SEC Comment Letter 0000000000-25-011193 to Investment Managers Series Trust II (CIK 0001587982)
Investment Managers Series Trust II (CIK 0001587982)
Date: Dec. 2, 2025 · CIK: 0001587982 · Accession: 0000000000-25-011193
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-191476, 811-22894
Letter
December 2, 2025 VIA E-MAIL Diane J. Drake Investment Managers Series Trust II 235 West Galena Street Milwaukee, Wisconsin 53212
Re: Investment Managers Series Trust II Post-Effective Amendments on Form N-1A File Nos. 333-191476, 811-22894
Dear Ms. Drake:
We write to express concern regarding the registration of exchange-traded funds that seek to provide more than 200% (2x) leveraged exposure to underlying indices or securities. On October 9, 2025, and October 10, 2025, Investment Managers Series Trust II filed post-effective amendments on Form N-1A to add the series referenced in Appendix A attached hereto.
We will not perform a substantive review of these filings referenced in Appendix A until the issues raised in this letter are addressed. Further, we request that in your response letter you undertake to delay the effectiveness of the filings until these issues are resolved.
Rule 18f-4 under the Investment Company Act of 1940
Rule 18f-4 limits fund leverage risk by requiring that an open-end fund s Value-at-Risk (VaR) does not exceed 200% of the VaR of a designated reference portfolio. 1 The fund s designated reference portfolio provides the unleveraged baseline against which to compare the fund s leveraged portfolio for purposes of identifying the fund s leverage risk under the rule. Accordingly, in defining the term designated reference portfolio, rule 18f-4 provides that, if
1 Rule 18f-4(c)(2). In circumstances not relevant here, a fund can satisfy a different test in the rule based on absolute VaR, rather than relative VaR. Diane J. Drake Page 2 of 4
the fund's investment objective and strategy is to track the performance (including a leverage multiple or inverse multiple) of an unleveraged index, the fund must use that index as its designated reference portfolio.2 As the Commission observed in adopting this requirement, where a fund tracks an index, that index will provide the most appropriate reference portfolio for a relative VaR test.
Each fund in the registrant s fund complex identified in Appendix A has an objective and strategy to track the performance, including a leverage multiple or inverse multiple, of an unleveraged index because each fund seeks to provide a leverage or inverse multiple of the return of one or more specific securities. Each fund therefore must use the security or securities that it tracks (collectively, the fund s reference assets ) as the fund s designated reference portfolio for purposes of the VaR test required by rule 18f-4. Whether the fund identifies the securities (or security) it tracks by their individual names or as an index does not change this conclusion.
Because each of these funds has an objective and strategy to provide a leverage multiple or inverse multiple of the return of the fund s reference assets, each fund s reference assets provide the precise representation of the fund s unleveraged portfolio and therefore the appropriate baseline to calculate the fund s leverage risk under the rule. Accordingly, we question how the fund s derivatives risk manager could reasonably determine to use a baseline other than the reference assets and how the funds directors, as fiduciaries, would be satisfied with the manager s choice.
* * *
We request the registrant revise its objective and strategy to be consistent with rule 18f-4, as discussed above, or withdraw its filings. A response to this letter should be in the form of a supplemental correspondence filed on EDGAR. We remind you that the fund and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action, or absence of action by the staff.
Should you have any questions regarding this letter, please feel free to contact us at (202) 551-6921.
Sincerely,
Division
of Investment Management
Show Raw Text
<DOCUMENT> <TYPE>TEXT-EXTRACT <SEQUENCE>2 <FILENAME>filename2.txt <TEXT> December 2, 2025 VIA E-MAIL Diane J. Drake Investment Managers Series Trust II 235 West Galena Street Milwaukee, Wisconsin 53212 Re: Investment Managers Series Trust II Post-Effective Amendments on Form N-1A File Nos. 333-191476, 811-22894 Dear Ms. Drake: We write to express concern regarding the registration of exchange-traded funds that seek to provide more than 200% (2x) leveraged exposure to underlying indices or securities. On October 9, 2025, and October 10, 2025, Investment Managers Series Trust II filed post-effective amendments on Form N-1A to add the series referenced in Appendix A attached hereto. We will not perform a substantive review of these filings referenced in Appendix A until the issues raised in this letter are addressed. Further, we request that in your response letter you undertake to delay the effectiveness of the filings until these issues are resolved. Rule 18f-4 under the Investment Company Act of 1940 Rule 18f-4 limits fund leverage risk by requiring that an open-end fund s Value-at-Risk (VaR) does not exceed 200% of the VaR of a designated reference portfolio. 