UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number : 811-22436
EntrepreneurShares Series Trust
(Exact name of registrant as specified in charter)
175 Federal Street, Suite #875
Boston, MA 02110
(Address of principal executive offices) (Zip code)
Dr. Joel M. Shulman
175 Federal Street, Suite #875
Boston, MA 02110
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-617-917-2605
Date of fiscal year end: June 30
Date of reporting period: December 31, 2020
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
Semi-Annual Report
EntrepreneurShares Series Trust™
EntrepreneurShares Series Trust (“Trust”) is a registered investment company consisting of separate investment portfolios called “Funds.” This Semi-Annual Report relates solely to the following Funds:
| Name | Ticker Symbol |
| ERShares Global Fund | ENTIX |
| ERShares US Small Cap Fund | IMPAX |
| ERShares US Large Cap Fund | IMPLX |
December 31, 2020
175 Federal Street
Suite #875
Boston, MA 02110
Toll Free: 877-271-8811
| ERShares Global Fund |
| SCHEDULE OF INVESTMENTS SUMMARY TABLE |
| December 31, 2020 (Unaudited) |
| Percentage of | ||||
| Net Assets | ||||
| Communications | 16.21 | % | ||
| Consumer Discretionary | 7.43 | % | ||
| Consumer Staples | 1.27 | % | ||
| Energy | 0.00 | % | ||
| Financials | 1.85 | % | ||
| Health Care | 39.94 | % | ||
| Industrials | 2.85 | % | ||
| Real Estate | 0.00 | % | ||
| Technology | 29.58 | % | ||
| Other Assets and Liabilities | 0.87 | % | ||
| Total | 100.00 | % | ||
Portfolio holdings and allocations are subject to change.
1
| ERShares Global Fund |
| SCHEDULE OF INVESTMENTS |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks — 99.13% | ||||||||
| Argentina — 1.95% | ||||||||
| Consumer Discretionary — 1.95% | ||||||||
| MercadoLibre, Inc. | 797 | $ | 1,335,150 | |||||
| Total Argentina | 1,335,150 | |||||||
| Australia — 3.36% | ||||||||
| Communications — 0.86% | ||||||||
| SEEK, Ltd. | 26,824 | 590,000 | ||||||
| Technology — 2.50% | ||||||||
| Technology One Ltd. (a) | 148,303 | 937,541 | ||||||
| WiseTech Global Ltd. | 32,500 | 770,468 | ||||||
| 1,708,009 | ||||||||
| Total Australia | 2,298,009 | |||||||
| Belgium — 2.61% | ||||||||
| Technology — 2.61% | ||||||||
| Materialise NV - ADR (a) | 33,000 | 1,788,930 | ||||||
| Total Belgium | 1,788,930 | |||||||
| Canada — 3.02% | ||||||||
| Consumer Staples — 1.27% | ||||||||
| Alimentation Couche-Tard, Inc., Class B | 25,373 | 867,757 | ||||||
| Technology — 1.75% | ||||||||
| Constellation Software, Inc. | 922 | 1,197,260 | ||||||
| Total Canada | 2,065,017 | |||||||
| China — 10.65% | ||||||||
| Communications — 3.50% | ||||||||
| Bilibili, Inc. - ADR (a),(b) | 5,000 | 428,600 | ||||||
| DouYu International Holdings, Ltd. - ADR (a) | 125,000 | 1,382,499 | ||||||
| Weimob, Inc. (a) | 325,000 | 584,396 | ||||||
| 2,395,495 | ||||||||
| Consumer Discretionary — 2.45% | ||||||||
| Li Auto, Inc., Class A - ADR (a),(b) | 15,000 | 432,450 | ||||||
| Niu Technologies - ADR (a),(b) | 44,300 | 1,242,615 | ||||||
| 1,675,065 | ||||||||
The accompanying notes are an integral part of these financial statements.
2
| ERShares Global Fund |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| China (Continued) | ||||||||
| Financials — 1.67% | ||||||||
| Futu Holdings, Ltd. - ADR (a),(b) | 25,000 | $ | 1,143,750 | |||||
| Health Care — 3.03% | ||||||||
| BeiGene Ltd. - ADR (a),(b) | 3,250 | 839,768 | ||||||
| Sino Biopharmaceutical Ltd. | 1,269,433 | 1,228,095 | ||||||
| 2,067,863 | ||||||||
| Total China | 7,282,173 | |||||||
| Denmark — 3.08% | ||||||||
| Health Care — 3.08% | ||||||||
| Ascendis Pharma A/S - ADR (a) | 4,892 | 815,888 | ||||||
| Genmab A/S (a) | 3,204 | 1,295,294 | ||||||
| 2,111,182 | ||||||||
| Total Denmark | 2,111,182 | |||||||
| France — 3.69% | ||||||||
| Health Care — 1.58% | ||||||||
| Cellectis S.A. - ADR (a) | 40,000 | 1,082,400 | ||||||
| Technology — 2.11% | ||||||||
| Teleperformance | 4,350 | 1,441,737 | ||||||
| Total France | 2,524,137 | |||||||
| Guernsey — 0.18% | ||||||||
| Financials — 0.18% | ||||||||
| Burford Capital Ltd. | 12,791 | 124,366 | ||||||
| Total Guernsey | 124,366 | |||||||
| Israel — 2.54% | ||||||||
| Communications — 1.00% | ||||||||
| Fiverr International, Ltd. (a) | 3,500 | 682,850 | ||||||
| Technology — 1.54% | ||||||||
| Check Point Software Technologies Ltd. (a) | 7,931 | 1,054,109 | ||||||
| Total Israel | 1,736,959 | |||||||
The accompanying notes are an integral part of these financial statements.
3
| ERShares Global Fund |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| Japan — 2.63% | ||||||||
| Communications — 1.52% | ||||||||
| GMO internet, Inc. | 36,334 | $ | 1,041,934 | |||||
| Consumer Discretionary — 1.11% | ||||||||
| Rakuten, Inc. | 79,016 | 760,660 | ||||||
| Total Japan | 1,802,594 | |||||||
| Luxembourg — 2.31% | ||||||||
| Communications — 2.31% | ||||||||
| Spotify Technology S.A. (a) | 5,020 | 1,579,593 | ||||||
| Total Luxembourg | 1,579,593 | |||||||
| Netherlands — 1.36% | ||||||||
| Technology — 1.36% | ||||||||
| Adyen N.V. (a) | 400 | 930,898 | ||||||
| Total Netherlands | 930,898 | |||||||
| Singapore — 0.36% | ||||||||
| Communications — 0.36% | ||||||||
| Sea Ltd. - ADR (a) | 1,250 | 248,813 | ||||||
| Total Singapore | 248,813 | |||||||
| Sweden — 1.02% | ||||||||
| Consumer Discretionary — 0.89% | ||||||||
| Evolution Gaming Group A.B. | 6,000 | 608,780 | ||||||
| Health Care — 0.13% | ||||||||
| Cellavision A.B. | 2,316 | 86,418 | ||||||
| Total Sweden | 695,198 | |||||||
| Switzerland — 3.80% | ||||||||
| Health Care — 3.80% | ||||||||
| CRISPR Therapeutics AG (a) | 17,000 | 2,602,871 | ||||||
| Total Switzerland | 2,602,871 | |||||||
The accompanying notes are an integral part of these financial statements.
4
| ERShares Global Fund |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| United Kingdom — 1.06% | ||||||||
| Industrials — 1.06% | ||||||||
| HomeServe plc | 51,915 | $ | 727,686 | |||||
| Total United Kingdom | 727,686 | |||||||
| United States — 55.51% | ||||||||
| Communications — 6.67% | ||||||||
| Roku, Inc. (a) | 7,609 | 2,526,340 | ||||||
| Zillow Group, Inc., Class A (a) | 15,000 | 2,039,100 | ||||||
| 4,565,440 | ||||||||
| Consumer Discretionary — 1.03% | ||||||||
| Tesla, Inc. (a) | 1,000 | 705,670 | ||||||
| Health Care — 28.31% | ||||||||
| Accolade, Inc. (a),(b) | 24,900 | 1,083,150 | ||||||
| Arcturus Therapeutics Holdings, Inc. (a) | 12,000 | 520,560 | ||||||
| Beam Therapeutics, Inc. (a),(b) | 8,000 | 653,120 | ||||||
| Castle Biosciences, Inc. (a) | 13,000 | 872,950 | ||||||
| Exact Sciences Corp. (a) | 10,000 | 1,324,900 | ||||||
| Intellia Therapeutics, Inc. (a),(b) | 58,000 | 3,155,201 | ||||||
| Invitae Corp. (a),(b) | 40,000 | 1,672,400 | ||||||
| Iovance Biotherapeutics, Inc. (a) | 20,000 | 928,000 | ||||||
| Masimo Corp. (a) | 6,776 | 1,818,543 | ||||||
| Personalis, Inc. (a) | 16,000 | 585,760 | ||||||
| Regeneron Pharmaceuticals, Inc. (a) | 1,587 | 766,696 | ||||||
| Seagen, Inc. (a) | 10,000 | 1,751,400 | ||||||
| Teladoc Health, Inc. (a),(b) | 5,776 | 1,154,969 | ||||||
| Twist Bioscience Corp. (a) | 15,000 | 2,119,350 | ||||||
| Veracyte, Inc. (a) | 20,000 | 978,800 | ||||||
| 19,385,799 | ||||||||
| Industrials — 1.79% | ||||||||
| Cognex Corp. | 15,281 | 1,226,835 | ||||||
| Technology — 17.71% | ||||||||
| Bill.com Holdings, Inc. (a) | 5,000 | 682,500 | ||||||
| Cloudflare, Inc. (a) | 9,000 | 683,910 | ||||||
| Crowdstrike Holdings, Inc., Class A (a) | 5,000 | 1,059,100 | ||||||
| Datadog, Inc. (a) | 10,000 | 984,400 | ||||||
| Microchip Technology, Inc. | 9,859 | 1,361,626 | ||||||
| Ontrak, Inc. (a),(b) | 20,000 | 1,235,800 | ||||||
| Phreesia, Inc. (a) | 25,000 | 1,356,500 | ||||||
The accompanying notes are an integral part of these financial statements.
5
| ERShares Global Fund |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| United States (Continued) | ||||||||
| Technology (Continued) | ||||||||
| Pure Storage, Inc., Class A (a) | 70,000 | $ | 1,582,700 | |||||
| salesforce.com, Inc. (a) | 2,500 | 556,325 | ||||||
| Square, Inc., Class A (a) | 5,000 | 1,088,200 | ||||||
| Veeva Systems, Inc., Class A (a) | 3,157 | 859,493 | ||||||
| Zoom Video Communications, Inc., Class A (a),(b) | 2,000 | 674,640 | ||||||
| 12,125,194 | ||||||||
| Total United States | 38,008,938 | |||||||
| TOTAL COMMON STOCKS (Cost $48,889,073) | 67,862,514 | |||||||
| Money Market Funds — 19.89% | ||||||||
| BlackRock Liquidity Funds FedFund Portfolio, Institutional Class, 0.00% (c)(d) | 8,474,467 | 8,474,467 | ||||||
| Fidelity Institutional Money Market Government Portfolio, Class I, 0.01% (c)(d) | 22,035 | 22,035 | ||||||
| Fidelity Investments Money Market Treasury Only Portfolio, Class I, 0.01% (c)(d) | 646,476 | 646,476 | ||||||
| Invesco Short-Term Investment Trust Government & Agency Portfolio, Institutional Class, 0.03% (c)(d) | 4,391,808 | 4,391,808 | ||||||
| JPMorgan U.S. Government Money Market Fund, Capital Class, 0.03% (c)(d) | 84,099 | 84,099 | ||||||
| TOTAL MONEY MARKET FUNDS (Cost $13,618,885) | 13,618,885 | |||||||
| Total Investments — 119.02% (Cost $62,507,958) | 81,481,399 | |||||||
| Liabilities in Excess of Other Assets — (19.02)% | (13,021,505 | ) | ||||||
| Net Assets — 100.00% | $ | 68,459,894 | ||||||
| (a) | Non-income producing security. |
| (b) | All or a portion of the security was on loan as of December 31, 2020. The total value of securities on loan as of December 31, 2020 was $12,288,756. |
| (c) | Rate disclosed is the seven day effective yield as of December 31, 2020. |
| (d) | All or a portion of this security was purchased with cash proceeds from securities lending. Total collateral had a value of $12,972,409. See Note 2. |
The accompanying notes are an integral part of these financial statements.
6
| ERShares Global Fund |
| SCHEDULE OF INVESTMENTS COUNTRY OF RISK TABLE |
| December 31, 2020 (Unaudited) |
| Percentage of | ||||
| Investments | ||||
| Argentina | 2.00 | % | ||
| Australia | 3.45 | % | ||
| Belgium | 2.68 | % | ||
| Canada | 1.30 | % | ||
| Cayman Islands | 10.92 | % | ||
| Denmark | 3.17 | % | ||
| France | 3.79 | % | ||
| Guernsey | 0.19 | % | ||
| Israel | 2.61 | % | ||
| Japan | 2.70 | % | ||
| Netherlands | 1.40 | % | ||
| Singapore | 0.37 | % | ||
| Sweden | 3.41 | % | ||
| Switzerland | 3.90 | % | ||
| United Kingdom | 1.09 | % | ||
| United States | 55.51 | % | ||
| Total | 100.00 | % | ||
7
| ERShares US Small Cap Fund |
| SCHEDULE OF INVESTMENTS SUMMARY TABLE |
| December 31, 2020 (Unaudited) |
| Percentage of | ||||
| Net Assets | ||||
| Communications | 2.59 | % | ||
| Consumer Discretionary | 5.01 | % | ||
| Consumer Staples | 0.71 | % | ||
| Energy | 1.80 | % | ||
| Financials | 6.54 | % | ||
| Health Care | 50.67 | % | ||
| Industrials | 4.03 | % | ||
| Materials | 0.92 | % | ||
| Real Estate | 3.23 | % | ||
| Technology | 22.21 | % | ||
| Other Assets and Liabilities | 2.29 | % | ||
| Total | 100.00 | % | ||
Portfolio holdings and allocations are subject to change.
