0.66%
10. PFIZER INC 0.66%

Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Please click on the following links to view each Fund's current holdings: VIDI Holdings, VUSE Holdings, VBND Holdings

The fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus and summary prospectus (VIDI, VUSE, VBND) contains this and other important information about the investment company, and a free hardcopy of the prospectus may be obtained by calling 1-800-617-0004. Read carefully before investing.

Investments involve risk. Principal loss is possible. The Funds have the same risks as the underlying securities traded on the exchange throughout the day at market price. Redemptions are limited and often commissions are charged on each trade. VIDI is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater for investments in emerging markets. A fund that concentrates its investments in the securities of a particular industry or geographic area may be more volatile than a fund that invests in a broader range of industries. VIDI and VBND may invest in illiquid or thinly traded securities which involve additional risks such as limited liquidity and greater volatility. VBND may make investments in debt securities. The Fund's investments in high yield securities expose it to a substantial degree of credit risk. These investments are considered speculative under traditional investment standards. Debt issuers and other counterparties may not honor their obligations or may have their debt downgraded by ratings agencies. An increase in interest rates may cause the value of fixed-income securities held by the Fund to decline. During periods of rising interest rates, certain debt obligations will be paid off substantially more slowly than originally anticipated and the value of those securities may fall sharply, resulting in a decline in the Fund's income and potentially in the value of the Fund's investments. VBND may also invest in asset backed and mortgage backed securities which include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. The performance of the funds may diverge from that of the Index. Because the Funds employ a representative sampling strategy and may also invest up to 20% of its assets in securities that are not included in the Index, the Funds may experience tracking error to a greater extent than a fund that seeks to replicate an index. The Funds are not actively managed and may be affected by a general decline in market segments related to the index. The Funds invest in securities included in, or representative of securities included in, the index, regardless of their investment merits. Small and medium-capitalization companies tend to have more limited liquidity and greater price volatility than large-capitalization companies. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value.

The Vident Funds are distributed by Quasar Distributors, LLC. The fund's investment advisor is Exchange Traded Concepts LLC. VIDI, VBND, and VUSE's sub-advisor is Vident Investment Advisory (VIA). Vident Financial owns the indexes that underline the funds. Quasar is not affiliated with Vident Financial, Exchange Traded Concepts, or Vident Investment Advisory.

Diversification does not guarantee a profit or protect from loss in a declining market.

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