File Nos. 333-21311 and 811-08049
As filed with the Securities and Exchange Commission
on January 28, 2020
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 77
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 79
RENAISSANCE CAPITAL GREENWICH FUNDS
(Exact Name of Registrant as Specified in Charter)
165 Mason Street
Greenwich, Connecticut 06830
(Address of Principal Executive Office) (Zip
Code)
Registrant’s Telephone Number, including
Area Code: (203) 622-2978
William K. Smith
165 Mason Street
Greenwich, Connecticut 06830
(Name and Address of Agent for Service)
Copy to:
Michael W. Mundt, Esq.
Stradley Ronon Stevens & Young, LLP
2000 K Street, NW, Suite 700
Washington, DC 20006-1871
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph
(b)
[X] on January 31, 2020 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph
(a)(1)
[ ] on, pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph
(a)(2)
[ ] on (date) pursuant to paragraph (a) (2),
of rule 485 (b)
RENAISSANCE CAPITAL GREENWICH FUNDS
ETF SERIES
Prospectus
January 31, 2020
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Fund
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Principal U.S. Listing Exchange
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Ticker
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Renaissance IPO ETF
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NYSE Arca, Inc.
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IPO
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Renaissance International IPO ETF
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NYSE Arca, Inc.
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IPOS
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Beginning on January 1, 2021, as permitted
by regulations adopted by the Securities and Exchange Commission (“SEC”), paper copies of the Funds’ shareholder
reports will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary,
such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each
time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder
reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder
reports and other Fund communications electronically anytime by contacting your financial intermediary.
Alternatively, you may elect to receive
all future reports in paper free of charge. You can inform your financial intermediary that you wish to continue receiving paper
copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with Renaissance Capital
Greenwich Funds.
The SEC has not approved or disapproved
these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
TABLE OF CONTENTS
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FUND SUMMARies
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1
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RENAISSANCE IPO ETF (ticker: “IPO”)
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1
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RENAISSANCE
INTERNATIONAL IPO ETF (ticker: “IPOS”)
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7
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ADDITIONAL
INFORMATION ABOUT THE FUNDS’ INVESTMENT STRATEGIES AND RISKS
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13
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PRINCIPAL INVESTMENT STRATEGIES
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13
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ADDITIONAL NON-PRINCIPAL INVESTMENT STRATEGIES
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13
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BORROWING MONEY
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13
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FUNDAMENTAL AND NON-FUNDAMENTAL POLICIES
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13
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LENDING PORTFOLIO SECURITIES
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14
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RISKS OF INVESTING IN THE FUNDS
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14
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ADDITIONAL RISKS
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17
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TAX ADVANTAGED PRODUCT STRUCTURE
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19
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PORTFOLIO HOLDINGS
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19
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MANAGEMENT OF THE FUNDS
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19
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DISTRIBUTION AND SERVICE PLAN
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20
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PORTFOLIO MANAGER
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20
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SHAREHOLDER INFORMATION
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20
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DETERMINATION OF NAV
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20
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BUYING AND SELLING EXCHANGE-TRADED SHARES
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21
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DISTRIBUTIONS
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21
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TAX INFORMATION
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22
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THE INDICES AND INDEX PROVIDER
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24
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THE INDICES
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24
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LICENSE AGREEMENT AND DISCLAIMERS
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25
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PREMIUM/DISCOUNT INFORMATION
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25
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GENERAL INFORMATION
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26
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FINANCIAL HIGHLIGHTS
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27
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FUND
SUMMARies
RENAISSANCE
IPO ETF (ticker: “IPO”)
INVESTMENT OBJECTIVE
The Renaissance IPO ETF (the “Fund”),
a series of Renaissance Capital Greenwich Funds (the “Trust”), seeks to replicate as closely as possible, before fees
and expenses, the price and yield performance of the Renaissance IPO Index (the “Index”).
FUND FEES AND EXPENSES
This table describes the fees and expenses
that you may pay if you buy and hold shares of the Fund (“Shares”).
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Shareholder Fees (fees paid directly from your investment)
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None
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Annual Fund Operating Expenses
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(expenses that you pay each year as a percentage of the value of your investment)
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Management Fee
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0.60%
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Distribution and Service (12b-1) Fees*
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None
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Other Expenses
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0.00%
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Total Annual Fund Operating Expenses
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0.60%
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_____________
*The Board has adopted a 12b-1 Plan
but no 12b-1 fees are being charged.
EXAMPLE
This example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other funds. This example does not take into account
brokerage commissions that you pay when purchasing or selling Shares of the Fund. The example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The example also
assumes that your investment has a 5% annual return and that the Fund’s operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions, your costs would be:
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YEAR
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EXPENSES
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1
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$61
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3
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$192
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5
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$335
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10
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$750
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PORTFOLIO TURNOVER
The Fund will pay transaction costs, such
as commissions, when it purchases and sells securities (or “turns over” its portfolio). A higher portfolio turnover
will cause the Fund to incur additional transaction costs and may result in higher taxes when the Fund Shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses or in the example, may affect the Fund’s
performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 92% of the average value of its portfolio.
PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks
to replicate as closely as possible, before fees and expenses, the price and yield performance of the Index. The Index, designed
by IPO research firm Renaissance Capital International, LLC (the “Index Provider”), is a portfolio of companies that
have recently completed an initial public offering (“IPO”) and are listed on a U.S. exchange. IPOs are a category of
unseasoned equities under-represented in core equity indices. IPOs that meet liquidity and operational screens are candidates for
inclusion in the Index. Sizable IPOs are included after the stock has been trading for at least five days, or upon quarterly reviews,
weighted by tradable float, and capped at 10%. Securities that have been public for two years are removed at the next quarterly
review. The Index has been constructed using a transparent and rules-based methodology.
The Fund normally
invests at least 80% of its total assets in securities that comprise the Index. Depositary receipts representing securities that
comprise the Index may count towards compliance with the Fund’s 80% policy. The Fund may also invest up to 20% of its assets
in certain futures, options, and swap contracts, cash and cash equivalents, as well as in common stocks not included in the Index
but which will help the Fund track the Index. Convertible securities and depositary receipts not included in the Index may be used
by the Fund in seeking performance that corresponds to its Index and in managing cash flows.
The Index is comprised
of common stocks, depositary receipts, real estate investment trusts (“REITs”) and partnership units. These securities
may include IPOs of foreign companies that are listed on a U.S. exchange, as well as IPOs of companies which are located in countries
categorized as emerging markets.
The Index Provider’s
IPO research shows that shares of IPOs within two years of their offering are under-represented in core equity indices. The Index
seeks to capture the unique returns from these unseasoned equities by including sizable IPOs in the Index after the stock has been
trading for at least five days, or upon quarterly reviews, and removing them at the quarterly review following their two-year anniversaries.
The Fund’s 80%
investment policy is non-fundamental and requires 60 days’ prior written notice to shareholders before it can be changed.
The Fund, using a
“passive” or indexing investment approach, attempts to approximate the investment performance of the Index by investing
in a portfolio of securities that generally replicates the Index. Renaissance Capital LLC (the “Adviser”) expects that,
over time, the correlation between the Fund’s performance before fees and expenses and that of the Index will be 95% or better.
A figure of 100% would indicate perfect correlation.
The Fund may concentrate
its investments in a particular industry or group of industries to the extent that the Index concentrates in an industry or group
of industries. Information technology frequently represents a major sector in the Index, and within this sector, Software frequently
represents the largest industry group.
The Fund may lend
securities to broker-dealers, banks and other institutions. When the Fund loans its portfolio securities, it will receive, at the
inception of each loan, liquid collateral equal to at least 102% (for U.S.-listed securities) or 105% (for non-U.S.-listed securities)
of the value of the portfolio securities being loaned.
PRINCIPAL RISKS OF INVESTING IN
THE FUND
Investors in the Fund should be willing
to accept a high degree of volatility in the price of the Fund’s Shares and the possibility of significant losses. An
investment in the Fund involves a substantial degree of risk. An investment in the Fund is not a deposit with a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Therefore, you should
consider carefully the following risks before investing in the Fund.
Risk of Investing in IPOs.
The Fund invests in companies that have recently completed an initial public offering. The stocks of such companies
are unseasoned equities lacking a trading history, a track record of reporting to investors and widely available research coverage.
IPOs are thus often subject to extreme price volatility and
speculative
trading. These stocks may have above-average price appreciation in connection with the initial public offering prior to
inclusion in the Index. The price of stocks included in the Index may not continue to appreciate and the performance of
these stocks may not replicate the performance exhibited in the past. In addition, IPOs share similar illiquidity risks
of private equity and venture capital. The free float shares held by the public in an IPO are typically a small percentage
of the market capitalization. The ownership of many IPOs often include large holdings by venture capital and private equity
investors who seek to sell their shares in the public market in the months following an IPO when shares restricted by lock-up
are released, causing greater volatility and possible downward pressure during the time that locked-up shares are released.
Information Technology Risk.
Information technology frequently represents a major sector in the Index, and within this sector, Software frequently
represents the largest industry group. Information technology companies are generally subject to the risks of rapidly changing
technologies; short product life cycles; fierce competition; aggressive pricing and reduced profit margins; the loss of patent,
copyright and trademark protections; cyclical market patterns; evolving industry standards; and frequent new product introductions.
Information technology companies may be smaller and less experienced companies, with limited product lines, markets or financial
resources and fewer experienced management or marketing personnel. Information technology company stocks, especially those
which are internet-related, have experienced extreme price and volume fluctuations that are often unrelated to their operating
performance.
Small and Mid-Capitalization Company
Risk. The Fund invests in small and mid-capitalization companies. Such companies may be more vulnerable to adverse
general market or economic developments, and their securities may be less liquid and may experience greater price volatility than
larger, more established companies as a result of several factors, including limited trading volumes, products or financial resources,
management inexperience and less publicly available information. Accordingly, such companies are generally subject to greater
market risk than larger, more established companies.
Depositary Receipt Risk. The
Fund may hold the securities of non-U.S. companies in the form of American Depositary Receipts (“ADRs”). ADRs
are negotiable certificates issued by a U.S. financial institution that represent a specified number of shares in a foreign stock
and trade on a U.S. national securities exchange, such as the New York Stock Exchange. Sponsored ADRs are issued with the
support of the issuer of the foreign stock underlying the ADRs and carry all of the rights of common shares, including voting rights.
The underlying securities of the ADRs in the IPO ETF’s portfolio are usually denominated or quoted in currencies other than
the U.S. Dollar. As a result, changes in foreign currency exchange rates may affect the value of the Fund’s portfolio.
In addition, because the underlying securities of ADRs trade on foreign exchanges at times when the U.S. markets are not
open for trading, the value of the securities underlying the ADRs may change materially at times when the U.S. markets are not
open for trading, regardless of whether there is an active U.S. market for shares of the Fund.
REIT Risk. Investments
in securities of real estate companies involve risks. These risks include, among others, adverse changes in national, state
or local real estate conditions; obsolescence of properties; changes in the availability, cost and terms of mortgage funds; and
the impact of changes in environmental laws. In addition, a REIT that fails to comply with federal tax requirements affecting
REITs may be subject to federal income taxation, or the federal tax requirement that a REIT distribute substantially all of its
net income to its shareholders may result in a REIT having insufficient capital for future expenditures. The value of a REIT
can depend on the structure of and cash flow generated by the REIT. In addition, like mutual funds, REITs have expenses,
including advisory and administration fees that are paid by their shareholders. As a result, you will absorb duplicate levels
of fees when the Fund invests in REITs. In addition, REITs are subject to certain provisions under federal tax law. The
failure of a company to qualify as a REIT could have adverse consequences for the Fund, including significantly reducing return
to the Fund on its investment in such company.
Partnership Unit Risk. Investments
in partnership units such as master limited partnerships and trusts, involve risks that differ from an investment in common stock.
Holders of partnership units have more limited control and limited rights to vote on matters affecting the partnership. There
are also certain tax risks associated with an investment in partnership units. In addition, conflicts of interest may exist
between common unit holders, subordinated unit holders and the general partner of a partnership, including a conflict arising as
a result of incentive distribution payments.
Non-U.S. Issuer Risk. Certain
companies in which the Fund may invest may be non-U.S. issuers whose securities are listed on U.S. exchanges. These securities
involve risks beyond those associated with investments in U.S. securities, including greater market volatility, higher transactional
costs, the possibility that the liquidity of such securities could be impaired because of future political and/or economic developments,
taxation by foreign governments, political instability, the possibility that foreign governmental restrictions may be adopted which
might adversely affect such securities and that the selection of such securities may be more difficult because there may be less
publicly available information concerning such non-U.S. issuers or the accounting, auditing and financial reporting standards,
practices and requirements applicable to non-U.S. issuers may differ from those applicable to U.S. issuers.
Emerging Markets
Risk. The Fund may invest a portion of its portfolio in securities of issuers located in emerging markets. Emerging market
companies involve certain risks not associated with investing in developed market countries because emerging market countries are
often in the initial stages of their industrialization cycles and have low per capita income. These increased risks include the
possibility of investment and trading limitations, greater liquidity concerns, higher price volatility, greater delays and possibility
of disruptions in settlement transactions, greater political uncertainties and greater dependence on international trade or development
assistance. In addition, emerging market countries may be subject to overburdened infrastructures and environmental problems.
Equity Securities Risk. The
value of the equity securities held by the Fund may fall due to general market and economic conditions, perceptions regarding the
markets in which the issuers of securities held by the Fund participate, or factors relating to specific issuers in which the Fund
invests. Equity securities are subordinated to preferred securities and debt in a company’s capital structure with
respect to priority in right to a share of corporate income, and therefore will be subject to greater dividend risk than preferred
securities or debt instruments. In addition, while broad market measures of equity securities have historically generated
higher average returns than fixed income securities, equity securities have also experienced significantly more volatility in those
returns.
Market Risk. The prices
of the securities in the Fund are subject to the risk associated with investing in the securities market, including general economic
conditions and sudden and unpredictable drops in value. An investment in the Fund may lose money.
Index Tracking Risk. The
Fund’s return may not match the return of the Index for a number of reasons. For example, the Fund incurs a number
of operating expenses not applicable to the Index and incurs costs associated with buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition of the Index. Because the Fund bears
the costs and risks associated with buying and selling securities while such costs and risks are not factored into the return of
the Index, the Fund’s return may deviate significantly from the return of the Index. In addition, the Fund may not
be able to invest in certain securities included in the Index, or invest in them in the exact proportions in which they are represented
in the Index, due to legal restrictions or other limitations. To the extent the Fund calculates its net asset value (“NAV”)
based on fair value prices and the value of the Index is based on securities’ closing prices, the Fund’s ability to
track the Index may be adversely affected.
Replication Management Risk. An
investment in the Fund involves risks similar to those of investing in any fund of equity securities traded on an exchange, such
as market fluctuations caused by such factors as economic and political developments, changes in interest rates and perceived trends
in security prices. However, because the Fund is not “actively” managed, unless a specific security is removed
from the Index, the Fund generally would not sell a security because the security’s issuer was in financial trouble. Therefore,
the Fund’s performance could be lower than funds that may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the value of one or more issuers.
Premium/Discount Risk. Disruptions
to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading market for Shares
may result in Shares trading at a significant premium or discount to NAV. This occurs because shares are offered and purchased
at market price not at the NAV. If a shareholder purchases Shares at a time when the market price is at a premium to the NAV or
sells Shares at a time when the market price is at a discount to the NAV, the shareholders may sustain losses.
Non-Diversified Risk. The
Fund is classified as a “non-diversified” investment company under the Investment Company Act of 1940, as amended (the
“1940 Act”). Therefore, the Fund may invest a relatively high percentage of its assets in a smaller number of
issuers or may invest a larger proportion of its assets in a single company. As a result, the gains and losses on a single
investment may have a greater impact on the Fund’s NAV and may make the Fund more volatile than more diversified funds. The
Fund may be particularly vulnerable to this risk because it seeks to replicate an index that is comprised of a limited number of
securities.
Concentration Risk. The
Fund’s assets may be concentrated in a particular sector or sectors or industry or group of industries to the extent the
Index concentrates in a particular sector or sectors or industry or group of industries. The Fund may be subject to the risk
that economic, political or other conditions that have a negative effect on that sector or industry will negatively impact the
Fund to a greater extent than if the Fund’s assets were invested in a wider variety of sectors or industries.
Securities Lending Risk. The
Fund may engage in securities lending. Securities lending involves the risk that the fund may lose money because the borrower
of the Fund’s loaned securities fails to return the securities in a timely manner or at all. The Fund could also lose
money in the event of a decline in the value of the collateral provided for the loaned securities or a decline in the value of
any investments made with cash collateral. These events could also trigger adverse tax consequences for the Fund.
Authorized Participant Concentration
Risk. Only an authorized participant may engage in creation or redemption transactions directly with the Fund. The Fund has
a limited number of institutions that act as authorized participants. To the extent that these institutions exit the business or
are unable to proceed with creation and/or redemption orders with respect to the Fund and no other authorized participant is able
to step forward to create or redeem Creation Units (as defined below), Fund shares may trade at a discount to NAV and possibly
face trading halts and/or delisting. This risk may be more pronounced in volatile markets, potentially where there are significant
redemptions in ETFs generally.
PERFORMANCE
The bar chart that follows shows how
the Fund’s performance has varied from year to year. The table below the bar chart shows the Fund’s average annual
returns (before and after taxes) and provides some indication of the risks of investing in the Fund by comparing the performance
of the Fund over time to the performance of the Index, and a broad-based market index (S&P 500 Index). The Fund’s past
performance (before and after income taxes) is not necessarily an indication of how the Fund will perform in the future.
The Fund’s highest quarterly return
was in the first quarter of 2019 with a return of 31.43%. The Fund’s lowest quarterly return was in the fourth quarter of
2018 with a return of -23.13%.
Renaissance IPO ETF Average Annual Total
Returns
for periods ended December 31,
2019:
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One Year
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Five Year
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Since Inception
(10/14/13)
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Return Before Taxes
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34.56%
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6.86%
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8.14%
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Return After Taxes on Distributions*
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34.36%
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6.76%
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7.87%
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Return After Taxes on Distributions and Sale of Fund Shares*
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20.51%
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5.36%
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6.35%
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Renaissance IPO Index (reflects no deduction for fees, expenses or taxes)
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34.76%
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7.24%
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8.69%
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S&P 500 Index (reflects no deduction for fees, expenses or taxes)
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31.49%
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11.70%
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13.14%
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* After-tax returns were
calculated using the historically highest individual federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax
returns shown are not relevant to investors who hold Shares of the Fund through tax-advantaged arrangements, such as 401(k) plans
or individual retirement accounts.
PORTFOLIO MANAGEMENT
Investment Adviser. Renaissance
Capital LLC.
Portfolio Manager. The
following individual is primarily responsible for the day-to-day management of the Fund’s portfolio:
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Name
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Title with Adviser
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Date Began Managing the Fund
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William K. Smith
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Portfolio Manager & Head Trader
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Since inception
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SUMMARY INFORMATION ABOUT PURCHASES
AND SALES OF FUND SHARES AND TAXES
PURCHASE AND SALE OF FUND SHARES
The Fund issues and redeems Shares
at NAV only in a large specified number of Shares each called a “Creation Unit,” or multiples thereof. A Creation
Unit consists of 50,000 Shares. Creation Units are sold only to and from institutional brokers through participation agreements.
Individual Shares of the Fund may
only be purchased and sold in secondary market transactions through brokers. Shares of the Fund are listed on NYSE Arca,
Inc. (the “Exchange”) and because Shares trade at market prices rather than NAV, Shares of the Fund may trade at a
price greater than or less than NAV.
TAX INFORMATION
The Fund’s distributions are
taxable and will generally be taxed as ordinary income or capital gains, unless you are investing through a tax-advantaged account
such as an IRA or 401(k). Dividends and capital gains on Fund shares invested in a tax-advantaged account may be taxed when withdrawn
from the tax-advantaged account.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase
Shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Adviser and its related companies
may pay the intermediary for the sale of Fund Shares and related services. These payments may create a conflict of interest by
influencing the broker-dealer, salesperson or other intermediary or its employees or associated persons to recommend the Fund over
another investment. Ask your financial adviser or visit your financial intermediary’s website for more information.
RENAISSANCE INTERNATIONAL
IPO ETF (ticker: “IPOS”)
INVESTMENT
OBJECTIVE
The Renaissance International
IPO ETF (the “Fund”), a series of Renaissance Capital Greenwich Funds (the “Trust”), seeks to replicate
as closely as possible, before fees and expenses, the price and yield performance of the Renaissance International IPO Index (the
“Index”).
FUND
FEES AND EXPENSES
This table describes
the fees and expenses that you may pay if you buy and hold shares of the Fund (“Shares”).
|
Shareholder Fees (fees paid directly from your investment)
|
None
|
|
|
|
|
Annual Fund Operating Expenses
|
|
|
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Management Fee
|
0.80%
|
|
Distribution and Service (12b-1) Fees*
|
None
|
|
Other Expenses
|
0.00%
|
|
Total Annual Fund Operating Expenses
|
0.80%
|
_____________
*The Board has adopted a 12b-1 Plan
but no 12b-1 fees are being charged.
EXAMPLE
This example is intended
to help you compare the cost of investing in the Fund with the cost of investing in other funds. This example does not take into
account brokerage commissions that you pay when purchasing or selling Shares of the Fund. The example assumes that you invest $10,000
in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The example also assumes
that your investment has a 5% annual return and that the Fund’s operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would be:
|
YEAR
|
EXPENSES
|
|
1
|
$82
|
|
3
|
$255
|
|
5
|
$444
|
|
10
|
$990
|
PORTFOLIO
TURNOVER
The Fund will pay
transaction costs, such as commissions, when it purchases and sells securities (or “turns over” its portfolio). A higher
portfolio turnover will cause the Fund to incur additional transaction costs and may result in higher taxes when the Fund Shares
are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, may affect
the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 80% of the average
value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The Fund, a series
of the Trust, seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Index.
The Index, designed by IPO research firm Renaissance Capital International, LLC (the “Index Provider”), is a portfolio
of companies that have recently completed an initial public offering (“IPO”) and are
listed
on a non-U.S. exchange. IPOs are a category of unseasoned equities under-represented in core equity indices. IPOs that meet liquidity
and operational screens are candidates for inclusion in the Index. Sizable IPOs are included after the stock has been trading
for at least five days, or upon quarterly reviews, weighted by tradable float, and capped at 10%. Securities that have been public
for two years are removed at the next quarterly review. The Index has been constructed using a transparent and rules-based methodology.
The Fund normally
invests at least 80% of its total assets in securities that comprise the Index. Depositary receipts representing securities that
comprise the Index may count towards compliance with the Fund’s 80% policy. The Fund may also invest up to 20% of its assets
in certain futures, options, and swap contracts, cash and cash equivalents, as well as in common stocks not included in the Index
but which will help the Fund track the Index. Convertible securities and depositary receipts not included in the Index may be used
by the Fund in seeking performance that corresponds to its Index and in managing cash flows.
The Index is comprised
of common stocks, depositary receipts, real estate investment trusts (“REITs”) and partnership units. These securities
may include IPOs of U.S. companies that are listed on an international exchange, as well as IPOs of companies which are located
in countries categorized as emerging markets.
The Index Provider’s
IPO research shows that shares of IPOs within two years of their offering are under-represented in core equity indices. The Index
seeks to capture the unique returns from these unseasoned equities by including sizable IPOs in the Index after the stock has been
trading for at least five days, or upon quarterly reviews, and removing them at the quarterly review following their two-year anniversaries.
The Fund’s 80%
investment policy is non-fundamental and requires 60 days’ prior written notice to shareholders before it can be changed.
The Fund, using a
“passive” or indexing investment approach, attempts to approximate the investment performance of the Index by investing
in a portfolio of securities that generally replicates the Index. Renaissance Capital LLC (the “Adviser”) expects that,
over time, the correlation between the Fund’s performance before fees and expenses and that of the Index will be 95% or better.
A figure of 100% would indicate perfect correlation.
The Fund may concentrate
its investments in a particular industry or group of industries to the extent that the Index concentrates in an industry or group
of industries. Information technology frequently represents a major sector in the Index. A portion of the Fund’s investments
may be in companies located in countries categorized as emerging markets. The Fund has frequently had high exposure to Chinese
companies.
The Fund may lend
securities to broker-dealers, banks and other institutions. When the Fund loans its portfolio securities, it will receive, at the
inception of each loan, liquid collateral equal to at least 102% (for U.S.-listed securities) or 105% (for non-U.S.-listed securities)
of the value of the portfolio securities being loaned.
PRINCIPAL
RISKS OF INVESTING IN THE FUND
Investors in the Fund
should be willing to accept a high degree of volatility in the price of the Fund’s Shares and the possibility of significant
losses. An investment in the Fund involves a substantial degree of risk. An investment in the Fund is not a deposit with a bank
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Therefore, you should
consider carefully the following risks before investing in the Fund.
Risk of Investing
in IPOs. The Fund invests in companies that have recently completed an initial public offering. The stocks of such companies
are unseasoned equities lacking a trading history, a track record of reporting to investors and widely available research coverage.
IPOs are thus often subject to extreme price volatility and speculative trading. These stocks may have above-average price appreciation
in connection with the initial public offering prior to inclusion in the Index. The price of stocks included in the Index may not
continue to appreciate and the performance of these stocks may not replicate the performance exhibited in the past. In addition,
IPOs share similar illiquidity risks of private equity and venture capital. The free float shares held by the public in an IPO
are typically a small percentage
of
the market capitalization. The ownership of many IPOs often include large holdings by venture capital and private equity investors
who seek to sell their shares in the public market in the months following an IPO when shares restricted by lock-up are released,
causing greater volatility and possible downward pressure during the time that locked-up shares are released.
Emerging Markets
Risk. The Fund invests a portion of its portfolio in securities of issuers located in emerging markets. Emerging market companies
involve certain risks not associated with investing in developed market countries because emerging market countries are often in
the initial stages of their industrialization cycles and have low per capita income. These increased risks include the possibility
of investment and trading limitations, greater liquidity concerns, higher price volatility, greater delays and possibility of disruptions
in settlement transactions, greater political uncertainties and greater dependence on international trade or development assistance.
In addition, emerging market countries may be subject to overburdened infrastructures and environmental problems.
China
Investment Risk. Investments in China can involve certain risks, including exposure to currency fluctuations, less liquidity,
expropriation, confiscatory taxation, nationalization and exchange control regulations (including currency blockage). Inflation
and rapid fluctuations in inflation and interest rates have had, and may continue to have, negative effects on the economy and
securities markets of China. In addition, the standards for environmental, social and corporate governance matters in China also
tend to be lower than such standards in more developed economies. Certain securities issued by companies located or operating in
China are subject to trading restrictions, quota limitations, and clearing and settlement risks. Trade disputes and the imposition
of tariffs on goods and services can affect the Chinese economy, particularly in light of China’s large export sector, as
well as the global economy. Trade disputes can result in increased costs of production and reduced profitability for non-export-dependent
companies that rely on imports to the extent China engages in retaliatory tariffs. Trade disputes may also lead to increased currency
exchange rate volatility.
Small and Mid-Capitalization
Company Risk. The Fund invests in small and mid-capitalization companies. Such companies may be more vulnerable to adverse
general market or economic developments, and their securities may be less liquid and may experience greater price volatility than
larger, more established companies as a result of several factors, including limited trading volumes, products or financial resources,
management inexperience and less publicly available information. Accordingly, such companies are generally subject to greater market
risk than larger, more established companies.
Depositary Receipt
Risk. The Fund may hold the securities of companies in the form of depositary receipts including global depositary receipts
(“GDRs”). Depositary receipts may be less liquid than the underlying shares in their primary trading market. Any distributions
paid to the holders of depositary receipts are usually subject to a fee charged by the depositary. Holders of depositary receipts
may have limited voting rights, and investment restrictions in certain countries may adversely impact the value of depositary receipts
because such restrictions may limit the ability to convert shares into depositary receipts and vice versa. Such restrictions may
cause shares of the underlying issuer to trade at a discount or premium to the market price of the depositary receipt.
REIT Risk.
Investments in securities of real estate companies involve risks. These risks include, among others, adverse changes in national,
state or local real estate conditions; obsolescence of properties; changes in the availability, cost and terms of mortgage funds;
and the impact of changes in environmental laws. In addition, a REIT that fails to comply with federal tax requirements affecting
REITs may be subject to federal income taxation, or the federal tax requirement that a REIT distribute substantially all of its
net income to its shareholders may result in a REIT having insufficient capital for future expenditures. The value of a REIT can
depend on the structure of and cash flow generated by the REIT. In addition, like mutual funds, REITs have expenses, including
advisory and administration fees that are paid by their shareholders. As a result, you will absorb duplicate levels of fees when
the Fund invests in REITs. In addition, REITs are subject to certain provisions under federal tax law. The failure of a company
to qualify as a REIT could have adverse consequences for the Fund, including significantly reducing return to the Fund on its investment
in such company.
Partnership Unit
Risk. Investments in partnership units, such as master limited partnerships and trusts, involve risks that differ from an investment
in common stock. Holders of partnership units have more limited control and limited rights to vote on matters affecting the partnership.
There are also certain tax risks associated with an investment in partnership units. In addition, conflicts of interest may exist
between common unit holders, subordinated unit holders and the general partner of a partnership, including a conflict arising as
a result of incentive distribution payments.
Non-U.S. Issuer
Risk. The Fund invests in non-U.S. issuers. These securities involve risks beyond those associated with investments in U.S.
securities, including greater market volatility, higher transactional costs, the possibility that the liquidity of such securities
could be impaired because of future political and/or economic developments, taxation by foreign governments, political instability,
the possibility that foreign governmental restrictions may be adopted which might adversely affect such securities and that the
selection of such securities may be more difficult because there may be less publicly available information concerning such non-U.S.
issuers or the accounting, auditing and financial reporting standards, practices and requirements applicable to non-U.S. issuers
may differ from those applicable to U.S. issuers. Current political uncertainty surrounding the European Union (the “EU”)
and its membership, including negotiations relating to the 2016 referendum in which the United Kingdom voted to exit the EU, may
increase market volatility.
Custody Risk.
Custody risk refers to risks in the process of clearing and settling trades and to the holding of securities by local banks, agents
and depositories. Low trading volumes and volatile prices in less developed markets make trades harder to complete and settle.
Local agents are held only to the standard of care of the local markets. Governments or trade groups may compel local agents to
hold securities in designated depositories that are subject to independent evaluation. The less developed a country’s securities
market is, the greater the likelihood of custody problems occurring.
Currency Risk.
The Fund holds investments that are denominated in non-U.S. currencies, or in securities that provide exposure to such currencies,
currency exchange rates or interest rates denominated in such currencies. Changes in currency exchange rates and the relative value
of non-U.S. currencies will affect the value of the Fund’s investment and the value of Fund’s Shares. Currency exchange
rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Renaissance
International IPO ETF may change quickly and without warning and you may lose money.
Valuation Risk.
The sales price the Fund could receive for a security may differ from the Fund’s valuation of the security and may differ
from the value used by the Index, particularly for securities that trade in low value or volatile markets or that are valued using
a fair value methodology. Because non-U.S. exchanges may be open on days when the Fund does not price its Shares, the value of
the securities in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s
Shares.
Equity Securities
Risk. The value of the equity securities held by the Fund may fall due to general market and economic conditions, perceptions
regarding the markets in which the issuers of securities held by the Fund participate, or factors relating to specific issuers
in which the Fund invests. Equity securities are subordinated to preferred securities and debt in a company’s capital structure
with respect to priority in right to a share of corporate income, and therefore will be subject to greater dividend risk than preferred
securities or debt instruments. In addition, while broad market measures of equity securities have historically generated higher
average returns than fixed income securities, equity securities have also experienced significantly more volatility in those returns.