8
| ERShares US Small Cap Fund |
| SCHEDULE OF INVESTMENTS |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks — 97.71% | ||||||||
| Communications — 2.59% | ||||||||
| Cargurus, Inc. (a) | 96,464 | $ | 3,060,802 | |||||
| HealthStream, Inc. (a) | 46,764 | 1,021,326 | ||||||
| HUYA, Inc. - ADR (a),(b) | 100,000 | 1,993,000 | ||||||
| 6,075,128 | ||||||||
| Consumer Discretionary — 5.01% | ||||||||
| Freshpet, Inc. (a) | 25,000 | 3,549,750 | ||||||
| GrowGeneration Corp. (a) | 100,000 | 4,022,000 | ||||||
| Niu Technologies - ADR (a),(b) | 148,800 | 4,173,840 | ||||||
| 11,745,590 | ||||||||
| Consumer Staples — 0.71% | ||||||||
| AquaBounty Technologies, Inc. (a) | 190,400 | 1,667,904 | ||||||
| Energy — 1.80% | ||||||||
| Ameresco, Inc., Class A (a) | 80,792 | 4,220,574 | ||||||
| Financials — 6.54% | ||||||||
| Live Oak Bancshares, Inc. | 132,025 | 6,265,906 | ||||||
| Pinnacle Financial Partners, Inc. | 27,994 | 1,802,814 | ||||||
| Preferred Bank | 27,585 | 1,392,215 | ||||||
| Trupanion, Inc. (a),(b) | 49,000 | 5,865,790 | ||||||
| 15,326,725 | ||||||||
| Health Care — 50.67% | ||||||||
| Accolade, Inc. (a),(b) | 25,500 | 1,109,250 | ||||||
| Allogene Therapeutics, Inc. (a),(b) | 41,800 | 1,055,032 | ||||||
| Arcturus Therapeutics Holdings, Inc. (a),(b) | 110,000 | 4,771,800 | ||||||
| Arrowhead Pharmaceuticals, Inc. (a) | 30,685 | 2,354,460 | ||||||
| Beam Therapeutics, Inc. (a),(b) | 25,000 | 2,041,000 | ||||||
| Berkeley Lights, Inc. (a),(b) | 9,100 | 813,631 | ||||||
| Castle Biosciences, Inc. (a) | 25,000 | 1,678,750 | ||||||
| Cellectis S.A. - ADR (a) | 70,300 | 1,902,318 | ||||||
| Corcept Therapeutics, Inc. (a) | 177,300 | 4,638,168 | ||||||
| CRISPR Therapeutics AG (a),(b) | 50,000 | 7,655,500 | ||||||
| Eagle Pharmaceuticals, Inc. (a) | 35,815 | 1,667,905 | ||||||
| Editas Medicine, Inc. (a),(b) | 80,000 | 5,608,800 | ||||||
| Exact Sciences Corp. (a) | 34,702 | 4,597,668 | ||||||
| Fate Therapeutics, Inc. (a) | 32,000 | 2,909,760 | ||||||
| Guardant Health, Inc. (a) | 22,943 | 2,956,894 | ||||||
| Intellia Therapeutics, Inc. (a),(b) | 150,000 | 8,160,001 | ||||||
| Invitae Corp. (a),(b) | 135,000 | 5,644,350 | ||||||
| Ionis Pharmaceuticals, Inc. (a),(b) | 34,463 | 1,948,538 | ||||||
| Iovance Biotherapeutics, Inc. (a) | 80,000 | 3,712,000 | ||||||
The accompanying notes are an integral part of these financial statements.
9
| ERShares US Small Cap Fund |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| Health Care (Continued) | ||||||||
| Kura Oncology, Inc. (a) | 62,331 | $ | 2,035,730 | |||||
| LeMaitre Vascular, Inc. (b) | 65,173 | 2,639,507 | ||||||
| Madrigal Pharmaceuticals, Inc. (a),(b) | 24,351 | 2,707,101 | ||||||
| Medpace Holdings, Inc. (a) | 17,698 | 2,463,562 | ||||||
| Merit Medical Systems, Inc. (a) | 31,915 | 1,771,602 | ||||||
| Natera, Inc. (a) | 50,000 | 4,976,000 | ||||||
| Neurocrine Biosciences Inc. (a) | 22,106 | 2,118,860 | ||||||
| Pacific Biosciences of California, Inc. (a),(b) | 150,000 | 3,891,000 | ||||||
| Personalis, Inc. (a) | 165,380 | 6,054,561 | ||||||
| Syros Pharmaceuticals, Inc. (a) | 168,600 | 1,829,310 | ||||||
| Twist Bioscience Corp. (a) | 50,000 | 7,064,500 | ||||||
| Ultragenyx Pharmaceutical, Inc. (a) | 25,582 | 3,541,316 | ||||||
| Vapotherm, Inc. (a) | 70,000 | 1,880,200 | ||||||
| Veracyte, Inc. (a) | 140,000 | 6,851,599 | ||||||
| Zynex, Inc. (a),(b) | 275,534 | 3,708,688 | ||||||
| 118,759,361 | ||||||||
| Industrials — 4.03% | ||||||||
| Avalara, Inc. (a) | 17,026 | 2,807,417 | ||||||
| Clean Harbors, Inc. (a) | 41,966 | 3,193,613 | ||||||
| Insperity, Inc. | 42,216 | 3,437,226 | ||||||
| 9,438,256 | ||||||||
| Materials — 0.92% | ||||||||
| Encore Wire Corporation | 35,700 | 2,162,349 | ||||||
| Real Estate — 3.23% | ||||||||
| eXp World Holdings, Inc. (a) | 85,300 | 5,384,136 | ||||||
| Medical Properties Trust, Inc. | 99,957 | 2,178,063 | ||||||
| 7,562,199 | ||||||||
| Technology — 22.21% | ||||||||
| Appfolio, Inc., Class A (a),(b) | 9,658 | 1,738,826 | ||||||
| Bill.com Holdings, Inc. (a) | 27,500 | 3,753,750 | ||||||
| Cloudflare, Inc. (a) | 34,000 | 2,583,660 | ||||||
| Crowdstrike Holdings, Inc., Class A (a) | 5,500 | 1,165,010 | ||||||
| Fastly, Inc. (a),(b) | 30,000 | 2,621,100 | ||||||
| Impinj, Inc. (a) | 50,316 | 2,106,731 | ||||||
| MongoDB, Inc. (a) | 13,042 | 4,682,600 | ||||||
| Monolithic Power Systems, Inc. (b) | 5,182 | 1,897,804 | ||||||
The accompanying notes are an integral part of these financial statements.
10
| ERShares US Small Cap Fund |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| Technology (Continued) | ||||||||
| Omnicell, Inc. (a) | 33,938 | $ | 4,073,239 | |||||
| Ontrak, Inc. (a),(b) | 68,800 | 4,251,152 | ||||||
| PagerDuty, Inc. (a),(b) | 165,000 | 6,880,500 | ||||||
| Phreesia, Inc. (a) | 44,000 | 2,387,440 | ||||||
| Pure Storage, Inc., Class A (a) | 140,000 | 3,165,400 | ||||||
| Schrodinger, Inc. (a) | 25,000 | 1,979,500 | ||||||
| Super Micro Computer, Inc. (a) | 100,761 | 3,190,093 | ||||||
| Vicor Corporation (a) | 39,282 | 3,622,586 | ||||||
| Zscaler, Inc. (a) | 9,750 | 1,947,173 | ||||||
| 52,046,564 | ||||||||
| TOTAL COMMON STOCKS (Cost $161,590,205) | 229,004,650 | |||||||
| Money Market Funds — 20.09% | ||||||||
| BlackRock Liquidity Funds FedFund Portfolio, Institutional Class, 0.00% (c)(d) | 30,677,569 | 30,677,569 | ||||||
| Fidelity Institutional Money Market Government Portfolio, Class I, 0.01% (c)(d) | 79,767 | 79,767 | ||||||
| Fidelity Investments Money Market Treasury Only Portfolio, Class I, 0.01% (c)(d) | 116,720 | 116,720 | ||||||
| Invesco Short-Term Investment Trust Government & Agency Portfolio, Institutional Class, 0.03% (c)(d) | 15,898,346 | 15,898,346 | ||||||
| JPMorgan U.S. Government Money Market Fund, Capital Class, 0.03% (c)(d) | 304,439 | 304,439 | ||||||
| TOTAL MONEY MARKET FUNDS (Cost $47,076,841) | 47,076,841 | |||||||
| Total Investments — 117.80% (Cost $208,667,046) | 276,081,491 | |||||||
| Liabilities in Excess of Other Assets — (17.80)% | (41,724,399 | ) | ||||||
| Net Assets — 100.00% | $ | 234,357,092 | ||||||
| (a) | Non-income producing security. |
| (b) | All or a portion of the security was on loan as of December 31, 2020. The total value of securities on loan as of December 31, 2020 was $43,656,269. |
| (c) | Rate disclosed is the seven day effective yield as of December 31, 2020. |
| (d) | All or a portion of this security was purchased with cash proceeds from securities lending. Total collateral had a value of $46,960,121. See Note 2. |
The accompanying notes are an integral part of these financial statements.
11
| ERShares US Large Cap Fund |
| SCHEDULE OF INVESTMENTS SUMMARY TABLE |
| December 31, 2020 (Unaudited) |
| Percentage of | ||||
| Net Assets | ||||
| Communications | 21.88 | % | ||
| Consumer Discretionary | 5.86 | % | ||
| Financials | 1.94 | % | ||
| Health Care | 37.78 | % | ||
| Technology | 30.22 | % | ||
| Other Assets and Liabilities | 2.32 | % | ||
| Total | 100.00 | % | ||
Portfolio holdings and allocations are subject to change.
12
| ERShares US Large Cap Fund |
| SCHEDULE OF INVESTMENTS |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks — 97.68% | ||||||||
| Communications — 21.88% | ||||||||
| Alphabet, Inc., Class A (a) | 1,400 | $ | 2,453,696 | |||||
| DouYu International Holdings, Ltd. - ADR (a) | 150,000 | 1,659,000 | ||||||
| Facebook, Inc., Class A (a) | 12,000 | 3,277,920 | ||||||
| Netflix, Inc. (a) | 10,386 | 5,616,022 | ||||||
| Roku, Inc. (a) | 27,609 | 9,166,740 | ||||||
| Spotify Technology S.A. (a) | 12,000 | 3,775,920 | ||||||
| Trade Desk, Inc. (The), Class A (a) | 7,300 | 5,847,300 | ||||||
| VeriSign, Inc. (a) | 16,212 | 3,508,277 | ||||||
| Zillow Group, Inc., Class A (a) | 66,000 | 8,972,040 | ||||||
| 44,276,915 | ||||||||
| Consumer Discretionary — 5.86% | ||||||||
| Amazon.com, Inc. (a) | 1,000 | 3,256,930 | ||||||
| Copart, Inc. (a) | 18,622 | 2,369,650 | ||||||
| Li Auto, Inc., Class A - ADR (a),(b) | 40,000 | 1,153,200 | ||||||
| Tesla, Inc. (a) | 6,000 | 4,234,020 | ||||||
| XPeng, Inc. - ADR (a) | 20,000 | 856,600 | ||||||
| 11,870,400 | ||||||||
| Financials — 1.94% | ||||||||
| BlackRock, Inc. | 5,440 | 3,925,178 | ||||||
| Health Care — 37.78% | ||||||||
| Arcturus Therapeutics Holdings, Inc. (a) | 45,000 | 1,952,100 | ||||||
| Arrowhead Pharmaceuticals, Inc. (a) | 57,498 | 4,411,822 | ||||||
| CRISPR Therapeutics AG (a) | 52,000 | 7,961,719 | ||||||
| Danaher Corp. | 10,000 | 2,221,400 | ||||||
| Editas Medicine, Inc. (a),(b) | 50,000 | 3,505,500 | ||||||
| Exact Sciences Corp. (a) | 35,000 | 4,637,150 | ||||||
| Intellia Therapeutics, Inc. (a) | 70,000 | 3,808,000 | ||||||
| Invitae Corp. (a),(b) | 140,000 | 5,853,400 | ||||||
| Ionis Pharmaceuticals, Inc. (a) | 29,244 | 1,653,456 | ||||||
| Masimo Corp. (a) | 22,850 | 6,132,483 | ||||||
| Pacific Biosciences of California, Inc. (a) | 150,000 | 3,891,000 | ||||||
| Personalis, Inc. (a) | 50,000 | 1,830,500 | ||||||
| Regeneron Pharmaceuticals, Inc. (a) | 4,115 | 1,987,998 | ||||||
| ResMed, Inc. | 16,125 | 3,427,530 | ||||||
| Seagen, Inc. (a) | 27,679 | 4,847,700 | ||||||
| Teladoc Health, Inc. (a),(b) | 34,196 | 6,837,832 | ||||||
| Twist Bioscience Corp. (a) | 47,000 | 6,640,629 | ||||||
| United Therapeutics Corporation (a) | 19,032 | 2,888,867 | ||||||
| Veracyte, Inc. (a) | 40,000 | 1,957,600 | ||||||
| 76,446,686 | ||||||||
The accompanying notes are an integral part of these financial statements.
13
| ERShares US Large Cap Fund |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| Technology — 30.22% | ||||||||
| Bill.com Holdings, Inc. (a) | 13,500 | $ | 1,842,750 | |||||
| Cloudflare, Inc. (a) | 42,500 | 3,229,575 | ||||||
| Crowdstrike Holdings, Inc., Class A (a) | 15,000 | 3,177,300 | ||||||
| Datadog, Inc. (a) | 44,000 | 4,331,360 | ||||||
| EPAM Systems, Inc. (a) | 6,090 | 2,182,352 | ||||||
| Fastly, Inc. (a) | 20,000 | 1,747,400 | ||||||
| Fortinet, Inc. (a) | 20,156 | 2,993,771 | ||||||
| NVIDIA Corp. | 8,783 | 4,586,483 | ||||||
| Okta, Inc. (a) | 15,000 | 3,813,900 | ||||||
| RingCentral, Inc., Class A (a) | 5,000 | 1,894,850 | ||||||
| salesforce.com, Inc. (a) | 13,000 | 2,892,890 | ||||||
| Square, Inc., Class A (a) | 35,500 | 7,726,220 | ||||||
| Synopsys, Inc. (a) | 12,200 | 3,162,728 | ||||||
| Twilio, Inc., Class A (a) | 20,000 | 6,769,999 | ||||||
| Ubiquiti, Inc. | 8,000 | 2,228,080 | ||||||
| Veeva Systems, Inc., Class A (a) | 11,785 | 3,208,466 | ||||||
| Zoom Video Communications, Inc., Class A (a),(b) | 3,000 | 1,011,960 | ||||||
| Zscaler, Inc. (a) | 21,750 | 4,343,693 | ||||||
| 61,143,777 | ||||||||
| TOTAL COMMON STOCKS (Cost $150,427,813) | 197,662,956 | |||||||
| Money Market Funds — 7.02% | ||||||||
| BlackRock Liquidity Funds FedFund Portfolio, Institutional Class, 0.00% (c)(d) | 9,273,488 | 9,273,488 | ||||||
| Fidelity Institutional Money Market Government Portfolio, Class I, 0.01% (c)(d) | 24,113 | 24,113 | ||||||
| Invesco Short-Term Investment Trust Government & Agency Portfolio, Institutional Class, 0.03% (c)(d) | 4,805,893 | 4,805,893 | ||||||
| JPMorgan U.S. Government Money Market Fund, Capital Class, 0.03% (c)(d) | 92,028 | 92,028 | ||||||
| TOTAL MONEY MARKET FUNDS (Cost $14,195,522) | 14,195,522 | |||||||
| Total Investments — 104.70% (Cost $164,623,335) | 211,858,478 | |||||||
| Liabilities in Excess of Other Assets — (4.70)% | (9,516,933 | ) | ||||||
| Net Assets — 100.00% | $ | 202,341,545 | ||||||
| (a) | Non-income producing security. |
| (b) | All or a portion of the security was on loan as of December 31, 2020. The total value of securities on loan as of December 31, 2020 was $12,882,727. |
| (c) | Rate disclosed is the seven day effective yield as of December 31, 2020. |
| (d) | All or a portion of this security was purchased with cash proceeds from securities lending. Total collateral had a value of $14,195,522. See Note 2. |
The accompanying notes are an integral part of these financial statements.
