SEC Company Response from AMERICAN CENTURY ETF TRUST (CIK 0001710607) — Apr 3, 2020
AMERICAN CENTURY ETF TRUST (CIK 0001710607)
Date: April 3, 2020 · CIK: 0001710607 · Accession: 0001710607-20-000122
AI Filing Summary & Sentiment
File numbers found in text: 333-221045, 811-23305
Letter
VIA EDGAR Division of Investment Management 100 F Street NE Washington, DC 20549-4720 Re: American Century ETF Trust (the “Registrant”) File Nos. 333-221045; 811-23305
Dear Ms. Stojic:
This letter responds to your comments that we discussed on March 9, 2020, relating to Post-Effective Amendment No. 37 to the Registrant’s Registration Statement filed on January 24, 2020, for the principal purpose of adding two new series, American Century Mid Cap Growth Impact ETF and American Century Sustainable Equity ETF (each, a “Fund” and collectively, the “Funds”). For your convenience, we restate each of your comments prior to our responses.
1.
Comment: We note portions of the filing are incomplete and we may have additional comments on information or exhibits supplied supplementally.
Response: We acknowledge the Staff’s comment.
2.
Comment: The Staff is aware that Natixis Advisers, L.P. filed an application (the “Application”) requesting exemptive relief to operate this type of nontransparent active ETF. The Commission issued an order (the “Order”) granting that relief on December 10, 2019. Please tailor disclosure throughout registration statement to conform to the specific exemptive relief granted by the Order including the relevant reps and conditions contained in the Application.
Response: We revised the disclosure as requested.
American Century Mid Cap Growth Impact ETF Prospectus
3.
Comment: The Application states that the Fund will include a legend describing how the Fund will operate differently from a traditional ETF. Revise the cover page to make the legend more prominent for example consider indenting the legend in a manner that offsets it from the rest of the text and using a larger font size. Consider other methods to better highlight the legend.
Response: We revised the legend as requested.
4.
Comment: Please revise the legend to include specific cross references to related principal risks by name.
Response: We revised the disclosure as requested.
5.
Comment: Please provide a completed fee table with the response.
Response: We provided a completed fee and example table supplementally to the Staff, the final filing will have a completed table.
6.
Comment: In the Principal Investment Strategies section of the American Century Mid Cap Growth Impact ETF (“MID”) prospectus, please revise the language to clarify that the Fund will invest in medium capitalization companies as opposed to medium sized companies. Medium “sized” is less descriptive and can be measured in different ways.
Response: We revised the disclosure as requested.
7.
Comment: In the first sentence of MID’s Principal Investment Strategies section, please clarify that the Fund will invest primarily in common stocks of exchange-traded securities. Does the Fund plan to invest in foreign securities per its exemptive relief as part of its principal investment strategies? If so, please disclose related strategies and risks. If the Fund plans to include foreign securities please discuss that the Fund’s investments in common stock listed on a foreign exchange must trade contemporaneously with the Fund.
Response: We clarified the disclosure as requested. The Fund does not plan to invest in foreign securities as part of its principal investment strategies.
8.
Comment: There are 17 United Nations Sustainable Development Goals (“UN SDG”), please provide further information on how MID will incorporate these goals into its strategy. For example, will the Fund only invest in portfolio companies that consider the UN SDG as part of their operating model? If a portfolio company does not identify the UN SDG as part of its operating policies, how will the Fund analyze whether the company considers these goals? What due diligence will the Fund conduct to determine how a portfolio company has incorporated the UN SDG? Will the Fund prioritize certain goals over others?
Response: We revised the disclosure as requested.
9.
Comment: MID has a nonfundamental policy to “invest at least 80% of the fund’s net assets in securities of medium [capitalization] companies.” Please remove the term “net” as the Fund may not borrow per its exemptive relief.
Response: We revised the disclosure as requested.
10.
Comment: Please apply MID’s 80% policy to the term “Impact” per Rule 35d-1. In this case, the Fund’s name indicates that it will invest in a particular type of security-impact investments-and the Fund’s strategy furthers that notion by applying the UN SDG screen. We consider the term “Impact” to carry similar names rule obligations as terms such as “ESG,” “Sustainable,” “Green,” etc.