Market Risk. The
prices of the securities in the Fund are subject to the risk associated with investing in the securities market, including general
economic conditions and sudden and unpredictable drops in value. An investment in the Fund may lose money.
Index Tracking
Risk. The Fund’s return may not match the return of the Index for a number of reasons. For example, the Fund incurs a
number of operating expenses not applicable to the Index and incurs costs associated with buying and selling securities, especially
when rebalancing the Fund’s securities holdings to reflect changes in the composition of the Index. Because the Fund bears
the costs and risks associated with buying and selling securities while such costs and risks are not factored into the return of
the Index, the Fund’s return may deviate significantly from the return of
the
Index. In addition, the Fund may not be able to invest in certain securities included in the Index, or invest in them in the exact
proportions in which they are represented in the Index, due to legal restrictions or other limitations. To the extent the Fund
calculates its net asset value (“NAV”) based on fair value prices and the value of the Index is based on securities’
closing prices, the Fund’s ability to track the Index may be adversely affected.
Replication Management
Risk. An investment in the Fund involves risks similar to those of investing in any fund of equity securities traded on an
exchange, such as market fluctuations caused by such factors as economic and political developments, changes in interest rates
and perceived trends in security prices. However, because the Fund is not “actively” managed, unless a specific security
is removed from the Index, the Fund generally would not sell a security because the security’s issuer was in financial trouble.
Therefore, the Fund’s performance could be lower than funds that may actively shift their portfolio assets to take advantage
of market opportunities or to lessen the impact of a market decline or a decline in the value of one or more issuers.
Premium/Discount
Risk. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading
market for Shares may result in Shares trading at a significant premium or discount to NAV. This occurs because shares are offered
and purchased at market price not at the NAV. If a shareholder purchases Shares at a time when the market price is at a premium
to the NAV or sells Shares at a time when the market price is at a discount to the NAV, the shareholders may sustain losses.
Non-Diversified
Risk. The Fund is classified as a “non-diversified” investment company under the Investment Company Act of 1940,
as amended (the “1940 Act”). Therefore, the Fund may invest a relatively high percentage of its assets in a smaller
number of issuers or may invest a larger proportion of its assets in a single company. As a result, the gains and losses on a single
investment may have a greater impact on the Fund’s NAV and may make the Fund more volatile than more diversified funds. The
Fund may be particularly vulnerable to this risk because it seeks to replicate an index that is comprised of a limited number of
securities.
Concentration Risk.
The Fund’s assets may be concentrated in a particular sector or sectors or industry or group of industries to the extent
the Index concentrates in a particular sector or sectors or industry or group of industries. The Fund may be subject to the risk
that economic, political or other conditions that have a negative effect on that sector or industry will negatively impact the
Fund to a greater extent than if the Fund’s assets were invested in a wider variety of sectors or industries.
Securities Lending
Risk. The Fund may engage in securities lending. Securities lending involves the risk that the fund may lose money because
the borrower of the Fund’s loaned securities fails to return the securities in a timely manner or at all. The Fund could
also lose money in the event of a decline in the value of the collateral provided for the loaned securities or a decline in the
value of any investments made with cash collateral. These events could also trigger adverse tax consequences for the Fund.
Authorized Participant
Concentration Risk. Only an authorized participant may engage in creation or redemption transactions directly with the Fund.
The Fund has a limited number of institutions that act as authorized participants. To the extent that these institutions exit the
business or are unable to proceed with creation and/or redemption orders with respect to the Fund and no other authorized participant
is able to step forward to create or redeem Creation Units (as defined below), Fund shares may trade at a discount to NAV and possibly
face trading halts and/or delisting. This risk may be more pronounced in volatile markets, potentially where there are significant
redemptions in ETFs generally.
PERFORMANCE
The bar chart that follows shows how
the Fund’s performance has varied from year to year. The table below the bar chart shows the Fund’s average annual
returns (before and after taxes) and provides some indication of the risks of investing in the Fund by comparing the performance
of the Fund over time to the performance of the Index and a broad-based market index (the MSCI ACWI ex U.S. Index). The Fund’s
past performance (before and after income taxes) is not necessarily an indication of how the Fund will perform in the future.
The Fund’s highest quarterly return
was in the fourth quarter of 2019 with a return of 13.08%. The Fund’s lowest quarterly return was in the fourth quarter of
2018 with a return of -11.47%.
Renaissance International IPO ETF Average
Annual Total Returns
for periods ended December 31,
2019:
|
|
One Year
|
Five Year
|
Since Inception
(10/6/14)
|
|
Return Before Taxes
|
28.90%
|
5.80%
|
5.81%
|
|
Return After Taxes on Distributions*
|
28.70%
|
5.39%
|
5.41%
|
|
Return After Taxes on Distributions and Sale of Fund Shares*
|
17.38%
|
4.52%
|
5.53%
|
|
Renaissance International IPO Index (reflects no deduction for fees, expenses or taxes)
|
28.90%
|
6.90%
|
6.89%
|
|
MSCI ACWI ex U.S. Index (reflects no deduction for fees, expenses or taxes)
|
22.13%
|
6.01%
|
5.43%
|
* After-tax returns were
calculated using the historically highest individual federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax
returns shown are not relevant to investors who hold Shares of the Fund through tax-advantaged arrangements, such as 401(k) plans
or individual retirement accounts.
PORTFOLIO
MANAGEMENT
Investment Adviser. Renaissance
Capital LLC.
Portfolio Manager.
The following individual is primarily responsible for the day-to-day management of the Fund’s portfolio:
|
Name
|
Title with Adviser
|
Date Began Managing the Fund
|
|
|
|
|
|
William K. Smith
|
Portfolio Manager & Head Trader
|
Since inception
|
SUMMARY INFORMATION
ABOUT PURCHASES AND SALES OF FUND SHARES AND TAXES
PURCHASE
AND SALE OF FUND SHARES
The Fund issues and
redeems Shares at NAV only in a large specified number of Shares each called a “Creation Unit,” or multiples thereof.
A Creation Unit consists of 50,000 Shares. Creation Units are sold only to and from institutional brokers through participation
agreements.
Individual Shares
of the Fund may only be purchased and sold in secondary market transactions through brokers. Shares of the Fund are listed on NYSE
Arca, Inc. (the “Exchange”) and because Shares trade at market prices rather than NAV, Shares of the Fund may trade
at a price greater than or less than NAV.
TAX
INFORMATION
The Fund’s distributions are
taxable and will generally be taxed as ordinary income or capital gains, unless you are investing through a tax-advantaged account
such as an IRA or 401(k). Dividends and capital gains on Fund shares invested in a tax-advantaged account may be taxed when withdrawn
from the tax-advantaged account.
PAYMENTS TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If you purchase Shares
of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Adviser and its related companies may
pay the intermediary for the sale of Fund Shares and related services. These payments may create a conflict of interest by influencing
the broker-dealer, salesperson or other intermediary or its employees or associated persons to recommend the Fund over another
investment. Ask your financial adviser or visit your financial intermediary’s website for more information.
ADDITIONAL
INFORMATION ABOUT THE FUNDS’ INVESTMENT STRATEGIES AND RISKS
PRINCIPAL INVESTMENT
STRATEGIES
Renaissance Capital
LLC (the “Adviser”) anticipates that, generally, the Renaissance IPO ETF and the Renaissance International IPO ETF
(each a “Fund” and, together, the “Funds”) will hold all of the securities that comprise their respective
Index in proportion to their weightings in such Index. However, under various circumstances, it may not be possible or practicable
to purchase all of those securities in those weightings. In these circumstances, each Fund may purchase a sample of securities
in its Index. There also may be instances in which the Adviser may choose to underweight or overweight a security in an Index,
purchase securities not in an Index that the Adviser believes are appropriate to substitute for certain securities in that Index
or utilize various combinations of other available investment techniques in seeking to replicate as closely as possible, before
fees and expenses, the price and yield performance of an Index. Each Fund may sell securities that are represented in its Index
in anticipation of their removal from its Index or purchase securities not represented in its Index in anticipation of their addition
to that Index. Each Fund may also, in order to comply with the tax diversification requirements of the Internal Revenue Code of
1986, as amended (“Internal Revenue Code”), temporarily invest in securities not included in its Index that are expected
to be highly correlated with the securities included in its Index.
ADDITIONAL NON-PRINCIPAL
INVESTMENT STRATEGIES
Each Fund may invest
in securities not included in its Index, money market instruments, including repurchase agreements or other funds which invest
exclusively in money market instruments, convertible securities, and structured notes (notes on which the amount of principal repayment
and interest payments are based on the movement of one or more specified factors, such as the movement of a particular stock or
stock index). Each Fund may also invest, up to 20% of its assets in certain derivatives including stock futures and options contracts,
warrants and swap agreements. Convertible securities and depositary receipts not included in a Fund’s Index may be used by
the Fund in seeking performance that corresponds to its Index and in managing cash flows. Each Fund may also invest, to the extent
permitted by the 1940 Act, in other unaffiliated funds, such as open-end or closed-end management investment companies, including
other exchange-traded funds (“ETFs”).
BORROWING MONEY
Each Fund may borrow
money from a bank up to a limit of one-third of the market value of its assets. To the extent that a Fund borrows money, it will
be leveraged; at such times, the Fund will appreciate or depreciate in value more rapidly than the Index.
FUNDAMENTAL AND
NON-FUNDAMENTAL POLICIES
Each Fund’s
investment objective and each of its other investment policies are non-fundamental policies that may be changed by the Board of
Trustees without shareholder approval, except as noted in this Prospectus or the Statement
of
Additional Information (“SAI”) under the section entitled “Investment Policies and Restrictions—Investment
Restrictions.” Shareholders will receive 60 days prior notification if there will be a change in a Fund’s investment
objective.
LENDING PORTFOLIO
SECURITIES
Each Fund may lend
its portfolio securities to brokers, dealers and other financial institutions desiring to borrow securities to complete transactions
and for other purposes. In connection with such loans, the Fund receives liquid collateral equal to at least 102% (for U.S.-listed
securities) or 105% (for non-U.S.-listed securities) of the value of the portfolio securities being loaned. This collateral is
marked-to-market on a daily basis. Although the Fund will receive collateral in connection with all loans of its securities holdings,
the Fund would be exposed to a risk of loss should a borrower fail to return the borrowed securities (e.g., the loaned securities
may have appreciated beyond the value of the collateral held by the Fund) or become insolvent. The Fund may pay fees to the party
arranging the loan of securities. In addition, the Fund will bear the risk of loss of any cash collateral that it invests.
RISKS OF INVESTING
IN THE FUNDS
The following section
provides additional information regarding the principal risks identified under “Principal Risks of Investing in the Fund”
in each Fund’s “Summary Information” section followed by additional risk information.
Investors in each
Fund should be willing to accept a high degree of volatility in the price of the Fund’s Shares and the possibility of significant
losses. An investment in a Fund involves a substantial degree of risk. Therefore, you should consider carefully the following risks
before investing in a Fund.
Risk of Investing
in IPOs. Each Fund invests in companies that have recently completed an initial public offering. The stocks of such companies
are unseasoned equities lacking a trading history, a track record of reporting to investors and widely available research coverage.
IPOs are thus often subject to extreme price volatility and speculative trading. These stocks may have above-average price appreciation
in connection with the initial public offering prior to inclusion in an Index. The price of stocks included in an Index may not
continue to appreciate and the performance of these stocks may not replicate the performance exhibited in the past. In addition,
IPOs share similar illiquidity risks of private equity and venture capital. The free float shares held by the public in an IPO
are typically a small percentage of the market capitalization. The ownership of many IPOs often include large holdings by venture
capital and private equity investors who seek to sell their shares in the public market in the months following an IPO when shares
restricted by lock-up are released, causing greater volatility and possible downward pressure during the time that locked-up shares
are released.
Information Technology Risk.
Information technology frequently represents a major sector in each Index. Within this sector, Software frequently
represents the largest industry group (Renaissance IPO ETF only).. Information technology companies are generally subject
to the risks of rapidly changing technologies; short product life cycles; fierce competition; aggressive pricing and reduced profit
margins; the loss of patent, copyright and trademark protections; cyclical market patterns; evolving industry standards; and frequent
new product introductions. Information technology companies may be smaller and less experienced companies, with limited
product lines, markets or financial resources and fewer experienced management or marketing personnel. Information technology
company stocks, especially those which are internet-related, have experienced extreme price and volume fluctuations that are often
unrelated to their operating performance.
Emerging Markets
Risk. A Fund may invest a portion of its portfolio in securities of issuers located in emerging markets. Emerging market companies
involve certain risks not associated with investing in developed market countries because emerging market countries are often in
the initial stages of their industrialization cycles and have low per capita income. These increased risks include the possibility
of investment and trading limitations, greater liquidity concerns, higher price volatility, greater delays and possibility of disruptions
in settlement transactions, greater political uncertainties and greater dependence on international trade or development assistance.
In addition, emerging market countries may be subject to overburdened infrastructures and environmental problems.
China
Investment Risk. (Renaissance International IPO ETF only) Investments in China can involve certain risks, including exposure
to currency fluctuations, less liquidity, expropriation, confiscatory taxation, nationalization and exchange control regulations
(including currency blockage). Inflation and rapid fluctuations in inflation and interest rates have had, and may continue to have,
negative effects on the economy and securities markets of China. In addition, the standards for environmental, social and corporate
governance matters in China also tend to be lower than such standards in more developed economies. Certain securities issued by
companies located or operating in China are subject to trading restrictions, quota limitations, and clearing and settlement risks.
Trade disputes and the imposition of tariffs on goods and services can affect the Chinese economy, particularly in light of China’s
large export sector, as well as the global economy. Trade disputes can result in increased costs of production and reduced profitability
for non-export-dependent companies that rely on imports to the extent China engages in retaliatory tariffs. Trade disputes may
also lead to increased currency exchange rate volatility.
Small and Mid-Capitalization
Company Risk. Each Fund invests in small and mid-capitalization companies. Such companies may be more vulnerable to adverse
general market or economic developments, and their securities may be less liquid and may experience greater price volatility than
larger, more established companies as a result of several factors, including limited trading volumes, products or financial resources,
management inexperience and less publicly available information. Accordingly, such companies are generally subject to greater market
risk than larger, more established companies.
Non-U.S. Securities
Risk. Each Fund invests in the securities of non-U.S. issuers. These securities involve risks beyond those associated with
investments in U.S. securities, including greater market volatility, higher transactional costs, the possibility that the liquidity
of such securities could be impaired because of future political and/or economic developments, taxation by foreign governments,
political instability, the possibility that foreign governmental restrictions may be adopted which might adversely affect such
securities and that the selection of such securities may be more difficult because there may be less publicly available information
concerning such non-U.S. issuers or the accounting, auditing and financial reporting standards, practices and requirements applicable
to non-U.S. issuers may differ from those applicable to U.S. issuers.
The risk of investments
in Europe may be heightened due to the 2016 referendum in which the United Kingdom voted to exit the European Union (the “EU”)
and uncertainty surrounding the terms of the exit. Political, economic and legal uncertainty may cause increased market volatility.
In addition, if one or more countries were to exit the EU or abandon the use of the Euro as a currency, the value of investments
associated with those countries or the Euro could decline significantly and unpredictably and it would likely cause additional
market disruption globally and introduce new legal and regulatory uncertainties.
Custody Risk. (Renaissance
International IPO ETF only) Custody risk refers to risks in the process of clearing and settling trades and to the holding of securities
by local banks, agents and depositories. Low trading volumes and volatile prices in less developed markets make trades harder to
complete and settle. Local agents are held only to the standard of care of the local markets. Governments or trade groups may compel
local agents to hold securities in designated depositories that are subject to independent evaluation. The less developed a country’s
securities market is, the greater the likelihood of custody problems occurring.
Currency Risk.
The Funds hold investments that are denominated in non-U.S. currencies, or in securities that provide exposure to such currencies,
currency exchange rates or interest rates denominated in such currencies. Changes in currency exchange rates and the relative value
of non-U.S. currencies will affect the value of the Fund’s investment and the value of the Fund’s Shares. Currency
exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose money.
Valuation Risk.
The sales price each Fund could receive for a security may differ from a Fund’s valuation of the security and may differ
from the value used by an Index, particularly for securities that trade in low value or volatile markets or that are valued using
a fair value methodology. Because non-U.S. exchanges may be open on days when
a
Fund does not price its Shares, the value of the securities in a Fund’s portfolio may change on days when shareholders will
not be able to purchase or sell a Fund’s Shares.
Equity Securities
Risk. The value of the equity securities held by each Fund may fall due to general market and economic conditions, perceptions
regarding the markets in which the issuers of securities held by a Fund participate, or factors relating to specific issuers in
which a Fund invests. For example, an adverse event, such as an unfavorable earnings report, may result in a decline in the value
of equity securities of an issuer held by a Fund; the price of the equity securities of an issuer may be particularly sensitive
to general movements in the securities markets; or a drop in the securities markets may depress the price of most or all of the
equities securities held by a Fund. In addition, the equity securities of an issuer in a Fund’s portfolio may decline in
price if the issuer fails to make anticipated dividend payments. Equity securities are subordinated to preferred securities and
debt in a company’s capital structure with respect to priority in right to a share of corporate income, and therefore will
be subject to greater dividend risk than preferred securities or debt instruments. In addition, while broad market measures of
equity securities have historically generated higher average returns than fixed income securities, equity securities have also
experienced significantly more volatility in those returns.
Market Risk. The
prices of the securities of each Fund are subject to the risk associated with investing in the securities market, including general
economic conditions and sudden and unpredictable drops in value. An investment in a Fund may lose money.
Index Tracking
Risk. Each Fund’s return may not match the return of its Index for a number of reasons. For example, a Fund incurs a
number of operating expenses not applicable to its Index and incurs costs associated with buying and selling securities, especially
when rebalancing a Fund’s securities holdings to reflect changes in the composition of its Index. A Fund’s return may
also deviate significantly from the return of its Index because a Fund bears the costs and risks associated with buying and selling
securities while such costs and risks are not factored into the return of its Index. A Fund may not be fully invested at times
as a result of reserves of cash held by the Fund to pay expenses. In addition, a Fund may not be able to invest in certain securities
included in its Index, or invest in them in the exact proportions they represent of its Index, due to legal restrictions or a lack
of liquidity on the stock exchanges in which the securities in a Fund trade. Moreover, a Fund may be delayed in purchasing or selling
securities included in its Index. To the extent a Fund calculates its NAV based on fair value prices and the value of its Index
is based on securities’ closing prices (i.e., the value of its Index is not based on fair value prices) or prices
differ from those used in calculating an Index, a Fund’s ability to track its Index may be adversely affected. The need to
comply with the tax diversification and other requirements of the Internal Revenue Code may also impact a Fund’s ability
to replicate the performance of its Index. In addition, if a Fund utilizes depositary receipts and derivative instruments that
are not included in its Index, its return may not correlate as well with the return of its Index as would be the case if a Fund
purchased all the securities in that Index directly.
Replication Management
Risk. Unlike many investment companies, the Funds are not “actively” managed. Therefore, unless a specific security
is removed from its Index, a Fund generally would not sell a security because the security’s issuer is in financial trouble.
If a specific security is removed from a Fund’s Index, that Fund may be forced to sell such security at an inopportune time
or for prices other than at current market values. An investment in a Fund involves risks similar to those of investing in any
fund of equity securities traded on an exchange, such as market fluctuations caused by such factors as economic and political developments,
changes in interest rates and perceived trends in security prices. A Fund’s Index may not contain the appropriate or a diversified
mix of securities for any particular economic cycle. The timing of changes in a Fund from one type of security to another in seeking
to replicate its Index could have a negative effect on a Fund. Unlike with an actively managed fund, the Adviser does not use techniques
or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline.
This means that, based on market and economic conditions, a Fund’s performance could be lower than funds that may actively
shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline or a decline
in the value of one or more issuers.
Premium/Discount
Risk. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading
market for Shares may result in Shares trading at a significant premium or discount to NAV. The NAV of the Shares will fluctuate
with changes in the market value of each Fund’s securities holdings.
The
market prices of Shares will fluctuate in accordance with changes in NAV and supply and demand on the Exchange. The Adviser cannot
predict whether Shares will trade below, at or above their NAV. Price differences may be due, in large part, to the fact that
supply and demand forces at work in the secondary trading market for Shares will be closely related to, but not identical to,
the same forces influencing the prices of the securities of an Index trading individually or in the aggregate at any point in
time. If a shareholder purchases Shares at a time when the market price is at a premium to the NAV or sells Shares at a time when
the market price is at a discount to the NAV, the shareholder may sustain losses. Any of these factors, discussed above and further
below, may lead to the Shares trading at a premium or discount to a Fund’s NAV.
Non-Diversified
Risk. Each Fund is a separate investment portfolio of the Trust which is an open-end investment company registered under the
1940 Act. A Fund is classified as a “non-diversified” investment company under the 1940 Act. As a result, a Fund is
subject to the risk that it will be more volatile than a diversified fund because a Fund may invest its assets in a smaller number
of issuers or may invest a larger proportion of its assets in a single issuer. As a result, the gains and losses on a single investment
may have a greater impact on a Fund’s NAV and may make a Fund more volatile than more diversified funds.
Concentration Risk.
Each Fund’s assets may be concentrated in a particular sector or sectors or industry or group of industries to the extent
that its Index concentrates in a particular sector or sectors or industry or group of industries. The securities of many or all
of the companies in the same sector or industry may decline in value due to developments adversely affecting such sector or industry.
By concentrating its assets in a particular sector or sectors or industry or group of industries, a Fund is subject to the risk
that economic, political or other conditions that have a negative effect on that sector or industry will negatively impact a Fund
to a greater extent than if a Fund’s assets were invested in a wider variety of sectors or industries.
Securities Lending
Risk. Each Fund may lend its portfolio securities to brokers, dealers and other financial institutions desiring to borrow securities
to complete transactions and for other purposes. In connection with such loans, the Fund receives liquid collateral equal to at
least 102% (for U.S.-listed securities) or 105% (for non-U.S.-listed securities) of the value of the portfolio securities being
loaned. This collateral is marked-to-market on a daily basis. Although a Fund will receive collateral in connection with all loans
of its securities holdings, a Fund would be exposed to a risk of loss should a borrower default on its obligation to return the
borrowed securities (e.g., the loaned securities may have appreciated beyond the value of the collateral held by the Fund)
or become insolvent. A Fund may pay fees to the party arranging the loan of securities. In addition, a Fund will bear the risk
of loss of any cash collateral that it invests.
When a dividend is
paid on a security that is out on loan, the borrower receives the dividend and in turn makes payment of the same amount to the
Fund. Dividends, if they constitute “qualified dividends,” are taxable at the same rate as long-term capital gains.
These payments made by borrowers, however, are not qualified dividends, and are taxable at higher ordinary income rates. As a result,
some of the distributions received by shareholders who hold Fund shares in taxable accounts may be subject to taxation at a higher
rate than if a Fund had not loaned its portfolio securities.
Authorized Participant
Concentration Risk. Only an authorized participant may engage in creation or redemption transactions directly with a Fund.
A Fund has a limited number of institutions that act as authorized participants. To the extent that these institutions exit the
business or are unable to proceed with creation and/or redemption orders with respect to a Fund and no other authorized participant
is able to step forward to create or redeem Creation Units, Fund shares may trade at a discount to NAV and possibly face trading
halts and/or delisting. This risk may be more pronounced in volatile markets, potentially where there are significant redemptions
in ETFs generally.
ADDITIONAL RISKS
Risk of Investing
in Derivatives. Derivatives are financial instruments whose values are based on the value of one or more indicators, such as
a security, asset, currency, interest rate, or index. Each Fund’s use of derivatives involves risks different from, and possibly
greater than, the risks associated with investing directly in securities and other more traditional investments. Moreover, although
the value of a derivative is based on an underlying indicator, a derivative does not carry the same rights as would be the case
if a Fund invested directly in the underlying securities.
Derivatives are subject
to a number of risks, such as potential changes in value in response to market developments or as a result of the counterparty’s
credit quality and the risk that a derivative transaction may not have the effect the Adviser anticipated. Derivatives also involve
the risk of mispricing or improper valuation and the risk that changes in the value of a derivative may not correlate perfectly
with the underlying indicator. Derivative transactions can create investment leverage, may be highly volatile, and a Fund could
lose more than the amount it invests. The use of derivatives may increase the amount and affect the timing and character of taxes
payable by shareholders of a Fund.
Swaps. The
use of swap agreements entails certain risks, which may be different from, and possibly greater than, the risks associated with
investing directly in the underlying asset for the swap agreement. For example, swap agreements may be subject to the risk of default
by a counterparty as a result of bankruptcy or otherwise, which may cause a Fund to lose payments due by such counterparty altogether,
or collect only a portion thereof, which collection could involve additional costs or delays. Swap agreements may be subject to
liquidity risk, which exists when a particular swap is difficult to purchase or sell. If a swap transaction is particularly large
or if the relevant market is illiquid, it may not be possible to initiate a transaction or liquidate a position at an advantageous
time or price, which may result in significant losses to a Fund. In addition, a swap transaction may be subject to a Fund’s
limitation on illiquid investments. Swap agreements may be subject to pricing risk, which exists when a particular swap agreement
becomes extraordinarily expensive (or inexpensive) relative to historical prices or the prices of corresponding cash market instruments.
The swaps market is a relatively new market and is largely unregulated. It is possible that developments in the swaps market, including
potential government regulation, could adversely affect a Fund’s ability to terminate existing swap agreements or to realize
amounts to be received under such agreements.
Options. An
option is a contract that provides the holder the right to buy or sell shares at a fixed price, within a specified period of time.
A call option gives the option holder the right to buy the underlying security from the option writer at the option exercise price
at any time prior to the expiration of the option. A put option gives the option holder the right to sell the underlying security
to the option writer at the option exercise price at any time prior to the expiration of the option. A decision as to whether,
when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful
because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower
total returns.
Warrants. Warrants
are equity securities in the form of options issued by a corporation which give the holder the right to purchase stock, usually
at a price that is higher than the market price at the time the warrant is issued. A purchaser takes the risk that the warrant
may expire worthless because the market price of the common stock fails to rise above the price set by the warrant.
Leverage Risk.
To the extent that a Fund borrows money or utilizes certain derivatives, it may be leveraged. Leveraging generally exaggerates
the effect on NAV of any increase or decrease in the market value of a Fund’s portfolio securities.
Short History of
an Active Market/No Guarantee of Active Trading Market. Each Fund is an organized series of the Trust. While Shares are listed
on the Exchange, there can be no assurance that active trading markets for the Shares will be maintained. The distributor of each
Fund’s Shares (the “Distributor”), does not maintain a secondary market in the Shares.
Trading Issues.
Trading in Shares on the Exchange may be halted due to market conditions or for reasons that, in the view of the Exchange,
make trading in Shares inadvisable. In addition, trading in Shares on the Exchange is subject to trading halts caused by extraordinary
market volatility pursuant to the Exchange’s “circuit breaker” rules. There can be no assurance that the requirements
of the Exchange necessary to maintain the listing of a Fund will continue to be met or will remain unchanged.
During a “flash
crash” the market prices of a Fund’s shares may decline suddenly and significantly. Such a decline may not reflect
the performance of the portfolio securities held by a Fund. Flash crashes may cause Authorized Participants and other market makers
to limit or cease trading in a Fund’s shares for temporary or longer periods. Shareholders could suffer significant losses
to the extent that they sell shares at these temporarily low market prices.
TAX ADVANTAGED PRODUCT
STRUCTURE
Unlike many conventional
mutual funds which are only bought and sold at closing NAVs, the Shares of each Fund have been designed to be tradable in a secondary
market on an intra-day basis and to be created and redeemed principally in-kind in Creation Units at each day’s market close.
These in-kind arrangements are designed to mitigate adverse effects on each Fund’s portfolio that could arise from frequent
cash purchase and redemption transactions that affect the NAV of a Fund. Moreover, in contrast to conventional mutual funds, where
frequent redemptions can have an adverse tax impact on taxable shareholders because of the need to sell portfolio securities which,
in turn, may generate taxable gain, the in-kind redemption mechanism of a Fund, to the extent used, generally is not expected to
lead to a tax event for shareholders that are not being redeemed. However, buying and selling shares of a Fund is a taxable event.
PORTFOLIO HOLDINGS
A description of the
Trust’s policies and procedures with respect to the disclosure of each Fund’s portfolio securities is available in
the Funds’ SAI and is located on the Funds’ website.
MANAGEMENT OF THE
FUNDS
Board of Trustees.
The Board of Trustees of the Trust has the responsibility for the general oversight of the management of the Funds, including
general supervision of the Adviser and other service providers, but is not involved in the day-to-day management of the Trust.
A list of the Trustees and the Trust officers, and their present positions and principal occupations, is provided in the Funds’
Statement of Additional Information (“SAI”).
Investment Adviser.
Renaissance Capital LLC serves as the investment adviser for the Funds. Subject to the supervision of the Board of Trustees,
the Adviser is responsible for the day-to-day investment management of each Fund and the Funds’ business affairs and administrative
matters. The Adviser has been an investment adviser since 1998 and also acts as the adviser to separately managed institutional
accounts. The Adviser is affiliated with the Index Provider, and uses an independent third party to calculate each index. The Adviser’s
principal business address is 165 Mason Street, Greenwich, CT 06830. A discussion regarding the Board of Trustees’ approval
of the Investment Management Agreement entered into between the Trust, on behalf of each Fund, and the Adviser, is available in
the Trust’s semi-annual report for the period ended March 31, 2019.
Pursuant to a Supervision
and Administration Agreement and, subject to the general supervision of the Board of Trustees of the Trust, the Adviser provides
or causes to be furnished, all supervisory, administrative and other services reasonably necessary for the operation of the Funds
and also bears the cost of various third-party services required by the Funds, including audit, certain custody, portfolio accounting,
legal, transfer agency and printing costs. The Supervision and Administration Agreement also requires the Adviser to provide investment
advisory services to the Funds pursuant to the Investment Management Agreement.
For providing investment
advisory, supervisory and administrative services to the Funds, the Adviser reserves a monthly management fee equal to 0.60% of
the IPO ETF’s average daily net assets and 0.80% of the International IPO ETF’s average daily net assets, pursuant
to an all-in fee structure.
In addition, each
Fund bears other fees and expenses that are not covered by the Supervision and Administration Agreement, which may vary and will
affect the total expense ratio of the Fund, such as taxes, brokerage fees, commissions and other transaction expenses, interest
and extraordinary expenses (such as litigation and indemnification expenses). The Adviser may earn a profit on the management fee
paid by a Fund. Also, the Adviser, and not Fund shareholders, would benefit from any price decreases in third-party services, including
decreases resulting from an increase in net assets.
Administrator,
Custodian and Transfer Agent. State Street Bank and Trust Company is the administrator for the Funds and provides transfer
agency and fund accounting services to each Fund (the “Administrator”), and State Street Bank and Trust Company is
the custodian of each Fund’s assets. The Administrator is also responsible for certain
clerical,
recordkeeping and/or bookkeeping services which are provided pursuant to the Investment Management Agreement.
Distributor. Foreside
Fund Services, LLC is the Distributor of the Shares. The Distributor will not distribute Shares in less than Creation Units, and
does not maintain a secondary market in the Shares. The Shares are traded in the secondary market.
DISTRIBUTION AND
SERVICE PLAN
The Board of Trustees
of the Trust has adopted a distribution and services plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under
the Plan, each Fund is authorized to pay distribution fees in connection with the sale and distribution of its Shares and pay service
fees in connection with the provision of ongoing services to shareholders and the maintenance of shareholder accounts in an amount
up to 0.25% of the Fund’s average daily net assets each year.
