Beginning on January 1, 2021, as permitted by regulations adopted
by the U.S. Securities and Exchange Commission, paper copies of the Fund’s shareholder reports will no longer be sent by
mail, unless you specifically request paper copies of the Fund’s 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. Please contact your financial intermediary to elect to
receive shareholder reports and other Fund communications electronically.
You may elect to receive all future reports in paper free of
charge. Please contact your financial intermediary to inform them that you wish to continue receiving paper copies of shareholder
reports and for details about whether your election to receive reports in paper will apply to all funds held with your financial
intermediary.
ALPHA ARCHITECT ETF TRUST
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2020 (Unaudited)
|
|
|
Freedom 100 Emerging
Markets ETF
|
|
|
Assets:
|
|
|
|
|
Investments, at value
|
|
$
|
12,484,924
|
|
|
Dividends and interest receivable
|
|
|
42,898
|
|
|
Foreign currencies, at value
|
|
|
-
|
|
|
Total assets
|
|
|
12,527,822
|
|
|
Liabilities:
|
|
|
|
|
|
Accrued investment advisory fees
|
|
|
5,613
|
|
|
Total liabilities
|
|
|
5,613
|
|
|
Net Assets
|
|
$
|
12,522,209
|
|
|
|
|
|
|
|
|
Net Assets Consist of:
|
|
|
|
|
|
Capital stock
|
|
$
|
16,453,245
|
|
|
Total Distributable Earnings
|
|
|
(3,931,036
|
)
|
|
Net Assets:
|
|
$
|
12,522,209
|
|
|
|
|
|
|
|
|
Calculation of Net Asset Value Per Share:
|
|
|
|
|
|
Net Assets
|
|
$
|
12,522,209
|
|
|
Shares Outstanding (unlimited shares of beneficial interest authorized, no par value)
|
|
|
650,000
|
|
|
Net Asset Value per Share
|
|
$
|
19.26
|
|
|
|
|
|
|
|
|
Cost of Investments
|
|
$
|
16,919,478
|
|
The accompanying notes are an integral part
of these financial statements.
ALPHA ARCHITECT ETF TRUST
STATEMENT OF OPERATIONS
For the Period Ended March 31, 2020 (Unaudited)
|
|
|
Freedom 100 Emerging
Markets ETF
|
|
|
Investment Income:
|
|
|
|
|
Dividend income (net of foreign withholding tax of $23,999)
|
|
$
|
82,664
|
|
|
Interest income
|
|
|
430
|
|
|
Total investment income
|
|
|
83,094
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Investment advisory fees
|
|
|
34,829
|
|
|
Total expenses
|
|
|
34,829
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
48,265
|
|
|
|
|
|
|
|
|
Realized and Unrealized Gain (Loss) on Investments:
|
|
|
|
|
|
Net realized gain (loss) on:
|
|
|
|
|
|
Investments
|
|
|
(74,664
|
)
|
|
In-kind redemptions
|
|
|
574,102
|
|
|
Foreign currency
|
|
|
(9,245
|
)
|
|
|
|
|
490,193
|
|
|
Net change in unrealized depreciation on:
|
|
|
|
|
|
Investments
|
|
|
(3,646,504
|
)
|
|
Foreign currency
|
|
|
(828,812
|
)
|
|
|
|
|
(4,475,316
|
)
|
|
Net realized and unrealized loss on investments:
|
|
|
(3,985,123
|
)
|
|
Net decrease in net assets resulting from operations
|
|
$
|
(3,936,858
|
)
|
The accompanying notes are an integral part
of these financial statements.
ALPHA ARCHITECT ETF TRUST
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
Freedom
100 Emerging Markets ETF
|
|
|
|
|
Six Months Ended
March 31,
2020
(Unaudited)
|
|
|
Year Ended
September 30,
2019
|
|
|
Increase (Decrease) in Net Assets from:
|
|
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
48,265
|
|
|
$
|
125,770
|
|
|
Net realized gain (loss) on investments
|
|
|
490,193
|
|
|
|
(15,841
|
)
|
|
Net change in unrealized appreciation (depreciation) on investments
|
|
|
(4,475,316
|
)
|
|
|
40,744
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
|
(3,936,858
|
)
|
|
|
150,673
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to Shareholders:
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(50,277
|
)
|
|
|
(94,575
|
)
|
|
Total distributions
|
|
|
(50,277
|
)
|
|
|
(94,575
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Capital Share Transactions:
|
|
|
|
|
|
|
|
|
|
Proceeds from shares sold
|
|
|
6,648,410
|
|
|
|
12,593,305
|
|
|
Payments for shares redeemed
|
|
|
(2,806,470
|
)
|
|
|
-
|
|
|
Transaction Fees (See Note 1)
|
|
|
4,162
|
|
|
|
13,839
|
|
|
Net increase in net assets from net change in capital share transactions
|
|
|
3,846,102
|
|
|
|
12,607,144
|
|
|
Total increase (decrease) in net assets
|
|
|
(141,033
|
)
|
|
|
12,663,242
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
|
Beginning of Period
|
|
|
12,663,242
|
|
|
|
-
|
|
|
End of Period
|
|
$
|
12,522,209
|
|
|
$
|
12,663,242
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Shares Outstanding
|
|
|
|
|
|
|
|
|
|
Shares outstanding, beginning of year
|
|
|
500,000
|
|
|
|
-
|
|
|
Shares sold
|
|
|
250,000
|
|
|
|
500,000
|
|
|
Shares reinvested
|
|
|
-
|
|
|
|
-
|
|
|
Shares repurchased
|
|
|
(100,000
|
)
|
|
|
-
|
|
|
Shares outstanding, end of year
|
|
|
650,000
|
|
|
|
500,000
|
|
The accompanying notes are an integral part
of these financial statements.