Response: The term “impact” as used in the Fund’s name suggests an investment strategy rather than a security type. The Fund’s investment process analyzes companies using the UN SDG to identify companies that generate, or could generate, social and environmental impact alongside a financial return. The portfolio managers use a variety of information sources when considering “impact” and they do not require a certain score or metric for each security to qualify. We believe this view is consistent with the adopting release for Rule 35d-1 (Investment Company Names, Inv. Co. Act Release No. 24828 (January 17, 2001)) (the “Adopting Release”) and the Staff’s 2001 Frequently Asked Questions about Rule 35d-1 (Investment Company Names) (“FAQs”). In the Adopting Release, the Commission stated that Rule 35d-1 does not apply to fund names that incorporate terms such as “growth” and “value”
since these terms connote types of investment strategies as opposed to types of investments. Similarly, in the FAQs, the Commission Staff opined that “Rule 35d-1 would not apply to the use of the term ‘income’ where that term suggests an investment objective or strategy rather than a type of investment. . . . Likewise, the term ‘equity income’ suggests that a fund focuses its investments in equities and has an investment objective or strategy of achieving current income.”
11.
Comment: At the end of strategy section, please disclose that the Fund is a nontransparent actively managed ETF.
Response: We revised the disclosure as requested.
12.
Comment: Please specifically state that the Fund will not disclose the daily holdings of the actual portfolio. Please also disclose that the Fund does not have a minimum overlap requirement between the proxy portfolio and the actual portfolio.
Response: We revised the disclosure as requested.
13.
Comment: Please consider reorganizing the Fund’s principal risks so that risks related to the proxy portfolio structure are listed first, followed by ESG risks second. These risks are the most prominent for this type of fund. Please also consider organizing the risks related to the Fund’s nontransparent structure under one main risk with related sub risks.
Response: We reorganized the disclosure as requested.
14.
Comment: Please add a principal risk that addresses MID’s foreign investments, if any. Given the Fund’s UN SDG strategy, please consider whether the Fund plans to invest in emerging markets, if so, include relevant risk disclosure.
Response: The Fund does not plan to invest in foreign or emerging market stocks as part of its principal investment strategy.
15.
Comment: Please add risk disclosure discussing predatory trading practices per the Application on page 17. Alternatively, please incorporate this disclosure into another related risk.
Response: We added the requested disclosure in the Proxy Portfolio Risk factor.
16.
Comment: Please add a risk that specifically discloses how trading halts effect the Fund given its nontransparent structure. Please add disclosure to state that if 10% or more of the Fund’s actual portfolio does not have readily available market quotations, the Fund will promptly request the exchange halt trading in the Fund’s shares, as discussed in footnote 36 of the Application. Also state that trading halts may have a greater impact on this Fund compared to other ETFs due to its lack of transparency. As stated on page 18 of the Application, please disclose that if the trading of a security held in the Fund’s actual portfolio is halted or otherwise does not have readily available market quotations and the advisor believes that the lack of any such readily available market quotations may affect the reliability of the proxy portfolio as an arbitrage vehicle or otherwise determines it is in the best interest of the Fund, the advisor promptly will disclose, on the Fund’s website, the identity and weighting of such security for so long as such security’s trading is halted or otherwise does not have readily available market quotations, and remains in the Actual Portfolio.
Response: We added the requested disclosure in the Trading Issues Risk factor.
17.
Comment: In the UN SDG Criteria Risk , the Fund should also consider risk disclosure related to the idea that ESG considerations may be linked to long term rather than short term returns. Second please define ESG factors here. The Fund must specify which of the 17 goals it plans to focus on or all, and whether those goals are E, S, or G focuses. The Fund also needs to disclose risks related to the accuracy and consistency of data reporting around ESG and UN SDG issues. These risks should be tailored to the Fund’s methodology for analyzing portfolio companies under the UN SDG or use of third party data providers.
Response: We revised the disclosure to clarify that the Fund uses the UN SDG rather than another “ESG” definition when evaluating companies.
18.
Comment: Please revise the Proxy Portfolio Risk to more closely track the language of the Application, particularly at page 10 under the section titled the NYSE Proxy Portfolio Methodology. Please also specifically include the following points:
a.
Please more specifically state that the Fund will not disclose the daily holdings of the actual portfolio.
Response: In response to Comment 12, this language appears in the Principal Strategies section.
b.
Please consider including risk disclosure explaining that the proxy portfolio methodology is novel and not yet proven as an effective arbitrage mechanism.
Response: We added the requested disclosure in the Proxy Portfolio Risk.
c.