No Rule 12b-1 fee
is currently paid by the Funds, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are
charged in the future, because these fees are paid out of Fund assets on an ongoing basis, these fees will increase the cost of
your investment in a Fund. By purchasing Shares subject to distribution fees and service fees, you may pay more over time than
you would by purchasing Shares with other types of sales charge arrangements. Long term shareholders may pay more than the economic
equivalent of the maximum front-end sales charge permitted by the rules of FINRA. The net income attributable to Shares will be
reduced by the amount of distribution fees and service fees and other expenses of the Fund.
PORTFOLIO MANAGER
The portfolio manager
who currently has responsibility for the day-to-day management of each Fund’s portfolio is William K. Smith. Mr. Smith is
a co-founder and officer of the Adviser and has been with the Adviser since 1991. Mr. Smith also serves as portfolio manager and
head trader for all of the ETFs. See the Funds’ SAI for additional information about the portfolio manager’s compensation,
other accounts managed by the portfolio manager and his ownership of Shares of the Funds.
SHAREHOLDER
INFORMATION
DETERMINATION OF
NAV
The price of a share
in a Fund is based on the net asset value (“NAV”), and is determined as of the end of regular trading hours on the
New York Stock Exchange (generally 4:00 p.m. Eastern Time) on days that the New York Stock Exchange is open. The NAV per share
is determined by dividing the market value of a Fund’s securities as of the close of trading plus any cash or other assets
(including dividends and accrued interest) less all liabilities (including accrued expenses) by the number of the Fund’s
shares outstanding. The New York Stock Exchange is closed on weekends and New Year’s Day, Martin Luther King, Jr. Day, Presidents’
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
In calculating NAV,
portfolio securities are valued at the last current sales price on the market where the security is normally traded, unless that
price is not representative of market values. This could be the case, for example, if, after the close of the market, an event
took place that had a major impact on the price of a Fund’s securities.
A Fund may, from time
to time, purchase securities for which market quotations are unreliable or are not readily available. Securities for which market
quotations are unreliable or not readily available will be valued at fair value as determined in good faith, and pursuant to procedures
adopted by the Board of Trustees. These procedures consider, among a variety of other factors, the following factors in determining
a security’s fair value: market prices for the security (or securities) deemed comparable; dealer valuations of the security
(or securities) deemed comparable; and determinations of value by other pricing services for the security (or securities) deemed
comparable.
The Administrator
and the Adviser are charged with the responsibility of identifying each such security and advising the Fair Value Committee that
a security requires a fair valuation. The Fair Value Committee consists of two representatives of the Adviser and one representative
of the Trust. The Adviser shall determine a methodology for valuing the security, including the information and sources of information
that shall be used to value the security, and calculate the value of the security based on the gathered information. The Adviser
will recommend such methodology to the Fair Value Committee, who will review the recommendation and vote on whether or not to adopt
the methodology.
The valuation of a
particular security depends upon the circumstances of each individual case, and all appropriate factors relevant to the value of
the security will be considered.
BUYING AND SELLING
EXCHANGE-TRADED SHARES
The Shares of each
Fund are listed on the Exchange. If you buy or sell Shares in the secondary market, you will incur customary brokerage commissions
and charges and may pay some or all of the spread between the bid and the offered price in the secondary market on each leg of
a round trip (purchase and sale) transaction. In times of severe market disruption or low trading volume in a Fund’s Shares,
this spread can increase significantly. It is anticipated that the Shares will trade in the secondary market at prices that may
differ to varying degrees from the NAV of the Shares. During periods of disruptions to creations and redemptions or the existence
of extreme market volatility, the market prices of Shares are more likely to differ significantly from the Shares’ NAV.
The Depository Trust
Company (“DTC”) serves as securities depository for the Shares. (The Shares may be held only in book-entry form; stock
certificates will not be issued.) DTC, or its nominee, is the record or registered owner of all outstanding Shares. Beneficial
ownership of Shares will be shown on the records of DTC or its participants (described below). Beneficial owners of Shares are
not entitled to have Shares registered in their names, will not receive or be entitled to receive physical delivery of certificates
in definitive form and are not considered the registered holder thereof. Accordingly, to exercise any rights of a holder of Shares,
each beneficial owner must rely on the procedures of: (i) DTC; (ii) “DTC Participants,” i.e., securities brokers and
dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives)
own DTC; and (iii) “Indirect Participants,” i.e., brokers, dealers, banks and trust companies that clear through or
maintain a custodial relationship with a DTC Participant, either directly or indirectly, through which such beneficial owner holds
its interests. The Trust understands that under existing industry practice, in the event the Trust requests any action of holders
of Shares, or a beneficial owner desires to take any action that DTC, as the record owner of all outstanding Shares, is entitled
to take, DTC would authorize the DTC Participants to take such action and that the DTC Participants would authorize the Indirect
Participants and beneficial owners acting through such DTC Participants to take such action and would otherwise act upon the instructions
of beneficial owners owning through them. As described above, the Trust recognizes DTC or its nominee as the owner of all Shares
for all purposes. For more information, see the section entitled “Book Entry Only System” in the Funds’ SAI.
Market Timing and
Related Matters. The Funds impose no restrictions on the frequency of purchases and redemptions. The Board of Trustees considered
the nature of each Fund (i.e., a fund whose shares trade intraday), that the Adviser monitors the trading activity of authorized
participants for patterns of abusive trading, that each Fund reserves the right to reject orders that may be disruptive to the
management of or otherwise not in that Fund’s best interests, and that each Fund may fair value certain of its securities.
Given this structure, the Board of Trustees determined that it is not necessary to impose restrictions on the frequency of purchases
and redemptions for the Funds at the present time.
DISTRIBUTIONS
Net Investment
Income and Capital Gains. As a shareholder of a Fund, you are entitled to your share of a Fund’s distributions of net
investment income and net realized capital gains on its investments. Each Fund pays out substantially all of its net earnings to
its shareholders as “distributions.”
A Fund typically earns
income dividends from stocks and interest from debt securities. These amounts, net of expenses, are typically passed along to Fund
shareholders as dividends from net investment income. A Fund realizes capital gains or losses whenever it sells securities. Net
capital gains are distributed to shareholders as “capital gain distributions.”
Net investment income,
if any, and net capital gains, if any, are distributed to shareholders at least annually. Dividends may be declared and paid more
frequently to improve index tracking or to comply with the distribution requirements of the Internal Revenue Code. In addition,
a Fund may determine to distribute at least annually amounts representing the full dividend yield net of expenses on the underlying
investment securities, as if the Fund owned the underlying investment securities for the entire dividend period in which case some
portion of each distribution may result in a return of capital, which, for tax purposes, is treated as a return of your investment
in Shares.
Distributions in cash
may be reinvested automatically in additional Shares of a Fund only if the broker through which you purchased Shares makes such
option available.
TAX INFORMATION
As with any investment,
you should consider how your Fund investment will be taxed. The tax information in this Prospectus is provided as general information.
You should consult your own tax professional about the tax consequences of an investment in a Fund, including the possible application
of foreign, state and local taxes. Unless your investment in a Fund is through a tax-exempt entity or tax-advantaged retirement
account, such as a 401(k) plan, you need to be aware of the possible tax consequences when: (i) the Fund makes distributions, (ii)
you sell Shares in the secondary market or (iii) you create or redeem Creation Units.
Taxes on Distributions.
As noted above, each Fund expects to distribute net investment income, if any, at least annually, and any net realized long-term
or short-term capital gains, if any, annually. A Fund may also pay a special distribution at any time to comply with U.S. federal
tax requirements.
In general, your distributions
are subject to U.S. federal income tax when they are paid, whether you take them in cash or reinvest them in a Fund. Distributions
of net investment income, including any net short-term gains, if any, are generally taxable as ordinary income. Whether distributions
of capital gains represent long-term or short-term capital gains is determined by how long a Fund owned the investments that generated
them, rather than how long you have owned your Shares. Distributions of net short-term capital gains in excess of net long–term
capital losses, if any, are generally taxable as ordinary income. Distributions of net long-term capital gains in excess of net
short-term capital losses, if any, that are properly reported as capital gain dividends are generally taxable as long-term capital
gains.
Each Fund may receive
dividends, the distribution of which a Fund may report as qualified dividends. In the event that a Fund receives such a dividend
and reports the distribution of such dividend as a qualified dividend, the dividend may be taxed at the long-term capital gains
rates, provided holding period and other requirements are met at both the shareholder and Fund level.
Distributions in
excess of a Fund’s current and accumulated earnings and profits are treated as a tax-free return of your investment to the
extent of your basis in the Shares, and generally as capital gain thereafter. A return of capital, which for tax purposes is treated
as a return of your investment, reduces your basis in Shares (but not below zero), thus reducing any loss or increasing any gain
on a subsequent taxable disposition of Shares. A distribution will reduce a Fund’s NAV per Share and may be taxable to you
as ordinary income or capital gain even though, from an economic standpoint, the distribution may constitute a return of capital.
Dividends, interest
and gains from non-U.S. investments of a Fund may give rise to withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may, in some cases, reduce or eliminate such taxes.
Prior to purchasing
shares of the Fund, prospective shareholders (except for tax qualified retirement plans) should consider the impact of dividends
or capital gains distributions that are expected to be announced, or have been
announced
but not paid. Any such dividends or capital gains distributions paid shortly after a purchase of shares by an investor prior to
the record date will have the effect of reducing the per share net asset value by the amount of the dividends or distributions.
All or a portion of such dividends or distributions, although in effect is a return of capital for such a recent purchaser, is
subject to taxation.
If more than 50% of
a Fund’s total assets at the end of its taxable year consist of foreign securities, a Fund may elect to “pass through”
to its investors certain foreign income taxes paid by a Fund, with the result that each investor will (i) include in gross income,
as an additional dividend, even though not actually received, the investor’s pro rata share of that Fund’s foreign
income taxes, and (ii) either deduct (in calculating U.S. taxable income) or credit (in calculating U.S. federal income), subject
to certain holding period and other limitations, the investor’s pro rata share of a Fund’s foreign income taxes.
Backup Withholding.
You may be subject to backup withholding on your distributions and proceeds if you have not provided a taxpayer identification
number or social security number or otherwise established a basis for exemption from backup withholding. The backup withholding
rate for individuals is currently 24%. This is not an additional tax and may be refunded, or credited against your U.S. federal
income tax liability, provided certain required information is furnished to the Internal Revenue Service.
Taxes on the Sale
or Cash Redemption of Exchange Listed Shares. Currently, any capital gain or loss realized upon a sale of Shares is generally
treated as long-term capital gain or loss if the Shares have been held for more than one year and as a short-term capital gain
or loss if held for one year or less. However, any capital loss on a sale of Shares held for six months or less is treated as long-term
capital loss to the extent that capital gain dividends were paid with respect to such Shares. The ability to deduct capital losses
may be limited. To the extent that a Fund shareholder’s Shares are redeemed for cash, this is normally treated as a sale
for tax purposes.
Taxes on Creations
and Redemptions of Creation Units. A person who exchanges equity securities for Creation Units generally will recognize a
gain or loss. The gain or loss will be equal to the difference between the market value of the Creation Units at the time of exchange
(plus any cash received by the exchanger as part of the issue) and the exchanger’s aggregate basis in the securities surrendered
(plus any cash paid by the exchanger as part of the issue). A person who exchanges Creation Units for equity securities generally
will recognize a gain or loss equal to the difference between the exchanger’s basis in the Creation Units (plus any cash
paid by the exchanger as part of the redemption) and the aggregate market value of the securities received (plus any cash received
by the exchanger as part of the redemption). The Internal Revenue Service, however, may assert that a loss realized upon an exchange
of primarily securities for Creation Units cannot be deducted currently under the rules governing “wash sales,” or
on the basis that there has been no significant change in economic position. Persons exchanging securities for Creation Units or
redeeming Creation Units should consult their own tax adviser with respect to whether wash sale rules apply and when a loss might
be deductible and the tax treatment of any creation or redemption transaction.
Under current U.S.
federal income tax laws, any capital gain or loss realized upon a redemption (or creation) of Creation Units is generally treated
as long-term capital gain or loss if the Shares (or securities surrendered) have been held for more than one year and as a short-term
capital gain or loss if the Shares (or securities surrendered) have been held for one year or less, assuming that such Creation
Units are held as a capital asset.
If you create or redeem
Creation Units, you will be sent a confirmation statement showing how many Shares you created or sold and at what price.
Medicare Tax.
An additional 3.8% Medicare tax is imposed on certain net investment income (including ordinary dividends and capital gain distributions
received from a Fund and net gains from redemptions or other taxable dispositions of Fund Shares) of U.S. individuals, estates
and trusts to the extent that such person’s “modified adjusted gross income” (in the case of an individual) or
“adjusted gross income” (in the case of an estate or trust) exceeds certain threshold amounts.
Non-U.S. Shareholders.
If you are not a citizen or resident alien of the United States, a Fund’s ordinary income dividends (which include distributions
of net short-term capital gains) will generally be subject to a 30% U.S.
withholding
tax, unless a lower treaty rate applies, such income is effectively connected with a U.S. trade or business, or a statutory exemption
applies. There are statutory exemptions in place for long-term capital gain dividends, interest-related dividends, and short-term
capital gain dividends received from a regulated investment company which meets the requirements of Internal Revenue Code Section
852(a) for the taxable year with respect to which the dividend is paid.
As part of the
Foreign Account Tax Compliance Act (“FATCA”), a withholding tax (at a 30% rate) is imposed on income dividends made
to certain non-U.S. entities that fail to comply (or be deemed compliant) with extensive reporting and withholding requirements
designed to inform the U.S. Department of the Treasury of U.S.-owned foreign investment accounts. After December 31, 2018, FATCA
withholding also would have applied to certain capital gain distributions, return of capital distributions and proceeds arising
from the sale of Fund shares; however, based on proposed regulations recently issued by the IRS, which can be relied upon currently,
such withholding is no longer required unless final regulations provide otherwise (which is not expected). Shareholders may be
requested to provide additional information to enable a withholding agent to determine whether withholding is required. A withholding
agent may be required to perform due diligence reviews to classify foreign entity investors for FATCA purposes. Investors are required
to agree to provide information necessary to allow a withholding agent to comply with FATCA rules. Any amount withheld from payments
pursuant to FATCA will reduce the amount distributed to the investor.
Non-U.S. shareholders
are advised to consult their tax advisors with respect to the particular tax consequences to them of an investment in a Fund, including
the possible applicability of the U.S. estate tax.
The foregoing discussion
summarizes some of the consequences under current U.S. federal income tax law of an investment in a Fund. It is not a substitute
for personal tax advice. Consult your own tax advisor about the potential tax consequences of an investment in a Fund under all
applicable tax laws.
THE
INDICES AND INDEX PROVIDER
THE INDICES
The Renaissance IPO Index is a rules
based, market capitalization weighted index intended to give investors a means of tracking the overall performance of companies
that have gone public on a recognized U.S. exchange in the last two years. Only companies with at least $100 million investable
market capitalization at the time of the IPO are eligible for inclusion in the IPO Index. The largest 80% of eligible companies
based upon full market capitalization are included in the IPO Index and weighted based upon float capitalization. Constituent stocks
are capped at 10% on any rebalancing date.
The Renaissance International
IPO Index is a rules based, market capitalization weighted index intended to give investors a means of tracking the overall performance
of companies that have gone public on a recognized non-U.S. exchange in the last two years. Only companies with at least $100 million
investable market capitalization at the time of the IPO are eligible for inclusion in the International IPO Index. The largest
80% of eligible companies based upon full market capitalization are included in the International IPO Index and weighted based
upon float capitalization. Constituent stocks are capped at 10% on any rebalancing date.
Each Index is calculated
and maintained by FTSE International Limited (the “Calculation Agent”) on behalf of the Index Provider. Index values
are calculated daily and are disseminated every 15 seconds throughout each trading day.
Each Index is calculated
using a capitalization weighting methodology, adjusted for float, which is modified so as to ensure compliance with the diversification
requirements of Subchapter M of the Internal Revenue Code. Each Index is reconstituted quarterly, at the close of business on the
third Friday in March, June, September and December, and companies are added and/or deleted based upon the Index eligibility criteria.
Sizable companies with recent stock exchange listings (i.e., recent initial public offerings) may be added to an Index on
a fast entry basis, provided the companies meet all eligibility criteria. The share weights of the components of each Index are
adjusted on a quarterly basis (every third Friday in a quarter-end month).
Rebalancing data,
including constituent weights and related information, is posted on the Index Provider’s website prior to the start of trading
on the first business day following the third Friday of the calendar quarter. A press announcement identifying additions and deletions
to each Index is issued on the Friday prior to a rebalancing date. Target share weights of the constituents remain constant between
quarters except in the event of certain types of corporate actions, including stock splits and reverse stock splits.
LICENSE AGREEMENT
AND DISCLAIMERS
The Adviser has entered
into a licensing agreement with Renaissance Capital International, LLC (the “Index Provider”) to use the Indices. The
Index Provider is a wholly owned subsidiary of the Adviser. Each Fund is entitled to use its Index pursuant to a sub-licensing
arrangement with the Adviser.
Shares of a Fund are
not sponsored, endorsed, sold or promoted by the Index Provider. The Index Provider makes no representation or warranty, express
or implied, to the owners of the Shares of a Fund or any member of the public regarding the advisability of investing in securities
generally or in the Shares of a Fund particularly or the ability of an Index to track the performance of its respective securities
markets. Each Index is determined and composed by the Index Provider without regard to the Adviser or the Shares of each Fund.
The Index Provider has no obligation to take the needs of the Adviser or the owners of the Shares of a Fund into consideration
in determining or composing an Index. The Index Provider is not responsible for and has not participated in the determination of
the timing of, prices at, or quantities of the Shares of a Fund to be issued or in the determination or calculation of the equation
by which the Shares of a Fund are to be converted into cash. The Index Provider has no obligation or liability in connection with
the administration, marketing or trading of the Shares of a Fund.
THE INDEX PROVIDER
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDICES OR ANY DATA INCLUDED THEREIN AND THE INDEX PROVIDER SHALL
HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. THE INDEX PROVIDER MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE ADVISER, OWNERS OF SHARES OF A FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDICES
OR ANY DATA INCLUDED THEREIN. THE INDEX PROVIDER MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDICES OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE INDEX PROVIDER HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Each Fund is not sponsored,
promoted, sold or supported in any other manner by the Calculation Agent nor does the Calculation Agent offer any express or implicit
guarantee or assurance either with regard to the results of using an Index and/or its trade mark or its price at any time or in
any other respect. Each Index is calculated and maintained by the Calculation Agent. The Calculation Agent uses its best efforts
to ensure that each Index is calculated correctly. Irrespective of its obligations towards the Index Provider, the Calculation
Agent has no obligation to point out errors in an Index to third parties including but not limited to investors and/or financial
intermediaries of a Fund. Neither publication of an Index by the Calculation Agent nor the licensing of an Index or its trade mark
for the purpose of use in connection with a Fund constitutes a recommendation by the Calculation Agent to invest capital in a Fund
nor does it in any way represent an assurance or opinion of the Calculation Agent with regard to any investment in a Fund. The
Calculation Agent is not responsible for fulfilling the legal requirements concerning the accuracy and completeness of a Fund’s
Prospectus.
PREMIUM/DISCOUNT
INFORMATION
Information regarding
how often the Shares of each Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at
a discount) the NAV of the Fund during the past four calendar quarters, as applicable, can be found at www.renaissancecapital.com.
GENERAL
INFORMATION
Continuous Offering
The method by which
Creation Units are created and traded may raise certain issues under applicable securities laws. Because new Creation Units are
issued and sold by the Trust on an ongoing basis, at any point a “distribution,” as such term is used in the Securities
Act may occur. Broker dealers and other persons are cautioned that some activities on their part may, depending on the circumstances,
result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject
them to the prospectus delivery and liability provisions of the Securities Act.
For example, a broker
dealer firm or its client may be deemed a statutory underwriter if it takes Creation Units after placing an order with the Distributor,
breaks them down into constituent Shares, and sells such Shares directly to customers, or if it chooses to couple the creation
of a supply of new Shares with an active selling effort involving solicitation of secondary market demand for Shares. A determination
of whether one is an underwriter for purposes of the Securities Act must take into account all the facts and circumstances pertaining
to the activities of the broker dealer or its client in the particular case, and the examples mentioned above should not be considered
a complete description of all the activities that could lead to a categorization as an underwriter.
Broker dealers who
are not “underwriters” but are participating in a distribution (as contrasted to ordinary secondary trading transactions),
and thus dealing with Shares that are part of an “unsold allotment” within the meaning of Section 4(3)(C) of the Securities
Act, would be unable to take advantage of the prospectus delivery exemption provided by Section 4(3) of the Securities Act. This
is because the prospectus delivery exemption in Section 4(3) of the Securities Act is not available in respect of such transactions
as a result of Section 24(d) of the 1940 Act. As a result, broker dealer firms should note that dealers who are not underwriters
but are participating in a distribution (as contrasted with ordinary secondary market transactions) and thus dealing with the Shares
that are part of an overallotment within the meaning of Section 4(3)(A) of the Securities Act would be unable to take advantage
of the prospectus delivery exemption provided by Section 4(3) of the Securities Act. Firms that incur a prospectus delivery obligation
with respect to Shares are reminded that, under Rule 153 of the Securities Act, a prospectus delivery obligation under Section
5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on the Exchange is satisfied by the fact that
the prospectus is available at the Exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available
with respect to transactions on an exchange.
Other Information
The Trust was organized
as a Delaware statutory trust on February 3, 1997. Its Declaration of Trust currently permits the Trust to issue an unlimited number
of Shares of beneficial interest. If shareholders are required to vote on any matters, each Share outstanding would be entitled
to one vote. Annual meetings of shareholders will not be held except as required by the 1940 Act and other applicable law. See
the Funds’ SAI for more information concerning the Trust’s form of organization. Section 12(d)(1) of the 1940 Act restricts
investments by investment companies in the securities of other investment companies, including Shares of the Fund. Registered investment
companies are permitted to invest in a Fund beyond the limits set forth in Section 12(d)(1) subject to certain terms and conditions
set forth in an SEC exemptive order issued to the Trust, including that such investment companies enter into an agreement with
the Trust.
Stradley Ronon Stevens
& Young, LLP serves as counsel to the Trust, including the Funds. Tait, Weller & Baker LLP serves as the Trust’s
independent registered public accounting firm and will audit the Fund’s financial statements annually.
FINANCIAL
HIGHLIGHTS
The Financial Highlights table is intended
to help you understand each Fund’s financial performance since inception. Certain information reflects financial results
for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment
in a Fund assuming reinvestment of all dividends and distributions. This information has been derived from each Fund’s financial
statements audited by Tait, Weller & Baker LLP whose report, along with each Fund’s financial statements, are included
in the Funds’ annual report, which is available upon request. The financial information included in this table should be
read in conjunction with the financial statements in the annual report, which are incorporated by reference in the SAI.
Renaissance IPO ETF
|
For a Share Outstanding Throughout Each Period
|
|
|
|
Year
Ended September 30,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Net
Assets Value, Beginning of Period
|
|
$
|
30.26
|
|
|
$
|
26.61
|
|
|
$
|
21.15
|
|
|
$
|
19.96
|
|
|
$
|
22.98
|
|
|
Income
(Loss) From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment
Income(1)
|
|
|
0.16
|
|
|
|
0.13
|
|
|
|
0.13
|
|
|
|
0.08
|
|
|
|
0.07
|
|
|
Net Realized
and Unrealized Gain (Loss)
|
|
|
(2.10
|
)
|
|
|
3.63
|
|
|
|
5.45
|
|
|
|
1.21
|
|
|
|
(2.57
|
)
|
|
Total
from Investment Operations
|
|
|
(1.94
|
)
|
|
|
3.76
|
|
|
|
5.58
|
|
|
|
1.29
|
|
|
|
(2.50
|
)
|
|
Other Capital(1)
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
*
|
|
|
0.00
|
*
|
|
Distribution
to Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From Net
Investment Income
|
|
|
(0.08
|
)
|
|
|
(0.11
|
)
|
|
|
(0.12
|
)
|
|
|
(0.10
|
)
|
|
|
(0.07
|
)
|
|
From Realized
Gain on Investments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.45
|
)
|
|
Net
Asset Value, End of Period
|
|
$
|
28.24
|
|
|
$
|
30.26
|
|
|
$
|
26.61
|
|
|
$
|
21.15
|
|
|
$
|
19.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Return(2)
|
|
|
(6.43
|
)%
|
|
|
14.13
|
%
|
|
|
26.45
|
%
|
|
|
6.50
|
%
|
|
|
(11.18
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
and Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets,
End of Period (000s)
|
|
$
|
42,367
|
|
|
$
|
19,668
|
|
|
$
|
14,638
|
|
|
$
|
12,691
|
|
|
$
|
20,956
|
|
|
Ratio of
Net Expenses to Average Net Assets
|
|
|
0.60
|
%
|
|
|
0.60
|
%
|
|
|
0.60
|
%
|
|
|
0.60
|
%
|
|
|
0.60
|
%
|
|
Ratio of
Net Investment Income to Average Net Assets
|
|
|
0.53
|
%
|
|
|
0.45
|
%
|
|
|
0.57
|
%
|
|
|
0.41
|
%
|
|
|
0.30
|
%
|
|
Portfolio
Turnover Rate(3)
|
|
|
92
|
%
|
|
|
192
|
%
|
|
|
159
|
%
|
|
|
109
|
%
|
|
|
86
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Calculated using average shares method.
|
|
|
|
|
|
|
(2)
|
Total return is calculated assuming a purchase of shares at net asset value on the first day and a sale at net asset value on the last day of each period reported. Distributions are assumed, for the purpose of this calculation, to be reinvested at net asset value per share on the payment date. Total return for periods of less than one year is not annualized. Broker commission charges are not included in this calculation.
|
|
|
|
|
|
|
(3)
|
Portfolio turnover rate excludes securities received or delivered from in-kind processing of creations or redemptions.
|
|
|
|
|
|
|
*
|
Per share amount represents less than $0.005 per share.
|
Renaissance International IPO ETF
FINANCIAL HIGHLIGHTS
|
For a Share Outstanding Throughout Each Period
|
|
|
|
|
|
|
Period
Ended
|
|
|
|
|
Year
Ended September 30,
|
|
|
September
30,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015(1)
|
|
|
Net
Assets Value, Beginning of Period
|
|
$
|
22.47
|
|
|
$
|
23.00
|
|
|
$
|
19.50
|
|
|
$
|
19.13
|
|
|
$
|
20.00
|
|
|
Income
(Loss) From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment
Income(2)
|
|
|
0.29
|
|
|
|
0.22
|
|
|
|
0.26
|
|
|
|
0.37
|
|
|
|
0.24
|
|
|
Net Realized
and Unrealized Gain (Loss)
|
|
|
(0.20
|
)
|
|
|
(0.54
|
)
|
|
|
3.45
|
|
|
|
0.31
|
|
|
|
(0.87
|
)
|
|
Total
from Investment Operations
|
|
|
0.09
|
|
|
|
(0.32
|
)
|
|
|
3.71
|
|
|
|
0.68
|
|
|
|
(0.63
|
)
|
|
Distribution
to Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From Net
Investment Income
|
|
|
(0.19
|
)
|
|
|
(0.21
|
)
|
|
|
(0.21
|
)
|
|
|
(0.31
|
)
|
|
|
(0.24
|
)
|
|
From Realized
Gain on Investments
|
|
|
(0.80
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net
Asset Value, End of Period
|
|
$
|
21.57
|
|
|
$
|
22.47
|
|
|
$
|
23.00
|
|
|
$
|
19.50
|
|
|
$
|
19.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Return(3)
|
|
|
0.95
|
%
|
|
|
(1.43
|
)%
|
|
|
19.08
|
%
|
|
|
3.73
|
%
|
|
|
(3.24
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
and Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets,
End of Period (000s)
|
|
$
|
2,157
|
|
|
$
|
2,247
|
|
|
$
|
2,300
|
|
|
$
|
1,950
|
|
|
$
|
1,913
|
|
|
Ratio of
Net Expenses to Average Net Assets
|
|
|
0.80
|
%
|
|
|
0.80
|
%
|
|
|
0.80
|
%
|
|
|
0.80
|
%
|
|
|
0.80
|
% (4)
|
|
Ratio of
Net Investment Income to Average Net Assets
|
|
|
1.41
|
%
|
|
|
0.92
|
%
|
|
|
1.31
|
%
|
|
|
1.95
|
%
|
|
|
1.18
|
% (4)
|
|
Portfolio
Turnover Rate(5)
|
|
|
80
|
%
|
|
|
107
|
%
|
|
|
88
|
%
|
|
|
81
|
%
|
|
|
101
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Commenced operations October 6, 2014.
|
|
|
|
|
|
|
(2)
|
Calculated using average shares method.
|
|
|
|
|
|
|
(3)
|
Total return is calculated assuming a purchase of shares at net asset value on the first day and a sale at net asset value on the last day of each period reported. Distributions are assumed, for the purpose of this calculation, to be reinvested at net asset value per share on the payment date. Total return for periods of less than one year is not annualized. Broker commission charges are not included in this calculation.
|
|
|
|
|
|
|
(4)
|
Annualized.
|
|
|
|
|
|
|
(5)
|
Portfolio turnover rate excludes securities received or delivered from in-kind processing of creations or redemptions.
|
Additional Information
This Prospectus does
not contain all the information included in the Registration Statement filed with the SEC with respect to the Funds’ Shares.
The Funds’ Registration Statement, including this Prospectus, the Funds’ SAI and the exhibits are available on the
EDGAR database at the SEC’s website (http://www.sec.gov), and copies may be obtained, after paying a duplicating fee, by
electronic request at the following email address: publicinfo@sec.gov. These documents and other information concerning the Trust
also may be inspected at the offices of the Exchange.
The SAI for the Funds,
which has been filed with the SEC, provides more information about the Funds. The SAI for the Funds is incorporated herein by reference
and is legally part of the Funds’ Prospectus. Additional information about the Funds’ investments is available in the
Funds’ annual and semi-annual reports to shareholders. In the Funds’ annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected each Fund’s performance during its last fiscal year.
The SAI and the
Funds’ annual and semi-annual reports may be obtained without charge by writing to a Fund at Foreside Fund Services, LLC,
the Fund’s Distributor, at 3 Canal Plaza, Suite 100, Portland, Maine 04101, or by calling the Distributor at the following
number: Investor Information: 1-866-486-6645.
Shareholder inquiries
may be directed to a Fund in writing to 165 Mason Street, Greenwich, CT 06830 or by calling 1-866-486-6645.
|
The Funds’ SAI, annual and semi-annual reports are available at www.renaissancecapital.com.
|
|
|
SEC Registration Number: 333-21311
|
|
|
(Investment Company Act file no. 811-08049)
|
|
|
|
www.renaissancecapital.com
|
RENAISSANCE
CAPITAL GREENWICH FUNDS
ETF SERIES
STATEMENT
OF ADDITIONAL INFORMATION
January 31, 2020
This Statement of Additional Information
(“SAI”) is not a prospectus. It should be read in conjunction with the current Prospectus dated January 31, 2020 (the
“Prospectus”) for the Renaissance IPO ETF and the Renaissance International IPO ETF (each a “Fund” and
collectively the “Funds”) of Renaissance Capital Greenwich Funds (the “Trust”), as such Prospectus may
be revised or supplemented from time to time.
The financial statements and Report
of Independent Registered Public Accounting Firm for the fiscal year ended September 30, 2019 are contained in the Funds’
Annual Report to Shareholders (the “Annual Report”) and are hereby incorporated by reference into this SAI.
|
Fund
|
|
Principal U.S. Listing Exchange
|
|
|
Ticker
|
|
|
Renaissance IPO ETF
|
|
NYSE Arca, Inc.
|
|
|
IPO
|
|
|
Renaissance International IPO ETF
|
|
NYSE Arca, Inc.
|
|
|
IPOS
|
|
The Funds’
Prospectus is dated January 31, 2020. A copy of the Prospectus and Annual Report may be obtained
without charge by writing to the Trust at 165 Mason Street, Greenwich, CT 06830, calling 1-866-486-6645 or visiting www.renaissancecapital.com.