14
| EntrepreneurShares Series Trust |
| STATEMENTS OF ASSETS AND LIABILITIES |
| December 31, 2020 (Unaudited) |
| ERShares | ERShares | ERShares | ||||||||||
| Global | US Small | US Large | ||||||||||
| Fund | Cap Fund | Cap Fund | ||||||||||
| Assets | ||||||||||||
| Investments, at cost | $ | 62,507,958 | $ | 208,667,046 | $ | 164,623,335 | ||||||
| Investments, at fair value (a) | 81,481,399 | 276,081,491 | 211,858,478 | |||||||||
| Cash | 2,841 | — | 4,723,792 | |||||||||
| Receivable for fund shares sold | — | — | 102,488 | |||||||||
| Receivable for investments sold | — | 8,199,707 | — | |||||||||
| Dividends and interest receivable | 10,400 | 30,858 | 1,849 | |||||||||
| Securities lending income receivable | 7,625 | 20,070 | 1,741 | |||||||||
| Tax reclaims receivable | 23,642 | 496 | 366 | |||||||||
| Prepaid expenses | 6,606 | 6,045 | 7,374 | |||||||||
| Total Assets | 81,532,513 | 284,338,667 | 216,696,088 | |||||||||
| Liabilities | ||||||||||||
| Collateral due to broker for securities loaned | 12,972,409 | 46,960,121 | 14,195,522 | |||||||||
| Due to custodian | — | 36,686 | — | |||||||||
| Payable for fund shares redeemed | — | 2,321 | — | |||||||||
| Payable for investments purchased | — | 2,779,204 | — | |||||||||
| Payable to Adviser | 74,224 | 159,005 | 115,715 | |||||||||
| Payable to Administrator | 5,609 | 14,907 | 15,508 | |||||||||
| Accrued expenses and other liabilities | 20,377 | 29,331 | 27,798 | |||||||||
| Total Liabilities | 13,072,619 | 49,981,575 | 14,354,543 | |||||||||
| Net Assets | $ | 68,459,894 | $ | 234,357,092 | $ | 202,341,545 | ||||||
| Net Assets consist of: | ||||||||||||
| Paid-in capital | 44,533,647 | 159,590,029 | 128,323,021 | |||||||||
| Accumulated earnings | 23,926,247 | 74,767,063 | 74,018,524 | |||||||||
| Net Assets | $ | 68,459,894 | $ | 234,357,092 | $ | 202,341,545 | ||||||
| Institutional Class | ||||||||||||
| Net Assets | $ | 68,459,894 | $ | 234,357,092 | $ | 202,341,545 | ||||||
| Shares outstanding (unlimited number of shares authorized, $0.01 par value) | 3,308,432 | 15,389,336 | 10,745,522 | |||||||||
| Net asset value, offering and redemption price per share | $ | 20.69 | $ | 15.23 | $ | 18.83 | ||||||
| Redemption price per share (NAV * 98%) (a) | $ | 20.28 | $ | 14.93 | $ | 18.45 | ||||||
| (a) | Includes securities on loan of $12,288,756, $43,656,269 and $12,882,727 (See Note 2). |
The accompanying notes are an integral part of these financial statements.
15
| EntrepreneurShares Series Trust |
| STATEMENTS OF OPERATIONS |
| For the six months ended December 31, 2020 (Unaudited) |
| ERShares | ERShares | ERShares | ||||||||||
| Global | US Small | US Large | ||||||||||
| Fund | Cap Fund | Cap Fund | ||||||||||
| Investment Income | ||||||||||||
| Dividend income (net of foreign taxes withheld of $6,304, $176 and $–) | $ | 142,435 | $ | 375,003 | $ | 237,331 | ||||||
| Interest income | 95 | 218 | 287 | |||||||||
| Securities lending income | 63,746 | 99,569 | 6,331 | |||||||||
| Total investment income | 206,276 | 474,790 | 243,949 | |||||||||
| Expenses | ||||||||||||
| Advisory fees | 381,843 | 730,249 | 583,846 | |||||||||
| Fund accounting and administration fees | 15,873 | 45,467 | 42,789 | |||||||||
| Auditing fees | 8,694 | 8,695 | 8,695 | |||||||||
| Registration fees | 8,496 | 11,673 | 12,109 | |||||||||
| Transfer agent | 8,307 | 15,043 | 14,972 | |||||||||
| Custodian fees | 6,071 | 4,433 | 4,428 | |||||||||
| Legal fees | 5,644 | 13,474 | 12,168 | |||||||||
| Pricing fees | 4,475 | 5,028 | 3,507 | |||||||||
| Trustees’ fees and expenses | 1,225 | 3,794 | 3,496 | |||||||||
| Shareholder reporting fees | 1,222 | 3,500 | 3,992 | |||||||||
| Insurance expense | 1,202 | 1,907 | 1,603 | |||||||||
| Chief Compliance Officer fees | 163 | 626 | 588 | |||||||||
| Miscellaneous | 7,273 | 4,623 | 4,525 | |||||||||
| Total expenses | 450,488 | 848,512 | 696,718 | |||||||||
| Fees contractually waived by Adviser | — | (19,795 | ) | (22,889 | ) | |||||||
| Net operating expenses | 450,488 | 828,717 | 673,829 | |||||||||
| Net investment loss | (244,212 | ) | (353,927 | ) | (429,880 | ) | ||||||
| Net Realized and Change in Unrealized Gain (Loss) on Investments | ||||||||||||
| Net realized gain (loss) on: | ||||||||||||
| Investments | 11,713,258 | 28,125,191 | 33,991,461 | |||||||||
| Foreign currency transactions | 220 | — | — | |||||||||
| Net realized gain | 11,713,478 | 28,125,191 | 33,991,461 | |||||||||
| Change in unrealized appreciation on: | ||||||||||||
| Investments | 6,618,071 | 44,104,116 | 17,581,873 | |||||||||
| Foreign currency translations | 1,246 | 5 | 12 | |||||||||
| Net change in unrealized appreciation | 6,619,317 | 44,104,121 | 17,581,885 | |||||||||
| Net realized and change in unrealized gain on investments | 18,332,795 | 72,229,312 | 51,573,346 | |||||||||
| Net increase in net assets resulting from operations | $ | 18,088,583 | $ | 71,875,385 | $ | 51,143,466 | ||||||
The accompanying notes are an integral part of these financial statements.
16
| ERShares Global Fund |
| STATEMENTS OF CHANGES IN NET ASSETS |
| Six Months | Year | |||||||
| Ended | Ended | |||||||
| December 31, | June 30, | |||||||
| 2020 | 2020 | |||||||
| (Unaudited) | ||||||||
| Increase (Decrease) in Net Assets from: | ||||||||
| Operations: | ||||||||
| Net investment loss | $ | (244,212 | ) | $ | (285,644 | ) | ||
| Net realized gain on investments and foreign currency transactions | 11,713,478 | 413,872 | ||||||
| Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 6,619,317 | 4,970,093 | ||||||
| Net increase in net assets resulting from operations | 18,088,583 | 5,098,321 | ||||||
| Distributions to Shareholders | ||||||||
| Institutional Class | ||||||||
| From earnings | (6,630,435 | ) | (1,788,910 | ) | ||||
| Total distributions to shareholders | (6,630,435 | ) | (1,788,910 | ) | ||||
| Capital Transactions | ||||||||
| Institutional Class | ||||||||
| Proceeds from shares sold | 133,697 | 483,631 | ||||||
| Proceeds from redemption fees (a) | — | 77 | ||||||
| Reinvestment of distributions | 5,884,564 | 1,436,494 | ||||||
| Cost of shares redeemed | (250,353 | ) | (17,779,977 | ) | ||||
| Net increase (decrease) in net assets resulting from capital transactions | 5,767,908 | (15,859,775 | ) | |||||
| Total Increase (Decrease) in Net Assets | 17,226,056 | (12,550,364 | ) | |||||
| Net Assets | ||||||||
| Beginning of period | 51,233,838 | 63,784,202 | ||||||
| End of period | $ | 68,459,894 | $ | 51,233,838 | ||||
| Share Transactions | ||||||||
| Institutional Class | ||||||||
| Shares sold | 6,292 | 30,378 | ||||||
| Shares issued in reinvestment of distributions | 268,212 | 87,859 | ||||||
| Shares redeemed | (12,226 | ) | (1,114,539 | ) | ||||
| Net increase (decrease) in shares outstanding | 262,278 | (996,302 | ) | |||||
| (a) | The Fund charges a 2% redemption fee on shares redeemed within 5 business days of purchase. Shares are redeemed at the NAV if held longer than 5 days. |
The accompanying notes are an integral part of these financial statements.
17
| ERShares US Small Cap Fund |
| STATEMENTS OF CHANGES IN NET ASSETS |
| Six Months | Year | |||||||
| Ended | Ended | |||||||
| December 31, | June 30, | |||||||
| 2020 | 2020 | |||||||
| (Unaudited) | ||||||||
| Increase (Decrease) in Net Assets from: | ||||||||
| Operations: | ||||||||
| Net investment loss | $ | (353,927 | ) | $ | (72,820 | ) | ||
| Net realized gain on investments and foreign currency transactions | 28,125,191 | 11,734,063 | ||||||
| Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 44,104,121 | (8,945,811 | ) | |||||
| Net increase in net assets resulting from operations | 71,875,385 | 2,715,432 | ||||||
| Distributions to Shareholders | ||||||||
| Institutional Class | ||||||||
| From earnings | (30,803,421 | ) | (9,831,600 | ) | ||||
| Total distributions to shareholders | (30,803,421 | ) | (9,831,600 | ) | ||||
| Capital Transactions | ||||||||
| Institutional Class | ||||||||
| Proceeds from shares sold | 665,789 | 13,368,391 | ||||||
| Proceeds from redemption fees (a) | — | 106 | ||||||
| Reinvestment of distributions | 30,801,244 | 9,828,304 | ||||||
| Cost of shares redeemed | (2,009,750 | ) | (12,963,251 | ) | ||||
| Net increase (decrease) in net assets resulting from capital transactions | 29,457,283 | 10,233,550 | ||||||
| Total Increase (Decrease) in Net Assets | 70,529,247 | 3,117,382 | ||||||
| Net Assets | ||||||||
| Beginning of period | 163,827,845 | 160,710,463 | ||||||
| End of period | $ | 234,357,092 | $ | 163,827,845 | ||||
| Share Transactions | ||||||||
| Institutional Class | ||||||||
| Shares sold | 46,359 | 1,289,169 | ||||||
| Shares issued in reinvestment of distributions | 1,845,491 | 823,831 | ||||||
| Shares redeemed | (147,119 | ) | (115,447 | ) | ||||
| Net increase (decrease) in shares outstanding | 1,744,731 | 997,553 | ||||||
| (a) | The Fund charges a 2% redemption fee on shares redeemed within 5 business days of purchase. Shares are redeemed at the NAV if held longer than 5 days. |
The accompanying notes are an integral part of these financial statements.
18
| ERShares US Large Cap Fund |
| STATEMENTS OF CHANGES IN NET ASSETS |
| Six Months | Year | |||||||
| Ended | Ended | |||||||
| December 31, | June 30, | |||||||
| 2020 | 2020 | |||||||
| (Unaudited) | ||||||||
| Increase (Decrease) in Net Assets from: | ||||||||
| Operations: | ||||||||
| Net investment loss | $ | (429,880 | ) | $ | (252,655 | ) | ||
| Net realized gain on investments and foreign currency transactions | 33,991,461 | 37,691,888 | ||||||
| Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 17,581,885 | (13,899,964 | ) | |||||
| Net increase in net assets resulting from operations | 51,143,466 | 23,539,269 | ||||||
| Distributions to Shareholders | ||||||||
| Institutional Class | ||||||||
| From earnings | (36,057,302 | ) | (8,147,630 | ) | ||||
| Total distributions to shareholders | (36,057,302 | ) | (8,147,630 | ) | ||||
| Capital Transactions | ||||||||
| Institutional Class | ||||||||
| Proceeds from shares sold | 2,291,171 | 8,188,540 | ||||||
| Proceeds from redemption fees (a) | 391 | 881 | ||||||
| Reinvestment of distributions | 36,005,768 | 8,143,889 | ||||||
| Cost of shares redeemed | (2,350,412 | ) | (13,737,301 | ) | ||||
| Net increase (decrease) in net assets resulting from capital transactions | 35,946,918 | 2,596,009 | ||||||
| Total Increase (Decrease) in Net Assets | 51,033,082 | 17,987,648 | ||||||
| Net Assets | ||||||||
| Beginning of period | 151,308,463 | 133,320,815 | ||||||
| End of period | $ | 202,341,545 | $ | 151,308,463 | ||||
| Share Transactions | ||||||||
| Institutional Class | ||||||||
| Shares sold | 112,062 | 531,797 | ||||||
| Shares issued in reinvestment of distributions | 1,794,904 | 534,727 | ||||||
| Shares redeemed | (116,317 | ) | (898,773 | ) | ||||
| Net increase (decrease) in shares outstanding | 1,790,649 | 167,751 | ||||||
| (a) | The Fund charges a 2% redemption fee on shares redeemed within 5 business days of purchase. Shares are redeemed at the NAV if held longer than 5 days. |
The accompanying notes are an integral part of these financial statements.
19
| ERShares Global Fund |
| FINANCIAL HIGHLIGHTS – Institutional Class |
(For a share outstanding during each period)
| Six Months | ||||||||||||||||||||||||
| Ended | ||||||||||||||||||||||||
| December 31, | Year Ended June 30, | |||||||||||||||||||||||
| 2020 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Selected Per Share Data: | ||||||||||||||||||||||||
| Net asset value, beginning of period | $ | 16.82 | $ | 15.78 | $ | 16.07 | $ | 14.65 | $ | 11.81 | $ | 12.19 | ||||||||||||
| Investment operations: | ||||||||||||||||||||||||
| Net investment loss (a) | (0.07 | ) | (0.08 | ) | (0.06 | ) | (0.10 | ) | (0.07 | ) | (0.07 | ) | ||||||||||||
| Net realized and unrealized gain (loss) | 6.12 | 1.61 | 0.16 | 2.77 | 2.91 | (0.27 | ) | |||||||||||||||||
| Total from investment operations | 6.05 | 1.53 | 0.10 | 2.67 | 2.84 | (0.34 | ) | |||||||||||||||||
| Less distributions to shareholders from: | ||||||||||||||||||||||||
| Net investment income | — | — | — | — | — | (0.04 | ) | |||||||||||||||||
| Net realized gains | (2.18 | ) | (0.49 | ) | (0.39 | ) | (1.25 | ) | — | — | ||||||||||||||
| Total distributions | (2.18 | ) | (0.49 | ) | (0.39 | ) | (1.25 | ) | — | (0.04 | ) | |||||||||||||
| Net asset value, end of period | $ | 20.69 | $ | 16.82 | $ | 15.78 | $ | 16.07 | $ | 14.65 | $ | 11.81 | ||||||||||||
| Total Return (b) | 35.24 | % (c) | 9.80 | % | 1.11 | % | 18.65 | % | 24.05 | % | (2.75 | )% | ||||||||||||
| Ratios and Supplemental Data: | ||||||||||||||||||||||||
| Net assets, end of period (000 omitted) | $ | 68,460 | $ | 51,234 | $ | 63,784 | $ | 63,082 | $ | 26,933 | $ | 21,782 | ||||||||||||
| Ratio of expenses to average net assets: | ||||||||||||||||||||||||
| Before fees waived | 1.47 | % (d) | 1.49 | % | 1.47 | % | 1.53 | % | 1.74 | % | 2.52 | % | ||||||||||||
| After fees waived | 1.47 | % (d) | 1.49 | % | 1.56 | % | 1.70 | % | 1.70 | % | 1.70 | % | ||||||||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||||||
| Before fees waived | (0.80 | )% (d) | (0.51 | )% | (0.27 | )% | (0.47 | )% | (0.57 | )% | (1.43 | )% | ||||||||||||
| After fees waived | (0.80 | )% (d) | (0.51 | )% | (0.36 | )% | (0.64 | )% | (0.53 | )% | (0.61 | )% | ||||||||||||
| Portfolio turnover rate | 74 | % (c) | 61 | % | 23 | % | 38 | % | 65 | % | 71 | % | ||||||||||||
| (a) | Based on average shares outstanding during the period. |
| (b) | Total returns would have been lower/higher had certain expenses not been waived/recovered by the advisor (see Note 3). Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. |
| (c) | Not annualized. |
| (d) | Annualized. |
The accompanying notes are an integral part of these financial statements.