Please note where appropriate that the Fund may incur expense to operate the proxy portfolio.
Response: The Fund will not incur any expenses to operate the proxy portfolio. The Fund’s shareholders pay a unified management fee. The advisor pays all expenses of managing and operating the Fund, other than the management fee payable to the advisor, brokerage and other transaction fees and expenses relating to the acquisition and disposition of portfolio securities, acquired fund fees and expenses, interest, taxes, litigation expenses, extraordinary expenses, and expenses incurred in connection with the provision of shareholder and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act (if any).
d.
Please explain that the effectiveness of the Proxy Portfolio as an arbitrage mechanism is contingent upon, among other things, the Fund’s factor model analysis creating a proxy portfolio that performs in a manner substantially identical to the performance of the Fund’s actual portfolio.
Response: We added the requested disclosure in the Proxy Portfolio Risk.
e.
Revise the last sentence of this risk to note that if the proxy portfolio methodology does not result in effective arbitrage, the Fund may exhibit wider premiums and discounts, bid/ask spreads, and tracking error per the Application on page 17. Additionally, please discuss here, or where appropriate, that at certain thresholds for such premiums and discounts spreads and tracking error, the Fund’s board will discuss and determine, what if anything, should be done to address such issues.
Response: We added the requested disclosure about wider premiums and discounts, bid/ask spreads, and tracking error in the Proxy Portfolio Risk. We added the requested disclosure about board notification thresholds in the Responsibilities of the Board section of the SAI.
f.
Please add a tracking error sub risk that discusses the Fund’s proxy overlap and the Fund’s potential for tracking error as described on page 11 of the Application. Please also disclose that the fund does not require a minimum proxy overlap with its actual portfolio and related risks.
Response: We added the tracking error disclosure in the Proxy Portfolio Risk. In response to Comment 12, the fact that the fund does not require a minimum proxy overlap with its actual portfolio appears in the Principal Strategies section.
19.
Comment: Remove the first sentence of the Proxy Portfolio Risk.
Response: We revised the disclosure as requested.
20.
Comment: The Fund’s Market Trading Risk should be revised to more closely track the language of the Application on Page 12. Specifically, add disclosure to state that publication of the proxy portfolio is not the same level of transparency as the publication of the full portfolio by a fully transparent active ETF and could cause the Fund’s shares to have wider spreads and larger premiums and discounts than fully transparent active ETFs using the same investment strategies. Alternatively, please consider whether a separate Premium Discount Risk is appropriate.
Response: This disclosure is included in the Proxy Portfolio Risk.
21.
Comment: In the Fund’s Authorized Participant Concentration Risk, or in a separate risk factor, disclose that the Fund is offering a novel and unique structure which may affect the number of entities willing to act as authorized participants and that this risk may be exacerbated during times of market stress. Please also discuss the potential consequences to the Fund and its investors if this risk is realized.
Response: We revised the disclosure as requested.
22.
Comment: Please apply global comments from Item 4 to Item 9.
Response: We revised the disclosure as requested.
23.
Comment: Please confirm supplementally that the Fund’s AFFE will not exceed 1 bps. Otherwise please include in fee table.
Response: We confirm that the Fund’s AFFE is not expected to exceed 1 bp. We also confirm that American Century Sustainable Equity ETF’s AFFE is not expected to exceed 1 bp.
24.
Comment: In Item 9, include a discussion of the Fund’s proxy portfolio methodology. Moreover, when describing such methodology, please disclose that the Fund does not require a minimum proxy overlap with its actual portfolio.
Response: Information about the proxy portfolio methodology appears in The Proxy Portfolio section of the prospectus. We included a cross reference to that section in Item 9.
25.
Comment: Please apply Item 4 risk comments to Item 9 risks.
Response: We revised the disclosure as requested.
26.
Comment: In the Market Trading Risk of Item 9 in the second paragraph, please add disclosure that trading halts may have greater impact on the fund than traditional ETFs because of its lack of transparency.
Response: We added this disclosure in the Trading Issues Risk.
27.
Comment: In the Funds’ Fundamental Investment Policies sections, please specify the number of days’ notice that shareholders will receive of a change in investment objective.
Response: We revised to include this disclosure under the heading “What is the fund’s investment objective.”
28.
Comment: In the second paragraph of the Fund’s Buying and Selling Shares section, please add disclosure to note the potential for wider spreads, given the nontransparent structure of the Fund. Especially during periods of market stress.