TABLE OF CONTENTS
Page
|
GENERAL DESCRIPTION OF THE TRUST
|
2
|
|
INVESTMENT POLICIES AND RESTRICTIONS
|
2
|
|
SPECIAL CONSIDERATIONS AND RISKS
|
7
|
|
EXCHANGE LISTING AND TRADING
|
9
|
|
BOARD OF TRUSTEES OF THE TRUST
|
10
|
|
PORTFOLIO HOLDINGS DISCLOSURE
|
14
|
|
QUARTERLY PORTFOLIO SCHEDULE
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14
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CODE OF ETHICS
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14
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PROXY VOTING POLICIES AND PROCEDURES
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14
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MANAGEMENT
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15
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BROKERAGE TRANSACTIONS
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19
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BOOK ENTRY ONLY SYSTEM
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20
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CREATION AND REDEMPTION OF CREATION UNITS
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21
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DETERMINATION OF NET ASSET VALUE
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33
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DIVIDENDS AND DISTRIBUTIONS
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33
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DIVIDEND REINVESTMENT SERVICE
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34
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CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
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34
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TAXES
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35
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CAPITAL STOCK AND SHAREHOLDER REPORTS
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39
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COUNSEL AND INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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39
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FINANCIAL STATEMENTS
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40
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LICENSE AGREEMENTS AND DISCLAIMERS
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40
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APPENDIX A PROXY VOTING POLICIES AND PROCEDURES
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A-1
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GENERAL
DESCRIPTION OF THE TRUST
The Trust is an open-end
management investment company. The Trust currently consists of two exchange traded funds (“ETFs”), the Renaissance
IPO ETF and the Renaissance International IPO ETF (each a “Fund” and collectively the “Funds”). Each Fund
is classified as a non-diversified management investment company under the Investment Company Act of 1940, as amended (“1940
Act”), and, as a result, is not required to meet certain diversification requirements under the 1940 Act. The Trust was organized
as a Delaware statutory trust on February 3, 1997. The shares of the Funds are referred to herein as “Shares.”
Each Fund offers and issues Shares at
its respective net asset value (“NAV”) only in aggregations of a specified number of Shares (each, a “Creation
Unit”). Similarly, Shares are redeemable by the Funds only in Creation Units. Creation Units of a Fund are issued and redeemed
generally in exchange for specified securities held by the Funds generally included in the
relevant Fund’s underlying index (the “Index”) (including any portion of such securities for which cash may be
substituted) and a specified cash payment. The Shares of each Fund are listed on the NYSE Arca, Inc. (the “Exchange”),
and trade in the secondary market at market prices that may differ from the Shares’ NAV. A Creation Unit consists of 50,000
Shares of a Fund. The Trust reserves the right to permit or require a “cash” option for creations and redemptions of
Shares of a Fund (subject to applicable legal requirements).
INVESTMENT
POLICIES AND RESTRICTIONS
Repurchase Agreements
Each
Fund may invest in repurchase agreements with commercial banks, brokers or dealers to generate income from its excess cash
balances and to invest securities lending cash collateral. A repurchase agreement is an agreement under which a Fund acquires a
money market instrument (generally a security issued by the U.S. Government or an agency thereof, a banker’s acceptance or
a certificate of deposit) from a seller, subject to resale to the seller at an agreed upon price and date (normally, the next business
day). A repurchase agreement may be considered a loan collateralized by securities. The resale price reflects an agreed upon interest
rate effective for the period the instrument is held by the Fund and is unrelated to the interest rate on the underlying instrument.
In these repurchase agreement transactions,
the securities acquired by a Fund (including accrued interest earned thereon) must have a total value at least equal to the value
of the repurchase agreement and are held by the Trust’s custodian bank until repurchased. In addition, the Trust’s
Board of Trustees (“Board” or “Trustees”) has established guidelines and standards for review of the creditworthiness
of any bank, broker or dealer counterparty to a repurchase agreement with a Fund. No more than an aggregate of 15% of a Fund’s
net assets will be invested in repurchase agreements having maturities longer than seven days.
The use of repurchase agreements involves
certain risks. For example, if the other party to the agreement defaults on its obligation to repurchase the underlying security
at a time when the value of the security has declined, the Fund may incur a loss upon disposition of the security. If the other
party to the agreement becomes insolvent and subject to liquidation or reorganization under the Bankruptcy Code or other laws,
a court may determine that the underlying security is collateral not within the control of the Fund and, therefore, the Fund may
incur delays in disposing of the security and/or may not be able to substantiate its interest in the underlying security and may
be deemed an unsecured creditor of the other party to the agreement.
Futures Contracts and Options
Futures contracts generally
provide for the future sale by one party and purchase by another party of a specified instrument, index or commodity at a specified
future time and at a specified price. Stock index futures contracts are settled daily with a payment by one party to the other
of a cash amount based on the difference between the level of the stock index specified in the contract from one day to the next.
Futures contracts are standardized as
to maturity date and underlying instrument
and are traded on futures exchanges. Each Fund may use futures contracts and options on futures contracts based on other indexes
or combinations of indexes that Renaissance Capital LLC (the “Adviser”) believes to be representative of each Fund’s
underlying index (each an “Index”).
An option is a contract
that provides the holder the right to buy or sell shares at a fixed price, within a specified period of time. An American call
option gives the option holder the right to buy the underlying security from the option writer at the option exercise price at
any time prior to the expiration of the option. An American put option gives the option holder the right to sell the underlying
security to the option writer at the option exercise price at any time prior to the expiration of the option.
Although futures contracts
(other than cash settled futures contracts including most stock index futures contracts) by their terms call for actual delivery
or acceptance of the underlying instrument or commodity, in most cases the contracts are closed out before the maturity date without
the making or taking of delivery. Closing out an open futures position is done by taking an opposite position (“buying”
a contract which has previously been “sold” or “selling” a contract previously “purchased”)
in an identical contract to terminate the position. Brokerage commissions are incurred when a futures contract position is opened
or closed.
Futures traders are required to make
a good faith margin deposit in cash or government securities with a broker or custodian to initiate and maintain open positions
in futures contracts. A margin deposit is intended to assure completion of the contract (delivery or acceptance of the underlying
instrument or commodity or payment of the cash settlement amount) if it is not terminated prior to the specified delivery date.
Brokers may establish deposit requirements which are higher than the exchange minimums. Futures contracts are customarily purchased
and sold on margin deposits which may range upward from less than 5% of the value of the contract being traded.
After a futures contract position is
opened, the value of the contract is marked-to-market daily. If the futures contract price changes to the extent that the margin
on deposit does not satisfy margin requirements, payment of additional “variation” margin will be required.
Conversely, a change in the contract
value may reduce the required margin, resulting in a repayment of excess margin to the contract holder. Variation margin payments
are made to and from the futures broker for as long as the contract remains open. The Funds expect to earn interest income on its
margin deposits.
A Fund may use futures contracts and
options thereon, together with positions in cash and money market instruments, to simulate full investment in its Index. Under
such circumstances, the Adviser may seek to utilize other instruments that it believes to be correlated to Index components or
a subset of the components. Liquid futures contracts may not be currently available for an Index.
Positions in futures
contracts and options may be closed out only on an exchange that provides a secondary market therefore. However, there can be no
assurance that a liquid secondary market will exist for any particular futures contract or option at any specific time. Thus, it
may not be possible to close a futures or options position. In the event of adverse price movements, a Fund would continue to be
required to make daily cash payments to maintain its required margin. In such situations, if a Fund has insufficient cash, it may
have to sell portfolio securities to meet daily margin requirements at a time when it may be disadvantageous to do so. In addition,
a Fund may be required to make delivery of the instruments underlying futures contracts they have sold.
Each Fund will seek
to minimize the risk that they will be unable to close out a futures or options contract by only entering into futures and options
for which there appears to be a liquid secondary market.
The risk of loss in
trading futures contracts or uncovered call options in some strategies (e.g., selling uncovered stock index futures contracts)
is potentially unlimited. A Fund does not plan to use futures and options contracts in this way. The risk of a futures position
may still be large as traditionally measured due to the low margin deposits required. In many cases, a relatively small price movement
in a futures contract may result in immediate and substantial loss or gain to the investor relative to the size of a required margin
deposit.
Futures are marked to
market daily. Utilization of futures transactions by a Fund involves the risk of imperfect or even negative correlation to an Index
if the index underlying the futures contracts differs from that Index. There is also the risk of loss by a Fund of margin deposits
in the event of bankruptcy of a broker with whom the Fund has an open position in the futures contract or option.
Certain financial futures
exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. The daily limit establishes
the maximum amount that the price of a futures contract may vary either up or down from the previous day’s settlement price
at the end of a trading session. Once the daily limit has been reached in a particular type of contract, no trades may be made
on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and therefore
does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions. Futures contract prices
have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt
liquidation of future positions and subjecting some futures traders to substantial losses.
Except as otherwise
specified in a Fund’s Prospectus or this SAI, there are no limitations on the extent to which a Fund may engage in transactions
involving futures and options thereon. Each Fund will take steps to prevent its futures positions from “leveraging”
its securities holdings. When a Fund has a long futures position, it will maintain with its custodian bank, cash or liquid securities
having a value equal to the notional value of the contract (less any margin deposited in connection with the position). When a
Fund has a short futures position, as part of a complex stock replication strategy each Fund will maintain with its custodian bank
assets substantially identical to those underlying the contract or cash and liquid securities (or a combination of the foregoing)
having a value equal to the net obligation of a Fund under the contract (less the value of any margin deposits in connection with
the position).
Swaps
Swap agreements are
contracts between parties in which one party agrees to make payments to the other party based on the change in market value or
level of a specified index or asset. In return, the other party agrees to make payments to the first party based on the return
of a different specified index or asset. Although swap agreements entail the risk that a party will default on its payment obligations
thereunder, a Fund seeks to reduce this risk by entering into agreements that involve payments no less frequently than quarterly.
The net amount of the excess, if any, of a Fund’s obligations over its entitlements with respect to each swap is accrued
on a daily basis and an amount of cash or highly liquid securities having an aggregate value at least equal to the accrued excess
is maintained in an account at the Trust’s custodian bank.
The use of such swap
agreements involves certain risks. For example, if the counterparty, under a swap agreement, defaults on its obligation to make
payments due from it as a result of its bankruptcy or otherwise, a Fund may lose such payments altogether or collect only a portion
thereof, which collection could involve costs or delays.
As
a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and related regulatory developments, which imposed
comprehensive regulatory requirements on swaps and swap market participants, certain categories of swaps, such as most types of
standardized interest rate and credit default swap index agreements, are subject to mandatory central clearing, and some of these
cleared swaps must be traded on an exchange or swap execution facility. It is expected that additional categories of swaps will
in the future be designated as subject to mandatory clearing and exchange trading. Mandatory clearing and exchange trading of additional
swaps will occur on a phased-in basis based on the type of market participant, Commodity Futures Trading Commission (“CFTC”)
approval of contracts for central clearing and public trading facilities making such cleared swaps available to trade. Some categories
of swaps may also be cleared and traded on exchanges on a voluntary basis. While the intent of these regulatory reforms requiring
clearing and exchange trading for swaps is to mitigate counterparty risk and increase liquidity and transparency in the swaps markets,
mandatory clearing and exchange trading may increase trading costs and impose other risks.
Warrants are equity securities in the
form of options issued by a corporation which give the holder the right, but not the obligation, to purchase stock, usually at
a price that is higher than the market price at the time the warrant is issued. A purchaser takes the risk that the warrant may
expire worthless because the market price of the common stock fails to rise above the price set by the warrant.
Convertible Securities
A convertible security is a bond, debenture,
note, preferred stock, right, warrant or other security that may be converted into or exchanged for a prescribed amount of common
stock or other security of the same or a different issuer or into cash within a particular period of time at a specified price
or formula. A convertible security generally entitles the holder to receive interest paid or accrued on debt securities or the
dividend paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Before conversion,
convertible securities generally have characteristics similar to both debt and equity securities. The value of convertible securities
tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value
of the underlying securities. Convertible securities ordinarily provide a stream of income with generally higher yields than those
of common stock of the same or similar issuers. Convertible securities generally rank senior to common stock in a corporation’s
capital structure but are usually subordinated to comparable nonconvertible securities. Convertible securities generally do not
participate directly in any dividend increases or decreases of the underlying securities although the market prices of convertible
securities may be affected by any dividend changes or other changes in the underlying securities.
Future Developments
A Fund may take advantage of opportunities
in the area of options, futures contracts, options on futures contracts, options on a Fund, warrants, swaps and any other investments
which are not presently contemplated for use or which are not currently available, but which may be developed, to the extent such
investments are considered suitable for a Fund by the Adviser. To the extent that there are future developments that a Fund may
take advantage of, adequate disclosure will be added to the prospectus as applicable under Principal or Additional Investment Strategies
or Risks.
Investment Restrictions
The Trust has adopted
the following investment restrictions as fundamental policies with respect to each Fund. These restrictions cannot be changed without
the approval of the holders of a majority of a Fund’s outstanding voting securities. For purposes of the 1940 Act, a majority
of the outstanding voting securities of a Fund means the vote, at an annual or a special meeting of the security holders of a Fund,
of the lesser of (1) 67% or more of the voting securities of a Fund present at such meeting, if the holders of more than 50% of
the outstanding voting securities of a Fund are present or represented by proxy, or (2) more than 50% of the outstanding voting
securities of a Fund. Under these restrictions:
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1.
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Each Fund may not make loans, except that a Fund may (i) lend portfolio
securities, (ii) enter into repurchase agreements, (iii) purchase all or a portion of an issue of debt securities, bank loan or
participation interests, bank certificates of deposit, bankers’ acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities and (iv) participate in an inter-fund lending program with other
registered investment companies;
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2.
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Each Fund may not borrow money, except as permitted under the 1940
Act, and as interpreted or modified by regulation from time to time. Under the 1940 Act, an investment company may borrow money
in an amount not exceeding 33 1/3% of its total assets (including the amount borrowed) less liabilities (other than borrowings);
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3.
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Each Fund may not issue senior securities, except as permitted under
the 1940 Act, and as interpreted or modified by regulation from time to time;
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4.
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Each Fund may not purchase a security (other than obligations of the
U.S. Government, its agencies or instrumentalities) if, as a result, 25% or more of its total assets would be invested in a single
issuer;
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5.
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Each Fund may not purchase or sell real estate, except that a Fund
may (i) invest in securities of issuers that invest in real estate or interests therein; (ii) invest in mortgage-related securities
and other securities that are secured by real estate or interests therein; and (iii) hold and sell real estate acquired by a Fund
as a result of the ownership of securities;
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6.
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Each Fund may not engage in the business of underwriting securities
issued by others, except to the extent that the Fund may be considered an underwriter within the meaning of the Securities Act
of 1933, as amended (the “Securities Act”), in the disposition of restricted securities or in connection with its investments
in other investment companies;
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7.
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Each Fund may not purchase or sell commodities, unless acquired as
a result of owning securities or other instruments, but it may purchase, sell or enter into financial options and futures, forward
and spot currency contracts, swap transactions and other financial contracts or derivative instruments and may invest in securities
or other instruments backed by commodities; and
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8.
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Each Fund may not purchase any security if, as a result of that purchase, 25% or more of its total
assets would be invested in securities of issuers having their principal business activities in the same industry, except that
a Fund will invest 25% or more of the value of its total assets in securities of issuers in any one industry or group of industries
if the index that a Fund replicates concentrates in an industry or group of industries. This limit does not apply to securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
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In addition to the investment
restrictions adopted as fundamental policies as set forth above, the Funds observe the following restrictions, which may be changed
by the Board without a shareholder vote. Each Fund will not:
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1.
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Make short sales of securities.
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2.
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Purchase any security on margin, except for such short-term loans as are necessary for clearance
of securities transactions. The deposit or payment by a Fund or initial or variation margin in connection with futures contracts
or related options thereon is not considered the purchase of a security on margin.
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3.
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Participate in a joint or joint-and-several basis in any trading account
in securities, although transactions for a Fund and any other account under common or affiliated management may be combined or
allocated between a Fund and such account.
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4.
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Purchase securities of open-end or closed-end investment companies
except in compliance with the 1940 Act, although a Fund may not acquire any securities of registered open-end investment companies
or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.
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In general, if a
percentage limitation is adhered to at the time of investment or contract, a later increase or decrease in percentage resulting
from any change in value or total or net assets will not result in a violation of such restriction, except that the percentage
limitations with respect to the borrowing of money will be continuously complied with.
Each Fund may not acquire any illiquid
investment if, immediately after the acquisition, the Fund would have invested more than 15% of its net assets in illiquid investments
that are assets. For purposes of this 15% limitation, illiquid investment means any investment that a Fund reasonably expects cannot
be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly
changing the market value of the investment, as determined pursuant to the 1940 Act and applicable rules and regulations thereunder.
Each Fund may invest
in securities not included in its Index, money market instruments or funds which reinvest exclusively in money market instruments,
in stocks that are in the relevant market but not that Index, and/or in combinations of certain stock index futures contracts,
options on such futures contracts, stock options, stock index options, options on the Shares, and stock index swaps and swaptions,
each with a view towards providing a Fund with exposure to the securities in the Index. These investments may be made to invest
uncommitted cash balances or, in limited circumstances, to assist in meeting shareholder redemptions of Creation Units.
SPECIAL
CONSIDERATIONS AND RISKS
A discussion of the
risks associated with an investment in each Fund is contained in the Funds’ Prospectus under the headings “Fund Summary—Principal
Risks of Investing in the Fund” and “Additional Information About the Funds’ Investment Strategies and Risks—Risks
of Investing in the Funds.” The discussion below supplements, and should be read in conjunction with, such sections of the
Funds’ Prospectus.
General
Investment in a Fund should be made
with an understanding that the value of a Fund’s portfolio securities may fluctuate in accordance with changes in the financial
condition of the issuers of the portfolio securities, the value of securities generally and other factors.
An investment in a Fund
should also be made with an understanding of the risks inherent in an investment in equity securities, including the risk that
the financial condition of issuers may become impaired or that the general condition of the stock market may deteriorate (either
of which may cause a decrease in the value of the portfolio securities and thus in the value of Shares). Common stocks are susceptible
to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of
their issuers change. These investor perceptions are based on various and unpredictable factors, including expectations regarding
government, economic, monetary and fiscal policies, inflation and interest rates, economic expansion or contraction, and global
or regional political, economic and banking crises.
Holders of common stocks
incur more risk than holders of preferred stocks and debt obligations because common stockholders, as owners of the issuer, have
generally inferior rights to receive payments from the issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Further, unlike debt securities which typically have a stated principal
amount payable at maturity (whose value, however, will be subject to market fluctuations prior thereto), or preferred stocks which
typically have a liquidation preference and which may have stated optional or mandatory redemption provisions, common stocks have
neither a fixed principal amount nor a maturity. Common stock values are subject to market fluctuations as long as the common stock
remains outstanding.
There can be no assurance
that a market will be made or maintained or that any such market will be or remain liquid. The price at which securities may be
sold and the value of a Fund’s Shares will be adversely affected if trading markets for a Fund’s portfolio securities
are limited or absent or if bid/ask spreads are wide.
Each Fund is not actively
managed by traditional methods, and therefore the adverse financial condition of any one issuer will not result in the elimination
of its securities from the securities held by a Fund unless the securities of such issuer are removed from its respective Index.
An investment in a Fund
should also be made with an understanding that a Fund will not be able to replicate exactly the performance of its Index because
the total return generated by the securities will be reduced by transaction costs incurred in adjusting the actual balance of the
securities and other Fund expenses, whereas such transaction costs and expenses are not included in the calculation of its respective
Index. It is also possible that for periods of time, a Fund may not fully replicate the performance of its Index due to the temporary
unavailability of certain Index securities in the secondary market or due to other extraordinary circumstances. It is also possible
that the composition of a Fund may not exactly replicate the composition of its Index if a Fund has to adjust its portfolio holdings
in order to continue to qualify as a “regulated investment company” under the U.S. Internal Revenue Code of 1986, as
amended (the “Internal Revenue Code”).
Regulatory developments affecting the exchange-traded
and OTC derivatives markets may impair a Fund’s ability to manage or hedge its investment portfolio through the use of derivatives.
The Dodd-Frank Act and the rules promulgated thereunder may limit the ability of a Fund to enter into one or more exchange-traded
or OTC derivatives transactions.
The Trust, on behalf
of each Fund, has filed a notice of eligibility with the National Futures Association claiming an exclusion from the definition
of the term “commodity pool operator” (“CPO”) under the Commodity Exchange Act (“CEA”). Therefore,
neither a Fund nor the Adviser (with respect to a Fund) is subject to registration or regulation as a commodity pool or CPO under
the CEA.
Each Fund’s use of derivatives may also
be limited by the requirements of the Internal Revenue Code, for qualification as a regulated investment company for U.S. Federal
income tax purposes.
With respect to investments in swap
transactions, commodity futures, commodity options or certain other derivatives used for purposes other than bona fide hedging
purposes, an investment company must meet one of the following tests under the amended regulations in order to claim an exemption
from being considered a “commodity pool” or CPO. First, the aggregate initial margin and premiums required to establish
an investment company’s positions in such investments may not exceed five percent (5%) of the liquidation value of the investment
company’s portfolio (after accounting for unrealized profits and unrealized losses on any such investments). Alternatively,
the aggregate net notional value of such instruments, determined at the time of the most recent position established, may not exceed
one hundred percent (100%) of the liquidation value of the investment company’s portfolio (after accounting for unrealized
profits and unrealized losses on any such positions). In addition to meeting one of the foregoing trading limitations, the investment
company may not market itself as a commodity pool or otherwise as a vehicle for trading in the commodity futures, commodity options
or swaps and derivatives markets. In the event that the Adviser is required to register as a CPO, the disclosure and operations
of a Fund would need to comply with all applicable CFTC regulations. Compliance with these additional registration and regulatory
requirements would increase operational expenses. Other potentially adverse regulatory initiatives could also develop. Harmonization
rules between the SEC and CFTC mitigate certain disclosure and operational burdens.
Shares are subject to the risks
of an investment in a portfolio of unseasoned equity securities in an economic region or industry sector in which an Index is highly
concentrated. In addition, because it is the policy of a Fund to generally invest in the securities that comprise its Index, the
portfolio of securities held by a Fund (“Fund Securities”) also will be concentrated in that economic sector or industry.
Due to the increased use of technologies such
as the Internet and a dependence on computer systems to perform business and operational functions, the Funds and their service
providers may be prone to operational and information security risks resulting from cyber-attacks and/or technological malfunctions.
In general, cyber-attacks are deliberate, but unintentional events may have similar effects. Cyber-attacks include, among others,
stealing or corrupting data maintained online or digitally, preventing legitimate users from accessing information or services
on a website, releasing confidential information without authorization, and causing operational disruption. Successful cyber-attacks
against, or security breakdowns of, a Fund or the investment adviser, accountant, custodian, transfer agent, index providers, Authorized
Participants (defined below) or other third-
party service providers may adversely impact
a Fund or its shareholders. For instance, cyber-attacks may interfere with the processing of shareholder transactions, affect a
Fund's ability to calculate its NAV, cause the release of private shareholder information or confidential Fund information, impede
trading, cause reputational damage, and subject a Fund to regulatory fines, penalties or financial losses, reimbursement or other
compensation costs, and additional compliance costs. Cyber-attacks may render records of Fund assets and transactions, shareholder
ownership of Fund Shares, and other data integral to the functioning of the Fund inaccessible or inaccurate or incomplete. A Fund
could incur substantial costs for cyber security risk management, prevention and/or resolution. Each Fund relies on third-party
service providers for many of its day-to-day operations, and will be subject to the risk that the protections and protocols implemented
by those service providers will be ineffective to protect the Fund from cyber-attack. Similar types of cyber security risks also
are present for issuers of securities in which each Fund invests, which could result in material adverse consequences for such
issuers, and may cause a Fund's investment in such securities to lose value.
EXCHANGE
LISTING AND TRADING
A discussion of exchange
listing and trading matters associated with an investment in each Fund is contained in the Funds’ Prospectus under the headings
“Fund Summary — Principal Risks of Investing in the Fund,” “Additional Information About the Funds’
Investment Strategies and Risks — Risks of Investing in the Funds,” “Shareholder Information — Determination
of NAV” and “Shareholder Information — Buying and Selling Exchange-Traded Shares.” The discussion below
supplements, and should be read in conjunction with, such sections of the Funds’ Prospectus.
The Shares of each Fund
are traded in the secondary market at prices that may differ to some degree from its NAV. The Exchange may but is not required
to remove the Shares of a Fund from listing if: (1) following the initial twelve-month period beginning upon the commencement of
trading of a Fund, there are fewer than 50 beneficial holders of the Shares, (2) the value of the Index or portfolio of securities
on which a Fund is based is no longer calculated or available, (3) a Fund’s underlying Index fails to meet certain continued
listing standards of the Exchange, or (4) such other event shall occur or condition exists that, in the opinion of the Exchange,
makes further dealings on the Exchange inadvisable. In addition, the Exchange will remove the Shares from listing and trading upon
termination of the Trust. There can be no assurance that the requirements of the Exchange necessary to maintain the listing of
Shares of a Fund will continue to be met.
As in the case of other
securities traded on the Exchange, brokers’ commissions on transactions will be based on negotiated commission rates at customary
levels.
In order to provide
investors with a basis to gauge whether the market price of the Shares on the Exchange is approximately consistent with the current
value of the assets of each Fund on a per Share basis, an updated Indicative Per Share Portfolio Value is disseminated intra-day
through the facilities of the Consolidated Tape Association’s Network B. Indicative Per Share Portfolio Values are disseminated
every 15 seconds during regular Exchange trading hours based on the most recently reported prices of Fund Securities. As the respective
international local markets close, the Indicative Per Share Portfolio Value will continue to be updated for foreign exchange rates
for the remainder of the U.S. trading day at the prescribed 15 second interval. The Funds are not involved in or responsible for
the calculation or dissemination of the Indicative Per Share Portfolio Value and make no warranty as to the accuracy of the Indicative
Per Share Portfolio Value.
BOARD
OF TRUSTEES OF THE TRUST
Trustees and Officers of the Trust
The Board of the Trust consists of three
Trustees, two of whom are not “interested persons” (as defined in the 1940 Act), of the Trust (the “Independent
Trustees”). Ms. Kathleen Shelton Smith, a Trustee who is an interested person, serves as Chairman of the Board. The Board
is responsible for overseeing the management and operations of the Trust, including general supervision of the duties performed
by the Adviser and other service providers to the Trust. The Adviser is responsible for the day-to-day administration and business
affairs of the Trust.
The Board believes that each Trustee’s
experience, qualifications, attributes or skills on an individual basis and in combination with those of the other Trustees lead
to the conclusion that the Board possesses the requisite skills and attributes to carry out its oversight responsibilities with
respect to the Trust. The Board believes that the Trustees’ ability to review, critically evaluate, question and discuss
information provided to them, to interact effectively with the Adviser, other service providers, counsel and independent auditors,
and to exercise effective business judgment in the performance of their duties, support this conclusion. The Board also has considered
the following experience, qualifications, attributes and/or skills, among others, of its members in reaching its conclusion: such
person’s character and integrity; length of service as a board member of the Trust; such person’s willingness to serve
and willingness and ability to commit the time necessary to perform the duties of a Trustee. In addition, the following specific
experience, qualifications, attributes and/or skills apply as to each Trustee: Mr. Greene has significant business and financial
experience, particularly in the investment management industry, where he has over 30 years of experience with trading and markets
through his involvement with the American Investors Fund and service as a board member of an investment trust; Mr. Auch has over
30 years of capital markets origination, investment sales management, financial product marketing and executive development expertise
at several major Wall Street firms, an affiliate of NBC and an executive search firm; and Ms. Smith has management and financial
expertise, including over 30 years of experience working with initial public offerings as an investment banker and portfolio manager
and service as Chairman, Chief Compliance Officer and Treasurer of various businesses of the Adviser, including Renaissance Capital
Investments, Inc., and Renaissance Capital International LLC. References to the experience, qualifications, attributes and skills
of Trustees are pursuant to requirements of the SEC, do not constitute holding out the Board or any Trustee as having any special
expertise or experience, and shall not impose any greater responsibility or liability on any such person or on the Board by reason
thereof.
The Trustees of the
Trust, their addresses, positions with the Trust, year of birth, term of office and length of time served, principal occupations
during the past five years, the number of portfolios in the Fund Complex overseen by each Trustee and other directorships, if any,
held by the Trustees, are set forth below.
Independent Trustees
|
Name, Address and Birth Year (a)
|
Position(s) Held with the Trust
|
Term of
Office and
Length of
Time Served (b)
|
Principal Occupation(s) During Past Five Years
|
Number of Portfolios in Fund Complex Overseen (c)
|
Other
Directorships
Held By
Trustee During
Past Five
Years
|
Warren K. Greene
1936 (d)
|
Trustee
|
Since December 1997
|
President – American
Investors Fund, LLC (July 2006-Present)
|
2
|
None
|
|
Walter E. Auch, Jr.
1945 (d)
|
Trustee
|
Since August 2013
|
Managing Director – Sophis Investments LLC (2018-Present);
Senior Vice President, H.J. Sims & Co., Inc. (2013-2016); Managing Director -
Auch Company LLC
(2001-2015);
|
2
|
None
|
(a) The address for each Trustee
and officer is 165 Mason Street, Greenwich, CT 06830.
(b) Each Trustee serves until
resignation, death, retirement or removal.
(c) The Fund Complex currently
consists of the Funds.
(d) Member of the Audit Committee.
Interested Trustees and
Officers
|
Name, Address and Birth Year (a)
|
Position(s) Held with the Trust
|
Term of Office and Length of Time Served (b)
|
Principal Occupation(s) During Past Five Years
|
Number of Portfolios in Fund Complex Overseen (c)
|
Other Directorships Held By Trustee During Past Five Years
|
|
Kathleen Shelton Smith
1954 (d)
|
Interested Trustee, Chairman, Secretary, Treasurer and Chief Compliance Officer
|
Since December 1997, Secretary since January 2020
|
Chairman and Chief Compliance Officer, Treasurer and Secretary of Renaissance Capital LLC, Renaissance Capital Investments, Inc. and Renaissance Capital International, LLC
|
2
|
None
|
|
William K. Smith
1951 (e)
|
President
|
Since December 1997
|
President, Chief Executive Officer and Director of Renaissance Capital LLC, Renaissance Capital Investments, Inc. and Renaissance Capital International, LLC
|
2
|
None
|
(a) The address for each Trustee and officer
is 165 Mason Street, Greenwich, CT 06830.
(b) Each Trustee serves until resignation,
death, retirement or removal.
(c) The Fund Complex currently consists of
the Funds.
(d) “Interested
person” of the Trust within the meaning of the 1940 Act. Ms. Smith is an officer of the Adviser and the spouse of William
K. Smith.
(e) Mr. Smith is the spouse of Kathleen Shelton
Smith.