ALPHA ARCHITECT ETF TRUST
FINANCIAL HIGHLIGHTS
March 31, 2020 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
to Average Net Assets
|
|
|
|
|
|
Net Asset
Value, Beginning of Period
|
|
Net
Investment Income(1)
|
|
Net Realized
and Unrealized Gains/(Losses) on Investments
|
|
Net Increase/
(Decrease) in Net Asset Value Resulting from Operations
|
|
Distributions
from Net Investment Income
|
|
Total Distributions
|
|
Transaction
Fees (See Note 1)
|
|
Net Asset
Value, End of Period
|
|
Total
Return(2)
|
|
Net Assets,
End of Period (000’s)
|
|
Net
Expenses(3)(4)
|
|
Gross
Expenses(3)
|
|
Net
Investment Income (Loss)(3)
|
|
Portfolio
Turnover Rate(5)
|
|
Freedom 100 Emerging Markets ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 to March 31,
2020
|
|
$25.33
|
|
0.09
|
|
(6.08)
|
|
(5.99)
|
|
(0.09)
|
|
(0.09)
|
|
0.01
|
|
$19.26
|
|
(23.68%)
|
|
$12,522
|
|
0.49%
|
|
0.49%
|
|
0.68%
|
|
21.7%
|
|
May
23, 2019 (6) to September 30, 2019
|
|
$25.00
|
|
0.31
|
|
0.19
|
|
0.50
|
|
(0.20)
|
|
(0.20)
|
|
0.03
|
|
$25.33
|
|
2.11%
|
|
$12,663
|
|
0.49%
|
|
0.49%
|
|
3.42%
|
|
0.3%
|
|
|
(1)
|
Net
investment income per share represents net investment income divided by the daily average
shares of beneficial interest outstanding throughout the period.
|
|
|
(2)
|
All
returns reflect reinvested dividends, if any, but do not reflect the impact of taxes.
Total return for a period of less than one year is not annualized.
|
|
|
(3)
|
For
periods of less than one year, these ratios are annualized.
|
|
|
(4)
|
Net
expenses include effects of any reimbursement or recoupment.
|
|
|
(5)
|
Portfolio
turnover is not annualized and is calculated without regard to short-term securities
having a maturity of less than one year.
|
|
|
(6)
|
Commencement
of operations.
|
ALPHA ARCHITECT ETF TRUST
NOTES TO FINANCIAL STATEMENTS
March 31, 2020 (UNAUDITED)
NOTE 1 – ORGANIZATION
Freedom 100 Emerging Markets ETF (the
“Fund”) is a series of the Alpha Architect ETF Trust (the “Trust”), which is organized as a Delaware statutory
trust on October 11, 2013. The Trust is registered with the Securities and Exchange Commission (“SEC”) under the Investment
Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of
the Fund’s shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities
Act”). The Fund is considered non-diversified under the 1940 Act. Non-diversified funds generally hold securities of fewer
issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single
economic, political or regulatory occurrence affecting these issuers. The Fund qualifies as an investment company as defined in
the Financial Accounting Standards Codification Topic 946-Financial Services- Investment Companies. The investment objective of
the Fund is to track the total return performance, before fees and expenses, of its index, called the Life + Liberty Freedom 100
Emerging Markets Index.
Freedom 100 Emerging Markets ETF commenced
operations on May 23, 2019.
The Life + Liberty Freedom 100 Emerging
Markets Index was developed in 2017 by Life + Liberty Investments, LLC, Freedom 100 Emerging Markets ETF’s index provider.
The Life + Liberty Freedom 100 Emerging Markets Index consists of approximately 100 equity securities listed in emerging market
countries that are determined based on quantified data covering 79 personal and economic freedom factors which are categorized
into three main types of freedoms: the rights to life, liberty, and property. A quantitative model is used to weigh the countries
based on human and economic freedom metrics, and securities within countries are then selected based upon market capitalization
and liquidity metrics.
Shares of the Freedom 100 Emerging Markets
ETF are listed and traded on Cboe BZX Exchange, Inc. (“Cboe”). Market prices for the shares may be different from their
net asset value (“NAV”). The Fund issues and redeems shares on a continuous basis at NAV only in blocks of 50,000 shares,
called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in a specified
universe. Once created, shares generally trade in the secondary market at market prices that change throughout the day in share
amounts less than a Creation Unit. Except when aggregated in Creation Units, shares are not redeemable securities of the Fund.
Shares of the Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participants”).
An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net
Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed
a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources
to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the shares directly from the Fund. Rather,
most retail investors may purchase shares in the secondary market with the assistance of a broker and are subject to customary
brokerage commissions or fees.
Authorized Participants may be required
to pay a Transaction Fee to compensate the Trust or its custodian for costs incurred in connection with creation and redemption
transactions. The standard transaction fee, which is payable to the Trust’s custodian, typically applies to in-kind purchases
of the Fund effected through the clearing process on any business day, regardless of the number of Creation Units purchased or
redeemed that day (“Standard Transaction Fees”).
ALPHA ARCHITECT ETF TRUST
NOTES TO FINANCIAL STATEMENTS
March 31, 2020 (UNAUDITED)
Variable fees are imposed to compensate
the Fund for the transaction costs associated with the cash transactions fees. Certain fund deposits consisting of cash-in-lieu
or cash value may be subject to a variable charge (“Variable Transaction Fees”), which is payable to the Fund, of up
to 2.00% of the value of the order in addition to the standard Transaction Fees. Variable Transaction Fees received by the Fund,
if any, are displayed in the Capital Share Transactions sections of the Statements of Changes in Net Assets.