20
| ERShares US Small Cap Fund |
| FINANCIAL HIGHLIGHTS – Institutional Class |
(For a share outstanding during each period)
| Six Months | ||||||||||||||||||||||||
| Ended | ||||||||||||||||||||||||
| December 31, | Year Ended June 30, | |||||||||||||||||||||||
| 2020 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Selected Per Share Data: | ||||||||||||||||||||||||
| Net asset value, beginning of period | $ | 12.01 | $ | 12.71 | $ | 15.27 | $ | 12.75 | $ | 9.72 | $ | 11.45 | ||||||||||||
| Investment operations: | ||||||||||||||||||||||||
| Net investment income (loss) (a) | (0.02 | ) | (0.01 | ) | — | (b) | (0.02 | ) | 0.01 | 0.02 | ||||||||||||||
| Net realized and unrealized gain (loss) | 5.51 | 0.11 | (0.28 | ) | 3.89 | 3.04 | (1.14 | ) | ||||||||||||||||
| Total from investment operations | 5.49 | 0.10 | (0.28 | ) | 3.87 | 3.05 | (1.12 | ) | ||||||||||||||||
| Less distributions to shareholders from: | ||||||||||||||||||||||||
| Net investment income | — | (0.01 | ) | — | — | (0.02 | ) | — | (b) | |||||||||||||||
| Net realized gains | (2.27 | ) | (0.79 | ) | (2.28 | ) | (1.35 | ) | — | (0.61 | ) | |||||||||||||
| Total distributions | (2.27 | ) | (0.80 | ) | (2.28 | ) | (1.35 | ) | (0.02 | ) | (0.61 | ) | ||||||||||||
| Net asset value, end of period | $ | 15.23 | $ | 12.01 | $ | 12.71 | $ | 15.27 | $ | 12.75 | $ | 9.72 | ||||||||||||
| Total Return (c) | 44.08 | % (d) | 0.86 | % | 1.58 | % | 32.42 | % | 31.39 | % | (9.63 | )% | ||||||||||||
| Ratios and Supplemental Data: | ||||||||||||||||||||||||
| Net assets, end of period (000 omitted) | $ | 234,357 | $ | 163,828 | $ | 160,710 | $ | 159,435 | $ | 120,847 | $ | 130,705 | ||||||||||||
| Ratio of expenses to average net assets: | ||||||||||||||||||||||||
| Before fees waived | 0.87 | % (e) | 0.90 | % | 0.89 | % | 0.90 | % | 0.90 | % | 0.91 | % | ||||||||||||
| After fees waived | 0.85 | % (e) | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | ||||||||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||||||
| Before fees waived | (0.38 | )% (e) | (0.10 | )% | (0.05 | )% | (0.16 | )% | (0.18 | )% | 0.11 | % | ||||||||||||
| After fees waived | (0.36 | )% (e) | (0.05 | )% | (0.01 | )% | (0.11 | )% | (0.13 | )% | 0.17 | % | ||||||||||||
| Portfolio turnover rate | 75 | % (d) | 139 | % (f) | 43 | % | 72 | % | 53 | % | 67 | % | ||||||||||||
| (a) | Based on average shares outstanding during the period. |
| (b) | Rounds to less than $0.005 per share. |
| (c) | Total returns would have been lower/higher had certain expenses not been waived/recovered by the advisor (see Note 3). Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. |
| (d) | Not annualized. |
| (e) | Annualized. |
| (f) | Given the abnormal market circumstances resulting from the COVID-19 situation, the Fund had taken a temporary defensive position. As the market started to recover, the Fund has been reversing its temporary defensive position. This temporary implementation and reversion of the defensive position increased the Fund’s turnover. |
The accompanying notes are an integral part of these financial statements.
21
| ERShares US Large Cap Fund |
| FINANCIAL HIGHLIGHTS – Institutional Class |
(For a share outstanding during each period)
| Six Months | ||||||||||||||||||||||||
| Ended | ||||||||||||||||||||||||
| December 31, | Year Ended June 30, | |||||||||||||||||||||||
| 2020 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Selected Per Share Data: | ||||||||||||||||||||||||
| Net asset value, beginning of period | $ | 16.90 | $ | 15.17 | $ | 14.75 | $ | 12.61 | $ | 10.65 | $ | 10.77 | ||||||||||||
| Investment operations: | ||||||||||||||||||||||||
| Net investment income (loss) (a) | (0.04 | ) | (0.03 | ) | — | (b) | (0.02 | ) | 0.04 | 0.07 | ||||||||||||||
| Net realized and unrealized gain (loss) | 6.00 | 2.73 | 0.69 | 3.48 | 2.10 | (0.12 | ) | |||||||||||||||||
| Total from investment operations | 5.96 | 2.70 | 0.69 | 3.46 | 2.14 | (0.05 | ) | |||||||||||||||||
| Less distributions to shareholders from: | ||||||||||||||||||||||||
| Net investment income | — | — | — | (0.01 | ) | (0.06 | ) | (0.07 | ) | |||||||||||||||
| Net realized gains | (4.03 | ) | (0.97 | ) | (0.27 | ) | (1.31 | ) | (0.12 | ) | — | |||||||||||||
| Total distributions | (4.03 | ) | (0.97 | ) | (0.27 | ) | (1.32 | ) | (0.18 | ) | (0.07 | ) | ||||||||||||
| Net asset value, end of period | $ | 18.83 | $ | 16.90 | $ | 15.17 | $ | 14.75 | $ | 12.61 | $ | 10.65 | ||||||||||||
| Total Return (c) | 33.83 | % (d) | 18.50 | % | 5.09 | % | 28.67 | % | 20.26 | % | (0.49 | )% | ||||||||||||
| Ratios and Supplemental Data: | ||||||||||||||||||||||||
| Net assets, end of period (000 omitted) | $ | 202,342 | $ | 151,308 | $ | 133,321 | $ | 124,392 | $ | 107,823 | $ | 88,495 | ||||||||||||
| Ratio of expenses to average net assets: | ||||||||||||||||||||||||
| Before fees waived | 0.78 | % (e) | 0.80 | % | 0.79 | % | 0.81 | % | 0.82 | % | 0.83 | % | ||||||||||||
| After fees waived | 0.75 | % (e) | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
| Ratio of net investment income (loss) to average net assets: | ||||||||||||||||||||||||
| Before fees waived | (0.51 | )% (e) | (0.24 | )% | (0.07 | )% | (0.18 | )% | 0.26 | % | 0.59 | % | ||||||||||||
| After fees waived | (0.48 | )% (e) | (0.19 | )% | (0.03 | )% | (0.12 | )% | 0.33 | % | 0.67 | % | ||||||||||||
| Portfolio turnover rate | 75 | % (d) | 149 | % (f) | 0 | % | 43 | % | 43 | % | 77 | % | ||||||||||||
| (a) | Based on average shares outstanding during the period. |
| (b) | Rounds to less than $0.005 per share. |
| (c) | Total returns would have been lower/higher had certain expenses not been waived/recovered by the advisor (see Note 3). Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemptions of Fund shares. |
| (d) | Not annualized. |
| (e) | Annualized. |
| (f) | Given the abnormal market circumstances resulting from the COVID-19 situation, the Fund had taken a temporary defensive position. As the market started to recover, the Fund has been reversing its temporary defensive position. This temporary implementation and reversion of the defensive position increased the Fund’s turnover. |
The accompanying notes are an integral part of these financial statements.
22
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS |
| December 31, 2020 (Unaudited) |
| 1. | ORGANIZATION |
EntrepreneurShares™ Series Trust, a Delaware statutory trust (the “Trust”), was formed on July 1, 2010, and has authorized capital of unlimited shares of beneficial interest. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and is authorized to issue multiple series and classes of shares. The ERShares Global Fund formerly known as the EntrepreneurShares Global Fund (the “Global Fund”), the ERShares US Small Cap Fund formerly known as the Entrepreneur U.S. Small Cap Fund (the “US Small Cap Fund”), and the ERShares US Large Cap Fund formerly known as the Entrepreneur U.S. Large Cap Fund (the “US Large Cap Fund”) (each separately a “Fund”, or collectively, the “Funds”) are each classified as a “diversified” series, as defined in the 1940 Act. The Funds are investment companies and, accordingly, follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification Topic 946 – Investment Companies including Accounting Standards Update (“ASU”) 2013-08. The Global Fund commenced operations on November 11, 2010. The US Small Cap Fund commenced operations on December 17, 2013. The US Large Cap Fund commenced operations on June 30, 2014.
The investment objective of the Global Fund is long-term capital appreciation. The Global Fund seeks to achieve its objective by investing in equity securities of global companies with market capitalizations that are above $300 million at the time of initial purchase and possess entrepreneurial characteristics, as determined by EntrepreneurShares, LLC, the Global Fund’s sub-advisor, (the “Sub-Advisor”), and Seaport Global Advisors, LLC formerly known as Weston Capital Advisors, LLC, the Global Fund’s investment advisor (the “Global Advisor”). Dr. Joel M. Shulman has been the Global Fund’s portfolio manager since November 11, 2010 and Managing Director of the Advisor and President of the Sub-Advisor.
The investment objective of the US Small Cap Fund is long-term capital appreciation. The US Small Cap Fund seeks to achieve its objective by investing at least 80% of its net assets (plus any borrowing for investment purposes) in equity securities of U.S. companies with market capitalization above $300 million at the time of initial purchase and possess entrepreneurial characteristics, as determined by Capital Impact Advisors, LLC (the “Advisor”, collectively with the Global Advisor, the “Advisors”), the US Small Cap Fund’s investment advisor. Dr. Joel M. Shulman has been the US Small Cap Fund’s portfolio manager since December 17, 2013 and Chief Executive Officer of the Advisor.
The investment objective of the US Large Cap Fund is long-term capital appreciation. The US Large Cap Fund seeks to achieve its objective by investing in equity securities of U.S. companies with market capitalizations that are above $5 billion at the time of initial purchase and possess entrepreneurial characteristics, as determined by Capital Impact Advisors, LLC, the US Large Cap Fund’s investment advisor. Dr. Joel M. Shulman has been the US Large Cap Fund’s portfolio manager since June 30, 2014 and is Managing Director of the Advisor.
The Global Fund has registered three classes of shares: Class A shares, Retail Class shares and Institutional Class shares. The US Small Cap Fund and US Large Cap Fund each have registered two classes of shares: Institutional Class shares and Retail Class shares. Each share represents an equal proportionate interest in the assets and liabilities belonging to the applicable class and is entitled to such dividends and distributions out of income belonging to the applicable class as are declared by the EntrepreneurShares Series Trust Board of Trustees (the “Board”). On matters that affect the Fund as a whole, each class has the same voting and other rights and preferences as any other class. On matters that affect only one class, only shareholders of that class may vote. Each class votes separately on matters affecting only that class, or on matters expressly required to be voted on separately by state or federal law. Shares of each class of a series have the same voting and other rights and preferences as the other classes and series of the Trust for matters that affect the Trust as a whole. Currently, only Institutional Class shares of each of the Global Fund, US Small Cap Fund and US Large Cap are being offered.
23
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Investment Valuation
The following is a summary of the Funds’ pricing procedures. It is intended to be a general discussion and may not necessarily reflect all pricing procedures followed by the Funds.
In determining the net asset value (“NAV”) of the Funds’ shares, securities that are listed on a national securities exchange (other than the National Association of Securities Dealers’ Automatic Quotation System (“NASDAQ”)) are valued at the last sale price on the day the valuation is made. Securities that are traded on NASDAQ under one of its three listing tiers, NASDAQ Global Select Market, NASDAQ Global Market and NASDAQ Capital Market, are valued at the NASDAQ Official Closing Price. Price information on listed securities is taken from the exchange where the security is primarily traded. Securities which are listed on an exchange but which are not traded on the valuation date are valued at the most recent bid price.
Unlisted securities held by the Funds are valued at the average of the quoted bid and ask prices in the over-the-counter market. Securities and other assets for which market quotations are not readily available are valued at their fair value as determined in good faith under procedures established by and under the general supervision and responsibility of the Board. Investments in registered open-end investment companies other than exchange-traded funds are valued at the reported NAV.
Short-term investments with 61 days or more to maturity at time of purchase are valued at fair market value through the 61st day prior to maturity, based on quotations received from market makers or other appropriate sources; thereafter, they are generally valued at amortized cost. There is no definitive set of circumstances under which the Funds may elect to use fair value procedures to value a security. Types of securities that the Funds may hold for which fair value pricing might be required include, but are not limited to: (a) illiquid securities, including restricted securities and private placements for which there is no public market; (b) options not traded on a securities exchange; (c) securities of an issuer that has entered into a restructuring; (d) securities whose trading has been halted or suspended, as permitted by the Securities and Exchange Commission (the “SEC”); (e) foreign securities, if an event or development has occurred subsequent to the close of the foreign market and prior to the close of regular trading on the New York Stock Exchange that would materially affect the value of the security; and (f) fixed income securities that have gone into default and for which there is not a current market value quotation.
Valuing securities at fair value involves greater reliance on judgment than securities that have readily available market quotations. There can be no assurance that the Funds could obtain the fair value price assigned to a security upon sale.
Securities that are not listed on an exchange are valued by the Funds’ Advisors, under the supervision of the Board. There is no single standard for determining the fair value of a security. Rather, in determining the fair value of a security, the Advisors and the Board take into account the relevant factors and surrounding circumstances, which may include: (1) the nature and pricing history (if any) of the security; (2) whether any dealer quotations for the security are available; (3) possible valuation methodologies that could be used to determine the fair value of the security; (4) the recommendation of the portfolio manager of the Funds with respect to the valuation of the security; (5) whether the same or similar securities are held by other funds managed by the Advisors or other funds and the method used to price the security in those funds; (6) the extent to which the fair value to be determined for the security will result from the use of data or formulae produced by third parties independent of the Advisors; and (7) the liquidity or illiquidity of the market for the security.