The Board has an
Audit Committee consisting of two Trustees who are Independent Trustees. Messrs. Greene and Auch currently serve as members of
the Audit Committee and Mr. Greene has been designated as an “audit
committee financial expert”
as defined under Item 407 of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Mr. Greene is the Chairman of the Audit Committee. The Audit Committee has the responsibility, among other things, to: (i) oversee
the accounting and financial reporting processes of the Trust and its internal control over financial reporting; (ii) oversee the
quality and integrity of the Trust’s financial statements and the independent audit thereof; (iii) oversee or, as appropriate,
assist the Board’s oversight of the Trust’s compliance with legal and regulatory requirements that relate to the Trust’s
accounting and financial reporting, internal control over financial reporting and independent audit; (iv) approve prior to appointment
the engagement of the Trust’s independent registered public accounting firm and, in connection therewith, to review and evaluate
the qualifications, independence and performance of the Trust’s independent registered public accounting firm; and (v) act
as a liaison between the Trust’s independent registered public accounting firm and the full Board. During the fiscal year
ended September 30, 2019, there were two Audit Committee meetings.
The Board has a Nominating
Committee consisting of two Trustees who are Independent Trustees. Messrs. Greene and Auch currently serve as members of the Nominating
Committee. Mr. Auch is the Chairman of the Nominating Committee. The Nominating Committee has the responsibility to select and
nominate persons for election or appointment by the Board as Independent Trustees of the Trust. During the fiscal year ended September
30, 2019, the Nominating Committee did not meet.
The Independent Trustees
have the responsibility, among other things, to: (i) evaluate, as necessary, the composition of the Board, its committees and make
such recommendations to the Board as deemed appropriate by the Committee; (ii) review and define Independent Trustee qualifications;
(iii) review the qualifications of individuals serving as Trustees on the Board and its committees; (iv) evaluate, recommend and
nominate qualified individuals for election or appointment as members of the Board and recommend the appointment of members and
chairs of each Board committee; and (v) review and assess, from time to time, the performance of the committees of the Board and
report the results to the Board.
The Board is comprised of three individuals,
one of whom, Ms. Smith, is an “interested person” as defined in the 1940 Act. The other two Trustees, Messrs. Greene
and Auch, are not “interested persons.” The Chairman of the Board, Ms. Smith is an Interested Trustee. The Board does
not have a lead independent director as it believes that it is beneficial to have a representative of the Adviser as its Chairman.
Ms. Smith is also Chairman and Treasurer of the Adviser. Accordingly, the Board believes her participation in the deliberations
of the Board helps assure that the Board decisions are informed and appropriate and are accurately communicated to and implemented
by the Adviser.
The Board has determined that its leadership
structure is appropriate given the business and nature of the Trust. The Board believes that its structure facilitates the orderly
and efficient flow of information to the Trustees from the Adviser and other service providers with respect to services provided
to each Fund, potential conflicts of interest that could arise from these relationships and of the risks that a Fund may face.
The Board further believes that its structure allows all of the Trustees to participate in the full range of the Board’s
oversight responsibilities. The Board believes that the orderly and efficient flow of information and the ability to bring each
Trustee’s talents to bear in overseeing each Fund’s operations is important, in light of the size and complexity of
the Fund and the risks that the Fund faces. The Board reviews its structure regularly to help ensure that such structure remains
appropriate as the business and operations of each Fund, and the environment in which the Fund operates changes.
As an integral part
of its responsibility for oversight of the Trust in the interests of shareholders, the Board, as a general matter, oversees risk
management of the Trust’s investment programs and business affairs. The function of the Board with respect to risk management
is one of oversight and not active involvement in, or coordination of, day-to-day risk management activities for the Trust. The
Board recognizes that not all risks that may affect the Trust can be identified, that it may not be practical or cost- effective
to eliminate or mitigate certain risks, that it may be necessary to bear certain risks (such as investment-related risks) to achieve
the Trust’s goals, and that the processes, procedures and controls employed to address certain risks may be limited in their
effectiveness. Moreover, reports received
by the Trustees that may relate to risk management matters are typically summaries of the relevant information.
The Board exercises oversight of the
risk management process primarily through the Audit Committee, and through oversight by the Board itself. The Trust faces a number
of risks, such as investment-related and compliance risks. The Adviser’s personnel seek to identify and address risks, i.e.,
events or circumstances that could have material adverse effects on the business, operations, shareholder services, investment
performance or reputation of the Trust. Under the overall supervision of the Board or the applicable Committee of the Board, the
Trust, the Adviser, and the affiliates of the Adviser employ a variety of processes, procedures and controls to identify such possible
events or circumstances, to lessen the probability of their occurrence and/or to mitigate the effects of such events or circumstances
if they do occur. Different processes, procedures and controls are employed with respect to different types of risks.
Various personnel, including the Trust’s
Chief Compliance Officer, as well as various personnel of the Adviser and other service providers
such as the Trust’s independent accountants, may report to the Audit Committee and/or to the Board with respect to various
aspects of risk management, as well as events and circumstances that have arisen and responses thereto.
For each Trustee, the dollar range of equity
securities beneficially owned by the Trustee in the Trust and in all registered investment companies advised by the Adviser (“Family
of Investment Companies”) that are overseen by the Trustee is shown below.
|
Name of Trustee
|
Dollar Range of Equity
Securities in Renaissance IPO ETF (As of December 31, 2019)
|
Dollar Range of Equity
Securities in Renaissance
International IPO ETF (As of December 31, 2019)
|
Aggregate
Dollar Range of Equity Securities in all Registered Investment Companies Overseen By Trustee In Family of Investment Companies
(As of December 31, 2019)
|
|
Warren K. Greene
|
None
|
$1-$10,000
|
$1-$10,000
|
|
Walter E. Auch, Jr.
|
None
|
$1-$10,000
|
$1-$10,000
|
|
Kathleen Shelton Smith
|
>$100,000
|
>$100,000
|
>$100,000
|
As to each Independent
Trustee and his immediate family members, no person owned beneficially or of record securities in an investment manager or principal
underwriter of a Fund, or a person (other than a registered investment company) directly or indirectly controlling, controlled
by or under common control with the investment manager or principal underwriter of a Fund as of December 31, 2019.
Remuneration of Trustees
The Trust pays each
Independent Trustee a fee of $500 per meeting and $1,000 each quarter.
The table below shows
the compensation paid to the Trustees by the Trust for the fiscal year ending September 30, 2019. Annual Trustee fees may be reviewed
periodically and changed by the Independent Trustees.
|
Name
of Trustee
|
Aggregate
Compensation
From
the Trust
|
Pension
or Retirement Benefits Accrued as Part of Trust Expenses
|
Estimated
Annual Benefits Upon Retirement
|
Total
Compensation From the Trust and the Fund Complex Paid to Trustee (a)
|
|
Warren K. Greene
|
$6,000
|
None
|
None
|
$6,000
|
|
Walter E. Auch, Jr.
|
$6,000
|
None
|
None
|
$6,000
|
|
Kathleen Shelton Smith (b)
|
None
|
None
|
None
|
None
|
(a) The “Fund Complex” currently
consists of the Funds.
(b) “Interested person” under the
1940 Act.
PORTFOLIO
HOLDINGS DISCLOSURE
Each Fund’s holdings
are publicly disseminated each day the Fund is open for business through financial reporting and news services, including publicly
accessible Internet websites. In addition, a basket composition file, which includes the security names and share quantities to
deliver in exchange for Creation Units, together with estimates and actual cash components is publicly disseminated daily prior
to the opening of the Exchange via the National Securities Clearing Corporation (the “NSCC”), a clearing agency that
is registered with the SEC. The basket represents one Creation Unit of a Fund. The Trust, Adviser, Custodian and Distributor will
not disseminate non-public information concerning the Trust.
QUARTERLY
PORTFOLIO SCHEDULE
The
Trust is required to disclose, after its first and third fiscal quarters, the complete schedule of the Funds’ portfolio holdings
with the SEC on Form N-Q (or any successor Form). Form N-Q (or any successor Form) for the Funds is available on the SEC’s
website at http://www.sec.gov. The Funds’ Form N-Q (or any successor Form) is available
by writing to the Trust at 165 Mason Street, Greenwich, CT 06830.
CODE
OF ETHICS
The Trust and the Adviser have adopted
a joint Code of Ethics pursuant to Rule 17j-1 under the 1940 Act, designed to prevent violations of the anti-fraud provisions of
the securities laws by forbidding Access Persons (as defined in the Code of Ethics) from: (i) recommending to or causing a Fund
to acquire or dispose of any security in which such Access Person or its affiliate has direct or indirect beneficial ownership
without prior written disclosure; (ii) purchasing or selling any security which such person intends to recommend for purchase or
sale by a Fund until a Fund has completed all of its intended trades in that security; (iii) acquiring a security in a limited
offering or in an IPO without prior written approval from the Chief Compliance Officer of the Trust; and (iv) engaging in any transaction
involving securities which have undergone an initial public offering in the past thirty (30) calendar days. Access Persons may
not purchase securities in an initial public offering or private placement.
PROXY
VOTING POLICIES AND PROCEDURES
The Funds’ proxy
voting record is available upon request and on the SEC’s website at http://www.sec.gov. Proxies for the Funds’ portfolio
securities are voted in accordance with the Adviser’s proxy voting policies and procedures, which are set forth in Appendix
A to this SAI.
The Trust
is required to disclose annually a Fund’s complete proxy voting record on Form N-PX covering the period July 1 through June
30 and file it with the SEC no later than August 31. Form N-PX for the Funds is available by writing to the Funds at: 165
Mason Street, Greenwich, CT 06830. The Funds’ Form N-PX is also available on the SEC’s website at www.sec.gov.
MANAGEMENT
The following
information supplements and should be read in conjunction with the section in the Prospectus entitled “Additional
Information About the Funds’ Investment Strategies and Risks - Management of the Fund.”
Investment Adviser
Renaissance Capital LLC serves as the
investment adviser to the Trust, on behalf of the Funds, and, subject to the general supervision of the Board, is responsible for
the day-to-day investment management of the Funds. The Adviser is a private company with headquarters in Greenwich, CT and manages
separately managed accounts.
The Adviser serves as
investment adviser to each Fund pursuant to an investment management agreement between the Trust and the Adviser (the “Investment
Management Agreement”). Under the Investment Management Agreement, the Adviser, subject to the supervision of the Board and
in conformity with the stated investment policies of each Fund, manages the investment of each Fund’s assets. The Adviser
is responsible for placing purchase and sale orders and providing continuous supervision of the investment portfolio of the Funds.
Pursuant to a Supervision
and Administration Agreement between the Trust, on behalf of each Fund, and the Adviser, the Adviser oversees the operation of
each Fund, provides or causes to be furnished the advisory, supervisory, administrative, distribution, transfer agency, custody
and all other services necessary for a Fund to operate, and exercises day-to-day oversight over the Funds’ service providers.
Under the Supervision and Administration Agreement, the Adviser also bears all the fees and expenses incurred in connection with
its obligations under the Supervision and Administration Agreement, including, but not limited to, the costs of various third-party
services required by the Funds, including audit, certain custody, portfolio accounting, legal, transfer agency and printing costs,
except those fees and expenses specifically assumed by the Trust on behalf of a Fund.
Pursuant to the terms
of each of the Investment Management Agreement and the Supervision and Administration Agreement, the Trust has agreed to indemnify
the Adviser for certain liabilities, including certain liabilities arising under the federal securities laws, unless such loss
or liability results from willful misfeasance, bad faith or gross negligence in the performance of its duties or the reckless disregard
of its obligations and duties. The Investment Management Agreement also provides that the Adviser may engage in other businesses,
devote time and attention to any other business, whether of a similar or dissimilar nature, and render investment advisory services
to others.
Compensation. As compensation
for its services, the Adviser is paid a monthly management fee for providing investment advisory, supervisory, administrative and
other services each Fund requires under an all-in fee structure based on a percentage of a Fund’s average daily net assets
at the annual rate of 0.60% for Renaissance IPO ETF and 0.80% for Renaissance International IPO ETF. For the fiscal years ended
September 30, 2017, 2018, and 2019, respectively, the Adviser was paid $80,926, $111,517, and $199,905 in management fees by the
Renaissance IPO ETF. For the fiscal years ended September 30, 2017, 2018, and 2019, respectively, the Adviser was paid $16,143,
$19,094, and $16,604 in management fees by the Renaissance International IPO ETF.
Each Fund also bears certain other expenses,
which are specifically excluded from being covered under the management fee and the Supervision and Administration Agreement (“Excluded
Expenses”) and may vary and will affect the total level of expenses paid by a Fund. Such Excluded Expenses include taxes,
brokerage fees, commissions and other transaction expenses, interest and extraordinary expenses (such as litigation and
indemnification expenses). Each Fund
also bears asset-based custodial fees not covered by the Supervision and Administration Agreement.
Term. Each of
the Investment Management Agreement and the Supervision and Administration Agreement is subject to annual approval by (1) the Board
or (2) a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of a Fund, provided that in
either event such continuance also is approved by a majority of the Board who are not interested persons (as defined in the 1940
Act) of the Trust by a vote cast in person at a meeting called for the purpose of voting on such approval. Each of the Investment
Management Agreement and the Supervision and Administration Agreement is terminable without penalty, on 60 days’ notice,
by the Board or by a vote of the holders of a majority (as defined in the 1940 Act) of the applicable Fund’s outstanding
voting securities. Each of the Investment Management Agreement and the Supervision and Administration Agreement is also terminable
upon 60 days’ notice by the Adviser and will terminate automatically in the event of its assignment (as defined in the 1940
Act).
The Administrator
State Street Bank and
Trust Company (“State Street”) serves as administrator for the Trust, on behalf of the Funds. The Administrator is
obligated on a continuous basis to provide such administrative services as the Board of the Trust reasonably deems necessary for
the proper administration of the Trust and each Fund. The Administrator will generally assist in all aspects of the Trust’s
and each Fund’s operations; supply and maintain office facilities, statistical and research data, data processing services,
clerical, bookkeeping and record keeping services (including without limitation the maintenance of such books and records as are
required under the 1940 Act and the rules thereunder, except as maintained by other agents), internal auditing, executive and administrative
services, and stationery and office supplies; prepare reports to shareholders or investors; prepare and file tax returns; supply
financial information and supporting data for reports to and filings with the SEC and various state Blue Sky authorities; supply
supporting documentation for meetings of the Board; provide monitoring reports and assistance regarding compliance with the Declaration
of Trust, by-laws, investment objectives and policies and with federal and state securities laws; arrange for appropriate insurance
coverage; calculate NAVs, net income and realized capital gains or losses; and negotiate arrangements with, and supervise and coordinate
the activities of, agents and others to supply services.
Custodian and Transfer
Agent
State Street serves as custodian for
the Funds pursuant to a Custodian Agreement. As Custodian, State Street holds the Funds’ assets. State Street serves as the
Funds’ transfer agent pursuant to a Transfer Agency Agreement. In addition, State Street provides various accounting services
to the Funds pursuant to a fund accounting agreement.
Securities Lending
The Board has approved each Fund’s
participation in a securities lending program. Under the securities lending program, each Fund has retained State Street to serve
as the securities lending agent.
For the fiscal year ended September
30, 2019, the income earned by each Fund as well as the fees and/or compensation paid by each Fund (in dollars) pursuant to the
Securities Authorization Agreement between the Trust on behalf of its respective series, and State Street were as follows:
|
|
|
Fees and/or compensation paid by the Fund for securities lending activities and related services
|
|
|
|
|
Gross income earned by the Fund from securities lending activities
|
Fees paid to State Street from a revenue
split
|
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in a revenue split
|
Administrative fees not included in a revenue
split
|
Indemnifi-
cation fee not included in a revenue split
|
Rebate (paid to borrower)
|
Other fees not included in a revenue split
|
Aggregate fees/ compensation paid by the Fund for securities lending activities
|
Net income from securities lending activities
|
|
Renaissance IPO ETF
|
$236,537
|
$56,730
|
$775
|
$0
|
$0
|
$8,788
|
$0
|
$66,293
|
$170,244
|
|
Renaissance International IPO ETF
|
$7,640
|
$1,896
|
$12
|
$0
|
$0
|
$26
|
$0
|
$1,934
|
$5,706
|
For the fiscal year ended September
30, 2019, State Street, acting as agent of the Funds, provided the following services to the Funds in connection with the Funds’
securities lending activities: (i) locating borrowers among an approved list of prospective borrowers; (ii) monitoring applicable
minimum spread requirements, lending limits and the value of the loaned securities and collateral received; (iii) seeking additional
collateral, as necessary, from borrowers; (iv) receiving and holding collateral from borrowers, and facilitating the investment
and reinvestment of all or substantially all cash collateral in an investment vehicle designated by the Funds; (v) returning collateral
to borrowers; (vi) facilitating substitute dividend, interest, and other distribution payments to the Funds from borrowers; (vii)
negotiating the terms of each loan of securities, including but not limited to the amount of any loan premium, and monitoring the
terms of securities loan agreements with prospective borrowers for consistency with the requirements of the Funds’ Securities
Lending and Services Agreement; (viii) selecting securities, including amounts (percentages), to be loaned; (ix) recordkeeping
and accounting servicing; and (x) arranging for return of loaned securities to the Fund in accordance with the terms of the Securities
Lending Authorization Agreement.
The Distributor
Foreside Fund Services, LLC (the “Distributor”)
is the principal underwriter and distributor of Shares. Its principal address is 3 Canal Plaza, Suite 100, Portland, Maine 04101
and investor information can be obtained by calling 1-866-486-6645. The Distributor has entered into an agreement with the Trust
which will continue
from its effective date unless terminated
by either party upon 60 days’ prior written notice to the other party by the Trust and the Adviser, or by the Distributor,
or until termination of the Trust or a Fund, and which is renewable annually thereafter (the “Distribution Agreement”),
pursuant to which it distributes Shares. Shares will be continuously offered for sale by the Trust through the Distributor only
in Creation Units, as described below under “Creation and Redemption of Creation Units—Procedures for Creation of Creation
Units.” Shares in less than Creation Units are not distributed by the Distributor. The Distributor will deliver a prospectus
to persons purchasing Shares in Creation Units and will maintain records of both orders placed with it and confirmations of acceptance
furnished by it. The Distributor is a broker-dealer registered under the Exchange Act and a member of the Financial Industry Regulatory
Authority (“FINRA”). The Distributor has no role in determining the investment policies of the Trust or which securities
are to be purchased or sold by a Fund.
The Distributor may also enter into
sales and investor services agreements with broker-dealers or other persons that are Participating Parties and DTC Participants
(as defined below) to provide distribution assistance, including broker-dealer and shareholder support and educational and promotional
services but must pay such broker-dealers or other persons, out of its own assets.
The Distribution Agreement provides
that it may be terminated at any time, without the payment of any penalty: (i) by vote of a majority of the Independent Trustees
or (ii) by vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of a Fund, on at least 60 days
written notice to the Distributor. The Distribution Agreement is also terminable upon 60 days’ notice by the Distributor
and will terminate automatically in the event of its assignment (as defined in the 1940 Act).
Affiliated Index Provider
Each Index is published by Renaissance
Capital International, LLC, (the “Index Provider”) which is a wholly-owned affiliate of the Adviser. In order to minimize
any potential for conflicts caused by the fact that the Adviser or its affiliates act as the Index Provider to the Funds, the Adviser
has retained an unaffiliated third party to calculate each Index, FTSE International Limited (the “Calculation Agent”).
The Calculation Agent, using the rules-based methodology, will calculate, maintain and disseminate
each Index on a daily basis. The Adviser will monitor the results produced by the Calculation Agent to help ensure that each Index
is being calculated in accordance with its rules-based methodology. In addition, the Adviser and the Index Provider have established
policies and procedures designed to prevent non-public information about pending changes to an Index from being used or disseminated
in an improper manner. Furthermore, the Adviser and the Index Provider have established policies and procedures designed to prevent
improper use and dissemination of non-public information about a Fund’s portfolio strategies and to prevent a Fund’s
portfolio managers from having any influence on the construction of each Index’s methodology.
Other Accounts Managed by the Portfolio Manager
As of the date indicated below, Mr.
Smith managed the following other accounts:
|
|
|
Other Accounts Managed
(As of September 30, 2019)
|
Accounts with respect to which the advisory fee is based on the performance of the account
|
|
Name of Portfolio Manager
|
Category of Account
|
Number of Accounts in Category
|
Total Assets in Accounts in Category
|
Number of Accounts in Category
|
Total Assets in Accounts in Category
|
|
William K. Smith
|
Registered investment companies
|
0
|
0
|
0
|
0
|
|
|
Other pooled investment vehicles
|
0
|
0
|
0
|
0
|
|
|
Other accounts
|
1
|
$24.74 million
|
0
|
0
|
Although the Funds in the Trust that
are managed by Mr. Smith may have different investment strategies, the Adviser does not believe that management of the various
accounts presents a material conflict of interest for Mr. Smith or the Adviser.
Portfolio Manager Compensation
The portfolio manager is paid a fixed
base salary and a discretionary bonus.
Portfolio Manager Share Ownership
The portfolio holdings of Mr. Smith,
as of September 30, 2019 are shown below.
|
Fund
|
None
|
$1 to $10,000
|
$10,001 to $50,000
|
$50,001 to $100,000
|
$100,001 to $500,000
|
$500,001 to $1,000,000
|
Over $1,000,000
|
|
William K. Smith
|
|
|
|
|
|
|
|
|
Renaissance IPO ETF
|
|
|
|
|
X
|
|
|
|
Renaissance International IPO ETF
|
|
|
|
|
X
|
|
|
|
Trust in aggregate
|
|
|
|
|
|
X
|
|
BROKERAGE
TRANSACTIONS
When selecting brokers and dealers to
handle the purchase and sale of portfolio securities, the Adviser looks for prompt execution of the order at a favorable price.
Generally, the Adviser works with recognized dealers in these securities, except when a better price and execution of the order
can be obtained elsewhere. The Funds will not deal with affiliates in principal transactions unless permitted by exemptive order
or applicable rule or regulation. The Adviser owes a duty to its clients to seek best execution on trades effected. Since the investment
objective of a Fund is investment performance that corresponds to that of an Index, the Adviser does not intend to select brokers
and dealers for the purpose of receiving research services in addition to a favorable price and prompt execution either from that
broker or an unaffiliated third party.
The Adviser assumes general supervision
over placing orders on behalf of a Fund for the purchase or sale of portfolio securities. If purchases or sales of portfolio securities
of a Fund and one or more other investment companies or clients supervised by the Adviser are considered at or about the same time,
transactions in such securities are allocated among the several investment companies and clients in a manner deemed equitable to
all by the Adviser. In some cases, this procedure could have a detrimental effect on the price or volume of the security so far
as a Fund is concerned. However, in other cases, it is possible that the ability to participate in
volume transactions and to negotiate
lower brokerage commissions will be beneficial to a Fund. The primary consideration is best execution. For the fiscal years ended
September 30, 2019, 2018 and 2017, the Renaissance IPO ETF paid brokerage commissions of $22,841.51, $19,880.91, and $20,404.89,
respectively. For the fiscal years ended September 30, 2019, 2018 and 2017, the Renaissance International IPO ETF paid brokerage
commissions of $3,185.98, $3,864.65, and $2,677.63, respectively. Brokerage commissions paid by a Fund may be substantially
different from year to year for multiple reasons, including market volatility and the demand for a particular Fund.
Portfolio turnover may vary from year
to year, as well as within a year. High turnover rates are likely to result in comparatively greater brokerage expenses and taxable
distributions. The overall reasonableness of brokerage commissions is evaluated by the Adviser based upon its knowledge of available
information as to the general level of commissions paid by other institutional investors for comparable services.
BOOK
ENTRY ONLY SYSTEM
The following information supplements
and should be read in conjunction with the section in the Funds’ Prospectus entitled “Shareholder Information—Buying
and Selling Exchange-Traded Shares.”
The Depository Trust Company (“DTC”)
acts as securities depositary for the Shares. Shares of a Fund are represented by securities registered in the name of DTC or its
nominee and deposited with, or on behalf of, DTC. Certificates will not be issued for Shares.
DTC, a limited-purpose trust company,
was created to hold securities of its participants (the “DTC Participants”) and to facilitate the clearance and settlement
of securities transactions among the DTC Participants in such securities through electronic book-entry changes in accounts of the
DTC Participants, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their
representatives) own DTC. More specifically, DTC is owned by a number of its DTC Participants and by the New York Stock Exchange
(“NYSE”) and FINRA. Access to the DTC system is also available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (the “Indirect
Participants”).
Beneficial ownership of Shares is limited
to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants. Ownership
of beneficial interests in Shares (owners of such beneficial interests are referred to herein as “Beneficial Owners”)
is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants)
and on the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants).
Beneficial Owners will receive from or through the DTC Participant a written confirmation relating to their purchase of Shares.
Conveyance of all notices, statements
and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the Trust on
behalf of a Fund and DTC, DTC is required to make available to the Funds upon request and for a fee to be charged to the applicable
Fund a listing of the Shares holdings of each DTC Participant. The Trust shall inquire of each such DTC Participant as to the number
of Beneficial Owners holding Shares, directly or indirectly, through such DTC Participant. The Trust on behalf of the Funds shall
provide each such DTC Participant with copies of such notice, statement or other communication, in such form, number and at such
place as such DTC Participant may reasonably request, in order that such notice, statement or communication may be transmitted
by such DTC Participant, directly or indirectly, to such Beneficial Owners. In addition, each Fund shall pay to each such DTC Participant
a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all
subject to applicable statutory and regulatory requirements.
Share distributions
shall be made to DTC or its nominee, Cede & Co., as the registered holder of all Shares. DTC or its nominee, upon receipt of
any such distributions, shall credit immediately DTC Participants’ accounts with payments in amounts proportionate to their
respective beneficial interests in Shares as shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect
Participants and Beneficial Owners of Shares held through such DTC Participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a “street
name,” and will be the responsibility of such DTC Participants.
The Trust and each Fund individually
have no responsibility or liability for any aspects of the records relating to or notices to Beneficial Owners, or payments made
on account of beneficial ownership interests in such Shares, or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests or for any other aspect of the relationship between DTC and the DTC Participants or the
relationship between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants.
DTC may determine to discontinue providing
its service with respect to the Shares at any time by giving reasonable notice to the Trust and discharging its responsibilities
with respect thereto under applicable law. Under such circumstances, the Trust shall take action either to find a replacement for
DTC to perform its functions at a comparable cost or, if such a replacement is unavailable, to issue and deliver printed certificates
representing ownership of Shares, unless the Trust makes other arrangements with respect thereto satisfactory to the Exchange.
CREATION
AND REDEMPTION OF CREATION UNITS
General
Each Fund issues and sells Shares only
in Creation Units on a continuous basis through the Distributor, without an initial sales load, at their NAV next determined after
receipt, on any Business Day (as defined herein), of an order in proper form. An Authorized Participant (defined below) that is
not a “qualified institutional buyer,” as such term is defined under Rule 144A of the Securities Act of 1933, will
not be able to receive, as part of a redemption, restricted securities eligible for resale under Rule 144A.
A “Business Day” with respect
to a Fund is any day on which the NYSE is open for business. As of the date of the Prospectus, the NYSE observes the following
holidays: New Year’s Day, Martin Luther King, Jr. Day, President’s Day (Washington’s Birthday), Good Friday,
Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Fund Deposit
The
consideration for a purchase of Creation Units generally consists of the in-kind deposit of a designated portfolio of equity securities
(the “Deposit Securities”) that comprise an Index and an amount of cash computed as described below (the “Cash
Component”) or, as permitted or required by a Fund, of cash. The Cash Component together with the Deposit Securities, as
applicable, are referred to as the “Fund Deposit,” which represents the minimum initial and subsequent investment amount
for Shares. The Cash Component represents the difference between the NAV of a Creation Unit and the market value of Deposit Securities
and may include a Dividend Equivalent Payment. The “Dividend Equivalent Payment” enables a Fund
to make a complete distribution of dividends on the next dividend payment date, and is an amount equal, on a per Creation Unit
basis, to the dividends on all the securities held by a Fund (“Fund Securities”)
with ex-dividend dates within the accumulation period for such distribution (the “Accumulation Period”), net of expenses
and liabilities for such period, as if all of the Fund Securities had been held by a Fund for the entire Accumulation Period. The
Accumulation Period begins on the ex-dividend date for a Fund and ends on the next ex-dividend date.
The
Administrator, through the NSCC, makes available on each Business Day, immediately prior to the opening of business on the
Exchange (currently 9:30 a.m. Eastern time), the list of the names and the required number of shares of each Deposit Security to
be included in the current Fund Deposit (based on information at the end of the previous Business Day) as well as the Cash Component
for a Fund. Such Fund Deposit is applicable, subject to any adjustments as described below, in order to effect creations of Creation
Units of a Fund until such time as the next-announced Fund Deposit composition is made available.
The identity and number of shares of
the Deposit Securities required for the Fund Deposit for a Fund changes as rebalancing adjustments and corporate action events
are reflected from time to time by the Adviser with a view to the investment objective of a Fund. The composition of the Deposit
Securities may also change in response to adjustments to the weighting or composition of the securities constituting the particular
Index. In addition, a Fund reserves the right to accept a basket of securities or cash that differs from Deposit Securities or
to permit or require the substitution of an amount of cash (i.e., a “cash in lieu” amount) to be added to the Cash
Component to replace any Deposit Security which may, among other reasons, not be available in sufficient quantity for delivery,
not be permitted to be re-registered in the name of the Fund as a result of an in-kind creation order pursuant to market convention
or which may not be eligible for transfer through the Clearing Process (described below), or which may not be eligible for trading
by a Participating Party (defined below). In light of the foregoing, in order to seek to replicate
the in-kind creation order process, the Trust, on behalf of each Fund, expects to purchase the Deposit Securities represented by
the cash in lieu amount in the secondary market (“Market Purchases”). In such cases where the Trust, on behalf of a
Fund, makes Market Purchases because a Deposit Security may not be permitted to be re-registered in the name of a Fund as a result
of an in-kind creation order pursuant to market convention, or for other reasons, the Authorized Participant will reimburse a Fund
for, among other things, any difference between the market value at which the securities were purchased by a Fund and the cash
in lieu amount (which amount, at the Adviser’s discretion, may be capped), applicable registration fees and taxes. Brokerage
commissions incurred in connection with a Fund’s acquisition of Deposit Securities will be at the expense of a Fund and will
affect the value of all Shares of a Fund; but the Adviser may adjust the transaction fee to the extent the composition of the Deposit
Securities changes or cash in lieu is added to the Cash Component to protect ongoing shareholders. The adjustments described above
will reflect changes, known to the Adviser on the date of announcement to be in effect by the time of delivery of a Fund Deposit,
in the composition of the Index or resulting from stock splits and other corporate actions.
In addition to the list of names and
numbers of securities constituting the current Deposit Securities of the Fund Deposit, the Administrator, through the NSCC, also
makes available (i) on each Business Day, the Dividend Equivalent Payment, if any, and the estimated Cash Component effective through
and including the previous Business Day, per outstanding Shares of the Fund, and (ii) on a continuous basis throughout the day,
the Indicative Per Share Portfolio Value.
Procedures for Creation of Creation
Units
To be eligible to place orders with
the Distributor to create Creation Units of a Fund, an entity or person either must be (1) a “Participating Party,”
i.e., a broker-dealer or other participant in the Clearing Process through the Continuous Net Settlement System of the NSCC;
or (2) a DTC Participant (see “Book Entry Only System”); and, in either case, must have executed an agreement with
the Distributor and the Transfer Agent (as it may be amended from time to time in accordance with its terms) (“Participant
Agreement”) (discussed below). A Participating Party and DTC Participant are collectively referred to as an “Authorized
Participant.” All Creation Units of a Fund, however created, will be entered on the records of the Depository in the name
of Cede & Co. for the account of a DTC Participant.