Because, among other things, the Fund imposes
transaction fees on purchases and redemptions of Shares to cover the custodial and other costs incurred by the Fund in effecting
trades, the Board determined that it is not necessary to adopt policies and procedures to detect and deter market timing of the
Fund’s Shares.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant
accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted
in the United States of America (“GAAP”).
|
A.
|
Security Valuation. Equity securities that are traded on a national securities exchange,
except those listed on the NASDAQ Global Market® (“NASDAQ”) are valued at the last reported sale price
on the exchange on which the security is principally traded. Securities traded on NASDAQ will be valued at the NASDAQ Official
Closing Price (“NOCP”). If on a particular day an exchange-traded or NASDAQ security does not trade, then the most
recent quoted bid for exchange-traded or the mean between the most recent quoted bid and ask price for NASDAQ securities will be
used. Equity securities that are not traded on a listed exchange are generally valued at the last sale price in the over-the-counter
market. If a non-exchange traded security does not trade on a particular day, then the mean between the last quoted closing bid
and asked price will be used. Prices denominated in foreign currencies are converted to U.S. dollar equivalents at the current
exchange rate, which approximates fair value. Redeemable securities issued by open-end investment companies are valued at the investment
company’s applicable net asset value, with the exception of exchange-traded open-end investment companies which are priced
as equity securities.
|
Securities for which
quotations are not readily available are valued by a committee established by the Trust’s Board of Trustees (the
“Board”) in accordance with procedures established by the Board. This “fair valuation” process is
designed to value the subject security at the price the Trust would reasonably expect to receive upon its current sale. When
a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular
situation, including a review of various factors set forth in the pricing procedures adopted by the Board. The use of
“fair value” pricing by the Fund may cause the net asset value of its shares to differ significantly from the net
asset value that would be calculated without regard to such considerations. As of March 31, 2020, the Fund did not hold any
“fair valued” securities.
ALPHA ARCHITECT ETF TRUST
NOTES TO FINANCIAL STATEMENTS
March 31, 2020 (UNAUDITED)
As described above, the Fund
may use various methods to measure the fair value of its investments on a recurring basis. GAAP establishes a hierarchy that
prioritizes inputs to valuation methods. The three levels of inputs are:
Level 1- Unadjusted quoted prices
in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2- Observable inputs other
than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs
may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment
speeds, credit risk, yield curves, default rates and similar data.
Level 3- Unobservable inputs
for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions
about the assumptions a market participant would use in valuing the asset or liability, would be based on the best information
available.
The availability of observable
inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security,
whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular
to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market,
the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value
is greatest for instruments categorized in Level 3.
The inputs used to measure fair
value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair
value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that
is significant to the fair value measurement in its entirety.
The following is a summary of
the fair value classification of the Fund’s investments as of March 31, 2020:
|
DESCRIPTION
|
|
LEVEL 1
|
|
|
LEVEL 2
|
|
|
LEVEL 3
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freedom 100 Emerging Markets ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks
|
|
$
|
12,448,435
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
12,448,435
|
|
|
Money Market Funds
|
|
|
36,489
|
|
|
|
-
|
|
|
|
-
|
|
|
|
36,489
|
|
|
Total Investments in Securities
|
|
$
|
12,484,924
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
12,484,924
|
|
|
|
*
|
For further detail on each
asset class, see the Schedule of Investments
|
During the fiscal period ended
March 31, 2020, the Fund did not invest in any Level 3 investments and recognized no transfers to/from Level 3. Transfers between
levels are recognized at the end of the reporting period.
|
B.
|
Risks. Markets may perform poorly and the returns from the securities in which the Fund
invests may underperform returns from the general securities markets. Securities markets may experience periods of high volatility
and reduced liquidity in response to governmental actions or intervention, economic or market developments, or other external factors.
The value of a company’s securities may rise or fall in response to company, market, economic or other news.
|
Foreign securities may underperform
U.S. securities and may be more volatile than U.S. securities. Risks relating to investments in foreign securities (including,
but not limited to, depositary receipts and participation certificates) and to securities of issuers with significant exposure
to foreign markets include: currency exchange rate fluctuation; less available public information about the issuers of securities;
less stringent regulatory standards; lack of uniform accounting, auditing and financial reporting standards; and country risks
including less liquidity, high inflation rates, unfavorable economic practices, political instability and expropriation and nationalization
risks.
ALPHA ARCHITECT ETF TRUST
NOTES TO FINANCIAL STATEMENTS
March 31, 2020 (UNAUDITED)
The risks of foreign securities
typically are greater in emerging and less developed markets. For example, in addition to the risks associated with investments
in any foreign country, political, legal and economic structures in these less developed countries may be new and changing rapidly,
which may cause instability and greater risk of loss. These securities markets may be less developed and securities in those markets
are generally more volatile and less liquid than those in developed markets. Investing in emerging market countries may involve
substantial risk due to, among other reasons, limited information; higher brokerage costs; different accounting, auditing and financial
reporting standards; less developed legal systems and thinner trading markets as compared to those in developed countries; different
clearing and settlement procedures and custodial services; and currency blockages or transfer restrictions. Emerging market countries
also are more likely to experience high levels of inflation, deflation or currency devaluations, which could hurt their economies
and securities markets. Certain emerging markets also may face other significant internal or external risks, including a heightened
risk of war and ethnic, religious and racial conflicts. In addition, governments in many emerging market countries participate
to a significant degree in their economies and securities markets, which may impair investment and economic growth of companies
in those markets. Such markets may also be heavily reliant on foreign capital and, therefore, vulnerable to capital flight.
See the Fund’s Prospectus
and Statement of Additional Information regarding the risks of investing in shares of the Fund.
|
C.
|
Foreign Currency. Investment securities and other assets and liabilities denominated in
foreign currencies are translated into U.S. dollar amounts using the spot rate of exchange at the date of valuation. Purchases
and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar
amounts on the respective dates of such transactions.
|
The Fund isolates that portion
of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from
changes in market prices of securities held. That portion of gains (losses) attributable to changes in foreign exchange rates is
included on the “Statement of Operations” under “Net realized gain (loss) – Foreign currency” and
“Change in Net Unrealized Appreciation (Depreciation) – Foreign Currency.” The remainder of gains (losses) attributable
to securities is included on the “Statement of Operations” under “Net realized gain (loss) – Investments,”
“Net realized gain (loss) – In-kind redemptions,” and “Change in Net Unrealized Appreciation (Depreciation)
– Investments.