24
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
Fair Value Measurement
The Funds have adopted authoritative fair valuation accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value, a discussion of changes in valuation techniques and related inputs during the year and expanded disclosure of valuation levels for major security types. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
| Level 1: | Unadjusted quoted prices in active markets for identical assets that the Funds have the ability to access at the measurement date; |
| Level 2: | Observable inputs other than quoted prices included in Level 1 that are observable for the asset either directly or indirectly. These inputs may include quoted prices for identical instruments on inactive markets, quoted prices for similar instruments, interest rates, prepayment spreads, credit risk, yield curves, default rates, and similar data; |
| Level 3: | Significant unobservable inputs for the asset to the extent that relevant observable inputs are not available, representing the Funds’ own assumptions that a market participant would use in valuing the asset, and would be based on the best information available. |
Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Funds. The Funds consider observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds’ perceived risk of that instrument.
Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active listed equities and real estate investment trusts, and certain money market securities. Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently or not at all. During the period ended December 31, 2020, the Funds did not hold any instrument which used significant unobservable inputs (Level 3) in determining fair value. The tables below are a summary of the inputs used to value the Funds’ investments as of December 31, 2020.
| Global Fund* | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 67,862,514 | $ | — | $ | — | $ | 67,862,514 | ||||||||
| Short-Term Investments | 13,618,885 | — | — | 13,618,885 | ||||||||||||
| Total Investments | $ | 81,481,399 | $ | — | $ | — | $ | 81,481,399 | ||||||||
25
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| US Small Cap Fund* | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 229,004,650 | $ | — | $ | — | $ | 229,004,650 | ||||||||
| Short-Term Investments | 47,076,841 | — | — | 47,076,841 | ||||||||||||
| Total Investments | $ | 276,081,491 | $ | — | $ | — | $ | 276,081,491 | ||||||||
| US Large Cap Fund* | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks | $ | 197,662,956 | $ | — | $ | — | $ | 197,662,956 | ||||||||
| Short-Term Investments | 14,195,522 | — | — | 14,195,522 | ||||||||||||
| Total Investments | $ | 211,858,478 | $ | — | $ | — | $ | 211,858,478 | ||||||||
| * | For further information regarding security characteristic, please see the Schedules of Investments. |
The Funds did not hold any investments at the end of the reporting period for which significant unobservable inputs (Level 3) were used in determining fair value; therefore, no reconciliation of Level 3 securities is included for this reporting period.
Use of Estimates and Indemnifications
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in these financial statements. Actual results could differ from those estimates.
In the normal course of business, the Trust, on behalf of the Funds, enters into contracts that contain a variety of representations which provide general indemnifications. The Trust’s maximum exposure under these arrangements is unknown; however, the Trust has not had claims or losses pursuant to these contracts and the Trust expects any risk of loss to be remote.
Federal Income Taxes
The Funds intend to continue to qualify as “regulated investment companies” under Sub-chapter M of the Internal Revenue Code of 1986, as amended. If so qualified, the Funds will not be subject to federal income tax to the extent they distribute substantially all of their net investment income and net realized gains to shareholders.
The Funds have reviewed all open tax years and major jurisdictions and concluded that the Funds did not have any tax positions that did not meet the “more-likely-than-not” threshold of being sustained by the applicable tax authority for the six months ended December 31, 2020. The Funds would recognize interest and penalties, if any, related to uncertain tax benefits in the Statements of Operations. During the six months ended December 31, 2020, the Funds did not incur any interest or penalties. Tax returns filed within the prior three years remain subject to examination by federal and state tax authorities.
Distribution to Shareholders
The Funds intend to continue to distribute to their shareholders any net investment income and any net realized long or short-term capital gains, if any, at least annually. Distributions are recorded on the ex-dividend date. The Funds may periodically make reclassifications among certain of their capital accounts as a result of the characterization of certain income and realized gains determined annually in accordance with federal tax regulations that may differ from U.S. GAAP.
26
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
Allocation of Expenses
Expenses incurred by the Trust that do not relate to a specific fund of the Trust are allocated to the individual funds by or under the direction of the Board in such a manner as the Board determine to be fair and equitable.
Foreign Currency Transactions
The Funds’ books and records are maintained in U.S. dollars. Foreign currency denominated transactions (i.e., fair value of investment securities, assets and liabilities, purchases and sales of investment securities and income and expenses) are translated into U.S. dollars at the current rate of exchange on the date of valuation. Purchases and sales of securities and income items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such fluctuations are included in net realized and unrealized gain or (loss) on investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, foreign taxes withheld, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains (losses) arise from the changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
Investment Transactions and Investment Income
Investment transactions are recorded on the trade date. Dividend income, less any foreign tax withheld, is recognized on the ex-dividend date and interest income is recognized on an accrual basis, including amortization/accretion of premiums or discounts. Net realized gains or losses are determined using the high cost identification method.
Securities Lending
Each Fund may lend portfolio securities constituting up to 33-1/3% of its total assets (as permitted by the 1940 Act) to unaffiliated broker-dealers, banks or other recognized institutional borrowers of securities, provided that the borrower at all times maintains cash, U.S. government securities or equivalent collateral or provides an irrevocable letter of credit in favor of the Fund equal in value to at least 102% of the value of loaned domestic securities and 105% of the value of loaned foreign securities on a daily basis. During the time portfolio securities are on loan, the borrower pays the lending Fund an amount equivalent to any dividends or interest paid on such securities, and such Fund may receive an agreed-upon amount of interest income from the borrower who delivered equivalent collateral or provided a letter of credit. Loans are subject to termination at the option of a Fund or the borrower. A Fund may pay reasonable administrative and custodial fees in connection with a loan of portfolio securities and may pay a negotiated portion of the interest earned on the cash or equivalent collateral to the borrower or placing broker. A Fund does not have the right to vote securities on loan, but could terminate the loan and regain the right to vote if that were considered important with respect to the investment.
The primary risk in securities lending is a default by the borrower during a sharp rise in price of the borrowed security resulting in a deficiency in the collateral posted by the borrower. The Funds will seek to minimize this risk by requiring that the value of the securities loaned be computed each day and additional collateral be furnished each day if required.
27
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
At December 31, 2020, the value of securities loaned and cash collateral received were as follows:
| Value of | Cash | |||||||
| Securities | Collateral | |||||||
| Loaned | Received | |||||||
| Global Fund | $ | 12,288,756 | $ | 12,972,409 | ||||
| US Small Cap Fund | $ | 43,656,269 | $ | 46,960,121 | ||||
| US Large Cap Fund | $ | 12,882,727 | $ | 14,195,522 | ||||
Securities purchased via reinvestment of cash collateral received as part of the securities lending program consisted of institutional money market funds with overnight and continuous maturities.
It is each Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day following valuation date of securities loaned. Therefore, the value of the collateral held may be temporarily less than required under the lending contract. As of December 31, 2020 the collateral consisted of BlackRock Liquidity Funds FedFund Portfolio – Institutional Class, Fidelity Investments Money Market Government Portfolio – Class I, Invesco Short-Term Investments Trust Government & Agency Portfolio – Institutional Class and JPMorgan U.S. Government Money Market Fund – Capital Class.
Disclosures about Offsetting Assets and Liabilities
The Funds are required to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The guidance requires retrospective application for all comparative periods presented. Management has evaluated the impact on the financial statement disclosures and determined that there is no effect. As there are no master netting arrangements relating to the Funds’ participation in securities lending, and all amounts related to securities lending are presented gross on the Funds’ Statement of Assets and Liabilities, no additional disclosures have been made on behalf of the Funds. Please refer to the Securities Lending Note for additional disclosures related to securities lending, including collateral related to securities on loan.
| 3. | AGREEMENTS |
Global Fund’s Investment Advisory Agreement
Seaport Global Advisors, LLC, a related party of the Global Fund, oversees the performance of the Global Fund and is responsible for overseeing the management of the investment portfolio of the Global Fund. These services are provided under the terms of an investment advisory agreement between the Trust and Global Advisors, pursuant to which Global Advisors receives an annual advisory fee equal to 1.25% of the Global Fund’s average net assets.
Through November 1, 2021, the Advisor has agreed to waive and/or reimburse the Global Fund for its advisory fee, and to the extent necessary, bear other expenses, to limit the total annualized expenses (excluding borrowing and investment-related costs and fees, taxes, extraordinary expenses and fees and expenses of underlying funds) of the Institutional Class shares of the Global Fund to the amounts of 1.70% per annum of net assets attributable to such shares of the Global Fund.
28
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
Global Advisors shall be permitted to recover expenses it has borne subsequent to the effective date of this agreement (whether through reduction of its advisory fee or otherwise) in later periods to the extent that the Global Fund’s expenses fall below the annual rates set forth above, given that such a rate is not greater than the rate that was in place at the time of the waiver, provided, however, that the Global Fund is not obligated to pay any such reimbursed fees more than three years after the expense was incurred by Global Advisors.
Sub-Advisory services are provided to the Global Fund, pursuant to an agreement between Global Advisors and EntrepreneurShares, LLC. Under the terms of this sub-advisory agreement, Seaport Global Advisors, LLC, not the Global Fund, compensates the Sub-Advisor based on the Global Fund’s average net assets. Certain officers of Seaport Global Advisors, LLC are also officers of the Sub-Advisor. Dr. Shulman is a majority owner of both Global Advisors and the Sub-Advisor.
US Small Cap Fund and US Large Cap Fund Investment Advisory Agreement
Capital Impact Advisors, LLC, a related party of the US Small Cap Fund and the US Large Cap Fund, oversees the performance of the US Small Cap Fund and the US Large Cap Fund and is responsible for overseeing the management of the investment portfolio of the US Small Cap Fund and the US Large Cap Fund. These services are provided under the terms of investment advisory agreements between the Trust and the Advisor, pursuant to which the Advisor receives an annual advisory fee equal to 0.75% of the US Small Cap Fund’s average net assets and 0.65% of the US Large Cap Fund’s average net assets.
Through November 1, 2021 for the US Small Cap Fund and the US Large Cap Fund, the Advisor has agreed to waive and/or reimburse the US Small Cap Fund and the US Large Cap Fund for its advisory fee, and to the extent necessary, bear other expenses, to limit the total annualized expenses (excluding borrowing and investment-related costs and fees, taxes, extraordinary expenses and fees and expenses of underlying funds) of the Institutional Class shares of the US Small Cap Fund to the amounts of 0.85% per annum of net assets attributable to such shares of the US Small Cap Fund and 0.75% per annum of net assets attributable to shares of the US Large Cap Fund. The Advisor shall be permitted to recover expenses it has borne subsequent to the effective date of this agreement (whether through reduction of its advisory fee or otherwise) in later periods to the extent that the US Small Cap Fund or the US Large Cap Fund’s expenses fall below the annual rates set forth above, given that such a rate is not greater than the rate that was in place at the time of the waiver, provided, however, that the US Small Cap Fund and the US Large Cap Fund are not obligated to pay any such reimbursed fees more than three years after the expense was incurred by Advisor.
Waived fees subject to recovery by year of expiration are as follows:
| Year of Expiration | Potential Recovery | |||||||
| US Small | US Large | |||||||
| Cap Fund | Cap Fund | |||||||
| 6/30/2021 | $ | 29,800 | $ | 37,220 | ||||
| 6/30/2022 | 58,897 | 56,945 | ||||||
| 6/30/2023 | 75,687 | 75,120 | ||||||
| 12/31/2023 | 19,795 | 22,889 | ||||||
| Total | $ | 184,179 | $ | 192,174 | ||||
29
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| 4. | INCOME TAXES |
The Funds plan to distribute substantially all of the net investment income and net realized gains that they have realized on the sale of securities. These income and gains distributions will generally be paid once each year, on or before December 31. The character of distributions made during the year for financial reporting purposes may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expense or gain items for financial reporting and tax reporting purposes.
The tax character of distributions paid during the year ended June 30, 2020 and the year ended June 30, 2019 was as follows:
| Global Fund | US Small Cap Fund | US Large Cap Fund | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
| Distributions paid from: | ||||||||||||||||||||||||
| Ordinary income* | $ | — | $ | 909,544 | $ | 93,892 | $ | 5,656,660 | $ | — | $ | 611,730 | ||||||||||||
| Long-term capital gains | 1,788,910 | 586,867 | 9,737,708 | 18,957,000 | 8,147,630 | 1,679,617 | ||||||||||||||||||
| Total distributions paid | $ | 1,788,910 | $ | 1,496,411 | $ | 9,831,600 | $ | 24,613,660 | $ | 8,147,630 | $ | 2,291,347 | ||||||||||||
| * | For federal income tax purposes, distribution of short-term capital gains are treated as ordinary income distributions. |
The Funds designate long-term capital gain dividends, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits for the Funds related to net capital gains to zero for the tax year ended June 30, 2020.
Additionally, U.S. GAAP requires that certain components of net assets be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share.
As of December 31, 2020, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for each Fund were as follows:
| US Small | US Large | |||||||||||
| Global Fund | Cap Fund | Cap Fund | ||||||||||
| Gross unrealized appreciation | $ | 21,193,896 | $ | 78,905,385 | $ | 53,360,950 | ||||||
| Gross unrealized depreciation | (2,188,800 | ) | (4,020,423 | ) | (5,504,611 | ) | ||||||
| Net unrealized appreciation (depreciation) on investments | 19,005,096 | 74,884,962 | 47,856,339 | |||||||||
| Tax cost of investments | 49,503,894 | 154,236,408 | 149,806,617 | |||||||||
The table above differs from the financial statements due to timing differences related to the deferral of losses primarily due to wash sales.
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| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
As of June 30, 2020, the components of accumulated earnings/(deficit) on a tax basis were as follows:
| US Small | US Large | |||||||||||
| Global Fund | Cap Fund | Cap Fund | ||||||||||
| Undistributed ordinary income | $ | — | $ | — | $ | — | ||||||
| Undistributed long-term capital gains | 388,596 | 18,060,134 | 30,144,283 | |||||||||
| Accumulated capital and other losses | (246,687 | ) | (155,619 | ) | (243,985 | ) | ||||||
| Unrealized appreciation on investments | 12,326,190 | 15,790,584 | 29,032,062 | |||||||||
| Total accumulated earnings | $ | 12,468,099 | $ | 33,695,099 | $ | 58,932,360 | ||||||
As of June 30, 2020, the Global, US Small Cap and US Large Cap Funds had qualified late-year losses of $246,687, $155,619 and $243,985, respectively, which are deferred until fiscal year 2021 for tax purposes. Net late-year ordinary losses incurred after December 31 and within the taxable year and net late-year specified losses incurred after October 31 and within the taxable year are deemed to arise on the first day of the Funds’ next taxable year.
| 5. | RELATED PARTIES |
At December 31, 2020, certain officers of the Trust were also employees of the Advisors. However, these officers were not compensated directly by the Funds. Refer to Note 1 for more information.
| 6. | BENEFICIAL OWNERSHIP |
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of a fund, under Section 2(a)(9) of the 1940 Act. As of December 31, 2020, for the benefit of its shareholders, MAC & Co., an affiliate of Global Fund, held 81.98% of the total Global Fund shares outstanding. As of December 31, 2020, for the benefit of its shareholders, MAC & Co., an affiliate of the US Small Cap Fund, held 90.91% of the total US Small Cap Fund shares outstanding. As of December 31, 2020, for the benefit of its shareholders, MAC & Co., an affiliate of the US Large Cap Fund, held 91.91% of the total US Large Cap Fund shares outstanding.
| 7. | INVESTMENT TRANSACTIONS |
During the six months ended December 31, 2020, the aggregate purchases and sales of securities (excluding in-kind transactions and short-term securities) were:
| US Small | US Large | |||||||||||
| Global Fund | Cap Fund | Cap Fund | ||||||||||
| Purchases: | $ | 43,234,387 | $ | 137,682,272 | $ | 128,667,860 | ||||||
| Sales: | $ | 43,274,743 | $ | 141,536,131 | $ | 122,556,008 | ||||||
The Funds did not have any purchases or sales of U.S. Government Securities.
| 8. | REDEMPTION FEES |
Each Fund imposes a redemption fee equal to 2% of the dollar value of the shares redeemed within five business days of the date of purchase. The redemption fee does not apply to shares purchased through reinvested distributions (dividends and capital gains) or through the automatic investment plan, shares held in retirement plans (if the plans request a waiver of the fee), or shares redeemed through designated systematic withdrawal plans.
