Correspondence 0001213900-23-022445 from DriveWealth ETF Trust (CIK 0001954014)
DriveWealth ETF Trust (CIK 0001954014)
Date: March 23, 2023 · CIK: 0001954014 · Accession: 0001213900-23-022445
AI Filing Summary & Sentiment
File numbers found in text: 333-268359, 811-23837
Show Raw Text
CORRESP
1
filename1.htm
DriveWealth ETF Trust
15 Exchange
Place
10th Floor
Jersey City, New Jersey 07302
March 23, 2023
Ms. Sally Samuel
Mr. Matthew S. Williams
U.S. Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, DC 20549-4720
Re: DriveWealth ETF Trust
File Nos. 333-268359; 811-23837
Dear Ms. Samuel and Mr. Williams:
DriveWealth ETF Trust (the
“Trust”) is filing this correspondence to respond to comments of the staff (the “Staff”) of the U.S. Securities
and Exchange Commission (the “SEC”) that were received by telephone on March 9, 2023. The comments relate to the prospectus
of DriveWealth ICE 100 Index ETF (formerly, DriveWealth 100) (the “Fund”), a series of the Trust, which is included in the
Trust’s Registration Statement on Form N-1A (the “Registration Statement”). The Registration Statement was filed with
the SEC on November 15, 2022. For your convenience, we have set forth each comment below, followed by the Trust’s response. Unless
otherwise stated, capitalized terms have the same meaning as given in the Registration Statement.
Prospectus
Summary Prospectus
Principal Risks
Comment 1: Please make
the following revisions to the disclosure in the risk factor entitled “Equity Securities Risk”: “The Index is composed
of ETFs, which issue, and may invest in, equity securities, such as common stock.”
Response 1: The sentence
identified by the Staff is intended to indicate that the Fund will invest in the equity securities issued by the Underlying ETFs. The
disclosure has been revised to clarify this.
Comment 2: Please define
the terms “bid” and “ask” when first used.
Response 2: The disclosure
has been revised in response to the comment.
Comment 3: Please delete
the cross-reference to the “Additional Information About the Fund and Underlying ETFs” subsection of the summary prospectus.
Response 3: The disclosure
has been revised in response to the comment.
Comment 4: Please summarize,
in the disclosure provided pursuant to Item 4(b) of Form N-1A, the “Management Risk” risk factor described pursuant to Item
9(c).
Response 4: The disclosure
has been revised in response to the comment.
Statutory Prospectus
Additional Information about the Fund’s
Investment Strategies
Comment 5: We note that
the Index ranks 200 ETFs but selects only 100 ETFs to be constituents of the Index. Please revise the disclosure to clarify the distinction.
Response 5: The disclosure
has been revised in response to the comment.
Comment 6: Please revise
the disclosure to clarify whether the rebalancing and reconstitution of the Index occur at the same time.
Response 6: The disclosure
has been revised in response to the comment.
Comment 7: Please revise
the description of the Fund’s 80% policy so it is identical to the description in the summary section.
Response 7: The disclosure
has been revised in response to the comment.
Additional Information about the Investment
Risks of the Fund and the Underlying ETFs
Comment 8: Please clarify
the cross-reference to the section entitled “Additional Information About the Fund and Underlying ETFs.”
Response 8: This cross-reference
has been revised in response to the comment.
Comment 9: Please consider
whether the disclosure appearing in the subsection entitled “Additional Information About the Fund and Underlying ETFs - Additional
Risks” should be moved to the Fund’s SAI.
Response 9: As noted
in footnote 7 to “ADI 2019-08 – Improving Principal Risks Disclosure” (the “ADI”), General Instruction
C.3.(b) of Form N-1A provides that a fund may include (except in the summary section) information in its prospectus that is not otherwise
required, so long as the information is not incomplete, inaccurate, or misleading and does not “obscure or impede” an understanding
of the information that is required to be included. The ADI also notes that funds are “encourage[d]” to disclose non-principal
risks in their statements of additional information rather than in their prospectuses because the Staff believes that including this disclosure
in the prospectus may “overwhelm” other important information.
The Trust has reviewed the disclosure
in the “Additional Information About the Fund and Underlying ETFs - Additional Risks” subsection and has moved disclosure
regarding certain risks of investing in the Fund and the Underlying ETFs to the SAI. However, it has retained other risks because the
Trust believes that, depending on the constituents of the Index and certain practices of the Fund, these are risks that, while not so
significant as to constitute principal risks under normal circumstances, are sufficiently important to investors as to be appropriate
for inclusion in the Fund’s prospectus. In addition, the Trust believes that, in light of the presentation, nature and quantity
of the information about non-principal risks of investing in the Fund, the disclosure will not (i) overwhelm the disclosure regarding
principal risks, or (ii) obscure or impede an understanding of the information regarding principal risks. As such, the Trust submits that
the disclosure is consistent with the Staff’s position as set forth in the ADI and the requirements of Form N-1A.
2
Comment 10: Please consider whether the
disclosure regarding the risks of investing in the Underlying ETFs should be included in the “Principal Risks of Investing in the
Fund” subsection.
Response 10: The disclosure
in the subsection of the statutory prospectus entitled “Additional Information about the Investment Risks of the Fund and the Underlying
ETFs - Principal Risks of Investing in the Fund - Investments in Other Investment Companies and ETFs Risk” has been revised to add
a brief description of some of the investment risks of the Underlying ETFs. The Trust believes that the existing disclosure in the summary
section of the prospectus regarding the Fund’s exposure to the risks of the Underlying ETFs is appropriate in light of the Fund’s
principal strategies and the Index, which has 100 constituent ETFs that are not limited to investing in, among other things, any asset
class, sector or market cap.
Comment 11: Please advise
the Staff supplementally if the Underlying ETFs are expected to invest in contingent convertible bonds.
Response 11: The Trust
has no current expectation that the Underlying ETFs will invest in contingent convertible bonds, particularly to an extent that would
have a significant impact on the Fund. We note that the risk factor entitled “Convertible Securities Risk” has been moved
to the SAI.
Comment 13: Please explain
supplementally how liquidity risk is applicable to the Underlying ETFs given that the minimum market cap and trading cap requirements.
Response 13: Although
liquidity risk is not a principal risk of the Fund, one or more Underlying ETFs may invest in less liquid or illiquid securities and thus
will be subject to liquidity risk.
Should you have any questions
regarding this letter, please contact me at (617) 951-9168.
Sincerely,
/s/ Julia M. Williams
Julia M. Williams
cc:
Keri E. Riemer, Esq., K&L Gates LLP
Richard F. Kerr, Esq, K&L Gates LLP
Christopher Quinn, DriveWealth ETF Trust
3