The Fund reports net realized
foreign exchange gains or losses that arise from sales of foreign currencies, currency gains or losses realized between the trade
and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding
taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities
at fiscal period end, resulting from changes in exchange rates.
ALPHA ARCHITECT ETF TRUST
NOTES TO FINANCIAL STATEMENTS
March 31, 2020 (UNAUDITED)
|
|
D.
|
Federal Income Taxes. The Fund intends to continue to comply with the requirements of subchapter
M of the Internal Revenue Code of 1986, as amended, as necessary to qualify as a regulated investment company and distribute substantially
all net taxable investment income and net realized gains to shareholders in a manner which results in no tax cost to the Fund. Therefore,
no federal income tax provision is required. As of and during the fiscal period ended March 31, 2020, the Fund did not have any
tax positions that did not meet the “more-likely-than-not” threshold of being sustained by the applicable tax authority.
As of and during the fiscal period ended March 31, 2020, the Fund did not have liabilities for any unrecognized tax benefits. The
Fund would/will recognize interest and penalties, if any, related to unrecognized tax benefits on uncertain tax positions as income
tax expense in the Statement of Operations. During the fiscal period ended March 31, 2020, the Fund did not incur any interest
or penalties.
|
The Fund is subject to examination
by U.S. taxing authorities for the tax periods since the Fund’s commencement of operations. The Fund may be subject to taxes
imposed on realized and unrealized gains on securities of certain foreign countries in which the Fund invests. The foreign tax
expense, if any, was recorded on an accrual basis and is included in “Net realized gain (loss) on investments” and
“Net increase (decrease) in unrealized appreciation or depreciation on investments” on the accompanying Statements
of Operations. The amount of foreign tax owed, if any, is included in “Payable for foreign taxes” on the accompanying
Statements of Assets and Liabilities and is comprised of withholding taxes on foreign dividends and taxes on unrealized gains.
|
E.
|
Security Transactions and Investment Income. Investment securities transactions are accounted
for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Dividend
income is recorded on the ex-dividend date, net of any foreign taxes withheld at source. Interest income is recorded on an accrual
basis. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable
tax rules and regulations.
|
|
F.
|
Distributions to Shareholders. Distributions to shareholders from net investment income
for the Fund are declared and paid on a quarterly basis and distributions to shareholders from net realized gains on securities
normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. The Fund may distribute
more frequently, if necessary for tax purposes.
|
|
G.
|
Use of Estimates. The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial
statements, as well as the reported amounts of increases and decreases in net assets from operations during the period. Actual
results could differ from those estimates.
|
|
H.
|
Share Valuation. The NAV per share of the Fund is calculated by dividing the sum of the
value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses)
by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s shares will not be priced
on the days on which NYSE is closed for regular trading. The offering and redemption price per share for the Fund is equal to the
Fund’s net asset value per share.
|
ALPHA ARCHITECT ETF TRUST
NOTES TO FINANCIAL STATEMENTS
March 31, 2020 (UNAUDITED)
|
I.
|
Guarantees and Indemnifications. In the normal course of business,
the Fund enter into contracts with service providers that contain general indemnification clauses. Additionally, as is customary,
the Trust’s organizational documents permit the Trust to indemnify its officers and trustees against certain liabilities
under certain circumstances. The Fund’s maximum exposure under these arrangements is unknown as this would involve future
claims that may be against the Fund that have not yet occurred. As of the date of this Report, no claim has been made for indemnification
pursuant to any such agreement of the Fund.
|
|
J.
|
Reclassification of Capital Accounts. GAAP requires that certain
components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications
have no effect on net assets or net asset value per share. In addition, the Fund realized net capital gains resulting from in-kind
redemptions, in which shareholders exchanged Fund shares for securities held by the Fund rather than for cash. Because such gains
are not taxable to the Fund, and are not distributed to shareholders, they have been reclassified from accumulated net realized
losses to paid-in capital. For the fiscal year and period ended September 30, 2019, the following table shows the reclassifications
made for Freedom 100 Emerging Markets ETF.
|
|
|
|
Undistributed
Net Investment
Gain (Loss)
|
|
|
Accumulated
Net Realized
Gain (Loss)
|
|
|
Paid in Capital
|
|
|
Freedom 100 Emerging Markets ETF
|
|
$
|
(8,097
|
)
|
|
$
|
8,097
|
|
|
$
|
-
|
|
NOTE 3 -COMMITMENTS AND OTHER RELATED
PARTY TRANSACTIONS.
Empowered Funds, LLC (the “Adviser”)
serves as the investment adviser to the Fund. Pursuant to an Investment Advisory Agreement (the “Advisory Agreement”)
between the Trust, on behalf of the Fund, and the Adviser, the Adviser provides investment advice to the Fund and oversees the
day-to-day operations of the Fund, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory
Agreement, the Adviser is also responsible for arranging transfer agency, custody, fund administration and accounting, and other
non-distribution related services necessary for the Fund to operate. The Adviser administers the Fund’s business affairs,
provides office facilities and equipment and certain clerical, bookkeeping and administrative services. The Adviser agrees to pay
all expenses incurred by the Fund except for the fee paid to the Adviser pursuant to the Advisory Agreement, payments under any
distribution plan adopted pursuant to Rule 12b-1, brokerage expenses, acquired fund fees and expenses, taxes, interest (including
borrowing costs), litigation expenses and other non-routine or extraordinary expenses.
At an in-person Board meeting held on May
16, 2019, the Board of Trustees of the Trust (the “Trustees”) including each Trustee who is not an “interested
person” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), approved the Advisory Agreement.