31
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| 9. | SECTOR RISK |
If a Fund has significant investments in the securities of issuers within a particular sector, any development affecting that sector will have a greater impact on the value of the net assets of the Fund than would be the case if the Fund did not have significant investments in that sector. In addition, this may increase the risk of loss in the Fund and increase the volatility of the Fund’s NAV per share. For instance, economic or market factors, regulatory changes or other developments may negatively impact all companies in a particular sector, and therefore the value of the Fund’s portfolio will be adversely affected. As of December 31, 2020, the Global, US Small Cap and US Large Cap Funds had 39.94%, 50.67% and 37.78% of the value of their net assets invested in stocks within the Health Care sector, respectively. As of December 31, 2020, the US Large Cap Fund had 30.22% of the value of its net assets invested in stocks within the Technology sector.
| 10. | MARKET AND GEOPOLITICAL RISK |
The increasing interconnectivity between global economies and financial markets increases the likelihood that events or conditions in one region or financial market may adversely impact issuers in a different country, region or financial market. Securities in the Funds’ portfolio may underperform due to inflation (or expectations for inflation), interest rates, global demand for particular products or resources, natural disasters, pandemics, epidemics, terrorism, regulatory events and governmental or quasi-governmental actions. The occurrence of global events similar to those in recent years, such as terrorist attacks around the world, natural disasters, social and political discord or debt crises and downgrades, among others, may result in market volatility and may have long term effects on both the U.S. and global financial markets. It is difficult to predict when similar events affecting the U.S. or global financial markets may occur, the effects that such events may have and the duration of those effects. Any such event(s) could have a significant adverse impact on the value and risk profile of the Funds’ portfolio. The current novel coronavirus (COVID-19) global pandemic and the aggressive responses taken by many governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines or similar restrictions, as well as the forced or voluntary closure of, or operational changes to, many retail and other businesses, has had negative impacts, and in many cases severe negative impacts, on markets worldwide. It is not known how long such impacts, or any future impacts of other significant events described above, will or would last, but there could be a prolonged period of global economic slowdown, which may impact your Fund investment. Therefore, the Funds could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns. During a general market downturn, multiple asset classes may be negatively affected. Changes in market conditions and interest rates can have the same impact on all types of securities and instruments. In times of severe market disruptions you could lose your entire investment.
| 11. | FOREIGN INVESTMENT RISK |
The Global Fund generally invests a significant portion of its total assets in securities principally traded in markets outside the U.S. The foreign markets in which the Global Fund invests in are sometimes open on days when the New York Stock Exchange (“NYSE”) is not open and the Global Fund does not calculate its NAV, and sometimes are not open on days when the NYSE is open and the Global Fund does calculate its NAV. Even on days on which both the foreign market and the NYSE are open, several hours may pass between the time when trading in the foreign market closes and the time at which the Global Fund calculates its NAV. That is generally the case for markets in Europe, Asia, Australia and other far eastern markets; the regular closing time of foreign markets in North and South America is generally the same as the closing time of the NYSE and the time at which the Global Fund calculate its NAV.
32
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
Foreign stocks, as an asset class, may underperform U.S. stocks, and foreign stocks may be more volatile than U.S. stocks. Risks relating to investment in foreign securities (including, but not limited to, depository receipts and participation certificates) 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 risk including less liquidity, high inflation rates, unfavorable economic practices and political instability. The risks of foreign investments are typically greater in emerging and less developed markets.
| 12. | CORONAVIRUS (COVID-19) PANDEMIC |
In early 2020, an outbreak of a novel strain of coronavirus (COVID-19) emerged globally. This coronavirus has resulted in closing international borders, enhanced health screenings, healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general public concern and uncertainty.
The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries, the financial health of individual companies and the market in general in significant and unforeseen ways. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Funds, including political, social and economic risks. Any such impact could adversely affect the Funds’ performance, the performance of the securities in which the Funds invest and may lead to losses on your investment in the Funds. The ultimate impact of COVID-19 on the financial performance of the Funds’ investments is not reasonably estimable at this time.
| 13. | LIQUIDITY RISK MANAGEMENT PROGRAM |
The Funds have adopted and implemented a written liquidity risk management program as required by Rule 22e-4 (the “Liquidity Rule”) under the Investment Company Act of 1940, as amended. The program is reasonably designed to assess and manage each Fund’s liquidity risk, taking into consideration, among other factors, each Fund’s investment strategies and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources.
During the six months ended December 31, 2020, the Board and the Trust’s Liquidity Risk Management Program Administrator (the “LPA”) reviewed each Fund’s investments and determined that each Fund held adequate levels of cash and highly liquid investments to meet shareholder redemption activities in accordance with applicable requirements. Accordingly, the Board and LPA concluded that (i) the Funds’ liquidity risk management program is reasonably designed to prevent violations of the Liquidity Rule and (ii) the Funds’ liquidity risk management program has been effectively implemented.
| 14. | SUBSEQUENT EVENTS EVALUATION |
Management has evaluated the Funds’ related events and transactions that occurred through the date of issuance of the Funds’ financial statements.
There were no other events or transactions that occurred during this period that materially impacted the amounts or disclosures in the Funds’ financial statements.
33
| EntrepreneurShares Series Trust |
| EXPENSE EXAMPLE |
| December 31, 2020 (Unaudited) |
As a Fund shareholder, you may incur two types of costs: (1) transaction costs, including commissions on trading, as applicable; and (2) ongoing costs, including advisory fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The expense examples below are based on an investment of $1,000 invested on July 1, 2020 and held through the period ended December 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use this information, 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 table under the heading entitled “Actual Expenses Paid” to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each 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 your 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. Further, the expenses do not include any brokerage commissions on investors’ purchases or redemptions of fund shares as described in the Funds’ prospectus. Therefore, the examples are useful in comparing ongoing costs only and will not help you determine the relative total cost of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning | Ending | |||||||||
| Account | Account Value | Annualized | ||||||||
| Value | December 31, | Expenses Paid | Expense | |||||||
| July 1, 2020 | 2020 | During Period | Ratio(a) | |||||||
| ERShares Global Fund | Actual | $1,000.00 | $1,358.40 | $8.77 | 1.47% | |||||
| Hypothetical (b) | $1,000.00 | $1,017.70 | $7.51 | 1.47% | ||||||
| ERShares US Small Cap Fund | Actual | $1,000.00 | $1,468.60 | $5.27 | 0.85% | |||||
| Hypothetical (b) | $1,000.00 | $1,020.86 | $4.32 | 0.85% | ||||||
| ERShares US Large Cap Fund | Actual | $1,000.00 | $1,290.00 | $4.32 | 0.75% | |||||
| Hypothetical (b) | $1,000.00 | $1,021.37 | $3.81 | 0.75% |
| (a) | Expenses are equal to the average account value over the period multiplied by the Fund’s annualized expense ratio, multiplied by 184/365 (to reflect the one-half year period). |
| (b) | Represents the hypothetical 5% annual return before taxes. |
34
| EntrepreneurShares Series Trust |
| ADDITIONAL INFORMATION |
| December 31, 2020 (Unaudited) |
FACTORS CONSIDERED BY THE TRUSTEES IN APPROVAL OF THE RENEWAL OF INVESTMENT ADVISORY AGREEMENTS
On September 23, 2020, all of the Trustees of EntrepreneurShares Series Trust (the “Trust”) met to discuss, among other things, the continuation of the investment advisory and sub-advisory agreements, if applicable, for the ERShares Global Fund (the “Global Fund”), the ERShares US Small Cap Fund (the “Small Cap Fund”), and the ERShares US Large Cap Fund (the “Large Cap Fund”) (collectively referred to as the “Funds”). In preparation for the meeting they reviewed materials addressing the review and consideration of the investment advisory agreements (the “Agreements”), which included a Gartenberg Memo to the Board of Trustees (the “Board”) from legal counsel, 15(c) analyses for the Funds, and the returns of each Fund and the Funds’ benchmark indices provided in the quarterly Board materials.
Seaport Global Advisors, LLC (“Seaport”) (formerly known as Weston Capital Advisors, LLC) is the Global Fund’s investment adviser, and EntrepreneurShares, LLC (“EntrepreneurShares”) is the Global Fund’s investment sub-adviser. Capital Impact Advisors, LLC (“Capital Impact Advisors”) is the investment adviser to the Small Cap Fund and the Large Cap Fund. Seaport, EntrepreneurShares, and Capital Impact Advisors are referred to herein as the “Advisers,” and the investment advisory agreements for the Global Fund, the Small Cap Fund, and the Large Cap Fund, along with the sub-advisory agreement for the Global Fund, are referred to herein as the “Advisory Agreements.” The Advisers are responsible for management of the investment portfolio of the Funds, and for overall management of the Funds’ business and affairs pursuant to the Advisory Agreements.
At the meeting, the Trustees had ample opportunity to consider matters they deemed relevant in considering the approval of the Advisory Agreements, and to request any additional information they considered reasonably necessary to their deliberations, without undue time constraints. In addition to the materials requested by the Trustees in connection with their consideration of the continuation of the Advisory Agreements, the Trustees received materials in advance of each regular quarterly meeting of the Board of Trustees that provided information relating to the services provided by the Advisers.
The Board then reviewed and discussed the written materials that were provided in advance of the Meeting and deliberated on the renewal of the Advisory Agreements. The Board relied upon the advice of independent legal counsel and their own business judgment in determining the material factors to be considered in evaluating the Advisory Agreements and the weight to be given to each such factor. The conclusions reached by the Board were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the Advisory Agreements. In considering the renewal of the Advisory Agreements, the Board reviewed and analyzed various factors that they determined were relevant, including the factors enumerated below.
Nature and Quality of Investment Advisory Services
The Trustees concluded that the nature, extent and quality of the investment advisory services provided to the Funds by the Advisers are satisfactory, and that the nature and extent of the services provided by the Advisers are appropriate to assure that the Funds’ operations are conducted in compliance with applicable laws, rules and regulations. The Trustees considered the experience and knowledge of the Advisers’ personnel as well as information furnished by the Advisers throughout the year at regular Board meetings, which included reports on investment performance, shareholder services, regulatory compliance, and other services provided to the Funds. The Trustees concluded that they have a reasonable belief that the nature, extent and quality of services provided by the Advisers to the Funds are appropriate.
35
| EntrepreneurShares Series Trust |
| ADDITIONAL INFORMATION (Continued) |
| December 31, 2020 (Unaudited) |
Comparative Fees and Expenses
The Trustees concluded that the advisory fees and net expense ratios of the Funds were not unreasonable, and they believe that the following factors, among others, support these conclusions: (1) the long-term returns of the Funds are generally positive when compared to peers; and (2) the Funds are still relatively small in assets under management when compared to their peer groups, and the Advisers are subsidizing the expenses of the Funds to ensure the Funds remain competitive with other funds.
Comparison of Fee Structures of Other Accounts
The Trustees concluded that the differential in advisory fees between the Funds and the separate accounts managed by the Advisers are reasonable and concluded that the fee rates charged to the Funds in comparison to those charged to the Advisers’ other clients are not unreasonable.
Performance
The Trustees concluded that the performance of the Funds has generally been good on a relative basis and on an absolute basis, with periods of underperformance. They concluded that renewal of the Advisory Agreements was in the best interest of the Funds’ shareholders. They believe that the following factors, among others, support these conclusions: (1) the Advisers manage the Funds in a manner that is materially consistent with their stated investment objective and style; and (2) the long-term returns of the Funds are generally positive in comparison to the peer group.
Costs and Profitability
The Trustees recognized that it is difficult to make comparisons of profitability from investment advisory contracts. The Trustees recognized that the Advisers are subsidizing the expenses of the Funds to ensure the Funds remain competitive with other funds. The Trustees concluded that the level of profitability realized by the Advisers from their provision of services to the Funds is reasonable, and, as noted above, that the overall expense ratios and investment advisory fees are fair and reasonable.
Economies of Scale
The Trustees concluded that the current fees were appropriate at foreseeable asset levels without the need for breakpoints. They believe that the following factors, among others, support these conclusions: (1) based on the materials reviewed at the meeting and the size of the Funds, the Funds have not realized economies of scale; and (2) many of the Funds’ expenses increase as the Funds’ assets grow, such as the intermediary service fees and the costs of conducting research to explore additional investments.
Conclusion
After reviewing the material provided for the meeting, management’s presentation, as well as other information regularly provided at the Board’s quarterly meetings throughout the year regarding the quality of services provided by the Advisers, the performance of the Funds, expense information, regulatory compliance issues, trading information and related matters and other factors deemed relevant by the Board, the Trustees, including all of the Independent Trustees, concluded that the Advisory Agreements are fair and reasonable and that the continuation of the Advisory Agreements is in the best interest of the Funds and their shareholders. Accordingly, the Trustees approved the continuation of the Advisory Agreements.
36
| EntrepreneurShares Series Trust |
| ADDITIONAL INFORMATION (Continued) |
| December 31, 2020 (Unaudited) |
Availability of Quarterly Portfolio Holdings Schedule
The Funds file complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT. These filings are available on the SEC’s website www.sec.gov. In addition, the Funds’ Form N-PORT is available without charge, upon request, by calling 1-877-271-8811.
Proxy Voting Policies and Procedures and Proxy Voting Record
A description of the Funds’ proxy voting policies and procedures and information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12 month period ended June 30, is available (1) without charge, upon request, by calling 1-877-271-8811, and (2) on the SEC’s website at www.sec.gov.
37
| EntrepreneurShares Series Trust |
| PRIVACY POLICY |
| (Unaudited) |
As part of the EntrepreneurShares fund family’s long tradition of trust, the confidentiality of personal information is paramount. We maintain high standards to safeguard your personal information. We will remain vigilant and professional in protecting that information and in using it in a fair and lawful manner. As part of this commitment to fulfilling your trust we have formulated this Privacy Policy.
