SEC Company Response from Natixis ETF Trust II (CIK 0001728860) — Jun 19, 2020
Natixis ETF Trust II (CIK 0001728860)
Date: June 19, 2020 · CIK: 0001728860 · Accession: 0001193125-20-173870
AI Filing Summary & Sentiment
File numbers found in text: 811-23500
Letter
Division of Investment Management Attention: Elena S. Stojic, Esq. VIA EDGAR File No.: 811-23500 Filing Type: Form N-1A/A
Dear Ms. Stojic:
This letter responds to comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) received by phone call on May 22, 2020, regarding the amendment to the initial registration statement to Natixis ETF Trust II (the “Registrant”) on Form N-1A/A for the Natixis U.S. Equity Opportunities ETF, Natixis Vaughan Nelson Select ETF and Natixis Vaughan Nelson Mid Cap ETF (each a “Fund” and together the “Funds”), which was filed with the Commission on April 24, 2020 (the “Registration Statement”). For your convenience, we have summarized each comment below, followed by the Registrant’s response. Any term that is used, but not defined, in this letter retains the same meaning as used by the Registrant in the Registration Statement.
Cover Page
1. Comment. Please revise the Legend on the front cover page of the Prospectus to make it bold.
Response. In response to this comment, the Registrant has revised the cover page to make the Legend bold.
2. Comment. Revise the Legend to also include a specific cross-reference to “Authorized Participant Concentration Risk.”
Response. In response to this comment, the Registrant has revised the Legend to include a specific cross-reference to Authorized Participant Concentration Risk as follows:
“For additional information regarding the unique attributes and risks of these ETFs, see the later discussion on the Proxy Portfolio and the “Proxy Portfolio Structure Risk,” “Authorized Participant Concentration Risk,” “Predatory Trading Practices Risk,” “Premium/Discount Risk,” and “Trading Issues Risk” below.”
Prospectus
Fund Fees and Expense Tables
3. Comment. Please provide via correspondence and redlines completed Fund Fees and Expense tables for each Fund.
Response. The Registrant has included completed Fund Fees and Expense tables for each Fund.
Natixis U.S. Equity Opportunities ETF:
Fund Fees & Expenses
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table. If such expenses were reflected, the expenses set forth below would be higher.
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
ETF
Management fees
0.75 %
Distribution and/or service (12b-1) fees
0.00 %
Other expenses
2.66 %
Total annual fund operating expenses
3.41 %
Fee waiver and/or expense reimbursement1
2.51 %
Total annual fund operating expenses after fee waiver and/or expense reimbursement
0.90 %
Natixis Advisors, L.P. (“Natixis Advisors” or the “Adviser”) has given a binding contractual undertaking to the Fund to limit the amount of the Fund’s total annual fund operating expenses to 0.90% of the Fund’s average daily net assets, exclusive of brokerage expenses, interest expense, taxes, acquired fund fees and expenses, organizational and extraordinary expenses, such as litigation and indemnification expenses. This undertaking is in effect through April 30, 2023 and may be terminated before then only with the consent of the Fund’s Board of Trustees. The Adviser will be permitted to recover management fees waived and/or expenses reimbursed to the extent that expenses in later periods fall below both (1) the expense limitation ratio in place at the time such amounts were waived/reimbursed and (2) the Fund’s current applicable expense limitation ratio. The Fund will not be obligated to repay any such waived/reimbursed fees and expenses more than one year after the end of the fiscal year in which the fees or expenses were waived/reimbursed.
Example
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated (whether or not shares are redeemed), and also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same, except that the example is based on the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement assuming that such waiver and/or reimbursement will only be in place through the date noted above and on the Total Annual Fund Operating Expenses for the remaining periods. The example does not take into account brokerage commissions and other fees to financial intermediaries that you may pay on your purchases and sales of shares of the Fund. It also does not include the transaction fees on purchases and redemptions of creation units (“Creation Units”), because those fees will not be imposed on retail investors. Although your actual costs may be higher or lower, based on these assumptions, your costs would be (based on estimated Fund expenses):
If shares are redeemed:
1 year
3 years
ETF
$
$
Natixis Vaughan Nelson Mid-Cap ETF:
Fund Fees & Expenses
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table. If such expenses were reflected, the expenses set forth below would be higher.