The table below represents the annual rate based on average daily net assets that the Fund pays the Adviser monthly:
|
Freedom 100 Emerging Markets ETF
|
|
|
0.49
|
%
|
ALPHA ARCHITECT ETF TRUST
NOTES TO FINANCIAL STATEMENTS
March 31, 2020 (UNAUDITED)
NOTE 4 - PURCHASES AND SALES OF SECURITIES
For the fiscal period ended March 31, 2020,
purchases and sales of securities for the Fund, excluding short-term securities and in-kind transactions, were as follows:
|
|
|
Purchases
|
|
|
Sales
|
|
|
Freedom 100 Emerging Markets ETF
|
|
$
|
7,295,769
|
|
|
$
|
2,965,994
|
|
For the fiscal period ended March 31, 2020,
in-kind transactions associated with creations and redemptions were as follows:
|
|
|
Purchases
|
|
|
Sales
|
|
|
Freedom 100 Emerging Markets ETF
|
|
$
|
2,282,420
|
|
|
$
|
2,811,559
|
|
There were no purchases or sales of U.S.
Government securities during the year.
NOTE 5 – TAX INFORMATION
The components of tax basis cost of investments
and net unrealized appreciation (depreciation) for federal income tax purposes at March 31, 2020 were as follows*:
|
|
|
Freedom 100 Emerging Markets ETF
|
|
|
Tax cost of of investments
|
|
$
|
12,605,196
|
|
|
Gross tax unrealized appreciation
|
|
|
736,653
|
|
|
Gross tax unrealized depreciation
|
|
|
(696,258
|
)
|
|
Net tax unrealized appreciation (depreciation)
|
|
$
|
40,395
|
|
|
Undistributed ordinary income
|
|
|
23,447
|
|
|
Undistributed long-term gain
|
|
|
-
|
|
|
Total distributable earnings
|
|
|
23,447
|
|
|
Other accumulated gain (loss)
|
|
|
(7,744
|
)
|
|
Total accumulated gain (loss)
|
|
$
|
56,098
|
|
* Because tax adjustments are calculated
annually at the end of the Fund’s fiscal year, the above table does not reflect tax adjustments for the current fiscal year.
For the previous fiscal year’s federal income tax information, please refer to the Notes to Financial Statements section
in the Fund’s most recent annual report.
The difference between book and tax-basis
cost is attributable to the realization for tax purposes of unrealized gains on investments in REITs, partnerships, passive foreign
investment companies and wash sales. Under tax law, certain capital and foreign currency losses realized after October 31 and within
the taxable year are deemed to arise on the first business day of the Fund’s next taxable year.
For the period ended September 30, 2019,
the Freedom 100 Emerging Markets ETF did not defer any qualified late year losses.
At September 30, 2019, the Freedom 100
Emerging Markets ETF had the following capital loss carryforwards:
|
|
|
Unlimited
Short-Term
|
|
|
Unlimited
Long-Term
|
|
|
Freedom 100 Emerging Markets ETF
|
|
$
|
(7,744
|
)
|
|
$
|
-
|
|
NOTE 6 – DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid
by the Fund during the fiscal period ended March 31, 2020 were as follows:
|
|
|
Fiscal Period Ended
March 31,
2020
|
|
|
Fiscal Period Ended
September 30,
2019
|
|
|
|
|
Ordinary Income
|
|
|
Ordinary Income
|
|
|
Freedom 100 Emerging Markets ETF
|
|
$
|
50,277
|
|
|
$
|
94,575
|
|
ALPHA ARCHITECT ETF TRUST
NOTES TO FINANCIAL STATEMENTS
March 31, 2020 (UNAUDITED)
NOTE 7 – OTHER INFORMATION
In August 2018, FASB issued ASU 2018-13,
Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement
(“ASU 2018-13”). The primary focus of ASU 2018-13 is to improve the effectiveness of the disclosure requirements for
fair value measurements. The changes affect all companies that are required to include fair value measurement disclosures. In general,
the amendments in ASU 2018-13 are effective for all entities for fiscal years and interim periods within those fiscal years, beginning
after December 15, 2019. An entity is permitted to early adopt the removed or modified disclosures upon the issuance of ASU 2018-13
and may delay adoption of the additional disclosures, which are required for public companies only, until their effective date.
Management is currently evaluating the impact these changes will have on the Fund’s financial statements and disclosures.
Freedom 100 Emerging Markets ETF (Ticker:
FRDM) is not offered or sold by Life + Liberty Indexes or any of its affiliates, licensors or contractors (the “LL Parties”)
nor do any of the LL Parties offer any express or implicit guarantee, warranty or assurance either with regard to the results
of using the Freedom 100 Emerging Markets Index (the “Index”) or the Index Price at any time or in any other respect.
The Index is calculated and published by the LL Parties. Life + Liberty Indexes has entered an agreement with FRDM’s
Adviser to sponsor the Fund. The LL Parties use commercially reasonable efforts to ensure that the Index is calculated correctly.
Neither publication of the Index by the LL Parties nor the licensing of the Index or Index trademark (s) for
the purpose of use in connection with the Freedom 100 Emerging Markets ETF (Ticker: FRDM) constitutes a recommendation by any
of the LL Parties to invest in the Freedom 100 Emerging Markets ETF (Ticker: FRDM). “Freedom 100” and “Life
+ Liberty Indexes” are trademarks of Life + Liberty Investments, LLC.
NOTE 8 – SUBSEQUENT EVENTS
In preparing these financial statements,
management of the Fund has evaluated events and transactions for potential recognition or disclosure through date the financial
statements were issued.
There were no transactions that occurred
during the period subsequent to March 31, 2020, that materially impacted the amounts or disclosures in the Fund’s financial
statements.
Effective March 31, 2020, Foreside Financial
Group, LLC (“Foreside”) acquired Quasar Distributors, LLC (“Quasar”), the Fund’s distributor, from
U.S. Bancorp. As a result of the acquisition, Quasar became a wholly-owned broker-dealer subsidiary of Foreside and is no longer
affiliated with U.S. Bancorp. The Board of Trustees of the Trust has approved a new Distribution Agreement to enable Quasar to
continue serving as the Fund’s distributor.
The recent global outbreak of COVID-19
has disrupted economic markets and the prolonged economic impact is uncertain. The operational and financial performance of the
issuers of securities in which the Fund invests depends on future developments, including the duration and spread of the outbreak,
and such uncertainty may in turn impact the value of the Fund’s investments.