Safeguarding Customer Information and Documents
To conduct regular business, we may collect nonpublic personal information from sources such as:
| ● | Account Applications and other forms, which may include a customer’s name, address, social security number, and information about a customer’s investment goals and risk tolerances; |
| ● | Account History, including information about the transactions and balances in a customer’s account; and |
| ● | Correspondence, written, telephonic, or electronic between a customer and Seaport Global Advisors, LLC; Capital Impact Advisors, LLC; EntrepreneurShares, LLC, and/or any EntrepreneurShares Mutual Fund or Exchange-Traded Fund product; such as, ERShares Global Fund, ERShares US Large Cap Fund, ERShares US Small Cap, ERShares Entrepreneurs ETF, ERShares NextGen Entrepreneurs ETF, or service providers to Seaport Global Advisors, Capital Impact, EntrepreneurShares, and/or EntrepreneurShares’ Funds. |
To conduct regular business, we collect non-public customer data in checklists, forms, in written notations, and in documentation provided to us by our customers for evaluation, registration, licensing or related consulting services. We also create internal lists of such data.
EntrepreneurShares will internally safeguard your nonpublic personal information by restricting access to only those employees who provide products or services to you or those who need access to your information to service your account. In addition, we will maintain physical, electronic and procedural safeguards that meet federal and/or state standards to guard your nonpublic personal information. Failure to observe EntrepreneurShares’ procedures regarding customer and consumer privacy will result in discipline and may lead to termination.
Sharing Nonpublic Personal and Financial Information
As EntrepreneurShares shares nonpublic information solely to service our client accounts, we do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law or otherwise disclosed herein.
EntrepreneurShares is committed to the privacy and protection of our customers’ personal and financial information. We will not share any such information with any affiliated or nonaffiliated third party except:
| ● | When necessary to complete transactions in a customer account, such as clearing firm. |
| ● | When required to service and/or maintain your account. |
| ● | In order to resolve a customer dispute or inquiry. |
| ● | With persons acting in a fiduciary or representative capacity on behalf of the customer. |
| ● | With rating agencies, persons assessing compliance with industry standards, or to the attorneys, accountants and auditors of the firm. |
| ● | In connection with any sale and / or merger of EntrepreneurShares’ business. |
| ● | To prevent or protect against actual or potential fraud, identity theft, unauthorized transactions, claims or other liability. |
| ● | To comply with all federal, state or local laws, rules, statutes and other applicable legal requirements. |
38
| EntrepreneurShares Series Trust |
| PRIVACY POLICY (Continued) |
| (Unaudited) |
| ● | In connection with a written agreement to provide advisory services or investment management when the information is released solely for the purpose of providing products or services covered by pursuant to the EntrepreneurShares’ Wrap Fee Program. |
| ● | Upon the customer’s specific instruction, consent or request. |
Note: When we share your nonpublic information with any third party for the reasons listed above, we make certain that there are written restrictions in place regarding the use and/or disclosure of said information.
Opt-Out Provisions
It is not a policy of EntrepreneurShares to share nonpublic personal and financial information with affiliated or unaffiliated third parties except under the circumstances noted above. Since sharing under the circumstances noted above is necessary to service customer accounts or is mandated by law, there are no allowances made for clients to opt out.
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| ERShares Global Fund Investment Advisor |
| Seaport Global Advisors, LLC |
| 175 Federal Street, Suite #875 |
| Boston, MA 02110 |
| ERShares Global Fund Investment Sub-Advisor |
| EntrepreneurShares, LLC |
| 175 Federal Street, Suite #875 |
| Boston, MA 02110 |
| ERShares US Small Cap Fund and ERShares US Large Cap Fund Investment Advisor |
| Capital Impact Advisors, LLC |
| 175 Federal Street, Suite #875 |
| Boston, MA 02110 |
| Independent Registered Public Accounting Firm |
| BBD, LLP |
| 1835 Market Street, 3rd Floor |
| Philadelphia, PA 19103 |
| Custodian |
| UMB Bank, N.A. |
| 928 Grand Boulevard, 5th Floor |
| Kansas City, MO 64106 |
| Distributor |
| Foreside Fund Services, LLC |
| Three Canal Plaza, Suite 100 |
| Portland, ME 04101 |
| Administrator, Accountant, Transfer Agent and Dividend Disbursing Agent |
| Ultimus Fund Solutions, LLC |
| 225 Pictoria Drive, |
| Cincinnati, OH 45246 |
| Counsel |
| Thompson Hine LLP |
| 41 South High Street, Suite 1700 |
| Columbus, OH 43215 |
| This report is intended only for the information of shareholders or those who have received the applicable Fund’s prospectus which contains information about that Fund’s management fee and expenses. Please read the prospectus carefully before investing. |
Semi-Annual Report
EntrepreneurShares Series Trust™
EntrepreneurShares Series Trust (“Trust”) is a registered investment company consisting of separate investment portfolios called “Funds.” This Semi-Annual Report relates solely to the following Funds:
| Name | Ticker Symbol |
| ERShares Entrepreneurs ETF | |
| (formerly, ERShares Entrepreneur 30 ETF) | ENTR |
| ERShares NextGen Entrepreneurs ETF | |
| (formerly, ERShares Non-US Small Cap ETF) | ERSX |
The Funds are exchange-traded funds. This means that shares of the Funds are listed on NYSE Arca, Inc. (“NYSE Arca”) and trade at market prices. The market price for each Fund’s shares may be different from its net asset value per share (“NAV”).
December 31, 2020
175 Federal Street
Suite #875
Boston, MA 02110
Toll Free: 877-271-8811
| ERShares Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS SUMMARY TABLE |
| December 31, 2020 (Unaudited) |
| Percentage of | ||||
| Net Assets | ||||
| Communications | 26.44 | % | ||
| Consumer Discretionary | 10.62 | % | ||
| Health Care | 31.95 | % | ||
| Technology | 30.45 | % | ||
| Other Assets and Liabilities | 0.54 | % | ||
| Total | 100.00 | % | ||
Portfolio holdings and allocations are subject to change.
2
| ERShares Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks — 99.46% | ||||||||
| Communications — 26.44% | ||||||||
| Alphabet, Inc., Class A (a) | 3,018 | $ | 5,289,468 | |||||
| Facebook, Inc., Class A (a) | 14,284 | 3,901,817 | ||||||
| Netflix, Inc. (a) | 8,693 | 4,700,566 | ||||||
| Roku, Inc. (a) | 25,410 | 8,436,628 | ||||||
| Spotify Technology S.A. (a) | 10,000 | 3,146,600 | ||||||
| Trade Desk, Inc. (The), Class A (a) | 5,044 | 4,040,244 | ||||||
| Twitter, Inc. (a) | 89,482 | 4,845,450 | ||||||
| Zillow Group, Inc., Class A (a) | 40,351 | 5,485,315 | ||||||
| 39,846,088 | ||||||||
| Consumer Discretionary — 10.62% | ||||||||
| Amazon.com, Inc. (a) | 1,757 | 5,722,426 | ||||||
| Copart, Inc. (a) | 28,490 | 3,625,353 | ||||||
| Tesla, Inc. (a) | 5,328 | 3,759,810 | ||||||
| Wayfair, Inc., Class A (a) | 12,814 | 2,893,529 | ||||||
| 16,001,118 | ||||||||
| Health Care — 31.95% | ||||||||
| 10X Genomics, Inc., Class A (a) | 28,994 | 4,105,550 | ||||||
| CRISPR Therapeutics AG (a) | 40,351 | 6,178,142 | ||||||
| Exact Sciences Corp. (a) | 20,000 | 2,649,800 | ||||||
| Invitae Corp. (a) | 130,877 | 5,471,967 | ||||||
| Masimo Corp. (a) | 14,878 | 3,992,958 | ||||||
| ResMed, Inc. | 17,569 | 3,734,467 | ||||||
| Seagen, Inc. (a) | 20,495 | 3,589,494 | ||||||
| Teladoc Health, Inc. (a) | 34,833 | 6,965,207 | ||||||
| Twist Bioscience Corp. (a) | 60,351 | 8,526,992 | ||||||
| Veracyte, Inc. (a) | 60,000 | 2,936,400 | ||||||
| 48,150,977 | ||||||||
| Technology — 30.45% | ||||||||
| Crowdstrike Holdings, Inc., Class A (a) | 18,175 | 3,849,829 | ||||||
| Datadog, Inc. (a) | 37,139 | 3,655,963 | ||||||
| NVIDIA Corp. | 9,862 | 5,149,936 | ||||||
| Okta, Inc. (a) | 16,298 | 4,143,929 | ||||||
| RingCentral, Inc., Class A (a) | 10,088 | 3,823,049 | ||||||
| Square, Inc., Class A (a) | 40,181 | 8,744,993 | ||||||
| Synopsys, Inc. (a) | 15,939 | 4,132,026 | ||||||
| Twilio, Inc., Class A (a) | 15,639 | 5,293,803 | ||||||
| Veeva Systems, Inc., Class A (a) | 14,839 | 4,039,918 | ||||||
The accompanying notes are an integral part of these financial statements.
3
| ERShares Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| Technology (Continued) | ||||||||
| Zoom Video Communications, Inc., Class A (a) | 9,079 | $ | 3,062,528 | |||||
| 45,895,974 | ||||||||
| TOTAL COMMON STOCKS (Cost $112,579,331) | 149,894,157 | |||||||
| Total Investments — 99.46% (Cost $112,579,331) | 149,894,157 | |||||||
| Other Assets in Excess of Liabilities — 0.54% | 816,154 | |||||||
| Net Assets — 100.00% | $ | 150,710,311 | ||||||
| (a) | Non-income producing security. |
The accompanying notes are an integral part of these financial statements.
4
| ERShares NextGen Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS SUMMARY TABLE |
| December 31, 2020 (Unaudited) |
| Percentage of | ||||
| Net Assets | ||||
| Communications | 17.37 | % | ||
| Consumer Discretionary | 19.38 | % | ||
| Consumer Staples | 2.81 | % | ||
| Energy | 4.32 | % | ||
| Financials | 9.05 | % | ||
| Health Care | 11.03 | % | ||
| Industrials | 6.64 | % | ||
| Real Estate | 1.14 | % | ||
| Technology | 26.29 | % | ||
| Other Assets and Liabilities | 1.97 | % | ||
| Total | 100.00 | % | ||
Portfolio holdings and allocations are subject to change.
5
| ERShares NextGen Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks — 98.03% | ||||||||
| Australia — 14.45% | ||||||||
| Communications — 4.57% | ||||||||
| carsales.com, Ltd. | 44,438 | $ | 686,390 | |||||
| SEEK, Ltd. | 48,398 | 1,061,120 | ||||||
| 1,747,510 | ||||||||
| Consumer Discretionary — 3.80% | ||||||||
| Harvey Norman Holdings, Ltd. | 213,635 | 772,033 | ||||||
| Kogan.com, Ltd. | 46,745 | 685,808 | ||||||
| 1,457,841 | ||||||||
| Financials — 3.75% | ||||||||
| Afterpay, Ltd. (a) | 15,799 | 1,436,220 | ||||||
| Technology — 2.33% | ||||||||
| Pro Medicus, Ltd. | 33,918 | 894,043 | ||||||
| Total Australia | 5,535,614 | |||||||
| Belgium — 2.00% | ||||||||
| Technology — 2.00% | ||||||||
| Materialise NV - ADR (a) | 14,142 | 766,638 | ||||||
| Total Belgium | 766,638 | |||||||
| Bermuda — 1.98% | ||||||||
| Financials — 1.98% | ||||||||
| Enstar Group, Ltd. (a) | 3,713 | 760,757 | ||||||
| Total Bermuda | 760,757 | |||||||
| Canada — 3.21% | ||||||||
| Financials — 1.10% | ||||||||
| First National Financial Corp. | 12,909 | 420,666 | ||||||
| Real Estate — 1.14% | ||||||||
| Tricon Residential, Inc. | 48,659 | 436,933 | ||||||
| Technology — 0.97% | ||||||||
| Real Matters, Inc. (a) | 24,760 | 373,666 | ||||||
| Total Canada | 1,231,265 | |||||||
The accompanying notes are an integral part of these financial statements.
6
| ERShares NextGen Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| Cayman Islands — 2.13% | ||||||||
| Consumer Discretionary — 2.13% | ||||||||
| NagaCorp, Ltd. | 620,846 | $ | 815,445 | |||||
| Total Cayman Islands | 815,445 | |||||||
| China — 20.91% | ||||||||
| Communications — 5.20% | ||||||||
| Bilibili, Inc. - ADR (a) | 19,279 | 1,652,596 | ||||||
| DouYu International Holdings, Ltd. - ADR (a) | 30,938 | 342,174 | ||||||
| 1,994,770 | ||||||||
| Consumer Discretionary — 5.12% | ||||||||
| Bosideng International Holdings, Ltd. | 2,029,091 | 1,034,639 | ||||||
| Niu Technologies - ADR (a) | 33,000 | 925,650 | ||||||
| 1,960,289 | ||||||||
| Consumer Staples — 1.04% | ||||||||
| Ausnutria Dairy Corp., Ltd. | 236,156 | 396,821 | ||||||
| Energy — 1.59% | ||||||||
| Tianneng Power International, Ltd. | 251,625 | 608,002 | ||||||
| Financials — 2.22% | ||||||||
| Futu Holdings, Ltd. - ADR (a) | 18,565 | 849,349 | ||||||
| Health Care — 2.50% | ||||||||
| 3SBio, Inc. | 499,947 | 456,409 | ||||||
| China Medical System Holdings, Ltd. | 448,599 | 501,169 | ||||||
| 957,578 | ||||||||
| Technology — 3.24% | ||||||||
| Kingdee International Software Group Co., Ltd. | 304,974 | 1,245,074 | ||||||
| Total China | 8,011,883 | |||||||
| France — 1.16% | ||||||||
| Health Care — 1.16% | ||||||||
| Cellectis S.A. - ADR (a) | 16,500 | 446,490 | ||||||
| Total France | 446,490 | |||||||
The accompanying notes are an integral part of these financial statements.
7
| ERShares NextGen Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| Israel — 9.34% | ||||||||
| Communications — 4.70% | ||||||||
| Fiverr International, Ltd. (a) | 5,491 | $ | 1,071,294 | |||||
| Wix.com, Ltd. (a) | 2,925 | 731,133 | ||||||
| 1,802,427 | ||||||||
| Technology — 4.64% | ||||||||
| AudioCodes, Ltd. | 17,276 | 475,954 | ||||||
| CyberArk Software, Ltd. (a) | 5,726 | 925,264 | ||||||
| Radware, Ltd. (a) | 13,600 | 377,400 | ||||||
| 1,778,618 | ||||||||
| Total Israel | 3,581,045 | |||||||
| Japan — 10.86% | ||||||||
| Communications — 1.02% | ||||||||
| Akatsuki, Inc. | 9,714 | 390,021 | ||||||
| Industrials — 5.16% | ||||||||
| JTOWER, Inc. (a) | 9,428 | 978,776 | ||||||
| Raksul, Inc. (a) | 15,711 | 678,534 | ||||||
| S-Pool, Inc. | 44,248 | 323,228 | ||||||
| 1,980,538 | ||||||||
| Technology — 4.68% | ||||||||
| GMO Payment Gateway, Inc. | 6,783 | 911,523 | ||||||
| SHIFT, Inc. (a) | 6,363 | 881,748 | ||||||
| 1,793,271 | ||||||||
| Total Japan | 4,163,830 | |||||||
| Luxembourg — 3.45% | ||||||||
| Technology — 3.45% | ||||||||
| Globant S.A. (a) | 4,254 | 925,713 | ||||||
| Solutions 30 S.E. (a) | 30,967 | 398,427 | ||||||
| 1,324,140 | ||||||||
| Total Luxembourg | 1,324,140 | |||||||
| Singapore — 0.35% | ||||||||
| Consumer Discretionary — 0.35% | ||||||||
| Best World International, Ltd. (b)(c) | 128,500 | 132,234 | ||||||
| Technology — 0.00% | ||||||||
| Hi-P International, Ltd. | 83 | 126 | ||||||
| Total Singapore | 132,360 | |||||||
The accompanying notes are an integral part of these financial statements.