1 The fund s designated reference portfolio provides the unleveraged baseline against which to compare the fund s leveraged portfolio for purposes of identifying the fund s leverage risk under the rule. Accordingly, in defining the term designated reference portfolio, rule 18f-4 provides that, if 1 Rule 18f-4(c)(2). In circumstances not relevant here, a fund can satisfy a different test in the rule based on absolute VaR, rather than relative VaR. Diane J. Drake Page 2 of 4 the fund's investment objective and strategy is to track the performance (including a leverage multiple or inverse multiple) of an unleveraged index, the fund must use that index as its designated reference portfolio.2 As the Commission observed in adopting this requirement, where a fund tracks an index, that index will provide the most appropriate reference portfolio for a relative VaR test. Each fund in the registrant s fund complex identified in Appendix A has an objective and strategy to track the performance, including a leverage multiple or inverse multiple, of an unleveraged index because each fund seeks to provide a leverage or inverse multiple of the return of one or more specific securities. Each fund therefore must use the security or securities that it tracks (collectively, the fund s reference assets ) as the fund s designated reference portfolio for purposes of the VaR test required by rule 18f-4. Whether the fund identifies the securities (or security) it tracks by their individual names or as an index does not change this conclusion. Because each of these funds has an objective and strategy to provide a leverage multiple or inverse multiple of the return of the fund s reference assets, each fund s reference assets provide the precise representation of the fund s unleveraged portfolio and therefore the appropriate baseline to calculate the fund s leverage risk under the rule. Accordingly, we question how the fund s derivatives risk manager could reasonably determine to use a baseline other than the reference assets and how the funds directors, as fiduciaries, would be satisfied with the manager s choice. * * * We request the registrant revise its objective and strategy to be consistent with rule 18f-4, as discussed above, or withdraw its filings. A response to this letter should be in the form of a supplemental correspondence filed on EDGAR. We remind you that the fund and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action, or absence of action by the staff. Should you have any questions regarding this letter, please feel free to contact us at (202) 551-6921. Sincerely, Division of Investment Management 2 Rule 18f-4(a) (defining the term Designated reference portfolio ). Appendix A 33 Act Accession No Complex Registrant Filing Date Series Names 333-191476 0001213900-25-097512 Tradr Investment 10/9/2025 TRadr 3X Long FLY Daily ETF Managers Tradr 3X Long CRM Daily ETF Series Trust II Tradr 3X Long CRWV Daily ETF Tradr 3X Long CSCO Daily ETF Tradr 3X Long FRMI Daily ETF Tradr 3X Long GLXY Daily ETF Tradr 3X Long INTC Daily ETF Tradr 3X Long IONQ Daily ETF Tradr 3X Long IREN Daily ETF Tradr 3X Long JOBY Daily ETF Tradr 3X Long LLY Daily ETF Tradr 3X Long ACHR Daily ETF Tradr 3X Long MARA Daily ETF Tradr 3X Long MRVL Daily ETF Tradr 3X Long NBIS Daily ETF Tradr 3X Long NOW Daily ETF Tradr 3X Long OKLO Daily ETF Tradr 3X Long OPEN Daily ETF Tradr 3X Long ORCL Daily ETF Tradr 3X Long PANW Daily ETF Tradr 3X Long QBTS Daily ETF Tradr 3X Long QCOM Daily ETF Tradr 3X Long ALAB Daily ETF Tradr 3X Long RDDT Daily ETF Tradr 3X Long RGTI Daily ETF Tradr 3X Long RIOT Daily ETF Tradr 3X Long RKLB Daily ETF Tradr 3X Long SMR Daily ETF Tradr 3X Long SNOW Daily ETF Tradr 3X Long SOFI Daily ETF Tradr 3X Long SOUN Daily ETF Tradr 3X Long TEM Daily ETF Tradr 3X Long TXN Daily ETF Tradr 3X Long APLD Daily ETF Tradr 3X Long UBER Daily ETF Tradr 3X Long UPST Daily ETF Tradr 3X Short NVDA Daily ETF Tradr 3X Short TSLA Daily ETF Tradr 3X Long APP Daily ETF Tradr 3X Long ASTS Daily ETF Tradr 3X Long BE Daily ETF Tradr 3X Long BLSH Daily ETF Tradr 3X Long BRKB Daily ETF Diane J. Drake Page 4 of 4 333-191476 0001213900-25-098097 Tradr Investment 10/10/2025 Tradr 3X Long AMD Daily ETF Managers Tradr 3X Long MSTR Daily ETF Series Trust II Tradr 3X Long NVDA Daily ETF Tradr 3X Long PLTR Daily ETF Tradr 3X Long TSLA Daily ETF Tradr 3X Long TSM Daily ETF Tradr 3X Short IONQ Daily ETF Tradr 3X Short QBTS Daily ETF Tradr 3X Short RGTI Daily ETF Tradr 3X Long ARKK Daily ETF Tradr 3X Long BMNR Daily ETF Tradr 3X Long COIN Daily ETF Tradr 3X Long ETH Daily ETF Tradr 3X Long FIG Daily ETF Tradr 3X Long HIMS Daily ETF Tradr 3X Long HOOD Daily ETF Tradr 3X Long IBIT Daily ETF </TEXT> </DOCUMENT>