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
ETF
Management fees
0.80 %
Distribution and/or service (12b-1) fees
0.00 %
Other expenses
5.40 %
Total annual fund operating expenses
6.20 %
Fee waiver and/or expense reimbursement1
5.30 %
Total annual fund operating expenses after fee waiver and/or expense reimbursement
0.90 %
Natixis Advisors, L.P. (“Natixis Advisors” or the “Adviser”) has given a binding contractual undertaking to the Fund to limit the amount of the Fund’s total annual fund operating expenses to 0.90% of the Fund’s average daily net assets, exclusive of brokerage expenses, interest expense, taxes, acquired fund fees and expenses, organizational and extraordinary expenses, such as litigation and indemnification expenses. This undertaking is in effect through April 30, 2023 and may be terminated before then only with the consent of the Fund’s Board of Trustees. The Adviser will be permitted to recover management fees waived and/or expenses reimbursed to the extent that expenses in later periods fall below both (1) the expense limitation ratio in place at the time such amounts were waived/reimbursed and (2) the Fund’s current applicable expense limitation ratio. The Fund will not be obligated to repay any such waived/reimbursed fees and expenses more than one year after the end of the fiscal year in which the fees or expenses were waived/reimbursed.
Example
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated (whether or not shares are redeemed), and also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same, except that the example is based on the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement assuming that such waiver and/or reimbursement will only be in place through the date noted above and on the Total Annual Fund Operating Expenses for the remaining periods. The example does not take into account brokerage commissions and other fees to financial intermediaries that you may pay on your purchases and sales of shares of the Fund. It also does not include the transaction fees on purchases and redemptions of creation units (“Creation Units”), because those fees will not be imposed on retail investors. Although your actual costs may be higher or lower, based on these assumptions, your costs would be (based on estimated Fund expenses):
If shares are redeemed:
1 year
3 years
ETF
$
$
Natixis Vaughan Nelson Select ETF:
Fund Fees & Expenses
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table. If such expenses were reflected, the expenses set forth below would be higher.
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
ETF
Management fees
0.75 %
Distribution and/or service (12b-1) fees
0.00 %
Other expenses
5.40 %
Total annual fund operating expenses
6.15 %
Fee waiver and/or expense reimbursement1
5.30 %
Total annual fund operating expenses after fee waiver and/or expense reimbursement
0.85 %
Natixis Advisors, L.P. (“Natixis Advisors” or the “Adviser”) has given a binding contractual undertaking to the Fund to limit the amount of the Fund’s total annual fund operating expenses to 0.85% of the Fund’s average daily net assets, exclusive of brokerage expenses, interest expense, taxes, acquired fund fees and expenses, organizational and extraordinary expenses, such as litigation and indemnification expenses. This undertaking is in effect through April 30, 2023 and may be terminated before then only with the consent of the Fund’s Board of Trustees. The Adviser will be permitted to recover management fees waived and/or expenses reimbursed to the extent that expenses in later periods fall below both (1) the expense limitation ratio in place at the time such amounts were waived/reimbursed and (2) the Fund’s current applicable expense limitation ratio. The Fund will not be obligated to repay any such waived/reimbursed fees and expenses more than one year after the end of the fiscal year in which the fees or expenses were waived/reimbursed.
Example
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated (whether or not shares are redeemed), and also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same, except that the example is based on the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement assuming that such waiver and/or reimbursement will only be in place through the date noted above and on the Total Annual Fund Operating Expenses for the remaining periods. The example does not take into account brokerage commissions and other fees to financial intermediaries that you may pay on your purchases and sales of shares of the Fund. It also does not include the transaction fees on purchases and redemptions of creation units (“Creation Units”), because those fees will not be imposed on retail investors. Although your actual costs may be higher or lower, based on these assumptions, your costs would be (based on estimated Fund expenses):
If shares are redeemed:
1 year
3 years
ETF
$
$
Prospectus Summary – Principal Investment Strategies
4. Comment. For the Natixis U.S. Equity Opportunities ETF and Natixis Vaughan Nelson Mid Cap ETF, please remove the reference to “net” from the 80% policy language, as the Funds are not permitted to borrow.
