News & Views

DUAL News


A Market-Based Alternative to Corporate Governance

November 22, 2020: Within the public company structure, firm ownership and control are separate. This disconnect can misalign the interests of the two parties. As a result, owners often clamor for good corporate governance procedures. But what constitutes good corporate governance?

Why Is the Number of Dual Share Class Companies Increasing?

November 1, 2020: A dual-class company is one that issues equity with different voting rights assigned to each share class. We have noted that there has been a marked increase in the number of dual share class companies over the last decade. What factors might be driving that increase? Why should you consider investing in dual share class companies? And what is one way to gain exposure to dual share class companies?

Introduction to the North Shore Dual Share Class ETF (DUAL)

October 4, 2020: Dual share class companies have increased in number in recent years. Companies taking advantage of the equity structure are usually young, innovative companies. The dual-class structure may allow these companies to gain access to the public markets without subjecting them to the short-term pressure of many shareholders.

Why May Dual Class Shares Outperform? MSCI Answers

October 18, 2020: MSCI has an inherent interest in understanding how dual share class stocks perform. After all, they construct indices for which they may choose to include or not include such companies.

The information contained in some of the linked material contains the manager's opinion. It should not be regarded as investment advice or recommendation of specific securities.

Exchange Traded Concepts, LLC serves as the investment advisor. The Fund is distributed by SEI Investments Distribution Co. (1 Freedom Valley Drive, Oaks, PA 19456), which is not affiliated with Exchange Traded Concepts, LLC, North Shore Indices, or any affiliates. Check the background of SIDCO on FINRA’s BrokerCheck.

Carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s full or summary prospectus, which may be obtained by visiting ( dualetf.com). Investors should read it carefully before investing or sending money.

Investing involves risk, including possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments, investments in smaller companies, and those in commodities typically exhibit higher volatility. Issuers in energy-related industries can be significantly affected by fluctuations in energy prices and supply and demand of energy fuels.

There is no guarantee the fund will achieve its stated objective. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index. The fund is non-diversified.

Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Market price returns are based upon the midpoint of the bid/ask spread at 4:00 PM Eastern time and do not represent the returns you would receive if you traded shares at other times. The first trading date is typically several days after the fund inception date. Therefore, NAV is used to calculate market returns prior to the first trade date because there is no bid/ask spread until the fund starts trading.

Dual Share Class Companies create unique risks. Dual Share Class Companies allow for a concentration of voting power in the hands of company insiders through a disproportionate allocation of voting rights among stockholders, which may negatively affect common stockholders in a variety of ways. For example, a company’s owners may use such power for personal benefit, while passing on financial risk to common stockholders. Further, Dual Share Class Companies allow entrenchment of management in the company, which may prevent common stockholders from being able to address issues relating to mismanagement of the company, such as share dilution, increased company debt, and financial underperformance relevant to the market. Investing only in a portfolio of Dual Share Class Companies may impact the Fund’s relative investment performance depending on whether such investments are in or out of favor in the market. A portfolio of Dual Share Class Companies may underperform a portfolio that includes companies with traditional ownership structures.