ALPHA
ARCHITECT ETF TRUST
FREQUENCY DISTRIBUTION OF
PREMIUMS AND DISCOUNTS
(Unaudited)
Closing Price vs. NAV
The following Frequency Distribution of
Premiums and Discounts chart is provided to show the frequency at which the closing price for the Fund was at a premium or discount
to its daily net asset value (NAV). Shareholders may pay more than net asset value when they buy Fund shares and receive less
than net asset value when they sell those shares, because shares are bought and sold at current market prices. The chart presented
represents past performance and cannot be used to predict future results.
|
|
|
Freedom 100 Emerging Markets
ETF
|
|
|
|
Fiscal Year Ended
September 30, 2019
|
|
|
|
|
|
|
|
Premium/Discount Range
|
|
Number of Trading Days
|
|
% of Total Trade Days
|
|
|
|
|
|
|
|
1.00% or more
|
|
22
|
|
24.18%
|
|
0.75% to 0.999%
|
|
19
|
|
20.88%
|
|
0.50% to 0.749%
|
|
19
|
|
20.88%
|
|
0.25% to 0.499%
|
|
11
|
|
12.09%
|
|
0.00% to 0.249%
|
|
14
|
|
15.37%
|
|
-0.001% to -0.249%
|
|
3
|
|
3.30%
|
|
-0.25% to -0.499%
|
|
3
|
|
3.30%
|
|
-0.50% to -0.749%
|
|
0
|
|
0.00%
|
|
-0.75% to -0.999%
|
|
0
|
|
0.00%
|
|
-1.00% or more
|
|
0
|
|
0.00%
|
|
|
|
91
|
|
100.00%
|
|
|
|
|
|
|
|
|
|
Freedom 100 Emerging Markets ETF
|
|
|
|
Period Ended
March 31, 2020
|
|
|
|
|
|
|
|
Premium/Discount Range
|
|
Number of Trading Days
|
|
% of Total Trade Days
|
|
|
|
|
|
|
|
1.00% or more
|
|
11
|
|
8.73%
|
|
0.75% to 0.999%
|
|
10
|
|
7.94%
|
|
0.50% to 0.749%
|
|
16
|
|
12.70%
|
|
0.25% to 0.499%
|
|
25
|
|
19.84%
|
|
0.00% to 0.249%
|
|
29
|
|
23.01%
|
|
-0.001% to -0.249%
|
|
19
|
|
15.08%
|
|
-0.25% to -0.499%
|
|
4
|
|
3.17%
|
|
-0.50% to -0.749%
|
|
5
|
|
3.97%
|
|
-0.75% to -0.999%
|
|
2
|
|
1.59%
|
|
-1.00% or more
|
|
5
|
|
3.97%
|
|
|
|
126
|
|
100.00%
|
ALPHA
ARCHITECT ETF TRUST
Expense Example
March 31, 2020 (Unaudited)
As a shareholder of the Alpha Architect
ETF Trust, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund
shares, and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds.
The example is based on an investment of
$1,000 invested at the beginning of the period and held the entire period (October 1, 2019 to March 31, 2020).
Actual Expenses
The first line of the table below provides
information about actual account values and actual expenses. You may use the information in this line, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example,
an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled
“Expenses Paid During the Period October 1, 2019 to March 31, 2020” to estimate the expenses you paid on your account
during this period.
Hypothetical Example for Comparison
Purposes
The second line of the table below provides
information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information
to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with
the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in
the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions
paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and
will not help you determine the relative total costs of owning different funds. If these transactional cost were included, your
costs would have been higher.
|
|
|
Annualized
|
|
Beginning
|
|
Ending
|
|
Expenses Paid During
|
|
|
|
Expense
|
|
Account Value
|
|
Account Value
|
|
Period October 1, 2019 to
|
|
|
|
Ratio
|
|
October 1, 2019
|
|
March 31, 2020
|
|
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
Freedom 100 Emerging Markets ETF
|
|
|
|
|
|
|
|
|
|
Actual
|
|
0.49%
|
|
$ 1,000.00
|
|
$ 763.20
|
|
$ 2.16
|
|
Hypothetical (5% annual return before expenses)
|
|
0.49%
|
|
1,000.00
|
|
1,022.55
|
|
2.48
|
1. The dollar amounts shown as expenses paid during the period
are equal to the annualized six-month expense ratio multiplied by the average account value during the period, multiplied by 183/366,
to reflect the one-half year period.
ALPHA
ARCHITECT ETF TRUST
Federal
Tax Information (Unaudited)
QUALIFIED
DIVIDEND INCOME/DIVIDENDS RECEIVED DEDUCTION
For the fiscal year ended September 30,
2019, certain dividends paid by the Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth
Tax Relief Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend
income was as follows:
|
Freedom 100 Emerging Markets ETF
|
|
|
83.66
|
%
|
For corporate shareholders, the percent
of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September
30, 2019 was as follows:
|
Freedom 100 Emerging Markets ETF
|
|
|
0.11
|
%
|
SHORT
TERM CAPITAL GAIN
The percentage of taxable ordinary income
distributions that are designated as short-term capital gain distributions under the Internal Revenue Section 871 (k)(2)(C) for
the Fund was 0.00% (unaudited).
ALPHA
ARCHITECT ETF TRUST
Foreign Tax Credit Pass Through
(Unaudited)
Pursuant to Section 853 of the Internal Revenue code, the Fund
designated the following amounts as foreign taxes paid for the period ended September 30, 2019. Foreign taxes paid for financial
statement purposes of Section 853 may be less than actual foreign taxes paid for financial statement purposes.
|
|
|
Creditable Foreign
Tax Credit Paid
|
|
|
Per Share
Amount
|
|
|
Portion of Ordinary Income
Distribution Derived From
Foreign Sourced Income
|
|
|
Freedom 100 Emerging Markets ETF
|
|
$32,393
|
|
|
$0.0648
|
|
|
|
99.91%
|
|
Foreign taxes paid or withheld should be included in taxable
income with an offsetting deduction from gross income or as a credit for taxes paid to foreign governments.