All orders to create Creation Units
must be placed in multiples of 50,000 Shares of the Fund. All orders to create Creation Units, whether through the Clearing Process
or outside the Clearing Process, must be received by the Distributor no later than the closing time of the regular trading session
on NYSE Arca (“Closing Time”) (ordinarily 4:00 p.m. Eastern time) on the date such order is placed in order for creation
of Creation Units to be effected based on the NAV of a Fund as determined on such date. A “Custom Order” may be placed
by an
Authorized Participant in the event
that the Trust, on behalf of a Fund, permits or requires the substitution of an amount of cash to be added to the Cash Component
to replace any Deposit Security which may not be available in sufficient quantity for delivery or which may not be eligible for
trading by such Authorized Participant or the investor for which it is acting, or other relevant reason. The Business Day on which
a creation order (or order to redeem as discussed below) is placed is herein referred to as the “Transmittal Date.”
Orders must be transmitted by telephone or other transmission method acceptable to the Distributor pursuant to procedures set forth
in the Participant Agreement, as described below (see “Placement of Creation Orders Using Clearing Process”). Severe
economic or market disruptions or changes, or telephone or other communication failure, may impede the ability to reach the Distributor,
a Participating Party or a DTC Participant.
Creation Units may be created in advance
of the receipt by the Trust, on behalf of a Fund, of all or a portion of a Fund Deposit. In such cases, the Authorized Participant
will remain liable for the full deposit of the missing portion(s) of a Fund Deposit and will be required to post collateral with
the Trust, on behalf of a Fund, consisting of cash at least equal to a percentage of the marked-to-market value of such missing
portion(s) that is specified in the Participant Agreement. A Fund may use such collateral to buy the missing portion(s) of a Fund
Deposit at any time and will subject such Authorized Participant to liability for any shortfall between the cost to the Fund of
purchasing such securities and the value of such collateral. A Fund will have no liability for any such shortfall. A Fund will
return any unused portion of the collateral to the Authorized Participant once the entire Fund Deposit has been properly received
by the Distributor and deposited into the Fund.
Orders to create Creation Units of a
Fund shall be placed with a Participating Party or DTC Participant, as applicable, in the form required by such Participating Party
or DTC Participant. Investors should be aware that their particular broker may not have executed a Participant Agreement, and that,
therefore, orders to create Creation Units of a Fund may have to be placed by the investor’s broker through a Participating
Party or a DTC Participant who has executed a Participant Agreement. At any given time there may be only a limited number of broker-dealers
that have executed a Participant Agreement. Those placing orders to create Creation Units of a Fund through the Clearing Process
should afford sufficient time to permit proper submission of the order to the Distributor prior to the Closing Time on the Transmittal
Date.
Orders for creation that are effected
outside the Clearing Process are likely to require transmittal by the DTC Participant earlier on the Transmittal Date than orders
effected using the Clearing Process. Those persons placing orders outside the Clearing Process should ascertain the deadlines applicable
to DTC and the Federal Reserve Bank wire system by contacting the operations department of the broker or depository institution
effectuating such transfer of Deposit Securities and Cash Component.
Orders to create Creation Units of a
Fund may be placed through the Clearing Process utilizing procedures applicable to domestic funds for domestic securities (“Domestic
Funds”) (see “Placement of Creation Orders Using Clearing Process”) or outside the Clearing Process utilizing
the procedures applicable to either Domestic Funds or foreign funds for foreign securities (“Foreign Funds”) (see “Placement
of Creation Orders Outside Clearing Process — Domestic Funds” and “Placement of Creation Orders Outside Clearing
Process — Foreign Funds”). In the event that a Fund includes both domestic and foreign securities, the time for submitting
orders is as stated in the “Placement of Creation Orders Outside Clearing Process — Foreign Funds” and “Placement
of Redemption Orders Outside Clearing Process — Foreign Funds” sections below shall operate.
Placement of Creation Orders Using
Clearing Process
Fund Deposits created through the Clearing
Process, if available, must be delivered through a Participating Party that has executed a Participant Agreement.
The Participant Agreement authorizes
the Distributor to transmit to NSCC on behalf of the Participating Party such trade instructions as are necessary to effect the
Participating Party’s creation order. Pursuant to such trade instructions from the Distributor to NSCC, the Participating
Party agrees to transfer the requisite Deposit Securities (or contracts to purchase such Deposit Securities that are expected to
be delivered in a “regular way”
manner by the second (2nd) Business
Day) and the Cash Component to a Fund, together with such additional information as may be required by the Distributor. An order
to create Creation Units of a Fund through the Clearing Process is deemed received by the Distributor on the Transmittal Date if
(i) such order is received by the Distributor not later than the Closing Time on such Transmittal Date and (ii) all other procedures
set forth in the Participant Agreement are properly followed.
Placement of Creation Orders Outside
Clearing Process — Domestic Funds
Fund Deposits created outside the Clearing
Process must be delivered through a DTC Participant that has executed a Participant Agreement. A DTC Participant who wishes to
place an order creating Creation Units of a Fund to be effected outside the Clearing Process need not be a Participating Party,
but such orders must state that the DTC Participant is not using the Clearing Process and that the creation of Creation Units will
instead be effected through a transfer of securities and cash. A Fund Deposit transfer must be ordered by the DTC Participant in
a timely fashion so as to ensure the delivery of the requisite number of Deposit Securities through DTC to the account of a Fund
by no later than 11:00 a.m. Eastern time, of the next Business Day immediately following the Transmittal Date. All questions as
to the number of Deposit Securities to be delivered, and the validity, form and eligibility (including time of receipt) for the
deposit of any tendered securities, will be determined by the Trust on behalf of each Fund, whose determination shall be final
and binding. The cash equal to the Cash Component must be transferred directly to the Distributor through the Federal Reserve wire
system in a timely manner so as to be received by the Distributor no later than 2:00 p.m. Eastern time, on the next Business Day
immediately following the Transmittal Date. An order to create Creation Units of a Fund outside the Clearing Process is deemed
received by the Distributor on the Transmittal Date if (i) such order is received by the Distributor not later than the Closing
Time on such Transmittal Date; and (ii) all other procedures set forth in the Participant Agreement are properly followed. However,
if the Distributor does not receive both the requisite Deposit Securities and the Cash Component in a timely fashion on the next
Business Day immediately following the Transmittal Date, such order will be cancelled. Upon written notice to the Distributor,
such cancelled order may be resubmitted the following Business Day using the Fund Deposit as newly constituted to reflect the current
NAV of a Fund. The delivery of Creation Units so created will occur no later than the second (2nd) Business Day following the day
on which the creation order is deemed received by the Distributor.
Additional transaction fees may be imposed
with respect to transactions effected outside the Clearing Process (through a DTC participant) and in circumstances in which any
cash can be used in lieu of Deposit Securities to create Creation Units. (See “Creation Transaction Fee” section below.)
Placement of Creation Orders Outside
Clearing Process—Foreign Funds
The Distributor will inform the Transfer
Agent, the Adviser and the Custodian upon receipt of a Creation Order. The Custodian will then provide such information to the
appropriate subcustodian. For a Fund, the Custodian will cause the subcustodian of a Fund to maintain an account into which the
Deposit Securities (or the cash value of all or part of such securities, in the case of a permitted or required cash purchase or
“cash in lieu” amount) will be delivered. Deposit Securities must be delivered to an account maintained at the applicable
local custodian. The Trust on behalf of a Fund, must also receive, on or before the contractual settlement date, immediately available
or same day funds estimated by the Custodian to be sufficient to pay the Cash Component next determined after receipt in proper
form of the purchase order, together with the creation transaction fee described below.
Once the Transfer Agent has accepted
a creation order, the Transfer Agent will confirm the issuance of a Creation Unit of the Fund against receipt of payment, at such
NAV as will have been calculated after receipt in proper form of such order. The Transfer Agent will then transmit a confirmation
of acceptance of such order.
Creation Units will not be issued until
the transfer of good title to the Trust, on behalf of a Fund, of the Deposit Securities and the payment of the Cash Component have
been completed. When the subcustodian has confirmed to the Custodian that the required Deposit Securities (or the cash value thereof)
have been delivered to the
account of the relevant subcustodian,
the Distributor and the Adviser will be notified of such delivery and the Transfer Agent will issue and cause the delivery of the
Creation Units.
Acceptance of Creation Orders
The Trust, on behalf of a Fund, reserves
the absolute right to reject a creation order transmitted to it by the Distributor if, for any reason, (a) the order is not in
proper form; (b) the creator or creators, upon obtaining the Shares, would own 80% or more of the currently outstanding Shares
of a Fund; (c) the Deposit Securities delivered are not as specified by the Administrator, as described above; (d) the acceptance
of the Deposit Securities would have certain adverse tax consequences to a Fund; (e) the acceptance of a Fund Deposit would, in
the opinion of counsel, be unlawful; (f) the acceptance of a Fund Deposit would otherwise, in the discretion of the Trust, on behalf
of a Fund, or the Adviser, have an adverse effect on a Fund or the rights of beneficial owners; or (g) in the event that circumstances
outside the control of the Trust on behalf of a Fund, the Distributor and the Adviser make it for all practical purposes impossible
to process creation orders. Examples of such circumstances include, without limitation, acts of God or public service or utility
problems such as earthquakes, fires, floods, extreme weather conditions and power outages resulting in telephone, telecopy and
computer failures; wars; civil or military disturbances, including acts of civil or military authority or governmental actions;
terrorism; sabotage; epidemics; riots; labor disputes; market conditions or activities causing trading halts; systems failures
involving computer or other information systems affecting the Trust on behalf of a Fund, the Adviser, the Distributor, DTC, the
NSCC or any other participant in the creation process, and similar extraordinary events. The Transfer Agent will notify a prospective
creator of its rejection of the order of such person. The Trust on behalf of a Fund, the Custodian, any subcustodian and the Distributor
are under no duty, however, to give notification of any defects or irregularities in the delivery of Fund Deposits to Authorized
Participants nor shall either of them incur any liability to Authorized Participants for the failure to give any such notification.
All questions as to the number of shares
of each security in the Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to
be delivered shall be determined by the Trust on behalf of a Fund, and the Trust’s determination shall be final and binding.
Creation Transaction Fee
A fixed creation transaction fee of
$500.00 for the Renaissance IPO ETF and $1,000.00 for the Renaissance International IPO ETF payable to the Custodian is imposed
on each creation transaction regardless of the number of Creation Units purchased in the transaction. In addition, a variable charge
for cash creations or for creations outside the Clearing Process currently of up to four times the basic creation transaction fee
will be imposed. In the case of cash creations or where the Trust, on behalf of a Fund, permits or requires a creator to substitute
cash in lieu of depositing a portion of the Deposit Securities, the creator may be assessed an additional variable charge to compensate
a Fund for the costs associated with purchasing the applicable securities. (See “Fund Deposit” section above.) As a
result, in order to seek to replicate the in-kind creation order process, the Trust, on behalf of a Fund, expects to purchase,
in the secondary market or otherwise gain exposure to, the portfolio securities that could have been delivered as a result of an
in-kind creation order pursuant to local law or market convention, or for other reasons (“Market Purchases”). In such
cases where the Trust, on behalf of a Fund, makes Market Purchases, the Authorized Participant will reimburse a Fund for, among
other things, any difference between the market value at which the securities and/or financial instruments were purchased by the
Trust, on behalf of a Fund, and the cash in lieu amount (which amount, at the Adviser’s discretion, may be capped), applicable
registration fees, brokerage commissions and certain taxes. The Adviser may adjust the transaction fee to the extent the composition
of the creation securities changes or cash in lieu is added to the Cash Component to protect ongoing shareholders. Creators of
Creation Units are responsible for the costs of transferring the securities constituting the Deposit Securities to the account
of a Fund.
Redemption of Creation Units
Shares may be redeemed only in Creation
Units at their NAV next determined after receipt of a redemption request in proper form by the Distributor, only on a Business
Day and only through a Participating Party or DTC Participant who has executed a Participant Agreement. A Fund will not redeem
Shares in amounts less than Creation Units. Beneficial Owners also may sell Shares in the secondary market, but must accumulate
enough Shares to constitute a Creation Unit in order to have such Shares redeemed by a Fund. There can be no assurance, however,
that there will be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit. Investors
should expect to incur brokerage and other costs in connection with assembling a sufficient number of Shares to constitute a redeemable
Creation Unit. See with respect to the Fund the section entitled “Fund Summary — Principal Risks of Investing in the
Fund” and “Additional Information About the Funds’ Investment Strategies and Risks—Risks of Investing in
the Fund” in the Prospectus.
The Administrator, through NSCC, makes
available immediately prior to the opening of business on the Exchange (currently 9:30 a.m. Eastern time) on each day that the
Exchange is open for business, Fund Securities that will be applicable (subject to possible amendment or correction) to redemption
requests received in proper form (as defined below) on that day. If the Trust, on behalf of a Fund, determines, based on information
available to the Trust when a redemption request is submitted by an Authorized Participant, that (i) the short interest of the
Fund in the marketplace is greater than or equal to 100% and (ii) the orders in the aggregate from all Authorized Participants
redeeming Fund Shares on a Business Day represent 25% or more of the outstanding Shares of a Fund,
such Authorized Participant will be required to verify to the Trust, on behalf of a Fund, the accuracy of its representations that
are deemed to have been made by submitting a request for redemption. If, after receiving notice of the verification requirement,
the Authorized Participant does not verify the accuracy of its representations that are deemed to have been made by submitting
a request for redemption in accordance with this requirement, its redemption request will be considered not to have been received
in proper form. Unless cash redemptions are permitted or required for a Fund, the redemption proceeds for a Creation Unit generally
consist of Fund Securities as announced by the Administrator on the Business Day of the request for redemption, plus cash in an
amount equal to the difference between the NAV of the Shares being redeemed, as next determined after a receipt of a request in
proper form, and the value of the Fund Securities, less the redemption transaction fee and variable fees described below. Should
the Fund Securities have a value greater than the NAV of the Shares being redeemed, a compensating cash payment to the Fund equal
to the differential plus the applicable redemption transaction fee will be required to be arranged for by or on behalf of the redeeming
shareholder. Each Fund reserves the right to honor a redemption request by delivering a basket of securities or cash that differs
from the Fund Securities.
Redemption Transaction Fee
The basic redemption transaction fee
of $500.00 for the Renaissance IPO ETF and $1,000.00 for the Renaissance International IPO ETF is the same no matter how many Creation
Units are being redeemed pursuant to any one redemption request. An additional charge up to four times the redemption transaction
fee will be charged with respect to cash redemptions or redemptions outside of the Clearing Process. An additional variable charge
for cash redemptions or partial cash redemptions (when cash redemptions are permitted or required for a Fund) may also be imposed
to compensate a Fund for the costs associated with selling the applicable securities. As a result, in order to seek to replicate
the in-kind redemption order process, a Fund expects to sell, in the secondary market, the portfolio securities or settle any financial
instruments that may not be permitted to be re-registered in the name of the Participating Party as a result of an in-kind redemption
order pursuant to market convention, or for other reasons (“Market Sales”). In such cases where a Fund makes Market
Sales, the Authorized Participant will reimburse the Fund for, among other things, any difference between the market value at which
the securities and/or financial instruments were sold or settled by the Fund and the cash in lieu
amount (which amount, at the Adviser’s discretion, may be capped), applicable registration fees, brokerage commissions and
certain taxes (“Transaction Costs”). The Adviser may adjust the transaction fee to the extent the composition of the
redemption securities changes or cash in lieu is added to the Cash Component to protect ongoing shareholders. In no event will
fees charged by a Fund in connection with a redemption exceed 2% of the value of each Creation
Unit. Investors who use the services
of a broker or other such intermediary may be charged a fee for such services. To the extent a Fund cannot recoup the amount of
Transaction Costs incurred in connection with a redemption from the redeeming shareholder because of the 2% cap or otherwise, those
Transaction Costs will be borne by a Fund’s remaining shareholders and will negatively affect that Fund’s performance.
Placement of Redemption Orders Using
Clearing Process
Orders to redeem Creation Units of a
Fund through the Clearing Process, if available, must be delivered through a Participating Party that has executed the Participant
Agreement. An order to redeem Creation Units of a Fund using the Clearing Process is deemed received on the Transmittal Date if
(i) such order is received by the Distributor not later than 4:00 p.m. Eastern time on such Transmittal Date; and (ii) all other
procedures set forth in the Participant Agreement are properly followed; such order will be effected based on the NAV of a Fund
as next determined. An order to redeem Creation Units of a Fund using the Clearing Process made in proper form but received by
a Fund after 4:00 p.m. Eastern time, will be deemed received on the next Business Day immediately
following the Transmittal Date. The requisite Fund Securities (or contracts to purchase such Fund Securities which are expected
to be delivered in a “regular way” manner) and the applicable cash payment will be transferred by the second (2nd)
Business Day following the date on which such request for redemption is deemed received.
Placement of Redemption Orders Outside
Clearing Process—Domestic Funds
Orders to redeem Creation Units of a
Fund outside the Clearing Process must be delivered through a DTC Participant that has executed the Participant Agreement. A DTC
Participant who wishes to place an order for redemption of Creation Units of a Fund to be effected outside the Clearing Process
need not be a Participating Party, but such orders must state that the DTC Participant is not using the Clearing Process and that
redemption of Creation Units of a Fund will instead be effected through transfer of Creation Units of a Fund directly through DTC.
An order to redeem Creation Units of a Fund outside the Clearing Process is deemed received by the Administrator on the Transmittal
Date if (i) such order is received by the Administrator not later than 4:00 p.m. Eastern time on such Transmittal Date; (ii) such
order is preceded or accompanied by the requisite number of Shares of Creation Units specified in such order, which delivery must
be made through DTC to the Administrator no later than 11:00 a.m. Eastern time, on such Transmittal
Date (the “DTC Cut-Off-Time”); and (iii) all other procedures set forth in the Participant Agreement are properly followed.
After the Administrator has deemed an
order for redemption outside the Clearing Process received, the Administrator will initiate procedures to transfer the requisite
Fund Securities (or contracts to purchase such Fund Securities) which are expected to be delivered within two Business Days and
the cash redemption payment to the redeeming Beneficial Owner by the second Business Day following the Transmittal Date on which
such redemption order is deemed received by the Administrator. An additional variable redemption transaction fee of up to four
times the basic transaction fee is applicable to redemptions outside the Clearing Process.
Placement of Redemption Orders Outside
Clearing Process—Foreign Funds
Arrangements satisfactory to the Trust,
on behalf of a Fund, must be in place for the Participating Party to transfer the Creation Units through DTC on or before the settlement
date. Redemptions of Shares for Fund Securities will be subject to compliance with applicable U.S. federal and state securities
laws and each Fund (whether or not it otherwise permits or requires cash redemptions) reserves the right to redeem Creation Units
for cash to the extent that a Fund could not lawfully deliver specific Fund Securities upon redemptions or could not do so without
first registering the Deposit Securities under such laws.
In connection with taking delivery of
Shares for Fund Securities upon redemption of Creation Units, a redeeming shareholder or entity acting on behalf of a redeeming
shareholder must maintain appropriate custody arrangements with a qualified broker-dealer, bank or other custody providers in each
jurisdiction in which any of the Fund Securities are customarily traded, to which account the Fund Securities will be delivered.
If neither
the redeeming shareholder nor the entity
acting on behalf of a redeeming shareholder has appropriate arrangements to take delivery of the Fund Securities in the applicable
foreign jurisdiction and it is not possible to make other such arrangements, or if it is not possible to effect deliveries of the
Fund Securities in such jurisdictions, the Trust may, in its discretion, exercise its option to redeem such Shares in cash, and
the redeeming shareholder will be required to receive its redemption proceeds in cash.
Deliveries of redemption proceeds generally
will be made within two business days. Due to the schedule of holidays in certain countries or for other reasons, however, the
delivery of redemption proceeds may take longer than two business days after the day on which the redemption request is received
in proper form. In such cases, the local market settlement procedures will not commence until the end of the local holiday periods.
The Renaissance International IPO ETF
generally intends to effect deliveries of Creation Unit Aggregations and portfolio securities on a basis of T+2. The Fund may effect
deliveries of Creation Unit Aggregations and portfolio securities on a basis other than T+2 in order to accommodate local holiday
schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and ex-dividend dates, or
under certain other circumstances. The ability of the Trust, on behalf of the Fund, to effect in-kind creations and redemptions
within two Business Days of receipt of an order in good form is subject, among other things, to the condition that, within the
time period from the date of the order to the date of delivery of the securities, there are no days that are holidays in the applicable
foreign market. For every occurrence of one or more intervening holidays in the applicable foreign market that are not holidays
observed in the U.S. equity market, the redemption settlement cycle will be extended by the number of such intervening holidays.
In addition to holidays, other unforeseeable closings in a foreign market due to emergencies may also prevent the Trust, on behalf
of the Fund, from delivering securities within the normal settlement period.
The securities delivery cycles currently
practicable for transferring portfolio securities to redeeming investors, coupled with foreign market holiday schedules, will require
a delivery process longer than seven calendar days in certain circumstances. The holidays applicable to the Renaissance International
IPO ETF during such periods are listed below, as are instances where more than seven days will be needed to deliver redemption
proceeds. Although certain holidays may occur on different dates in subsequent years, the number of days required to deliver redemption
proceeds in any given year is not expected to exceed the maximum number of days listed below for the Renaissance International
IPO ETF. The proclamation of new holidays, the treatment by market participants of certain days as “informal holidays”
(e.g., days on which no or limited securities transactions occur, as a result of substantially shortened trading hours),
the elimination of existing holidays, or changes in local securities delivery practices could affect the accuracy of information
set forth herein.
Listed below are the dates in calendar
year 2020 in which the regular holidays in non-U.S. markets may impact the Renaissance International IPO ETF settlement. This list
is based on information available to the Renaissance International IPO ETF. The list may not be accurate or complete and is subject
to change:
|
|
Argentina
|
|
|
January 1
|
|
|
|
April 2
|
|
|
|
June 17
|
|
|
|
November 23
|
|
|
|
February 24
|
|
|
|
April 10
|
|
|
|
July 9
|
|
|
|
December 8
|
|
|
|
February 25
|
|
|
|
May 1
|
|
|
|
August 17
|
|
|
|
December 25
|
|
|
|
March 24
|
|
|
|
May 25
|
|
|
|
October 12
|
|
|
|
|
|
|
|
Austria
|
|
|
January 1
|
|
|
|
May 21
|
|
|
|
October 26
|
|
|
|
December 25
|
|
|
|
January 6
|
|
|
|
June 1
|
|
|
|
November 1
|
|
|
|
|
|
|
|
April 13
|
|
|
|
June 11
|
|
|
|
December 8
|
|
|
|
|
|
|
|
May 1
|
|
|
|
August 15
|
|
|
|
|
|
|
|
|
|
|
|
Belgium
|
|
|
January 1
|
|
|
|
May 1
|
|
|
|
June 23
|
|
|
|
November 11
|
|
|
|
April 10
|
|
|
|
May 21
|
|
|
|
July 21
|
|
|
|
December 25
|
|
|
|
April 13
|
|
|
|
June 1
|
|
|
|
November 1
|
|
|
|
|
|
|
Brazil
|
|
January 1
|
|
|
April
21
|
|
|
|
September
7
|
|
|
|
December
24*
|
|
|
February 24
|
|
|
May
1
|
|
|
|
October
12
|
|
|
|
December
25
|
|
|
February 25
|
|
|
June
11
|
|
|
|
November
2
|
|
|
|
December
31
|
|
|
April 10
|
|
|
July
9
|
|
|
|
November
20
|
|
|
|
|
|
|
* Early closing.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
January 1
|
|
|
May
21
|
|
|
|
September
18
|
|
|
|
December
25
|
|
|
April 10
|
|
|
June
29
|
|
|
|
October
12
|
|
|
|
December
31
|
|
|
May 1
|
|
|
July
16
|
|
|
|
December
8
|
|
|
|
|
|
|
Canada
|
|
January 1
|
|
|
July 1
|
|
|
|
November 11
|
|
|
|
|
|
|
February 17
|
|
|
August 3
|
|
|
|
December 25
|
|
|
|
|
|
|
April 10
|
|
|
September 7
|
|
|
|
December 28
|
|
|
|
|
|
|
May 18
|
|
|
October 12
|
|
|
|
|
|
|
|
|
|
|
China
|
|
January 1
|
|
|
January 29
|
|
|
|
June 25
|
|
|
|
October 5
|
|
|
January 24
|
|
|
January 30
|
|
|
|
June 26
|
|
|
|
October 6
|
|
|
January 27
|
|
|
April 6
|
|
|
|
July 1
|
|
|
|
October 7
|
|
|
January 28
|
|
|
May 1
|
|
|
|
October 1
|
|
|
|
December 25
|
|
|
June 1
|
|
|
October 2
|
|
|
|
|
|
|
|
|
|
|
Columbia
|
|
January 1
|
|
|
May 1
|
|
|
|
July 20
|
|
|
|
November 16
|
|
|
January 6
|
|
|
May 25
|
|
|
|
August 7
|
|
|
|
December 8
|
|
|
March 23
|
|
|
June 15
|
|
|
|
August 17
|
|
|
|
December 24
|
|
|
April 9
|
|
|
June 22
|
|
|
|
October 12
|
|
|
|
December 25
|
|
|
April 10
|
|
|
June 29
|
|
|
|
November 2
|
|
|
|
December 31
|
|
|
Czech Republic
|
|
January 1
|
|
|
May
1
|
|
|
|
September
28
|
|
|
|
December
24
|
|
|
April 10
|
|
|
May
8
|
|
|
|
October
28
|
|
|
|
December
25
|
|
|
April 13
|
|
|
July
6
|
|
|
|
November
17
|
|
|
|
December
31
|
|
|
Denmark
|
|
January 1
|
|
|
May 8
|
|
|
|
June 5
|
|
|
|
December 31
|
|
|
April 9
|
|
|
May 21
|
|
|
|
December 24
|
|
|
|
|
|
|
April 10
|
|
|
May 22
|
|
|
|
December 25
|
|
|
|
|
|
|
April 13
|
|
|
June 1
|
|
|
|
|
|
|
|
|
|
|
Finland
|
|
January 1
|
|
|
May 1
|
|
|
|
October 31
|
|
|
|
December 25
|
|
|
January 6
|
|
|
May 21
|
|
|
|
December 6
|
|
|
|
December 31
|
|
|
April 10
|
|
|
May 31
|
|
|
|
December 24
|
|
|
|
|
|
|
April 13
|
|
|
June 19
|
|
|
|
|
|
|
|
|
|
|
France
|
|
January 1
|
|
|
May 4
|
|
|
|
June 1
|
|
|
|
December 28
|
|
|
April 10
|
|
|
May 8
|
|
|
|
July 14
|
|
|
|
|
|
|
April 13
|
|
|
May 20
|
|
|
|
November 11
|
|
|
|
|
|
|
May 1
|
|
|
May 25
|
|
|
|
December 25
|
|
|
|
|
|
|
Germany
|
|
January 1
|
|
|
May 1
|
|
|
|
June 11
|
|
|
|
November 1
|
|
|
April 10
|
|
|
May 21
|
|
|
|
October 3
|
|
|
|
December 25
|
|
|
April 13
|
|
|
June 1
|
|
|
|
October 31
|
|
|
|
December 31
|
|
|
Greece
|
|
January 1
|
|
|
April
10
|
|
|
|
May
1
|
|
|
|
December
25
|
|
|
January 6
|
|
|
April
13
|
|
|
|
June
8
|
|
|
|
|
|
|
March 2
|
|
|
April
17
|
|
|
|
October
28
|
|
|
|
|
|
|
March 25
|
|
|
April
20
|
|
|
|
December
24
|
|
|
|
|
|
|
Hungary
|
|
January 1
|
|
|
May
1
|
|
|
|
August
21
|
|
|
|
December
25
|
|
|
April 10
|
|
|
June
1
|
|
|
|
October
23
|
|
|
|
|
|
|
April 13
|
|
|
August
20
|
|
|
|
December
24
|
|
|
|
|
|
|
Indonesia
|
|
January 1
|
|
|
May
21
|
|
|
|
June
1
|
|
|
|
December
24
|
|
|
March 25
|
|
|
May
22
|
|
|
|
July
31
|
|
|
|
December
25
|
|
|
April 10
|
|
|
May
25
|
|
|
|
August
17
|
|
|
|
December
31
|
|
|
May 1
|
|
|
May
26
|
|
|
|
August
20
|
|
|
|
|
|
|
May 7
|
|
|
May
27
|
|
|
|
October
29
|
|
|
|
|
|
|
Italy
|
|
January 1
|
|
|
April 13
|
|
|
|
December 8
|
|
|
|
|
|
|
January 6
|
|
|
May 1
|
|
|
|
December 25
|
|
|
|
|
|
|
April 10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Japan
|
|
January 1
|
|
|
April 29
|
|
|
|
July 24
|
|
|
|
November 23
|
|
|
January 2
|
|
|
May 4
|
|
|
|
August 10
|
|
|
|
December 23
|
|
|
January 3
|
|
|
May 5
|
|
|
|
August 11
|
|
|
|
December 31
|
|
|
January 13
|
|
|
May 6
|
|
|
|
September 21
|
|
|
|
|
|
|
February 11
|
|
|
July 20
|
|
|
|
September 22
|
|
|
|
|
|
|
March 20
|
|
|
July 23
|
|
|
|
October 12
|
|
|
|
|
|
|
Netherlands
|
|
January 1
|
|
|
April 27
|
|
|
|
May 5
|
|
|
|
June 1
|
|
|
April 10
|
|
|
April 30
|
|
|
|
May 21
|
|
|
|
December 25
|
|
|
April 13
|
|
|
May 1
|
|
|
|
|
|
|
|
|
|
|
Norway
|
|
January 1
|
|
|
May 1
|
|
|
|
December 24
|
|
|
|
|
|
|
April 9
|
|
|
May 21
|
|
|
|
December 25
|
|
|
|
|
|
|
April 10
|
|
|
June 1
|
|
|
|
December 31
|
|
|
|
|
|
|
April 13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Poland
|
|
January 1
|
|
|
May 1
|
|
|
|
December 24
|
|
|
|
|
|
|
January 6
|
|
|
June 11
|
|
|
|
December 25
|
|
|
|
|
|
|
April 10
|
|
|
November 11
|
|
|
|
December 31
|
|
|
|
|
|
|
April 13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portugal
|
|
January 1
|
|
|
June 10
|
|
|
|
November 1
|
|
|
|
December 24
|
|
|
April 10
|
|
|
June 11
|
|
|
|
December 1
|
|
|
|
December 25
|
|
|
April 13
|
|
|
August 15
|
|
|
|
December 8
|
|
|
|
December 31
|
|
|
May 1
|
|
|
October 5
|
|
|
|
|
|
|
|
|
|
|
Russia
|
|
January 1
|
|
|
February
24
|
|
|
|
May
4
|
|
|
|
June
12
|
|
|
January 2
|
|
|
March
9
|
|
|
|
May
5
|
|
|
|
November
4
|
|
|
January 7
|
|
|
May
1
|
|
|
|
May
11
|
|
|
|
|
|
|
South Africa
|
|
January 1
|
|
|
April
27
|
|
|
|
August
10
|
|
|
|
December
25
|
|
|
April 10
|
|
|
May
1
|
|
|
|
September
24
|
|
|
|
|
|
|
April 13
|
|
|
June
16
|
|
|
|
December
16
|
|
|
|
|
|
|
Spain
|
|
January 1
|
|
|
April 13
|
|
|
|
June 24
|
|
|
|
November 9
|
|
|
January 6
|
|
|
May 1
|
|
|
|
August 15
|
|
|
|
December 8
|
|
|
April 9
|
|
|
May 15
|
|
|
|
September 11
|
|
|
|
December 25
|
|
|
May 19
|
|
|
June 1
|
|
|
|
September 24
|
|
|
|
|
|
|
April 10
|
|
|
June 11
|
|
|
|
October 12
|
|
|
|
|
|
|
Sweden
|
|
January 1
|
|
|
May 1
|
|
|
|
December 24
|
|
|
|
|
|
|
January 6
|
|
|
May 21
|
|
|
|
December 25
|
|
|
|
|
|
|
April 10
|
|
|
June 19
|
|
|
|
December 31
|
|
|
|
|
|
|
April 13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Switzerland
|
|
January 1
|
|
|
April 10
|
|
|
|
May 21
|
|
|
|
December 24
|
|
|
January 2
|
|
|
April 13
|
|
|
|
June 1
|
|
|
|
December 25
|
|
|
January 6
|
|
|
May 1
|
|
|
|
June 11
|
|
|
|
December 31
|
|
|
Taiwan
|
|
January 1
|
|
|
February
28
|
|
|
|
June
25
|
|
|
|
October
9
|
|
|
January 23
|
|
|
April
2
|
|
|
|
June
26
|
|
|
|
|
|
|
January 24
|
|
|
April
3
|
|
|
|
October
1
|
|
|
|
|
|
|
January 29
|
|
|
May
1
|
|
|
|
October
2
|
|
|
|
|
|
|
Thailand
|
|
January 1
|
|
|
April
15
|
|
|
|
July
6
|
|
|
|
December
7
|
|
|
February 10
|
|
|
May
1
|
|
|
|
July
28
|
|
|
|
December
10
|
|
|
April 6
|
|
|
May
4
|
|
|
|
August
12
|
|
|
|
December
31
|
|
|
April 13
|
|
|
May
6
|
|
|
|
October
13
|
|
|
|
|
|
|
April 14
|
|
|
June
3
|
|
|
|
October
23
|
|
|
|
|
|
|
Turkey
|
|
January 1
|
|
|
May
19
|
|
|
|
July
15
|
|
|
|
August
3
|
|
|
April 23
|
|
|
May
25
|
|
|
|
July
30
|
|
|
|
October
28
|
|
|
May 1
|
|
|
May
26
|
|
|
|
July
31
|
|
|
|
October
29
|
|
|
United Kingdom
|
|
January 1
|
|
|
May 1
|
|
|
|
June 19
|
|
|
|
November 26
|
|
|
January 2
|
|
|
May 4
|
|
|
|
July 3
|
|
|
|
December 24
|
|
|
January 6
|
|
|
May 8
|
|
|
|
July 6
|
|
|
|
December 25
|
|
|
January 20
|
|
|
May 21
|
|
|
|
August 31
|
|
|
|
December 28
|
|
|
April 9
|
|
|
May 22
|
|
|
|
October 12
|
|
|
|
December 29
|
|
|
April 10
|
|
|
May 25
|
|
|
|
November 9
|
|
|
|
December 30
|
|
|
April 13
|
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June 1
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November 11
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December 31
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June 5
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United States
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January 1
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May 25
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September 7
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November 27
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January 20
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July 3
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October 12
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December 25
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April 10
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November 11
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Redemptions. The longest redemption
cycle for a Fund is a function of the longest redemption cycle among the countries and regions whose securities comprise the Fund.