Response: We revised the disclosure as requested.
29.
Comment: In the Share Price and Distributions section, in the first sentence under The Proxy Portfolio,
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CORRESP 1 filename1.htm Document April 3, 2020 VIA EDGAR Ms. Elena Stojic Division of Investment Management U.S. Securities and Exchange Commission 100 F Street NE Washington, DC 20549-4720 Re: American Century ETF Trust (the “Registrant”) File Nos. 333-221045; 811-23305 Dear Ms. Stojic: This letter responds to your comments that we discussed on March 9, 2020, relating to Post-Effective Amendment No. 37 to the Registrant’s Registration Statement filed on January 24, 2020, for the principal purpose of adding two new series, American Century Mid Cap Growth Impact ETF and American Century Sustainable Equity ETF (each, a “Fund” and collectively, the “Funds”). For your convenience, we restate each of your comments prior to our responses. 1. Comment: We note portions of the filing are incomplete and we may have additional comments on information or exhibits supplied supplementally. Response: We acknowledge the Staff’s comment. 2. Comment: The Staff is aware that Natixis Advisers, L.P. filed an application (the “Application”) requesting exemptive relief to operate this type of nontransparent active ETF. The Commission issued an order (the “Order”) granting that relief on December 10, 2019. Please tailor disclosure throughout registration statement to conform to the specific exemptive relief granted by the Order including the relevant reps and conditions contained in the Application. Response: We revised the disclosure as requested. American Century Mid Cap Growth Impact ETF Prospectus 3. Comment: The Application states that the Fund will include a legend describing how the Fund will operate differently from a traditional ETF. Revise the cover page to make the legend more prominent for example consider indenting the legend in a manner that offsets it from the rest of the text and using a larger font size. Consider other methods to better highlight the legend. Response: We revised the legend as requested. 4. Comment: Please revise the legend to include specific cross references to related principal risks by name. Response: We revised the disclosure as requested. 5. Comment: Please provide a completed fee table with the response. Response: We provided a completed fee and example table supplementally to the Staff, the final filing will have a completed table. 6. Comment: In the Principal Investment Strategies section of the American Century Mid Cap Growth Impact ETF (“MID”) prospectus, please revise the language to clarify that the Fund will invest in medium capitalization companies as opposed to medium sized companies. Medium “sized” is less descriptive and can be measured in different ways. Response: We revised the disclosure as requested. 7. Comment: In the first sentence of MID’s Principal Investment Strategies section, please clarify that the Fund will invest primarily in common stocks of exchange-traded securities. Does the Fund plan to invest in foreign securities per its exemptive relief as part of its principal investment strategies? If so, please disclose related strategies and risks. If the Fund plans to include foreign securities please discuss that the Fund’s investments in common stock listed on a foreign exchange must trade contemporaneously with the Fund. Response: We clarified the disclosure as requested. The Fund does not plan to invest in foreign securities as part of its principal investment strategies. 8. Comment: There are 17 United Nations Sustainable Development Goals (“UN SDG”), please provide further information on how MID will incorporate these goals into its strategy. For example, will the Fund only invest in portfolio companies that consider the UN SDG as part of their operating model? If a portfolio company does not identify the UN SDG as part of its operating policies, how will the Fund analyze whether the company considers these goals? What due diligence will the Fund conduct to determine how a portfolio company has incorporated the UN SDG? Will the Fund prioritize certain goals over others? Response: We revised the disclosure as requested. 9. Comment: MID has a nonfundamental policy to “invest at least 80% of the fund’s net assets in securities of medium [capitalization] companies.” Please remove the term “net” as the Fund may not borrow per its exemptive relief. Response: We revised the disclosure as requested. 10. Comment: Please apply MID’s 80% policy to the term “Impact” per Rule 35d-1. In this case, the Fund’s name indicates that it will invest in a particular type of security-impact investments-and the Fund’s strategy furthers that notion by applying the UN SDG screen. We consider the term “Impact” to carry similar names rule obligations as terms such as “ESG,” “Sustainable,” “Green,” etc. Response: The term “impact” as used in the Fund’s name suggests an investment strategy rather than a security type. The Fund’s investment process analyzes companies using the UN SDG to identify companies that generate, or could generate, social and environmental impact alongside a financial return. The portfolio managers use a variety of information sources when considering “impact” and they do not require a certain score or