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NETLease
Corporate Real Estate ETF

FACTSHEET   Holdings   BROCHURE

About NETLease ETF

The NETLease Corporate Real Estate ETF (NETL) seeks to track the performance, before fees and expenses, of the Fundamental Income Net Lease Real Estate Index (NETLXT). The index’s goal is to track the performance of the U.S. listed Net Lease real estate sector in a diversified manner by screening for real estate companies that focus on investments in net lease real estate and assigning only those companies identified to the Index. The Index places constraints on constituents to protect against concentration in any one company or tenant.

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What is Net Lease Real Estate?

A net lease is a type of lease agreement made between the property owner and the tenant in which the tenant is responsible for paying both the rent and most, if not all, the property expenses. The most common net lease is a “triple-net lease”, where the tenant pays rent “net” of all the expenses of a property, namely, (1) property taxes, (2) insurance and (3) maintenance. Property owners benefit from the consistency of receiving rental revenue paid by the tenant without the responsibility for managing the property or paying expenses that can change over time. In addition, net leases generally have long initial lease terms of 10 years or more providing predictability to the property owner.

All types of properties are net leased to companies including properties used to generate revenue and profits like restaurants, convenience stores or drug stores, distribution centers used by the businesses or other logistics-focused companies to move goods from production to customers, manufacturing facilities to make the goods, and corporate headquarters. When you invest in the net lease sector, you are investing in the backbone of American business.

What are Net Lease REITs?

Net Lease REITs are real estate investment trusts which own portfolios of properties primarily comprised of properties leased to single tenants under net leases. The Net Lease real estate sector is defined and grouped by lease type as opposed to a property type such as industrial, office, or retail. Collectively, the Net Lease Sector, as defined by the Fundamental Income Net Lease Real Estate Index, includes 22 companies which own more than 28,000 properties across all 50 states leased to tenants operating in a variety of industries.

Net Lease Sector Index Highlights

As of June 30, 2024

21Companies
$237BEnterprise Value
$147BMarket Capitalization
$16.3BAnnualized Revenue
38.1%Debt/Enterprise Value
32,767Properties
14.9 yrsWeighted Avg.
Remaining Lease Term
50States
3.5%Largest Weighted Tenant
Concentration
98.7%Occupancy
12.3xEquity Cash Flow Multiple
5.9 yrsWeighted Avg.
Debt Term Remaining
4.2%Avg. Borrowing Rate

Fundamental Income Net Lease Real Estate Index: The Fundamental Income Net Lease Real Estate Index (NETLXT) is a rules based, passive index that, for the first time, defines and tracks the performance of the rapidly expanding net lease real estate sector in a diversified manner.

It is not possible to invest directly in an index.

Exchange Traded Concepts, LLC serves as the investment advisor. Fundamental Income serves as the index provider. The Funds are distributed by Quasar Distributors, LLC which is not affiliated with Fundamental Income, Exchange Traded Concepts, LLC or any of their affiliates.

The Funds’ investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company and may be obtained by clicking here. Please read it carefully before investing. A free, hard-copy of the prospectus can also be requested by calling 1-800-617-0004.

Investments involve risk. Principal loss is possible. The fund may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The Index, and consequently the Fund, is expected to concentrate its investments in real estate companies. As a result, the value of the Fund’s shares may rise and fall more than the value of shares of a fund that invests in securities of companies in a broader range of industries.

Investments in real estate companies and REITs involve unique risks, including limited financial resources, they may trade less frequently and in limited volume, and they may be more volatile than other securities. In addition, securities in the real estate sector are subject to certain risks associated with direct ownership of real estate and the risk that the value of their underlying real estate may go down. Companies in the Net Lease Real Estate sector may be affected by unique factors related to leasing properties to single tenants including dependence on the financial performance of its’ tenants and lease terms related to rent escalations based on economic measurements. The fund may invest in foreign securities which involves political, economic and currency risks, differences in accounting methods and greater volatility. Investments in small and mid-sized companies have historically been subject to greater investment risk than large company stocks.

The 30-Day SEC yield is a standardized yield calculation based on the most recent 30-day period covered by the fund’s filings with the SEC. The yield figure reflects dividends and interest earned during the period after the deduction of the fund’s expenses.

Returns for periods of less than one year are not annualized. Performance data represents past performance and does not guarantee future results. An investor’s return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Performance data current to the most recent month-end can be obtained by calling 800-617-0004.

Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the original cost. Returns for periods of less than one year are not annualized. The market price returns are based on the official closing price of an ETF share or, if the official closing price isn’t available, the midpoint between the national best bid and national best offer (“NBBO”) as of the time the ETF calculates current NAV per share, and do not represent the returns you would receive if you traded shares at other times. Beginning 12/21/2020, market price returns are calculated using closing price or the NBBO midpoint at 4:00 PM ET. Prior to that date, the midpoint of the bid/ask spread at 4:00 PM ET was used.

Market Price: The current price at which shares are bought and sold. The market price returns are based on the official closing price of an ETF share or, if the official closing price isn’t available, the midpoint between the national best bid and national best offer (“NBBO”) as of the time the ETF calculates current NAV per share, and do not represent the returns you would receive if you traded shares at other times. Beginning 12/21/2020, market price returns are calculated using closing price or the NBBO midpoint at 4:00 PM ET. Prior to that date, the midpoint of the bid/ask spread at 4:00 PM ET was used.

A basis point is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

NAV: The dollar value of a single share, based on the value of the underlying assets of the fund minus its liabilities, divided by the number of shares outstanding. Calculated at the end of each business day.

Debt/Enterprise Value: Debt-to-Enterprise Value is the weighted average Total Debt-to-Enterprise Value of the index constituents, where Total Debt is as of most recent constituent company 10K or 10Q filings. Enterprise Value is equal to the equity market capitalization as of December 31, 2022 plus total debt and preferred equity less cash as of most recent constituent company 10K or 10Q filing. Weightings for each constituent based on NETL weighting as of 12/31/2022.

Credit Rating: is a quantified assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation. A credit rating can be assigned to any entity that seeks to borrow money—an individual, a corporation, a state or provincial authority, or a sovereign government.

Ratings are determined by private independent rating services such as Standard & Poor’s, Moody’s and Fitch. These firms evaluate a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion.Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade. To be considered an investment grade issue, the company must be rated at ‘BBB’ or higher by Standard and Poor’s orMoody’s.

Bank of America BBB Corporate Index: a subset of the ICE BofA US Corporate Master Index tracking the performance of US dollar denominated investment grade rated corporate debt publicly issued in the US domestic market. This subset includes all securities with a given investment grade rating BBB. When the last calendar day of the month takes place on the weekend, weekend observations will occur as a result of month ending accrued interest adjustments.