In the calendar year 2020, the dates of regular holidays affecting the following securities markets present the worst-case redemption
cycles* for the Renaissance International IPO ETF as follows:
|
2020
|
|
Country
|
|
Trade
Date
|
|
Settlement
Date
|
|
Number of
Days to
Settle
|
|
China
|
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1/23/2020
|
|
1/31/2020
|
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8
|
|
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1/24/2020
|
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2/3/2020
|
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10
|
|
|
|
|
|
|
|
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Denmark
|
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4/7/2020
|
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4/15/2020
|
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8
|
|
|
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4/8/2020
|
|
4/16/2020
|
|
8
|
|
|
|
|
|
|
|
|
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Indonesia
|
|
5/19/2020
|
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5/28/2020
|
|
9
|
|
|
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5/20/2020
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5/29/2020
|
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9
|
|
|
|
|
|
|
|
|
|
Japan
|
|
4/30/2020
|
|
5/8/2020
|
|
10
|
|
|
|
5/1/2020
|
|
5/11/2020
|
|
8
|
|
|
|
12/30/2020
|
|
1/7/2021
|
|
8
|
|
|
|
12/31/2020
|
|
1/8/2021
|
|
8
|
|
|
|
|
|
|
|
|
|
Norway
|
|
4/7/2020
|
|
4/15/2020
|
|
8
|
|
|
|
4/8/2020
|
|
4/16/2020
|
|
8
|
|
|
|
|
|
|
|
|
|
Russia
|
|
4/28/2020
|
|
5/6/2020
|
|
8
|
|
|
|
4/29/2020
|
|
5/7/2020
|
|
8
|
|
|
|
4/30/2020
|
|
5/8/2020
|
|
8
|
|
|
|
|
|
|
|
|
|
Spain
|
|
4/7/2020
|
|
4/15/2020
|
|
8
|
|
|
|
4/8/2020
|
|
4/16/2020
|
|
8
|
|
|
|
|
|
|
|
|
|
Switzerland
|
|
12/30/2020
|
|
1/7/2020
|
|
8
|
|
|
|
12/31/2020
|
|
1/8/2020
|
|
8
|
|
|
|
|
|
|
|
|
|
Taiwan
|
|
1/21/2020
|
|
1/30/2020
|
|
9
|
|
|
|
1/22/2020
|
|
1/31/2020
|
|
9
|
|
|
|
|
|
|
|
|
|
United Kingdom
|
|
4/7/2020
|
|
4/15/2020
|
|
8
|
|
|
|
4/8/2020
|
|
4/16/2020
|
|
8
|
|
|
|
5/19/2020
|
|
5/27/2020
|
|
8
|
|
|
|
5/20/2020
|
|
5/29/2020
|
|
9
|
|
|
|
12/22/2020
|
|
1/1/2021
|
|
10
|
|
|
|
12/23/2020
|
|
1/4/2021
|
|
12
|
|
|
|
|
|
|
|
|
The Renaissance International IPO ETF generally intends to
effect deliveries of portfolio securities on a basis of “T” plus two business days (i.e., days on which the NYSE is
open). The ability of the Renaissance International IPO ETF to effect in-kind redemptions within two business days of receipt
of a redemption request is subject, among other things, to the condition that, within the time period from the date of the request
to the date of delivery of the securities, there are no days that are local market holidays on the relevant business days. For
every occurrence of one or more intervening holidays in the local market that are not holidays observed in the United States,
the redemption settlement cycle may be extended by the number of such intervening local holidays. In addition to holidays, other
unforeseeable closings in a foreign market due to emergencies may also prevent the Fund from delivering securities within two
business days.
The securities delivery cycles currently
practicable for transferring portfolio securities to redeeming investors, coupled with local market holiday schedules, may require
a delivery process longer than the standard settlement period. In certain circumstances during the calendar year, the settlement
period may be greater than seven calendar days. Such periods are listed in the table above, as are instances where more than seven
days will be needed to deliver redemption proceeds. Since certain holidays may occur on different dates in subsequent years, the
number of days required to deliver redemption proceeds in any given year may exceed the maximum number of days listed in the table
above. The proclamation of new holidays, the treatment by market participants of certain days as “informal holidays”
(e.g., days on which no or limited securities transactions occur, as a result of substantially shortened trading hours), the elimination
of existing holidays, or changes in local securities delivery practices, could affect the information set forth herein at some
time in the future and longer (worse) redemption periods are possible.
The right of redemption may be suspended
or the date of payment postponed (1) for any period during which the NYSE is closed (other than customary weekend and holiday closings);
(2) for any period during which trading on the NYSE is suspended or restricted; (3) for any period during which an emergency exists
as a result of which disposal of the Shares of a Fund or determination of its NAV is not reasonably practicable; or (4) in such
other circumstance as is permitted by the SEC.
DETERMINATION
OF NET ASSET VALUE
The following information supplements
and should be read in conjunction with the section in the Funds’ Prospectus entitled “Shareholder Information —
Determination of NAV.”
For purposes of computing a Fund’s
net asset value per share, securities traded on national security exchanges or on the NASDAQ National Market System, for which
market quotations are available are valued by an independent pricing service as of the close of business on the date of valuation.
The pricing service generally uses the last reported sale price for exchange traded securities, and the NASDAQ official closing
price (NOCP) for NASDAQ traded securities or, lacking any reported sales on that day, the mean between the current bid and ask
prices.
Securities for which market quotations
are unreliable or not readily available, including any restricted security, will be valued at fair value as determined in good
faith, and pursuant to procedures adopted by the Board of Trustees (the “Procedures”). The Procedures consider a number
of factors in determining a security’s fair value, including, but not limited to: market prices for the security (or securities)
deemed comparable; dealer valuations of the security (or securities) deemed comparable; and determinations of value by other pricing
services for the security (or securities) deemed comparable.
The Administrator and the Adviser are
charged with the responsibility of identifying each such security and advising the Fair Value Committee that a security requires
a fair valuation. The Fair Value Committee consists of two representatives of the Adviser and one representative of the Trust.
The Adviser shall determine a methodology for valuing the security, including the information and sources of information that shall
be used to value the security, and calculate the value of the security based on the gathered information. The Adviser shall recommend
such methodology to the Fair Value Committee, who will review the recommendation and vote on whether or not to adopt the methodology.
The valuation of a particular security depends upon the circumstances of each individual case, and all appropriate factors relevant
to the value of the security will be considered.
The Board of Trustees will review the
method of valuation on a quarterly basis. In making a good faith valuation of restricted securities, the Fair Value Committee (subject
to oversight by the Board of Trustees) generally will take the following factors into consideration: restricted securities which
are, or are convertible into, securities of the same class of securities for which a public market exists usually will be valued
at market value less the same percentage discount at which purchased. This discount will be revised periodically by the Fair Value
Committee or by the Board of Trustees if either party believes that it no longer reflects the value of the restricted securities.
Restricted securities not of the same class as securities for which a public market exists usually will be valued initially at
cost. Any subsequent adjustment from cost will be based upon considerations deemed relevant under the procedures.
As indicated in the Prospectus, net
asset value for a Fund is determined as of the end of regular trading hours on the New York Stock Exchange (generally 4:00 p.m.
Eastern Time) on days that the New York Stock Exchange is open. The net asset value per share is determined by dividing the market
value of a Fund’s securities as of the close of trading plus any cash or other assets (including dividends and accrued interest)
less all liabilities (including accrued expenses) by the number of that Fund’s shares outstanding.
DIVIDENDS
AND DISTRIBUTIONS
The following information supplements
and should be read in conjunction with the section of the Funds’ Prospectus entitled “Shareholder Information —
Distributions.”
General Policies
Dividends from net investment income,
if any, are declared and paid at least annually by a Fund. Distributions of net realized capital gains, if any, generally are declared
and paid once a year, but a Fund may make
distributions on a more frequent basis
for a Fund to improve its Index tracking or to comply with the distribution requirements of the Internal Revenue Code, in all events
in a manner consistent with the provisions of the 1940 Act. In addition, a Fund may distribute at least annually amounts representing
the full dividend yield on the underlying portfolio securities of a Fund, net of expenses of a Fund, as if a Fund owned such underlying
portfolio securities for the entire dividend period in which case some portion of each distribution may result in a return of capital
for tax purposes for certain shareholders.
Dividends and other distributions on
Shares are distributed, as described below, on a pro rata basis to Beneficial Owners of such Shares. Dividend payments are made
through DTC Participants and Indirect Participants to Beneficial Owners then of record with proceeds received from a Fund. Each
Fund makes additional distributions to the minimum extent necessary (i) to distribute the entire annual taxable income of the Fund,
plus any net capital gains and (ii) to avoid imposition of the excise tax imposed by Section 4982 of the Internal Revenue Code.
Fund Management reserves the right to declare special dividends if, in its reasonable discretion, such action is necessary or advisable
to preserve the status of each Fund as a regulated investment company (“RIC”) or to avoid imposition of income or excise
taxes on undistributed income.
DIVIDEND
REINVESTMENT SERVICE
No reinvestment service is provided
by the Trust, on behalf of a Fund. Broker-dealers may make available the DTC book-entry Dividend Reinvestment Service for use by
Beneficial Owners of a Fund through DTC Participants for reinvestment of their dividend distributions. If this service is used,
dividend distributions of both income and realized gains will be automatically reinvested in additional whole Shares of a Fund.
Beneficial Owners should contact their broker to determine the availability and costs of the service and the details of participation
therein. Brokers may require Beneficial Owners to adhere to specific procedures and timetables.
CONTROL
PERSONS AND PRINCIPAL SHAREHOLDERS
The following table sets forth the
name, address and percentage of ownership of each shareholder who is known by the Trust to own, of record or beneficially, 5% or
more of the outstanding equity securities of a Fund as of December 31, 2019. Any person who owns beneficially, either directly
or through one or more controlled companies, more than 25% or more of the voting securities of a Fund is presumed to control the
Fund under the provisions of the 1940 Act. A controlling person may possess the ability to control the outcome of matters submitted
for shareholder vote of the Fund.
Renaissance IPO ETF
|
|
|
|
|
Name
|
Address
|
Percentage Ownership
|
|
National Financial Services LLC
|
640 Fifth Avenue, New York, NY 10019
|
19.70%
|
|
Charles Schwab & Co., Inc.
|
PO Box 64930, Phoenix, AZ 85082-4930
|
18.30%
|
|
TD Ameritrade Clearing, Inc.
|
200 South 108th Avenue, Omaha, NE 68154
|
10.81%
|
|
Stifel, Nicolaus & Company, Inc.
|
501 North Broadway, St. Louis, MO 63102
|
7.59%
|
|
Pershing LLC
|
One Pershing Plaza, Jersey City, NJ 07399
|
6.71%
|
|
BofA Securities, Inc.
|
One Bryant Park, New York, NY 10036
|
5.70%
|
Renaissance International IPO ETF
|
|
|
|
|
Name
|
Address
|
Percentage Ownership
|
|
Wells Fargo Clearing Services
|
One North Jefferson Avenue, St. Louis, MO 63103
|
41.24%
|
|
JP Morgan Securities
|
3 Chase Metrotech Center, Brooklyn, NY 11245-0001
|
12.60%
|
|
Charles Schwab & Co., Inc.
|
PO Box 64930, Phoenix, AZ, 85082-4930
|
9.97%
|
|
BofA Securities, Inc.
|
One Bryant Park, New York, NY 10036
|
9.74%
|
|
TD Ameritrade Clearing, Inc.
|
200 South 108th Avenue, Omaha, NE 68154
|
8.02%
|
|
National Financial Services LLC
|
640 Fifth Avenue, New York, NY 10019
|
5.82%
|
As of December 31, 2019, the Trustees
and Officers as a group owned 45.33% of the Renaissance International IPO ETF.
As of December 31, 2019, the Trustees
and Officers as a group owned 3.41% of the Renaissance IPO ETF.
TAXES
The following information also supplements
and should be read in conjunction with the section in the Funds’ Prospectus entitled “Shareholder Information —
Tax Information” and the section in this Statement of Additional Information entitled “Special Considerations and Risks.”
The following summary of certain relevant tax provisions is subject to change, and does not constitute legal or tax advice.
Each Fund has elected and intends to
qualify each year as a RIC under Subchapter M of the Internal Revenue Code. As a RIC, the Funds will not be subject to U.S. federal
income tax on the portion of its taxable investment income and capital gains that it distributes to its shareholders. To qualify
for treatment as a RIC, a company must annually distribute at least 90% of its net investment company taxable income (which includes
dividends, interest and net short-term capital gains) and meet several other requirements relating to the nature of its income
and the diversification of its assets, among others. If a Fund fails to qualify for any taxable year as a RIC, all of its taxable
income will be subject to tax at the applicable corporate income tax rate without any deduction for distributions to shareholders,
and such distributions generally will be taxable to shareholders as ordinary dividends to the extent of a Fund’s current
and accumulated earnings and profits. There are certain savings provisions for failures to satisfy the requirements to qualify
for taxation as a RIC, which, in general, are limited to those due to reasonable cause and not willful neglect. Even if such savings
provisions apply, a Fund may be subject to a monetary sanction of $50,000 or more.
The capital losses of a Fund, if
any, do not flow through to shareholders. Rather, the Fund may use its capital losses, subject to applicable limitations, to offset
its capital gains without being required to pay taxes on or distribute to shareholders such gains that are offset by the losses.
If a Fund has a “net capital loss” (that is, capital losses in excess of capital gains), the excess (if any) of the
Fund's net short-term capital losses over its net long-term capital gains is treated as a short-term capital loss arising on the
first day of the Fund’s next taxable year, and the excess (if any) of the Fund’s net long-term capital losses over
its net short-term capital gains is treated as a long-term capital loss arising on the first day of the Fund’s next taxable
year. Any such net capital losses of a Fund that are not used to offset capital gains may be carried forward indefinitely to reduce
any future capital gains realized by the Fund in succeeding taxable years.
Each Fund will be subject to a 4% excise
tax on certain undistributed income if it does not distribute to its shareholders in each calendar year at least 98% of its ordinary
income for the calendar year, 98.2% of its capital
gain net income for the twelve months
ended October 31 of such year, and 100% of any undistributed amounts from the prior years. Each Fund intends to declare and distribute
dividends and distributions in the amounts and at the times necessary to avoid the application of this 4% excise tax.
As a result of U.S. federal income tax
requirements, the Trust, on behalf of a Fund, has the right to reject an order for a creation of Shares if the creator (or group
of creators) would, upon obtaining the Shares so ordered, own 80% or more of the outstanding Shares of a Fund and if, pursuant
to Section 351 of the Internal Revenue Code, a Fund would have a basis in the Deposit Securities different from the market value
of such securities on the date of deposit. The Trust also has the right to require information necessary to determine beneficial
share ownership for purposes of the 80% determination. See “Creation and Redemption of Creation Units—Procedures for
Creation of Creation Units.”
Dividends, interest and gains received
by a Fund from a non-U.S. investment may give rise to withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of a Fund’s total assets
at the end of its taxable year consist of foreign stock or securities, a Fund may elect to “pass through” to its investors
certain foreign income taxes paid by a Fund, with the result that each investor will (i) include in gross income, as an additional
dividend, even though not actually received, the investor’s pro rata share of a Fund’s foreign income taxes, and (ii)
either deduct (in calculating U.S. taxable income) or credit (in calculating U.S. federal income), subject to certain holding period
and other limitations, the investor’s pro rata share of a Fund’s foreign income taxes. If the Fund makes such an election
and obtains a refund of foreign taxes paid by the Fund in a prior year, the Fund may be eligible to reduce the amount of foreign
taxes reported by the Fund, generally by the amount of the foreign taxes refunded, for the year in which the refund is received.
Each Fund will report annually the
amount of dividends received from ordinary income, the amount of distributions received from capital gains and the portion of dividends,
if any, which may be eligible to be treated as qualified dividends or for the dividends-received deduction. Certain ordinary dividends
paid to non-corporate shareholders may qualify for taxation at a lower tax rate applicable to long-term capital gains, provided
holding period and other requirements are met at both the shareholder and Fund levels.
In general, a sale of Shares results
in capital gain or loss, and for individual shareholders, is taxable at a federal rate dependent upon the length of time the Shares
were held. A redemption of a shareholder’s Fund Shares is normally treated as a sale for tax purposes. Fund Shares held for
a period of one year or less at the time of such sale or redemption will, for tax purposes, generally result in short-term capital
gains or losses, and those held for more than one year will generally result in long-term capital gains or losses. The maximum
tax rate on long-term capital gains available to non-corporate shareholders generally is 15% or 20% depending on the shareholders’
filing status and level of taxable income.
An additional 3.8% Medicare tax is imposed
on certain net investment income (including ordinary dividends and capital gain distributions received from a Fund and net gains
from redemptions or other taxable dispositions of Fund Shares) of U.S. individuals, estates and trusts to the extent that such
person’s “modified adjusted gross income” (in the case of an individual) or “adjusted gross income”
(in the case of an estate or trust) exceeds certain threshold amounts.
Under the 2017 Tax Cuts and Jobs
Act, “qualified REIT dividends” (i.e., ordinary REIT dividends other than capital gain dividends and portions of REIT
dividends designated as qualified dividend income) are treated as eligible for a 20% deduction by noncorporate taxpayers. This
deduction, if allowed in full, equates to a maximum effective tax rate of 29.6% (37% top rate applied to income after 20% deduction).
Proposed regulations issued by the IRS, which can be relied upon currently, enable the Fund to pass through the special character
of “qualified REIT dividends” to a shareholder, provided both the Fund and a shareholder meet certain holding period
requirements with respect to their shares. A noncorporate shareholder receiving such dividends would treat them as eligible for
the 20% deduction, provided the RIC shares were held by the shareholder for more than 45 days during the 91-day period beginning
on the date that is 45 days before the date on which the shares become ex-
dividend with respect to such dividend.
The amount of a RIC’s dividends eligible for the 20% deduction for a taxable year is limited to the excess of the RIC’s
qualified REIT dividends for the taxable year over allocable expenses.
A U.S. REIT is not subject to federal
income tax on the income and gains it distributes to shareholders. Dividends paid by a U.S. REIT, other than capital gain distributions,
will be taxable as ordinary income up to the amount of the U.S. REIT’s current and accumulated earnings and profits. Capital
gain dividends paid by a U.S. REIT to a Fund will be treated as long-term capital gains by the Fund and, in turn, may be distributed
by the Fund to its shareholders as a capital gain distribution. Because of certain noncash expenses, such as property depreciation,
an equity U.S. REIT’s cash flow may exceed its taxable income. The equity U.S. REIT, and in turn a Fund, may distribute this
excess cash to shareholders in the form of a return of capital distribution. However, if a U.S. REIT is operated in a manner that
fails to qualify as a REIT, an investment in the U.S. REIT would become subject to double taxation, meaning the taxable income
of the U.S. REIT would be subject to federal income tax at the corporate income tax rate without any deduction for dividends paid
to shareholders and the dividends would be taxable to shareholders as ordinary income (or possibly as qualified dividend income)
to the extent of the U.S. REIT’s current and accumulated earnings and profits.
While non-U.S. REITs often use complex
acquisition structures that seek to minimize taxation in the source country, an investment by a Fund in a non-U.S. REIT may subject
the Fund, directly or indirectly, to corporate taxes, withholding taxes, transfer taxes and other indirect taxes in the country
in which the real estate acquired by the non-U.S. REIT is located. A Fund’s pro rata share of any such taxes will reduce
the Fund’s return on its investment. A Fund’s investment in a non-U.S. REIT may be considered an investment in a PFIC,
as discussed below. Also, a Fund in certain limited circumstances may be required to file an income tax return in the source country
and pay tax on any gain realized from its investment in the non-U.S. REIT under rules similar to those in the United States, which
tax foreign persons on gain realized from dispositions of interests in U.S. real estate.
Special tax rules may change the normal
treatment of gains and losses recognized by a Fund if the Fund makes certain investments such as investments in swaps, options
and non-U.S. corporations classified as “passive foreign investment companies” (“PFICs”). Those special
tax rules can, among other things, affect the treatment of capital gain or loss as long-term or short-term and may result in ordinary
income or loss rather than capital gain or loss and may accelerate when a Fund has to take these items into account for tax purposes.
Investments in PFICs are subject to special
tax rules which may result in adverse tax consequences to a Fund and its shareholders. To the extent a Fund invests in PFICs, it
generally intends to elect to “mark to market” these investments at the end of each taxable year. By making this election,
a Fund will recognize as ordinary income any increase in the value of such shares as of the close of the taxable year over their
adjusted basis and as ordinary loss any decrease in such investment (but only to the extent of prior income from such investment
under the mark to market rules). Gains realized with respect to a disposition of a PFIC that a Fund has elected to mark to market
will be ordinary income. By making the mark to market election, a Fund may recognize income in excess of the distributions that
it receives from its investments. Accordingly, a Fund may need to borrow money or dispose of some of its investments in order to
meet its distributions requirements. If a Fund does not make the mark to market election with respect to an investment in a PFIC,
a Fund could become subject to U.S. federal income tax with respect to certain distributions from, and gain on dispositions of,
the PFIC which cannot be avoided by distributing such amounts to a Fund’s shareholders.
Gain or loss on the sale or redemption
of Fund Shares is measured by the difference between the amount of cash received (or the fair market value of any property received)
and the adjusted tax basis of the Shares. Shareholders should keep records of investments made (including Shares acquired through
reinvestment of dividends and distributions) so they can compute the tax basis of their Fund Shares. Adjusted cost basis information
for covered securities, which generally include shares of a regulated investment company acquired after January 1, 2012,
is required to be reported to the Internal Revenue Service and to taxpayers. Shareholders should contact their financial intermediaries
with respect to reporting of cost basis and available elections for their accounts.
A loss realized on a sale or exchange
of Shares of a Fund may be disallowed if other Fund Shares or substantially identical shares are acquired (whether through the
automatic reinvestment of dividends or otherwise) within a sixty-one (61) day period beginning thirty (30) days before and ending
thirty (30) days after the date that the Shares are disposed of. In such a case, the basis of the Shares acquired will be adjusted
to reflect the disallowed loss. Any loss upon the sale or exchange of Shares held for six (6) months
or less will be treated as long-term capital loss to the extent of any capital gain dividends received by the shareholders. Distribution
of ordinary income and capital gains may also be subject to foreign, state and local taxes.
Each Fund may make investments in which
it recognizes income or gain prior to receiving cash with respect to such investment. For example, under certain tax rules, a Fund
may be required to accrue a portion of any discount at which certain securities are purchased as income each year even though a
Fund receives no payments in cash on the security during the year. To the extent that a Fund makes such investments, it generally
would be required to pay out such income or gain as a distribution in each year to avoid taxation at a Fund level.
Distributions reinvested in additional
Fund Shares through the means of a dividend reinvestment service (see “Dividend Reinvestment Service”) will nevertheless
be taxable dividends to Beneficial Owners acquiring such additional Shares to the same extent as if such dividends had been received
in cash.
Some shareholders may be subject to
a withholding tax on distributions of ordinary income, capital gains and any cash received on redemption of Creation Units (“backup
withholding”). The backup withholding rate for individuals is currently 24%. Generally, shareholders subject to backup withholding
will be those for whom no certified taxpayer identification number is on file with the withholding agent or who, to the withholding
agent’s knowledge, have furnished an incorrect number. When establishing an account, an investor must certify under penalty
of perjury that such number is correct and that such investor is not otherwise subject to backup withholding. Backup withholding
is not an additional tax. Any amounts withheld will be allowed as a credit against shareholders’ U.S. federal income tax
liabilities, and may entitle them to a refund, provided that the required information is timely furnished to the Internal Revenue
Service.
Distributions of ordinary income
paid to shareholders who are nonresident aliens or foreign entities will generally be subject to a 30% U.S. withholding tax, unless
a lower treaty rate applies, such income is effectively connected with a U.S. trade or business, or a statutory exemption applies.
There are statutory exemptions in place for long-term capital gain dividends, interest-related dividends, and short-term capital
gain dividends received from a regulated investment company which meets the requirements of Internal Revenue Code Section 852(a)
for the taxable year with respect to which the dividend is paid.
As part of the Foreign Account Tax
Compliance Act (“FATCA”), a withholding tax (at a 30% rate) is imposed on income dividends made to certain non-U.S.
entities that fail to comply (or be deemed compliant) with extensive reporting and withholding requirements designed to inform
the U.S. Department of the Treasury of U.S.-owned foreign investment accounts. After December 31, 2018, FATCA withholding
also would have applied to certain capital gain distributions, return of capital distributions and proceeds arising from the sale
of Fund shares; however, based on proposed regulations recently issued by the IRS, which can be relied upon currently, such withholding
is no longer required unless final regulations provide otherwise (which is not expected). Shareholders may be requested to provide
additional information to enable a withholding agent to determine whether withholding is required. A withholding agent may be required
to perform due diligence reviews to classify foreign entity investors for FATCA purposes. Investors are required to agree to provide
information necessary to allow a withholding agent to comply with FATCA rules. Any amount withheld from payments pursuant to FATCA
will reduce the amount distributed to the investor.
The foregoing discussion is a summary
only and is not intended as a substitute for careful tax planning. Purchasers of Shares of a Fund should consult their own tax
advisers as to the tax consequences of investing in such Shares, including under state, local and other tax laws. Finally, the
foregoing discussion is based on applicable provisions of the Internal Revenue Code, regulations, judicial authority and administrative
interpretations in effect on the date
hereof. Changes in applicable authority could materially affect the conclusions discussed above, and such changes often occur.
Reportable Transactions
Under promulgated Treasury regulations,
if a shareholder recognizes a loss on disposition of a Fund’s Shares of $2 million or more in any one taxable year (or $4
million or more over a period of six taxable years) for an individual shareholder or $10 million or more in any taxable year (or
$20 million or more over a period of six taxable years) for a corporate shareholder, the shareholder must file with the IRS
a disclosure statement on Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting
requirement, but under current guidance, shareholders of a RIC that engaged in a reportable transaction are not excepted. Future
guidance may extend the current exception from this reporting requirement to shareholders of most or all RICs. In addition, significant
penalties may be imposed for the failure to comply with the reporting requirements. The fact that a loss is reportable under these
regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders
should consult their tax advisors to determine the applicability of these regulations in light of their individual circumstances.
CAPITAL
STOCK AND SHAREHOLDER REPORTS
The Trust is comprised of two investment
funds. The Trust issues Shares of beneficial interest with no par value. The Board may designate additional funds of the Trust.
Each Share issued by the Trust has a
pro rata interest in the assets of a Fund. Shares have no pre-emptive, exchange, subscription or conversion rights and are freely
transferable. Each Share is entitled to participate equally in dividends and distributions declared by the Board with respect to
a Fund, and in the net distributable assets of a Fund on liquidation.
Each Share has one vote with respect
to matters upon which a shareholder vote is required consistent with the requirements of the 1940 Act and the rules promulgated
thereunder and each fractional Share has a proportional fractional vote. Shares of the Funds comprising the Trust vote together
as a single class except that if the matter being voted on affects only a particular fund it will be voted on only by that fund,
and if a matter affects a particular fund differently from other funds, that fund will vote separately on such matter. Under Delaware
law, the Trust is not required to hold an annual meeting of shareholders unless required to do so under the 1940 Act. The policy
of the Trust is not to hold an annual meeting of shareholders unless required to do so under the 1940 Act. All Shares of the Trust
have noncumulative voting rights for the election of Trustees. Under Delaware law, Trustees of the Trust may be removed by vote
of the shareholders.
Under Delaware law, shareholders of
a statutory trust may have similar limitations on liability as shareholders of a corporation.
Each Fund will issue through DTC Participants
to its shareholders semi-annual reports containing unaudited financial statements and annual reports containing financial statements
audited by an independent auditor approved by the Trust’s Trustees and by the shareholders when meetings are held and such
other information as may be required by applicable laws, rules and regulations. Beneficial Owners also receive annually notification
as to the tax status of a Fund’s distributions.
Shareholder inquiries may be made by
writing to the Fund, c/o Renaissance Capital LLC, 165 Mason Street, Greenwich, CT 06830.
COUNSEL
AND INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Stradley Ronon Stevens & Young,
LLP, 2000 K Street, NW, Suite 700, Washington, DC 20006-1871, is counsel to the Trust.
Tait, Weller & Baker LLP, Two Liberty
Place, 50 South 16th Street, Suite 2900, Philadelphia PA 19102 is the Funds’ independent registered public accounting
firm and audits the Funds’ financial statements and performs other related audit services.
FINANCIAL
STATEMENTS
The audited financial statements
of the Funds, including the financial highlights appearing in the Funds’ Annual Report to shareholders for its fiscal year
ended September 30, 2019, were filed electronically with the SEC, and are incorporated by reference and made part of this SAI.
You may request a copy of the Funds’ Annual Report and Semi-Annual Report for the Funds at no charge by calling 1-866-486-6645
during normal business hours.
LICENSE
AGREEMENTS AND DISCLAIMERS
The information contained herein regarding
the Renaissance IPO Index and the Renaissance International IPO Index was provided by the Index Provider, which is a wholly owned
subsidiary of the Adviser. The information contained herein regarding the securities markets and DTC was obtained from publicly
available sources.