metric for each security to qualify. We believe this view is consistent with the adopting release for Rule 35d-1 (Investment Company Names, Inv. Co. Act Release No. 24828 (January 17, 2001)) (the “Adopting Release”) and the Staff’s 2001 Frequently Asked Questions about Rule 35d-1 (Investment Company Names) (“FAQs”). In the Adopting Release, the Commission stated that Rule 35d-1 does not apply to fund names that incorporate terms such as “growth” and “value” since these terms connote types of investment strategies as opposed to types of investments. Similarly, in the FAQs, the Commission Staff opined that “Rule 35d-1 would not apply to the use of the term ‘income’ where that term suggests an investment objective or strategy rather than a type of investment. . . . Likewise, the term ‘equity income’ suggests that a fund focuses its investments in equities and has an investment objective or strategy of achieving current income.” 11. Comment: At the end of strategy section, please disclose that the Fund is a nontransparent actively managed ETF. Response: We revised the disclosure as requested. 12. Comment: Please specifically state that the Fund will not disclose the daily holdings of the actual portfolio. Please also disclose that the Fund does not have a minimum overlap requirement between the proxy portfolio and the actual portfolio. Response: We revised the disclosure as requested. 13. Comment: Please consider reorganizing the Fund’s principal risks so that risks related to the proxy portfolio structure are listed first, followed by ESG risks second. These risks are the most prominent for this type of fund. Please also consider organizing the risks related to the Fund’s nontransparent structure under one main risk with related sub risks. Response: We reorganized the disclosure as requested. 14. Comment: Please add a principal risk that addresses MID’s foreign investments, if any. Given the Fund’s UN SDG strategy, please consider whether the Fund plans to invest in emerging markets, if so, include relevant risk disclosure. Response: The Fund does not plan to invest in foreign or emerging market stocks as part of its principal investment strategy. 15. Comment: Please add risk disclosure discussing predatory trading practices per the Application on page 17. Alternatively, please incorporate this disclosure into another related risk. Response: We added the requested disclosure in the Proxy Portfolio Risk factor. 16. Comment: Please add a risk that specifically discloses how trading halts effect the Fund given its nontransparent structure. Please add disclosure to state that if 10% or more of the Fund’s actual portfolio does not have readily available market quotations, the Fund will promptly request the exchange halt trading in the Fund’s shares, as discussed in footnote 36 of the Application. Also state that trading halts may have a greater impact on this Fund compared to other ETFs due to its lack of transparency. As stated on page 18 of the Application, please disclose that if the trading of a security held in the Fund’s actual portfolio is halted or otherwise does not have readily available market quotations and the advisor believes that the lack of any such readily available market quotations may affect the reliability of the proxy portfolio as an arbitrage vehicle or otherwise determines it is in the best interest of the Fund, the advisor promptly will disclose, on the Fund’s website, the identity and weighting of such security for so long as such security’s trading is halted or otherwise does not have readily available market quotations, and remains in the Actual Portfolio. Response: We added the requested disclosure in the Trading Issues Risk factor. 17. Comment: In the UN SDG Criteria Risk , the Fund should also consider risk disclosure related to the idea that ESG considerations may be linked to long term rather than short term returns. Second please define ESG factors here. The Fund must specify which of the 17 goals it plans to focus on or all, and whether those goals are E, S, or G focuses. The Fund also needs to disclose risks related to the accuracy and consistency of data reporting around ESG and UN SDG issues. These risks should be tailored to the Fund’s methodology for analyzing portfolio companies under the UN SDG or use of third party data providers. Response: We revised the disclosure to clarify that the Fund uses the UN SDG rather than another “ESG” definition when evaluating companies. 18. Comment: Please revise the Proxy Portfolio Risk to more closely track the language of the Application, particularly at page 10 under the section titled the NYSE Proxy Portfolio Methodology. Please also specifically include the following points: a. Please more specifically state that the Fund will not disclose the daily holdings of the actual portfolio. Response: In response to Comment 12, this language appears in the Principal Strategies section. b. Please consider including risk disclosure explaining that the proxy portfolio methodology is novel and not yet proven as an effective arbitrage mechanism. Response: We added the requested disclosure in the Proxy Portfolio Risk. c. Please note where appropriate that the Fund may incur expense to operate the proxy portfolio. Response: The Fund will not incur any expenses to operate the proxy portfolio. The