The Reality Shares DIVCON Dividend Guard ETF (GARD), an index-based exchange-traded fund managed by Reality Shares Advisors (RSA), will merge into and with the Reality Shares DIVCON Dividend Defender ETF (DFND), wich is also managed by RSA.
The merger was approved by the ETFs’ Board of Trustees on 12 December, 2019. The decision of the Board to merge the ETFs is not subject to shareholder approval. However, a Combined Information Statement and Prospectus that contains more information about the merger and the Reality Shares DIVCON Dividend Defender ETF will be mailed to shareholders of the Reality Shares DIVCON Dividend Guard ETF prior to the merger. Subject to the satisfaction of certain customary closing conditions, the merger is expected to occur on or about 28 February 8, 2020. No assurance can be given as to the exact timing of the closing of the transaction.
Upon the completion of the merger, which is expected to be tax-free for shareholders, the assets of GARD will be transferred to, and the liabilities of GARD will be assumed by, DFND. The shareholders of GARD will receive shares of DFND with an aggregate net asset value equal to the aggregate net asset value of the GARD shares held by them.
The Reality Shares DIVCON Dividend Defender ETF seeks to provide stable overall returns, with lower volatility and correlation compared to the S&P 500. By short-selling low-quality companies as indicated by DIVCON, the Fund may provide more stable results in periods of heightened market volatility.
The Reality Shares DIVCON Dividend Defender ETF uses DIVCON, a forward-looking dividend rating methodology to evaluate large-cap company health indicators based on seven key factors, with a 75 per cent long-investment in companies likely to increase dividends and a 25 per cent short in the firms likely to cut their dividends according to DIVCON.
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