Above figures may differ from those cited elsewhere in this
report due to difference in the calculation of income and gains under GAAP purposes and Internal Revenue Service purposes.
Shareholders are strongly advised to consult their own tax advisers
with respect to the tax consequences of their investments in the Fund.
ALPHA
ARCHITECT ETF TRUST
OFFICERS AND AFFILIATED TRUSTEE
The table below sets forth certain information about each of
the Trust’s executive officers as well as its affiliated Trustee.
Name and Year of
Birth
|
Position(s) Held
with the Trust
|
Term of Office
and Length of
Time Served
|
Principal Occupation(s) During Past
Five Years
|
|
Wesley R. Gray
1980
|
Chief Executive Officer/Chief Investment Officer
|
Indefinite term; Trustee since 2014; CEO / CIO since 2010
|
CEO / CIO, Alpha Architect (Since 2010)
Assistant Professor of Finance, Drexel University (2010-2014)
|
|
John R. Vogel
1983
|
Chief Financial Officer/Chief Investment Officer
|
Indefinite term; Principal Financial Officer since 2014, CFO / CIO since 2011
|
CFO / CIO, Alpha Architect (Since 2011)
|
|
Patrick R. Cleary
1982
|
Chief Operating Officer/Chief Compliance Officer
|
Indefinite term; CCO / COO since 2015. COO since 2014.
|
CCO / COO, Alpha Architect (Since 2015)
|
INDEPENDENT TRUSTEES
The following table sets forth certain information about the
Trust’s Independent Trustees.
Name, Address,
and Year of Birth
|
Position(s)
Held with
Trust
|
Term of
Office
and
Length of
Time
Served
|
Principal Occupation During Past 5 Years
|
Number of
Funds in
Fund
Complex
Overseen by
Trustee
|
Other
Directorships
Held by
Trustee
During Past
5 Years
|
|
Independent Trustees
|
|
Daniel Dorn
Born: 1975
c/o Alpha Architect Trust
213 Foxcroft Road, Broomall, PA 19008
|
Trustee
|
Since 2014
|
Associate Professor of Finance, Drexel University, LeBow College
of Business (2003 – present)
|
8
|
None
|
|
Chukwuemeka (Emeka) O. Oguh
Born: 1983
c/o Alpha Architect Trust
213 Foxcroft Road, Broomall, PA 19008
|
Trustee
|
Since 2018
|
Co-founder and CEO, PeopleJoy (2016 – present); Co-founder and CEO, Apptempo (2013 – 2015); Head of Product, Dataminr (2011 – 2013); Fund of Funds analyst, Merrill Lynch (2005 – 2009)
|
8
|
None
|
|
Michael S. Pagano, Ph.D., CFA
Born: 1962
c/o Alpha Architect Trust
213 Foxcroft Road, Broomall, PA 19008
|
Trustee
|
Since 2014
|
The Robert J. and Mary Ellen Darretta Endowed Chair in Finance,
Villanova University (1999 - present); Associate Editor of The Financial Review (2009 - present) and Editorial Board Member
of the International Journal of Managerial Finance (2005 - present), Atlantic Economic Journal (2014 – 2015)
and Advances in Quantitative Analysis of Finance and Accounting (2010 - present); Founder, Michael S. Pagano, LLC (business
consulting firm) (2008 - present); Member of FINRA’s Market Regulation Committee (2009 - present); Member of Bloomberg’s
Tradebook Advisory Council (2012 - 2014).
|
8
|
None
|
Additional information about the Affiliated Trustee and Independent
Trustees is available in the Statement of Additional Information (SAI).
ALPHA
ARCHITECT ETF TRUST
BOARD REVIEW AND APPROVAL
OF ADVISORY CONTRACT
(Unaudited)
The Board (the members of which are referred
to as “Trustees”) of the Alpha Architect ETF Trust (the “Trust”) met in person on February 8, 2019 to consider
the approval of Advisory Agreement between the Trust, on behalf of the Freedom 100 Emerging Markets ETF (the “Fund”),
and Empowered Funds, LLC (the “Adviser”). In accordance with Section 15(c) of the 1940 Act, the Board requested, reviewed
and considered materials furnished by the Adviser relevant to the Board’s consideration of whether to approve the Advisory
Agreement. In connection with considering approval of the Advisory Agreement, the Trustees who are not “interested persons”
of the Trust, as that term is defined in the 1940 Act (the “Independent Trustees”), met in executive session with counsel
to the Trust, who provided assistance and advice. In reaching the decision to approve the Advisory Agreement, the Board considered
and reviewed information provided by the Adviser, including among other things information about its personnel, operations, financial
condition, and compliance and risk management. The Board also reviewed a copy of the proposed Advisory Agreement. During their
review and consideration, the Board focused on and reviewed the factors they deemed relevant, including:
Nature, Quality and Extent of Services. The
Board was presented and considered information concerning the nature, quality and extent of the overall services expected to be
provided by the Adviser to the Fund. In this connection, the Board considered the responsibilities of the Adviser, recognizing
that the Adviser had invested significant time and effort in structuring the Trust and the Fund, obtaining the necessary exemptive
relief from the Securities and Exchange Commission (“SEC”) and arranging service providers for the Fund. In addition,
the Board considered that, going forward, the Adviser would be responsible for providing investment advisory services to the Fund,
monitoring compliance with the Fund’s objectives, policies and restrictions, and carrying out directives of the Board. The Board
also considered the services expected to be provided by the Adviser in the oversight of the Trust’s administrator, transfer agent
and custodian. In addition, the Board evaluated the integrity of the Adviser’s personnel, the experience of the portfolio
management team in managing assets and the adequacy of the Adviser’s resources. The Board also considered the Fund’s
investment strategy would require trading in emerging markets.