Response. In response to this comment, the Registrant has revised the disclosure to remove the reference to “net” as follows:
Natixis U.S. Equity Opportunities ETF: “The Fund ordinarily invests at least 80% of its net assets in equity securities…Under normal market conditions, the Fund will invest at least 80% of its net assets in securities of U.S. issuers.”
Natixis Vaughan Nelson Mid Cap ETF: “Under normal market conditions, the Fund will invest at least 80% of its net assets in companies….”
5. Comment. For the Loomis Sayles All Cap Growth Segment of the Natixis U.S. Equity Opportunities ETF, please specify the Fund’s starting universe (e.g., Large Cap US Equities).
Response. The Registrant notes that the Loomis Sayles All Cap Growth Segment of the Natixis U.S. Equity Opportunities ETF can invest in exchange-traded equity securities issued by companies of any size, consistent with the growth style of equity management described in the prospectus. The Registrant respectfully submits that the “Principal Investment Strategies” section states that the Loomis Sayles All Cap Growth Segment “may invest in companies of any size.” Accordingly, no changes to the disclosure have been made.
6. Comment. For each Fund, with respect to the language which states “The Fund may also invest in common stocks listed on a foreign exchange that trade on such exchange contemporaneously with the shares.” please change “with the shares” to “with the shares of the Fund”.
Response. In response to this comment, the Registrant has revised the disclosure for each Fund as follows:
•
“Invest in common stocks listed on a foreign exchange that trade on such exchange contemporaneously with the shares of the Fund.”
7. Comment. Within each “Non-Transparent ETF with Proxy Portfolio Structure” section, please revise the fourth sentence for consistency with the Exemptive Application.
Response. In response to this comment, the Registrant has revised each Fund’s “Non-Transparent ETF with Proxy Portfolio Structure” section as follows:
“The Fund is a type of exchange traded fund (“ETF”). Unlike traditional ETFs, however, which generally publish their portfolio holdings on a daily basis, the Fund discloses a portfolio transparency substitute—the “Proxy Portfolio”—and certain related information about the relative performance of the Proxy Portfolio and the Fund’s actual portfolio (“Actual Portfolio”) holdings (the “Proxy Portfolio Disclosures”), which are intended to help keep the market price of the Fund’s shares trading at or close to the
underlying net asset value (“NAV”) per share of the Fund. While the Proxy Portfolio includes some of the Fund’s holdings, it is not the Fund’s Actual Portfolio, and the Fund will not disclose the daily holdings of the Actual Portfolio. The purpose of disclosing the Proxy Portfolio rather than the Fund’s full portfolio holdings is to protect seek Although the Fund seeks to benefit from keeping its portfolio information secret, the Fund and its shareholders against the risk that market participants could use the daily disclosure of the Fund’s portfolio holdings may attempt to use the Proxy Portfolio to identify the Fund’s trading strategy, which if successful, could result in such market participants engaging and engage in certain predatory trading practices that may have the potential to harm the Fund and its shareholders (such as “front-running” or “free riding”). The Fund’s exemptive relief limits the types of securities in which the Fund can invest, which may constrain the Fund’s ability to implement its investment strategies. The Fund is actively-managed and does not intend to track an index.”
8. Comment. Significant market events have occurred as a result of the COVID-19 pandemic. Please consider whether the Funds’ disclosure, including risk disclosures, should be revised based on how events are effecting both debt and equity markets. If the Registrant believes that no additional disclosure is warranted, please explain supplementally why not.