Fund’s shareholders pay a unified management fee. The advisor pays all expenses of managing and operating the Fund, other than the management fee payable to the advisor, brokerage and other transaction fees and expenses relating to the acquisition and disposition of portfolio securities, acquired fund fees and expenses, interest, taxes, litigation expenses, extraordinary expenses, and expenses incurred in connection with the provision of shareholder and distribution services under a plan adopted pursuant to Rule 12b-1 under the Investment Company Act (if any). d. Please explain that the effectiveness of the Proxy Portfolio as an arbitrage mechanism is contingent upon, among other things, the Fund’s factor model analysis creating a proxy portfolio that performs in a manner substantially identical to the performance of the Fund’s actual portfolio. Response: We added the requested disclosure in the Proxy Portfolio Risk. e. Revise the last sentence of this risk to note that if the proxy portfolio methodology does not result in effective arbitrage, the Fund may exhibit wider premiums and discounts, bid/ask spreads, and tracking error per the Application on page 17. Additionally, please discuss here, or where appropriate, that at certain thresholds for such premiums and discounts spreads and tracking error, the Fund’s board will discuss and determine, what if anything, should be done to address such issues. Response: We added the requested disclosure about wider premiums and discounts, bid/ask spreads, and tracking error in the Proxy Portfolio Risk. We added the requested disclosure about board notification thresholds in the Responsibilities of the Board section of the SAI. f. Please add a tracking error sub risk that discusses the Fund’s proxy overlap and the Fund’s potential for tracking error as described on page 11 of the Application. Please also disclose that the fund does not require a minimum proxy overlap with its actual portfolio and related risks. Response: We added the tracking error disclosure in the Proxy Portfolio Risk. In response to Comment 12, the fact that the fund does not require a minimum proxy overlap with its actual portfolio appears in the Principal Strategies section. 19. Comment: Remove the first sentence of the Proxy Portfolio Risk. Response: We revised the disclosure as requested. 20. Comment: The Fund’s Market Trading Risk should be revised to more closely track the language of the Application on Page 12. Specifically, add disclosure to state that publication of the proxy portfolio is not the same level of transparency as the publication of the full portfolio by a fully transparent active ETF and could cause the Fund’s shares to have wider spreads and larger premiums and discounts than fully transparent active ETFs using the same investment strategies. Alternatively, please consider whether a separate Premium Discount Risk is appropriate. Response: This disclosure is included in the Proxy Portfolio Risk. 21. Comment: In the Fund’s Authorized Participant Concentration Risk, or in a separate risk factor, disclose that the Fund is offering a novel and unique structure which may affect the number of entities willing to act as authorized participants and that this risk may be exacerbated during times of market stress. Please also discuss the potential consequences to the Fund and its investors if this risk is realized. Response: We revised the disclosure as requested. 22. Comment: Please apply global comments from Item 4 to Item 9. Response: We revised the disclosure as requested. 23. Comment: Please confirm supplementally that the Fund’s AFFE will not exceed 1 bps. Otherwise please include in fee table. Response: We confirm that the Fund’s AFFE is not expected to exceed 1 bp. We also confirm that American Century Sustainable Equity ETF’s AFFE is not expected to exceed 1 bp. 24. Comment: In Item 9, include a discussion of the Fund’s proxy portfolio methodology. Moreover, when describing such methodology, please disclose that the Fund does not require a minimum proxy overlap with its actual portfolio. Response: Information about the proxy portfolio methodology appears in The Proxy Portfolio section of the prospectus. We included a cross reference to that section in Item 9. 25. Comment: Please apply Item 4 risk comments to Item 9 risks. Response: We revised the disclosure as requested. 26. Comment: In the Market Trading Risk of Item 9 in the second paragraph, please add disclosure that trading halts may have greater impact on the fund than traditional ETFs because of its lack of transparency. Response: We added this disclosure in the Trading Issues Risk. 27. Comment: In the Funds’ Fundamental Investment Policies sections, please specify the number of days’ notice that shareholders will receive of a change in investment objective. Response: We revised to include this disclosure under the heading “What is the fund’s investment objective.” 28. Comment: In the second paragraph of the Fund’s Buying and Selling Shares section, please add disclosure to note the potential for wider spreads, given the nontransparent structure of the Fund. Especially during periods of market stress. Response: We revised the disclosure as requested. 29. Comment: In the Share Price and Distributions section, in the first sentence under The Proxy Portfolio,