Performance. The Board
noted that, as the Fund had not yet commenced investment operations, it had no investment performance. The Board was advised that
the Adviser had performed extensive research on the strategy of the Fund. The Board also noted the Adviser had been managing other
ETFs within the Trust.
Comparative Fees and Expenses. In
considering the proposed advisory fees, the Board reviewed and considered the fees in light of the nature, quality and extent of
the services expected to be provided by the Adviser. With respect to the advisory fee and expense ratio for the Fund, the Board
also considered the fee and expense ratio versus the fees and expenses charged to other ETFs and mutual funds within the emerging
markets universe. The Board noted that there were few passively-managed and actively-managed ETFs and mutual funds using strategies
directly comparable to that to be used for the Fund, and it was therefore difficult to compare a Fund’s management fee and
estimated expenses with the fees and expenses of comparable passively-managed and actively-managed ETFs and mutual funds.
Costs and Profitability. The
Board further considered information regarding the profits that may be realized by the Adviser in connection with providing services
to the Fund. The Advisor’s potential level of profitability was discussed, as well as the current levels of compensation
paid to the Adviser’s personnel versus the market. A discussion regarding the Advisor’s potential profitability in
light of its fixed and variable costs, as well the Advisor’s support agreement with the Fund’s sponsor. The Board,
however, reviewed financial information provided by the Adviser with respect to the Fund, and the anticipated costs associated
with the personnel, systems and equipment necessary to manage the Fund and to meet the regulatory and compliance requirements adopted
by the SEC and other regulatory bodies as well as other expenses the Adviser would pay in accordance with the Advisory Agreement.
The Board also took into consideration that the Adviser would be responsible for paying all expenses incurred by the Fund except
for the fees paid to the Adviser pursuant to the Agreements, payments under any distribution plan adopted pursuant to Rule 12b-1,
brokerage expenses, acquired fund fees and expenses, taxes, interest (including borrowing costs), litigation expenses and other
non-routine or extraordinary expenses.
Other Benefits. The Board
further considered the extent to which the Adviser might derive ancillary benefits from Fund operations. For example, the Adviser
may engage in soft dollar transactions in the future, although it did not currently plan to do so.
Economies of Scale. The
Board also considered whether economies of scale would be realized by the Fund as it commences operations and its assets grow,
including the extent to which this is reflected in the level of fees to be charged. The Board that the advisory fee for the Fund
did not include breakpoints but concluded that it was premature – as the Fund had not yet commenced operations, to meaningfully
evaluate potential economies of scale.
Conclusion. No single factor
was determinative of the Board’s decision to approve the Advisory Agreement; rather, the Board based its determination on
the total mix of information available to it. Based on a consideration of all the factors in their totality, the Board, including
a majority of the Independent Trustees, approved the Advisory Agreement, including the compensation payable under the Agreement.
ALPHA ARCHITECT ETF TRUST
INFORMATION ABOUT PORTFOLIO
HOLDINGS
(Unaudited)
The Fund files its complete schedules
of portfolio holdings for its first and third fiscal quarters with the Securities and Exchange Commission (“SEC”)
on Part F of Form N-PORT. The Fund’s Form N-PORT is available without charge, upon request, by calling (215) 882-9983.
Furthermore, you may obtain the Form N-PORT on the SEC’s website at www.sec.gov. The Fund’s
portfolio holdings are posted on its website at http://www.freedometfs.com/frdm daily.
INFORMATION ABOUT PROXY VOTING
(Unaudited)
A description of the policies and procedures
the Fund uses to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information
(“SAI”). The SAI is available without charge upon request by calling (215) 882-9983, by accessing the SEC’s
website at www.sec.gov, or by accessing the Fund’s website at http://www.freedometfs.com/frdm.
When available, information regarding
how the Fund voted proxies relating to portfolio securities during the twelve months ending June 30 will be (1) available by calling
(215) 882-9983 and (2) the SEC’s website at www.sec.gov.
PRIVACY POLICY
(Unaudited)
ALPHA ARCHITECT ETF TRUST (the
“Trust”) is strongly committed to preserving and safeguarding the personal financial information of any customers of
the Trust. Confidentiality is extremely important to us.
Regulation S-P requires, among
others, each investment company to “adopt written policies and procedures that address administrative, technical, and physical
safeguards for the protection of customer records and information.”
However,
Pursuant to Regulation S-P’s definition of “customer,” the Trust currently does not have, nor does it anticipate
having in the future, any customers. In addition, the Trust does not collect any non-public personal information from any consumers.
Nonetheless, the Trust has instituted
certain technical, administrative and physical safeguards through which Trust would seek to protect personal financial information
about any customers from unauthorized use and access. First, technical procedures are used in order to limit the accessibility
and exposure of Trust-maintained information contained in electronic form. If customer information were obtained by the Trust,
such technical procedures would cover such information.
Second, administrative procedures
that are in place, would be used to control the number and type of employees, affiliated and nonaffiliated persons, to whom customer
information (if the Trust were to obtain any) would be accessible.
Third, physical safeguards have
been established, which if customer information were obtained by the Trust, to prevent access to such information contained in
hard-copy form.
As these procedures illustrate,
the Trust realizes the importance of information confidentiality and security and emphasizes practices which are aimed at achieving
those goals.
Adviser
Empowered Funds, LLC
213 Foxcroft Road
Broomall, PA 19008
Distributor
Quasar Distributors, LLC
111 East Kilbourn Avenue, Suite 1250
Milwaukee, Wisconsin 53202
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302
Milwaukee, Wisconsin 53212
Transfer Agent
U.S. Bancorp Fund Services, LLC
doing business as U.S. Bank Global Fund Services
615 East Michigan Street
Milwaukee, Wisconsin 53202
Independent Registered Public Accounting
Firm
Spicer Jeffries LLP
4601 DTC Boulevard, Suite 700
Denver, CO 80237
Legal Counsel
Pellegrino, LLC
303 West Lancaster Avenue, Suite 302
Wayne, PA 19087
Freedom 100 Emerging Markets ETF
Symbol – FRDM
CUSIP – 02072L607