The Renaissance IPO ETF and the Renaissance
International IPO ETF are not sponsored, endorsed, sold or promoted by the Index Provider. The Index Provider makes no representation
or warranty, express or implied, to the owners of the Shares of a Fund or any member of the public regarding the advisability of
investing in securities generally or in the Shares of a Fund particularly or the ability of the Index to track the performance
of the relevant securities markets. Each Index is determined and composed by the Index Provider without regard to the Adviser or
the owners of the Shares of a Fund. The Index Provider has no obligation to take the needs of the Adviser or the owners of the
Shares of a Fund into consideration in determining or composing the Index. The Index Provider is not responsible for and has not
participated in the determination of the timing of, prices at, or quantities of the Shares of a Fund to be issued or in the determination
or calculation of the equation by which the Shares of a Fund are to be converted into cash. The Index Provider has no obligation
or liability in connection with the administration, marketing or trading of the Shares of a Fund.
THE INDEX PROVIDER DOES NOT GUARANTEE
THE ACCURACY AND/OR THE COMPLETENESS OF AN INDEX OR ANY DATA INCLUDED THEREIN AND THE INDEX PROVIDER SHALL HAVE NO LIABILITY FOR
ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. THE INDEX PROVIDER MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
OBTAINED BY THE ADVISER, OWNERS OF THE SHARES OF A FUND OR ANY OTHER PERSON OR ENTITY FROM THE USE OF AN INDEX OR
ANY DATA INCLUDED THEREIN. THE INDEX PROVIDER MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO AN INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING
ANY OF THE FOREGOING, IN NO EVENT SHALL THE INDEX PROVIDER HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL
DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Each Fund is not sponsored, promoted,
sold or supported in any other manner by the Calculation Agent nor does the Calculation Agent offer any express or implicit guarantee
or assurance either with regard to the results of using an Index and/or its trade mark or its price at any time or in any other
respect. Each Index is calculated and maintained by the Calculation Agent. The Calculation Agent uses its best efforts to ensure
that each Index is calculated correctly. Irrespective of its obligations towards the Index Provider, the Calculation Agent has
no obligation to point out errors in an Index to third parties including but not limited to investors and/or financial intermediaries
of a Fund. Neither the publication of an Index by the Calculation Agent nor the licensing of an Index or its trade mark for the
purpose of use in connection with a Fund constitutes a recommendation by the Calculation Agent to invest capital in a Fund nor
does it in any way represent an assurance or opinion of the Calculation Agent with regard to any investment in a Fund. The Calculation
Agent is not responsible for fulfilling the legal requirements concerning the accuracy and completeness of the Prospectus.
APPENDIX
A
PROXY VOTING POLICIES AND PROCEDURES
I.
POLICY STATEMENT
Introduction – Renaissance
Capital, LLC (the “Adviser”) is adopting these proxy voting policies and procedures (the “Policies and Procedures”)
in order to comply with Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended, and its associated recordkeeping requirements.
The Policies and Procedures apply to
those client accounts (i) that contain voting securities; and (ii) for which the Adviser has authority to vote client proxies.
The Policies and Procedures will be reviewed and, as necessary, updated periodically to address new or revised proxy voting issues.
Other, similar rights such as consent rights shall be evaluated on a case by case basis.
Pursuant to the Policies and Procedures
and its fiduciary duties, the Adviser will vote client proxies as part of its authority to manage, acquire and dispose of account
assets. When voting proxies for client accounts, the Adviser’s primary objective is to make voting decisions solely in the
best interests of clients and beneficiaries and participants of benefits plans for which we manage assets. In fulfilling its obligations
to clients, the Adviser will act in a manner deemed to be prudent and diligent and which is intended to enhance the economic value
of the underlying securities held in client accounts. In certain situations, a client or its fiduciary may provide the Adviser
with a statement of proxy voting policy. In these situations, the Adviser seeks to comply with such policy to the extent it would
not be inconsistent with applicable regulation or the fiduciary responsibility of the Adviser.
Duty to Vote Proxies –
The Adviser acknowledges that it is part of its fiduciary duty to its clients to vote client proxies, except in cases in which
the cost of doing so, in the opinion of the Adviser, would exceed the expected benefits to the client. This may be particularly
true in the case of non-U.S. securities. While the proxy voting process is well established in the United States and other developed
markets with a number of tools and services available to assist an investment manager, voting proxies of non-US companies located
in certain jurisdictions, particularly emerging markets, may involve a number of logistical problems that may have a detrimental
effect on the Adviser’s ability to vote such proxies. The logistical problems include, but are not limited to: (i) proxy
statements and ballots being written in a language other than English, (ii) untimely and/or inadequate notice of shareholder meetings,
(iii) restrictions on the ability of holders outside the issuer’s jurisdiction of organization to exercise votes, (iv) requirements
to vote proxies in person, (v) the imposition of restrictions on the sale of the securities for a period of time in proximity to
the shareholder meeting, and (vi) requirements to provide local agents with power of attorney to facilitate the Adviser’s
voting instructions. Accordingly, the Adviser may conduct a cost-benefit analysis in determining whether to attempt to vote its
clients’ shares at a non-US company’s meeting, whereby if it is determined that the cost associated with the attempt
to exercise its vote outweighs the benefit the Adviser believes its clients will derive by voting on the company’s proposal,
the Adviser may decide not to attempt to vote at the meeting.
Material Conflicts – The
Adviser will vote its clients’ proxies in the best interests of its clients and not its own. In voting client proxies, the
Adviser will avoid material conflicts of interests between the interests of the Adviser and its affiliates on the one hand and
the interests of its clients on the other. The Adviser recognizes that it may have a material conflict of interest in voting a
client proxy where (i) it manages assets, administers employee benefit plans, or provides brokerage, underwriting or insurance
to companies whose management is soliciting proxies; (ii) it manages money for an employee group that is the proponent of a proxy
proposal; (iii) has a personal relationship with participants in a proxy solicitation or a director or candidate for director;
or (iv) it otherwise has a personal interest in the outcome in a particular matter before shareholders. Notwithstanding the above
categories, the Adviser understands that the determination of whether a “material conflict” exists depends on all of
the facts and circumstances of the particular situation. The Adviser acknowledges the existence of a
relationship of the type discussed above,
even in the absence of any active efforts to solicit the investment adviser with respect to a proxy vote, is sufficient for a material
conflict to exist.
The Adviser will vote its clients’
proxies in a pre-determined voting policy involving little discretion on the part of the Adviser. The Adviser will rely on this
pre-determined voting policy to demonstrate that its votes were not products of a conflict of interest. The Adviser’s Proxy
Voting Guidelines are contained in a separate schedule.
II.
ADMINISTRATION OF PROXY POLICIES AND PROCEDURES
A.
Proxy Review Committee
The Adviser’s Proxy Review
Committee (the “Committee”) is responsible for creating and implementing the Policies and Procedures and, in that regard,
has adopted the general principles and guidelines set forth above in Sections I and II. Among other things, the Committee is responsible
for the following:
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1.
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The Committee consists of the officers of the Adviser.
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2.
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The Committee shall have the authority to amend and change the Policies and Procedures and designate
voting positions consistent with the objective of maximizing long-term investment returns for the Adviser’s clients.
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3.
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The Committee shall meet as needed to oversee and address all questions relating to the Adviser’s
Policies and Procedures, including: (1) general review of proposals being put forth at shareholder meetings of portfolio companies;
(2) adopting changes in the Policies and Procedures; (3) determining whether voting on matters in the manner favored by the Adviser
are “material” conflicts of interests within the meaning of Rule 206(4)-6 under the Investment Advisers Act of 1940,
as amended; (4) determining how to vote matters for which specific direction has not been provided the Proxy Voting Guidelines
(i.e. “case by case” matters) or are otherwise not covered by the Proxy Voting Guidelines (collectively, “Discretionary
Proposals”); (5) determining whether to override the Proxy Voting Guidelines with respect to any proxy vote; and (6) designating
a compliance officer (the “Compliance Officer”) to implement the Operating Procedures set forth in Part B of this Section
II.
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4.
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The Committee will appoint a Designated Officer to review and vote proxies.
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B.
Operating Procedures
The following operating procedures are
intended to ensure that the Adviser satisfies its proxy voting obligations:
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1.
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The Designated Officer will review and vote proxies in a timely manner as they are received. These
votes will be compiled for the necessary compliance with proxy voting disclosure requirements.
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2.
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For all Discretionary Matters, the Designated Officer shall screen the matter and make a determination
regarding whether the matter presents a potential material conflict of interest between the interests of the Adviser and its affiliates
on the one hand and the Adviser’s client on the other.
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In order to determine whether a
Discretionary Matter poses a potential material conflict of interest, the Designated Officer shall consider:
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(a)
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all issuers for which the Adviser or its affiliates manages assets;
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(b)
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all issuers for which the Adviser or its affiliates administers employee benefit plans;
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(c)
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all issuers for which the Adviser or its affiliates brokerage, underwriting or insurance;
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(d)
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any issuer for which the Adviser or its affiliates is soliciting the provision of services enumerated
in (a), (b) and (c);
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(e)
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any other issuer with which the Adviser or its affiliates or its senior officers has a material
business relationship; and
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(f)
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any employee group for which the Adviser manages money.
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If the Designated Officer determines
that a potential conflict exists, the Designated Officer will report this conflict to the Committee and to the Board of the Renaissance
Capital Greenwich Funds (“Fund”), if it involves proxies for shares held in the Fund. In the event of a conflict, the
Designated Officer will vote in accordance with the Adviser’s Proxy Voting Guidelines. If the Guidelines do not address the
particular proxy matter, the Designated Officer will consult with at least one of the Fund’s independent trustees.
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3.
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The Designated Officer shall present each meeting of the Committee with: (i) a list of all Pre-Determined
Matters to be voted in accordance with the Proxy Voting Guidelines; (ii) a list of all Discretionary Matters; The Committee shall
meet annually to review proxies voted.
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4.
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Directed Matters will be voted in accordance with the instructions of the client.
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5.
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The Designated Officer shall insure that proxies are voted in accordance with these Procedures
and Policies.
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6.
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The Designated Officer may delegate any of his or her functions to a third party proxy voting or
other service provider.
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III.
CLIENT DISCLOSURE POLICIES
The Adviser will disclose the Policies
and Procedures to its clients. The Adviser’s disclosure will consist of a “concise summary” of its proxy voting
policies and procedures. This disclosure will also tell clients how to get a complete copy of the Adviser’s policies and
procedures. The Adviser’s proxy voting disclosure will be provided to new clients along with the Adviser’s “brochure”
or Part II to its Form ADV which will be delivered with a letter identifying the presence of the disclosure. The Designated Officer
will provide any client, upon written request, with a tabulation of how such client’s proxies were voted by the Adviser.
IV.
RECORDKEEPING REQUIREMENTS
Rule 204-2 under the Advisers Act, as
amended, requires that the Adviser retain (i) its proxy voting policies and procedures; (ii) proxy statements received regarding
client securities; (iii) records of votes it cast on behalf of clients; (iv) records of client requests for proxy voting information,
and (v) any documents prepared by the investment adviser that were material to making a decision how to vote, or that memorialized
the basis for the decision. The Adviser will keep all written requests from clients and any written response from
the Adviser (to either a written or an oral request). The Adviser may rely on proxy statements filed on the SEC’s EDGAR system
instead of keeping its own copies, and may rely on proxy statements and records of proxy votes cast by the Adviser that are maintained
with a third party such as a proxy voting service, provided that the Adviser has obtained an undertaking from the third party to
provide a copy of the documents promptly upon request.
PART C. OTHER INFORMATION
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(a)
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Amended Certificate of Trust dated October 30, 1997, filed in Pre-Effective Amendment No. 1 on
October 31, 1997 and is incorporated herein by this reference.
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Delaware Trust
Instrument dated February 3, 1997, filed on February 6, 1997 to the Registrant's Registration Statement on Form N-1A, and hereby
incorporated by reference.
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(b)
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Bylaws dated February 3, 1997 are incorporated herein by reference
to the Registrant's Registration Statement on Form N-1A filed on February 6, 1997.
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(d)(1)
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Amended Investment Advisory Agreement between the Registrant and Renaissance Capital LLC dated
August 22, 2014 is filed in Post-Effective Amendment No. 52 on January 28, 2016 and is incorporated herein by this reference.
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(d)(2)
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Supervision and Administration Agreement filed in Post-Effective Amendment No. 27 on July 18, 2014 and is incorporated herein
by this reference.
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(e)(1)
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Distribution Agreement between Registrant and Renaissance Capital Investments, Inc. dated November
10, 2015 is filed in Post-Effective Amendment No. 52 on January 28, 2016 and is incorporated herein by this reference.
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(e)(2)
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Form of Selected Dealer Agreement is filed in Pre-Effective Amendment No. 1 on October 31, 1997 and is incorporated herein
by this reference.
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(e)(3)
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Distribution
Agreement between Foreside Fund Services, LLC (“Foreside”) and the Registrant on behalf of the Renaissance IPO ETF
filed in Post-Effective Amendment No. 24 on August 30, 2013 and is incorporated herein by this reference.
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(e)(4)
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Form of Participation Agreement with Foreside Fund Services, LLC filed in Post-Effective Amendment No. 24 on August 30, 2013
and is incorporated herein by this reference.
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(e)(5)
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First Amendment to the Registrant’s Distribution Agreement between Foreside and the Registrant
filed in Post-Effective Amendment 29 on October 1, 2014 and is incorporated herein by this reference.
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(e)(6)
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Second Amendment to the Registrant’s Distribution Agreement between Foreside and the Registrant dated August 14, 2014
filed in Post-Effective Amendment No. 52 on January 28, 2016 and is incorporated herein by this reference.
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(e)(7)
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Novation to the Distribution Agreement between Foreside and the Registrant filed in Post-Effective
Amendment No. 71 on January 26, 2018 and is incorporated herein by this reference.
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(g)(1)
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Custody Agreement between the Registrant and The Bank of New York is filed in Post-Effective Amendment
No. 8 on February 18, 2004 and is incorporated herein by this reference.
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(g)(2)
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Custodian Agreement between State Street Bank and Trust Company (“State Street”) and
the Registrant on behalf of Renaissance IPO ETF, is filed in Post-Effective Amendment 29 on October 1, 2014 and is incorporated
herein by reference.
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(g)(3)
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Letter Amendment to the Custodian Agreement between State Street and the Registrant on behalf of
Renaissance IPO ETF, is filed in Post-Effective Amendment 29 on October 1, 2014 and is incorporated herein by reference.
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(g)(4)
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Amendment to the Custody Agreement between State Street and the Registrant, dated January 2, 2020,
is filed herewith.
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(h)(1)
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Administration Agreement between State Street Bank and Trust Company and the Registrant on behalf
of the Renaissance IPO ETF, is filed in Post-Effective Amendment 29 on October 1, 2014 and is incorporated herein by reference.
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(h)(2)
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Letter Amendment to the Administration Agreement between State Street and the Registrant, is filed
in Post-Effective Amendment 29 on October 1, 2014 and is incorporated herein by reference.
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(h)(3)
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Transfer Agency and Service Agreement between State Street and the Registrant on behalf of the
Renaissance IPO ETF, is filed in Post-Effective Amendment 29 on October 1, 2014 and is incorporated herein by reference.
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(h)(4)
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Letter Amendment to the Transfer Agency and Service Agreement between State Street and the Registrant,
is filed in Post-Effective Amendment 29 on October 1, 2014 and is incorporated herein by reference.
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(h)(5)
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Securities Lending Authorization Agreement, dated October 9, 2013, between the Trust, on behalf
of the Funds, and State Street Bank and Trust Company, is filed herewith.
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(h)(6)
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First Amendment to Securities Lending Authorization Agreement, dated September 30, 2014, between
the Trust, on behalf of the Funds, and State Street Bank and Trust Company, is filed herewith.
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(h)(7)
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Second Amendment to Securities Lending Authorization Agreement, dated September 15, 2016, between
the Trust, on behalf of the Funds, and State Street Bank and Trust Company, is filed herewith.
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(h)(8)
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Third Amendment to the Securities Lending Authorization Agreement, dated January 10, 2020, between
the Trust, on behalf of the Funds, and State Street Bank and Trust Company, is filed herewith.
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(i)
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Opinion of Kramer Levin Naftalis & Frankel LLP, is filed in Pre-Effective
Amendment No. 2 on December 18, 1997 and is incorporated herein by this reference.
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Opinion of Morris, Nichols, Arsht &
Tunnell is filed in Pre-Effective Amendment No. 2 on December 18, 1997 and is incorporated herein by this reference.
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(j)(1)
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Consent of Kramer, Levin, Naftalis & Frankel is incorporated herein by reference to Post-Effective
Amendment No. 4 to the Registrant's Registration Statement on Form N-1A filed on January 30, 2002.
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(j)(2)
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Consent of Tait, Weller & Baker, LLP Independent Auditors filed herewith.
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(l)
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Form of Investment Letter is filed in Pre-Effective Amendment No. 1 on October 31, 1997 and is incorporated herein by this
reference.
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(m)(1)
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Rule 12b-1 Distribution Plan is filed in Pre-Effective Amendment No. 1 on October 31, 1997 and
is incorporated herein by this reference.
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(m)(2)
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Amendment to Rule 12b-1 Distribution Plan filed in Post-Effective Amendment No. 24 on August 30, 2013 and is incorporated herein
by this reference.
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(m)(3)
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Distribution and Shareholder Serving Plan dated October 6, 1997, as amended and restated November
18, 2011 is filed in Post-Effective Amendment No. 20 on January 27, 2012 and is incorporated herein by this reference.
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(p)(1)
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Code of Ethics dated November 16, 2018 is filed in Post-Effective Amendment No. 75 on January 28,
2019 is incorporated herein by this reference.
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Powers of Attorney: (1) Warren K. Greene
filed in Post-Effective Amendment No. 8 on February 18, 2004 and is incorporated herein by this reference. (2) Walter E. Auch,
Jr. filed in Post-Effective Amendment No. 24 on August 30, 2013 and is incorporated herein by this reference.
ITEM 29. Persons Controlled By or Under Common Control with Registrant
None.
ITEM 30. Indemnification
Article X, Section 10.02 of the Registrant's
Delaware Trust Instrument, incorporated herein as Exhibit 2 hereto, provides for the indemnification of Registrant's Trustees and
officers, as follows:
Section 10.02 Indemnification.
(a) Subject to the exceptions and limitations contained in Subsection
10.02(b):
(i) every person who is, or has been, a Trustee
or officer of the Trust (hereinafter referred to as a "Covered Person") shall be indemnified by the Trust to the fullest
extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action,"
"suit," or "proceeding" shall apply to all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or
threatened while in office or thereafter, and the words "liability"
and "expenses" shall include, without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court
or body before which the proceeding was brought (A) to be liable to the Trust or its Shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office or (B) not to have acted
in good faith in the reasonable belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there
has been a determination that such Trustee or officer did not engage in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office, (A) by the court or other body approving the settlement; (B) by
at least a majority of those Trustees who are neither Interested Persons of the Trust nor are parties to the matter based upon
a review of readily available facts (as opposed to a full trial-type inquiry); or (C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a full trial-type inquiry).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any other rights to which
any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be a Covered Person and shall
inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained herein shall affect any rights
to indemnification to which Trust personnel, other than Covered Persons, and other persons may be entitled by contract or otherwise
under law.
(d) Expenses in connection with the preparation and presentation
of a defense to any claim, action, suit or proceeding of the character described in Subsection (a) of this Section 10.02 may be
paid by the Trust or Series from time to time prior to final disposition thereof upon receipt of an undertaking by or on behalf
of such Covered Person that such amount will be paid over by him to the Trust or Series if it is ultimately determined that he
is not entitled to indemnification under this Section 10.02; provided, however, that either (i) such Covered Person shall have
provided appropriate security for such undertaking, (ii) the Trust is insured against losses arising out of any such advance payments
or (iii) either a majority of the Trustees who are neither Interested Persons of the Trust nor parties to the matter, or independent
legal counsel in a written opinion, shall have determined, based upon a review of readily available facts (as opposed to a trial-type
inquiry or full investigation), that there is reason to believe that such Covered Person will be found entitled to indemnification
under this Section 10.02."
Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to trustees, officers, and controlling persons or Registrant pursuant to the
foregoing provisions, or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Investment Company Act of 1940, as amended, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred
or paid by a trustee, officer, or controlling person of Registrant in the successful defense of any action, suit, or proceeding)
is asserted by such trustee, officer, or controlling person in connection with the securities being registered, Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 31. Business
and Other Connections of Investment Adviser
Renaissance Capital LLC, Registrant's investment
adviser, is a registered investment adviser providing pre-IPO research to institutional investors and IPO index service to managers
of ETFs and structured products. The directors and officers of Renaissance Capital LLC have held the following
positions of a substantial nature:
|
Name
|
Position with the Adviser
|
Other Employment
|
|
William K. Smith
|
President, Chief Executive Officer and Director
|
President, Chief Executive Officer and Director of Renaissance Capital Investments, Inc., and Renaissance Capital International, LLC
|
|
Kathleen Shelton Smith
|
Chairman and Chief
Compliance Officer, Treasurer and Secretary
|
Chairman and Chief
Compliance Officer, Treasurer and
Secretary of Renaissance Capital Investments, Inc., and Renaissance
Capital International, LLC
|
|
Linda R. Killian
|
Vice President and Director
|
Vice President and Director of Renaissance Capital Investments, Inc., and Renaissance Capital International, LLC
|
The business address of each of the officers and directors is 165
Mason Street, Greenwich, CT 06830.
Item 32. Principal
Underwriters
|
|
(a)
|
Foreside Fund Services, LLC (the “Distributor”) serves as principal underwriter for the Renaissance IPO ETF and
International IPO ETF and the following other investment companies registered under the Investment Company Act of 1940, as amended:
|
|
|
1.
|
ABS Long/Short Strategies Fund
|
|
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4.
|
American Century ETF Trust
|
|
|
7.
|
Bluestone Community Development Fund (f/k/a The 504 Fund)
|
|
|
8.
|
Braddock Multi-Strategy Income Fund, Series of Investment Managers Series Trust
|
|
|
10.
|
Brinker Capital Destinations Trust
|
|
|
11.
|
Center Coast Brookfield MLP & Energy Infrastructure Fund
|
|
|
12.
|
Cliffwater Corporate Lending Fund
|
|
|
13.
|
CornerCap Group of Funds
|
|
|
14.
|
Davis Fundamental ETF Trust
|
|
|
15.
|
Direxion Shares ETF Trust
|
|
|
16.
|
Eaton Vance NextShares Trust
|
|
|
17.
|
Eaton Vance NextShares Trust II
|
|
|
19.
|
Ellington Income Opportunities Fund
|
|
|
20.
|
EntrepreneurShares Series Trust
|
|
|
21.
|
Evanston Alternative Opportunities Fund
|
|
|
22.
|
EventShares U.S. Policy
|
|
|
23.
|
Exchange Listed Funds Trust (f/k/a
Exchange Traded Concepts Trust II)
|
|
|
24.
|
Fiera Capital Series Trust
|
|
|
29.
|
Friess Small Cap Growth Fund, Series of Managed Portfolio Series
|
|
|
30.
|
GraniteShares ETF Trust
|
|
|
31.
|
Guinness Atkinson Funds
|
|
|
32.
|
Infinity Core Alternative Fund
|
|
|
34.
|
Innovator ETFs Trust II (f/k/a/ Elkhorn ETF Trust)
|
|
|
35.
|
Ironwood Institutional Multi-Strategy Fund LLC
|
|
|
36.
|
Ironwood Multi-Strategy Fund LLC
|
|
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38.
|
John Hancock Exchange-Traded Fund Trust
|
|
|
39.
|
Manor Investment Funds
|
|
|
40.
|
Miller/Howard Funds Trust
|
|
|
41.
|
Miller/Howard High Income Equity Fund
|
|
|
42.
|
Moerus Worldwide Value Fund, Series of Northern Lights Fund Trust IV
|
|
|
43.
|
Morningstar Funds Trust
|
|
|
44.
|
Pickens Morningstar® Renewable Energy Response™, Series of ETF Series Solutions
ETF (f/k/a NYSE® Pickens Oil Response™ ETF)
|
|
|
46.
|
Overlay Shares Core Bond ETF, Series of Listed Funds Trust
|
|
|
47.
|
Overlay Shares Foreign Equity ETF, Series of Listed Funds Trust
|
|
|
48.
|
Overlay Shares Large Cap Equity ETF, Series of Listed Funds Trust
|
|
|
49.
|
Overlay Shares Municipal Bond ETF, Series of Listed Funds Trust
|
|
|
50.
|
Overlay Shares Small Cap Equity ETF, Series of Listed Funds Trust
|
|
|
51.
|
Pacific Global ETF Trust
|
|
|
52.
|
Palmer Square Opportunistic Income Fund
|
|
|
53.
|
Partners Group Private Income Opportunities, LLC
|
|
|
54.
|
PENN Capital Funds Trust
|
|
|
55.
|
Performance Trust Mutual Funds, Series of Trust for Professional Managers
|
|
|
56.
|
Plan Investment Fund, Inc.
|
|
|
57.
|
PMC Funds, Series of Trust for Professional Managers
|
|
|
58.
|
Point Bridge GOP Stock Tracker ETF, Series of ETF Series Solutions
|
|
|
59.
|
Quaker Investment Trust
|
|
|
60.
|
Renaissance Capital Greenwich Funds
|
|
|
61.
|
RMB Investors Trust (f/k/a Burnham Investors Trust)
|
|
|
62.
|
Robinson Opportunistic Income Fund, Series of Investment Managers Series Trust
|
|
|
63.
|
Robinson Tax Advantaged Income Fund, Series of Investment Managers Series Trust
|
|
|
64.
|
Roundhill BITKRAFT Esports & Digital Entertainment ETF, Series of Listed Funds Trust
|
|
|
68.
|
Sound Shore Fund, Inc.
|
|
|
69.
|
Source Dividend Opportunity ETF, Series of Listed Funds Trust
|
|
|
70.
|
Steben Alternative Investment Funds
|
|
|
73.
|
Tactical Income ETF, Series of Collaborative Investment Series Trust
|
|
|
75.
|
The Community Development Fund
|
|
|
76.
|
The Relative Value Fund
|
|
|
78.
|
Third Avenue Variable Series Trust
|
|
|
80.
|
TIFF Investment Program
|
|
|
81.
|
Timothy Plan High Dividend Stock ETF, Series of The Timothy Plan
|
|
|
82.
|
Timothy Plan International ETF, Series of The Timothy Plan
|
|
|
83.
|
Timothy Plan US Large Cap Core ETF, Series of The Timothy Plan
|
|
|
84.
|
Timothy Plan US Small Cap Core ETF, Series of The Timothy Plan
|
|
|
85.
|
Transamerica ETF Trust
|
|
|
86.
|
U.S. Global Investors Funds
|
|
|
87.
|
Variant Alternative Income Fund
|
|
|
88.
|
VictoryShares Developed Enhanced Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
89.
|
VictoryShares Dividend Accelerator ETF, Series of Victory Portfolios II
|
|
|
90.
|
VictoryShares Emerging Market High Div Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
91.
|
VictoryShares Emerging Market Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
92.
|
VictoryShares International High Div Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
93.
|
VictoryShares International Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
94.
|
VictoryShares US 500 Enhanced Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
95.
|
VictoryShares US 500 Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
96.
|
VictoryShares US Discovery Enhanced Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
97.
|
VictoryShares US EQ Income Enhanced Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
98.
|
VictoryShares US Large Cap High Div Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
99.
|
VictoryShares US Multi-Factor Minimum Volatility ETF, Series of Victory Portfolios II
|
|
|
100.
|
VictoryShares US Small Cap High Div Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
101.
|
VictoryShares US Small Cap Volatility Wtd ETF, Series of Victory Portfolios II
|
|
|
102.
|
VictoryShares USAA Core Intermediate-Term Bond ETF, Series of Victory Portfolios II
|
|
|
103.
|
VictoryShares USAA Core Short-Term Bond ETF, Series of Victory Portfolios II
|
|
|
104.
|
VictoryShares USAA MSCI Emerging Markets Value Momentum ETF, Series of Victory Portfolios II
|
|
|
105.
|
VictoryShares USAA MSCI International Value Momentum ETF, Series of Victory Portfolios II
|
|
|
106.
|
VictoryShares USAA MSCI USA Small Cap Value Momentum ETF, Series of Victory Portfolios II
|
|
|
107.
|
VictoryShares USAA MSCI USA Value Momentum ETF, Series of Victory Portfolios II
|
|
|
108.
|
Vivaldi Opportunities Fund
|
|
|
109.
|
West Loop Realty Fund, Series of Investment Managers Series Trust (f/k/a
Chilton Realty Income & Growth Fund)
|
|
|
111.
|
WST Investment Trust
|
|
|
112.
|
XAI Octagon Floating Rate & Alternative Income Term Trust
|
|
|
(b)
|
The following are the Officers and Manager of the Distributor, the Registrant’s underwriter. The Distributor’s
main business address is Three Canal Plaza, Suite 100, Portland, Maine 04101.
|
|
Name
|
Address
|
Position with Underwriter
|
Position with Registrant
|
|
Richard J. Berthy
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
President, Treasurer and Manager
|
None
|
|
Mark A. Fairbanks
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
Vice President
|
None
|
|
Jennifer K. DiValerio
|
899 Cassatt Road, 400 Berwyn Park, Suite 110, Berwyn, PA 19312
|
Vice President
|
None
|
|
Nanette K. Chern
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
Vice President and Chief Compliance Officer
|
None
|
|
Jennifer E. Hoopes
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
Secretary
|
None
|
(c) Not
applicable.
ITEM 33. Location of Accounts and Records
The majority of the accounts, books and other
documents required to be maintained for the Renaissance IPO ETF and Renaissance International IPO ETF under Section 31(a) of the
1940 Act and the Rules thereunder are maintained at the offices of State Street Bank and Trust Company located at One Lincoln Street,
Boston, Massachusetts 02111. The records required to be maintained under Rule 31a-1(b)(1) with respect to journals of receipts
and deliveries of securities and receipts and disbursements of cash are maintained at the offices of the Funds’ custodian,
as listed under "Investment Advisory and Other Services" in Part B to this Registration Statement.
ITEM 34. Management Services
Not applicable.
ITEM 35. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933, as amended, and has duly caused this Amendment to its Registration Statement on Form N-1A to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Greenwich, and the State of Connecticut on this 28th day of January,
2020.
RENAISSANCE CAPITAL GREENWICH FUNDS
By: _____/s/
William K. Smith______________
William K. Smith, President
Pursuant to the requirements
of the Securities Act of 1933, as amended, this Amendment to its Registration Statement has been signed below by the following
persons in the capacities indicated on the 28th day of January, 2020.
|
/s/ William K. Smith_________
William K. Smith
|
President
|
|
/s/ Kathleen S. Smith_________
Kathleen Shelton Smith
|
Treasurer,
Chief Compliance Officer, Chairman and Interested Trustee
|
|
/s/ Warren K. Greene*________
Warren K. Greene
|
Independent Trustee
|
|
/s/ Walter E. Auch*__________
Walter E. Auch
|
Independent Trustee
|
|
/s/ Kathleen S. Smith_________
By Kathleen Shelton Smith
*Attorney In Fact
|
|
EXHIBIT INDEX
Exhibit
(g)(4) Amendment to the Custody Agreement
(h)(5) Securities Lending Authorization Agreement
(h)(6) First Amendment to the Securities Lending Authorization Agreement
(h)(7) Second Amendment to the Securities Lending Authorization Agreement
(h)(8) Third Amendment to the Securities Lending Authorization Agreement
(j)(2) Consent of Tait, Weller & Baker, LLP
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