Response. The Registrant notes that the “More About Risk” section of the Funds’ prospectus includes the following risk disclosure, which is further revised as follows:
“Recent Market Events Risk. An outbreak of res
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CORRESP 1 filename1.htm Comment Response Letter for Natixis ETF Trust II June 19, 2020 U.S. Securities and Exchange Commission Division of Investment Management 100 F Street, NE Washington, DC 20549-0504 Attention: Elena S. Stojic, Esq. VIA EDGAR Re: Registrant: Natixis ETF Trust II File No.: 811-23500 Filing Type: Form N-1A/A Dear Ms. Stojic: This letter responds to comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) received by phone call on May 22, 2020, regarding the amendment to the initial registration statement to Natixis ETF Trust II (the “Registrant”) on Form N-1A/A for the Natixis U.S. Equity Opportunities ETF, Natixis Vaughan Nelson Select ETF and Natixis Vaughan Nelson Mid Cap ETF (each a “Fund” and together the “Funds”), which was filed with the Commission on April 24, 2020 (the “Registration Statement”). For your convenience, we have summarized each comment below, followed by the Registrant’s response. Any term that is used, but not defined, in this letter retains the same meaning as used by the Registrant in the Registration Statement. Cover Page 1. Comment. Please revise the Legend on the front cover page of the Prospectus to make it bold. Response. In response to this comment, the Registrant has revised the cover page to make the Legend bold. 2. Comment. Revise the Legend to also include a specific cross-reference to “Authorized Participant Concentration Risk.” Response. In response to this comment, the Registrant has revised the Legend to include a specific cross-reference to Authorized Participant Concentration Risk as follows: “For additional information regarding the unique attributes and risks of these ETFs, see the later discussion on the Proxy Portfolio and the “Proxy Portfolio Structure Risk,” “Authorized Participant Concentration Risk,” “Predatory Trading Practices Risk,” “Premium/Discount Risk,” and “Trading Issues Risk” below.” Prospectus Fund Fees and Expense Tables 3. Comment. Please provide via correspondence and redlines completed Fund Fees and Expense tables for each Fund. Response. The Registrant has included completed Fund Fees and Expense tables for each Fund. Natixis U.S. Equity Opportunities ETF: Fund Fees & Expenses The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table. If such expenses were reflected, the expenses set forth below would be higher. Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ETF Management fees 0.75 % Distribution and/or service (12b-1) fees 0.00 % Other expenses 2.66 % Total annual fund operating expenses 3.41 % Fee waiver and/or expense reimbursement1 2.51 % Total annual fund operating expenses after fee waiver and/or expense reimbursement 0.90 % 1 Natixis Advisors, L.P. (“Natixis Advisors” or the “Adviser”) has given a binding contractual undertaking to the Fund to limit the amount of the Fund’s total annual fund operating expenses to 0.90% of the Fund’s average daily net assets, exclusive of brokerage expenses, interest expense, taxes, acquired fund fees and expenses, organizational and extraordinary expenses, such as litigation and indemnification expenses. This undertaking is in effect through April 30, 2023 and may be terminated before then only with the consent of the Fund’s Board of Trustees. The Adviser will be permitted to recover management fees waived and/or expenses reimbursed to the extent that expenses in later periods fall below both (1) the expense limitation ratio in place at the time such amounts were waived/reimbursed and (2) the Fund’s current applicable expense limitation ratio. The Fund will not be obligated to repay any such waived/reimbursed fees and expenses more than one year after the end of the fiscal year in which the fees or expenses were waived/reimbursed. Example This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated (whether or not shares are redeemed), and also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same, except that the example is based on the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement assuming that such waiver and/or reimbursement will only be in place through the date noted above and on the Total Annual Fund Operating Expenses for the remaining periods. The example does not take into account brokerage commissions and other fees to financial intermediaries that you may pay on your purchases and sales of shares of the Fund. It also does not include the transaction fees on purchases and redemptions of creation units (“Creation Units”), because those fees will not be imposed on retail investors. Although your actual costs may be higher or lower, based on these assumptions, your costs would be (based on estimated Fund expenses): If shares are redeemed: 1 year 3 years ETF $ 92 $ 401 Natixis Vaughan Nelson Mid-Cap ETF: Fund Fees & Expenses The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table. If such expenses were reflected, the expenses set forth below would be higher. Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ETF Management fees 0.80 % Distribution and/or service (12b-1) fees 0.00 % Other expenses 5.40 % Total annual fund operating expenses 6.20 % Fee waiver and/or expense reimbursement1 5.30 % Total annual fund operating expenses after fee waiver and/or expense reimbursement 0.90 % 1 Natixis Advisors, L.P. (“Natixis Advisors” or the “Adviser”) has given a binding contractual undertaking to the Fund to limit the amount of the Fund’s total annual fund operating expenses to 0.90% of the Fund’s average daily net assets, exclusive of brokerage expenses, interest expense, taxes, acquired fund fees and expenses, organizational and extraordinary expenses, such as litigation and indemnification expenses. This undertaking is in effect through April 30, 2023 and may be terminated before then only with the consent of the Fund’s Board of Trustees. The Adviser will be permitted to recover management fees waived and/or expenses reimbursed to the extent that expenses in later periods fall below both (1) the expense limitation ratio in place at the time such amounts were waived/reimbursed and (2) the Fund’s current applicable expense limitation ratio. The Fund will not be obligated to repay any such waived/reimbursed fees and expenses more than one year after the end of the fiscal year in which the fees or expenses were waived/reimbursed. Example This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated (whether or not shares are redeemed), and also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same, except that the example is based on the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement assuming that such waiver and/or reimbursement will only be in place through the date noted above and on the Total Annual Fund Operating Expenses for the remaining periods. The example does not take into account brokerage commissions and other fees to financial intermediaries that you may pay on your purchases and sales of shares of the Fund. It also does not include the transaction fees on purchases and redemptions of creation units (“Creation Units”), because those fees will not be imposed on retail investors. Although your actual costs may be higher or lower, based on these assumptions, your costs would be (based on estimated Fund expenses): If shares are redeemed: 1 year 3 years ETF $ 92 $ 527 Natixis Vaughan Nelson Select ETF: Fund Fees & Expenses The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table. If such expenses were reflected, the expenses set forth below would be higher. Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) ETF Management fees 0.75 % Distribution and/or service (12b-1) fees 0.00 % Other expenses 5.40 % Total annual fund operating expenses 6.15 % Fee waiver and/or expense reimbursement1 5.30 % Total annual fund operating expenses after fee waiver and/or expense reimbursement 0.85 % 1 Natixis Advisors, L.P. (“Natixis Advisors” or the “Adviser”) has given a binding contractual undertaking to the Fund to limit the amount of the Fund’s total annual fund operating expenses to 0.85% of the Fund’s average daily net assets, exclusive of brokerage expenses, interest expense, taxes, acquired fund fees and expenses, organizational and extraordinary expenses, such as litigation and indemnification expenses. This undertaking is in effect through April 30, 2023 and may be terminated before then only with the consent of the Fund’s Board of Trustees. The Adviser will be permitted to recover management fees waived and/or expenses reimbursed to the extent that expenses in later periods fall below both (1) the expense limitation ratio in place at the time such amounts were waived/reimbursed and (2) the Fund’s current applicable expense limitation ratio. The Fund will not be obligated to repay any such waived/reimbursed fees and expenses more than one year after the end of the fiscal year in which the fees or expenses were waived/reimbursed. Example This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated (whether or not shares are redeemed), and also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same, except that the example is based on the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement assuming that such waiver and/or reimbursement will only be in place through the date noted above and on the Total Annual Fund Operating Expenses for the remaining periods. The example does not take into account brokerage commissions and other fees to financial intermediaries that you may pay on your purchases and sales of shares of the Fund. It also does not include the transaction fees on purchases and redemptions of creation units (“Creation Units”), because those fees will not be imposed on retail investors. Although your actual costs may be higher or lower, based on these assumptions, your costs would be (based on estimated Fund expenses): If shares are redeemed: 1 year 3 years ETF $ 87 $ 512 Prospectus Summary – Principal Investment Strategies 4. Comment. For the Natixis U.S. Equity Opportunities ETF and Natixis Vaughan Nelson Mid Cap ETF, please remove the reference to “net” from the 80% policy language, as the Funds are not permitted to borrow. Response. In response to this comment, the Registrant has revised the disclosure to remove the reference to “net” as follows: Natixis U.S. Equity Opportunities ETF: “The Fund ordinarily invests at least 80% of its net assets in equity securities…Under normal market conditions, the Fund will invest at least 80% of its net assets in securities of U.S. issuers.” Natixis Vaughan Nelson Mid Cap ETF: “Under normal market conditions, the Fund will invest at least 80% of its net assets in companies….” 5. Comment. For the Loomis Sayles All Cap Growth Segment of the Natixis U.S. Equity Opportunities ETF, please specify the Fund’s starting universe (e.g., Large Cap US Equities). Response. The Registrant notes that the Loomis Sayles All Cap Growth Segment of the Natixis U.S. Equity Opportunities ETF can invest in exchange-traded equity securities issued by companies of any size, consistent with the growth style of equity management described in the prospectus. The Registrant respectfully submits that the “Principal Investment Strategies” section states that the Loomis Sayles All Cap Growth Segment “may invest in companies of any size.” Accordingly, no changes to the disclosure have been made. 6. Comment. For each Fund, with respect to the language which states “The Fund may also invest in common stocks listed on a foreign exchange that trade on such exchange contemporaneously with the shares.” please change “with the shares” to “with the shares of the Fund”. Response. In response to this comment, the Registrant has revised the disclosure for each Fund as follows: • “Invest in common stocks listed on a foreign exchange that trade on such exchange contemporaneously with the shares of the Fund.” 7. Comment. Within each “Non-Transparent ETF with Proxy Portfolio Structure” section, please revise the fourth sentence for consistency with the Exemptive Application. Response. In response to this comment, the Registrant has revised each Fund’s “Non-Transparent ETF with Proxy Portfolio Structure” section as follows: “The Fund is a type of exchange traded fund (“ETF”). Unlike traditional ETFs, however, which generally publish their portfolio holdings on a daily basis, the Fund discloses a portfolio transparency substitute—the “Proxy Portfolio”—and certain related information about the relative performance of the Proxy Portfolio and the Fund’s actual portfolio (“Actual Portfolio”) holdings (the “Proxy Portfolio Disclosures”), which are intended to help keep the market price of the Fund’s shares trading at or close to the underlying net asset value (“NAV”) per share of the Fund. While the Proxy Portfolio includes some of the Fund’s holdings, it is not the Fund’s Actual Portfolio, and the Fund will not disclose the daily holdings of the Actual Portfolio. The purpose of disclosing the Proxy Portfolio rather than the Fund’s full portfolio holdings is to protect seek Although the Fund seeks to benefit from keeping its portfolio information secret, the Fund and its shareholders against the risk that market participants could use the daily disclosure of the Fund’s portfolio holdings may attempt to use the Proxy Portfolio to identify the Fund’s trading strategy, which if successful, could result in such market participants engaging and engage in certain predatory trading practices that may have the potential to harm the Fund and its shareholders (such as “front-running” or “free riding”). The Fund’s exemptive relief limits the types of securities in which the Fund can invest, which may constrain the Fund’s ability to implement its investment strategies. The Fund is actively-managed and does not intend to track an index.” 8. Comment. Significant market events have occurred as a result of the COVID-19 pandemic. Please consider whether the Funds’ disclosure, including risk disclosures, should be revised based on how events are effecting both debt and equity markets. If the Registrant believes that no additional disclosure is warranted, please explain supplementally why not. Response. The Registrant notes that the “More About Risk” section of the Funds’ prospectus includes the following risk disclosure, which is further revised as follows: “Recent Market Events Risk. An outbreak of res