8
| ERShares NextGen Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| Sweden — 10.80% | ||||||||
| Consumer Discretionary — 4.72% | ||||||||
| Evolution Gaming Group A.B. | 9,900 | $ | 995,292 | |||||
| Instalco A.B. | 26,927 | 813,281 | ||||||
| 1,808,573 | ||||||||
| Health Care — 2.85% | ||||||||
| Cellavision A.B. (a) | 10,038 | 373,777 | ||||||
| Sectra A.B. | 8,124 | 719,271 | ||||||
| 1,093,048 | ||||||||
| Technology — 3.23% | ||||||||
| Sinch A.B. (a) | 7,611 | 1,237,740 | ||||||
| Total Sweden | 4,139,361 | |||||||
| Switzerland — 4.52% | ||||||||
| Health Care — 4.52% | ||||||||
| CRISPR Therapeutics AG (a) | 11,313 | 1,732,133 | ||||||
| Total Switzerland | 1,732,133 | |||||||
| United Kingdom — 10.14% | ||||||||
| Communications — 1.88% | ||||||||
| Frontier Developments plc (a) | 17,101 | 719,869 | ||||||
| Consumer Discretionary — 3.26% | ||||||||
| Dunelm Group plc | 35,566 | 588,853 | ||||||
| Frasers Group plc (a) | 107,036 | 659,113 | ||||||
| 1,247,966 | ||||||||
| Consumer Staples — 1.77% | ||||||||
| Fevertree Drinks plc | 19,613 | 678,504 | ||||||
| Industrials — 1.48% | ||||||||
| HomeServe plc | 40,542 | 567,668 | ||||||
| Technology — 1.75% | ||||||||
| Computacenter plc | 20,073 | 672,189 | ||||||
| Total United Kingdom | 3,886,196 | |||||||
The accompanying notes are an integral part of these financial statements.
9
| ERShares NextGen Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| Shares | Fair Value | |||||||
| Common Stocks (Continued) | ||||||||
| United States — 2.73% | ||||||||
| Energy — 2.73% | ||||||||
| SolarEdge Technologies, Inc. (a) | 3,275 | $ | 1,045,118 | |||||
| Total United States | 1,045,118 | |||||||
| TOTAL COMMON STOCKS (Cost $25,254,929) | 37,572,275 | |||||||
| Total Investments — 98.03% (Cost $25,254,929) | 37,572,275 | |||||||
| Other Assets in Excess of Liabilities — 1.97% | 754,574 | |||||||
| Net Assets — 100.00% | $ | 38,326,849 | ||||||
| (a) | Non-income producing security. |
| (b) | Illiquid security. The total fair value of these securities as of December 31, 2020 was $132,234, representing 0.35% of net assets. |
| (c) | Security is currently being valued according to the fair value procedures approved by the Board of Trustees. |
The accompanying notes are an integral part of these financial statements.
10
| ERShares NextGen Entrepreneurs ETF |
| SCHEDULE OF INVESTMENTS COUNTRY OF RISK TABLE |
| December 31, 2020 (Unaudited) |
| Percentage of | ||||
| Investments | ||||
| Australia | 14.73 | % | ||
| Belgium | 2.04 | % | ||
| Bermuda | 2.02 | % | ||
| Canada | 3.28 | % | ||
| Cayman Islands | 2.17 | % | ||
| China | 21.34 | % | ||
| France | 1.19 | % | ||
| Israel | 9.53 | % | ||
| Japan | 11.08 | % | ||
| Luxemburg | 3.52 | % | ||
| Singapore | 0.35 | % | ||
| Sweden | 11.02 | % | ||
| Switzerland | 4.61 | % | ||
| United Kingdom | 10.34 | % | ||
| United States | 2.78 | % | ||
| Total | 100.00 | % | ||
11
| EntrepreneurShares Series Trust |
| STATEMENTS OF ASSETS AND LIABILITIES |
| December 31, 2020 (Unaudited) |
| ERShares | ||||||||
| ERShares | NextGen | |||||||
| Entrepreneurs | Entrepreneurs | |||||||
| ETF | ETF | |||||||
| Assets | ||||||||
| Investments, at cost | $ | 112,579,331 | $ | 25,254,929 | ||||
| Investments, at fair value | 149,894,157 | 37,572,275 | ||||||
| Foreign currencies, at value (cost $2,279 and $747,754) | 2,279 | 759,967 | ||||||
| Receivable for investments sold | 3,573,534 | — | ||||||
| Dividends and interest receivable | — | 17,233 | ||||||
| Total Assets | 153,469,970 | 38,349,475 | ||||||
| Liabilities | ||||||||
| Payable for investments purchased | 2,693,602 | — | ||||||
| Unified fee | 66,057 | 22,626 | ||||||
| Total Liabilities | 2,759,659 | 22,626 | ||||||
| Net Assets | $ | 150,710,311 | $ | 38,326,849 | ||||
| Net Assets consist of: | ||||||||
| Paid-in capital | 93,812,157 | 27,412,304 | ||||||
| Accumulated earnings | 56,898,154 | 10,914,545 | ||||||
| Net Assets | $ | 150,710,311 | $ | 38,326,849 | ||||
| Net Assets | $ | 150,710,311 | $ | 38,326,849 | ||||
| Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | 5,750,000 | 1,650,000 | ||||||
| Net asset value (offering and redemption price per share) | $ | 26.21 | $ | 23.23 | ||||
The accompanying notes are an integral part of these financial statements.
12
| EntrepreneurShares Series Trust |
| STATEMENTS OF OPERATIONS |
| For the six months ended December 31, 2020 (Unaudited) |
| ERShares | ||||||||
| ERShares | NextGen | |||||||
| Entrepreneurs | Entrepreneurs | |||||||
| ETF | ETF | |||||||
| Investment Income | ||||||||
| Dividend income (net of foreign taxes withheld of $— and $23,442) | $ | 43,818 | $ | 159,387 | ||||
| Interest income | 164 | 8 | ||||||
| Total investment income | 43,982 | 135,953 | ||||||
| Expenses | ||||||||
| Unified fee | 350,659 | 122,551 | ||||||
| Total expenses | 350,659 | 122,551 | ||||||
| Net investment income (loss) | (306,677 | ) | 13,402 | |||||
| Net Realized and Change in Unrealized Gain (Loss) on Investments | ||||||||
| Net realized gain (loss) on: | ||||||||
| Investments | 25,365,141 | 1,386,095 | ||||||
| Foreign currency transactions | — | (3,369 | ) | |||||
| Net realized gain | 25,365,141 | 1,382,726 | ||||||
| Change in unrealized appreciation on: | ||||||||
| Investments | 13,004,317 | 9,291,265 | ||||||
| Foreign currency translations | — | 8,835 | ||||||
| Net change in unrealized appreciation | 13,004,317 | 9,300,100 | ||||||
| Net realized and change in unrealized gain on investments | 38,369,458 | 10,682,826 | ||||||
| Net increase in net assets resulting from operations | $ | 38,062,781 | $ | 10,696,228 | ||||
The accompanying notes are an integral part of these financial statements.
13
| EntrepreneurShares Series Trust |
| STATEMENTS OF CHANGES IN NET ASSETS |
| ERShares NextGen | ||||||||||||||||
| ERShares Entrepreneurs ETF | Entrepreneurs ETF | |||||||||||||||
| Six Months | Year | Six Months | Year | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| December 31, | June 30, | December 31, | June 30, | |||||||||||||
| 2020 | 2020 | 2020 | 2020 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Increase (Decrease) in Net Assets from: | ||||||||||||||||
| Operations: | ||||||||||||||||
| Net investment income (loss) | $ | (306,677 | ) | $ | (39,254 | ) | $ | 13,402 | $ | 163,266 | ||||||
| Net realized gain (loss) on investments, in-kind redemptions and foreign currency transactions | 25,365,141 | 8,359,373 | 1,382,726 | (2,555,322 | ) | |||||||||||
| Net change in unrealized appreciation on investments and foreign currency translations | 13,004,317 | 11,499,544 | 9,300,100 | 2,810,767 | ||||||||||||
| Net increase in net assets resulting from operations | 38,062,781 | 19,819,663 | 10,696,228 | 418,711 | ||||||||||||
| Distributions to Shareholders | ||||||||||||||||
| From earnings | (9,414,439 | ) | (61,004 | ) | (183,374 | ) | (430,110 | ) | ||||||||
| Change in net assets from distributions | (9,414,439 | ) | (61,004 | ) | (183,374 | ) | (430,110 | ) | ||||||||
| Capital Transactions | ||||||||||||||||
| Proceeds from shares issued | 5,720,853 | 22,269,438 | 3,851,360 | 4,215,173 | ||||||||||||
| Cost of shares redeemed | — | (2,642,935 | ) | (2,963,760 | ) | — | ||||||||||
| Net increase in net assets resulting from capital transactions | 5,720,853 | 19,626,503 | 887,600 | 4,215,173 | ||||||||||||
| Total Increase in Net Assets | 34,369,195 | 39,385,162 | 11,400,454 | 4,203,774 | ||||||||||||
| Net Assets | ||||||||||||||||
| Beginning of period | 116,341,116 | 76,955,954 | 26,926,395 | 22,722,621 | ||||||||||||
| End of period | $ | 150,710,311 | $ | 116,341,116 | $ | 38,326,849 | $ | 26,926,395 | ||||||||
| Share Transactions | ||||||||||||||||
| Issued | 250,000 | 1,250,000 | 200,000 | 250,000 | ||||||||||||
| Redeemed | — | (150,000 | ) | (150,000 | ) | — | ||||||||||
| Net increase in shares outstanding | 250,000 | 1,100,000 | 50,000 | 250,000 | ||||||||||||
The accompanying notes are an integral part of these financial statements.
14
| ERShares Entrepreneurs ETF |
| FINANCIAL HIGHLIGHTS |
(For a share outstanding during each period)
| Six Months | Period | |||||||||||||||
| Ended | Ended | |||||||||||||||
| December 31, | Year Ended June 30, | June 30, | ||||||||||||||
| 2020 | 2020 | 2019 | 2018 (a) | |||||||||||||
| (Unaudited) | ||||||||||||||||
| Selected Per Share Data: | ||||||||||||||||
| Net asset value, beginning of period | $ | 21.15 | $ | 17.49 | $ | 17.57 | $ | 15.00 | ||||||||
| Investment operations: | ||||||||||||||||
| Net investment income (loss) | (0.05 | ) | (0.01 | ) | 0.02 | 0.03 | ||||||||||
| Net realized and unrealized gain | 6.76 | 3.68 | 0.42 | 2.55 | ||||||||||||
| Total from investment operations | 6.71 | 3.67 | 0.44 | 2.58 | ||||||||||||
| Less distributions to shareholders from: | ||||||||||||||||
| Net investment income | — | (0.01 | ) | (0.03 | ) | (0.01 | ) | |||||||||
| Net realized gains | (1.65 | ) | — | (0.49 | ) | — | ||||||||||
| Total distributions | (1.65 | ) | (0.01 | ) | (0.52 | ) | (0.01 | ) | ||||||||
| Net asset value, end of period | $ | 26.21 | $ | 21.15 | $ | 17.49 | $ | 17.57 | ||||||||
| Total Return (b) | 31.31 | % (c) | 21.03 | % | 3.14 | % | 17.43 | % (c) | ||||||||
| Total Return at Market (d) | 31.05 | % (c) | 21.06 | % | 2.78 | % | 17.76 | % (c) | ||||||||
| Ratios and Supplemental Data: | ||||||||||||||||
| Net assets, end of period (000 omitted) | $ | 150,710 | $ | 116,341 | $ | 76,956 | $ | 73,814 | ||||||||
| Ratio of Net Expenses to Net Assets (e) | 0.49 | % (f) | 0.49 | % | 0.49 | % | 0.49 | % (f) | ||||||||
| Ratio of Net Investment Income (Loss) to Average Net Assets | (0.43 | )% (f) | (0.05 | )% | 0.12 | % | 0.25 | % (f) | ||||||||
| Portfolio turnover rate | 86 | % (c) | 130 | % (g) | 39 | % | 32 | % (c) | ||||||||
| (a) | For the period November 7, 2017 (commencement of operations) to June 30, 2018. |
| (b) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at net asset value. This percentage is not an indication of the performance of a shareholder’s investment in the Fund based on market value due to differences between the market price of the shares and the net asset value per share of the Fund. |
| (c) | Not annualized. |
| (d) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at market value. Market value is determined by the composite closing price. Composite closing security price is defined as the last reported sale price from any primary listing market (e.g., NYSE Arca) or participating regional exchanges or markets. The composite closing price is the last reported sale price from any of the eligible sources, regardless of volume and not an average price and may have occurred on a date prior to the close of the reporting period. Market value may be greater or less than net asset value, depending on the Fund’s closing price on the listing market. |
| (e) | The Fund operates under a “Unified Fee” structure under which the Advisor pays substantially all of the expenses for the Fund. The Fund pays the Advisor the Unified Fee, an amount based on its average net assets, computed daily and paid monthly. The Fund pays the Advisor 0.49%. Out of these fees, the Advisor pays substantially all of the Fund’s expenses. |
| (f) | Annualized. |
| (g) | Given the abnormal market circumstances during the quarter ending June 30, 2020, as a result of the COVID-19 situation; the Fund had taken a temporary defensive approach. Implementing the temporary defensive measure resulted in the increase in portfolio turnover for the Fund. The Fund’s exposure to the Entrepreneur 30 Index had been reduced in line with the following guideline of the prospectus “Under normal circumstances, the Fund will invest at least 80% of its net assets, plus any borrowings for investment purposes, in securities of companies included in the Entrepreneur 30 Index.” |
The accompanying notes are an integral part of these financial statements.
15
| ERShares NextGen Entrepreneurs ETF |
| FINANCIAL HIGHLIGHTS |
(For a share outstanding during each period)
| Six Months | Year | Period | ||||||||||
| Ended | Ended | Ended | ||||||||||
| December 31, | June 30, | June 30, | ||||||||||
| 2020 | 2020 | 2019 (a) | ||||||||||
| (Unaudited) | ||||||||||||
| Selected Per Share Data: | ||||||||||||
| Net asset value, beginning of period | $ | 16.83 | $ | 16.83 | $ | 15.00 | ||||||
| Investment operations: | ||||||||||||
| Net investment income | — | (b) | 0.08 | 0.14 | ||||||||
| Net realized and unrealized gain | 6.51 | 0.19 | 1.69 | (c) | ||||||||
| Total from investment operations | 6.51 | 0.27 | 1.83 | |||||||||
| Less distributions to shareholders from: | ||||||||||||
| Net investment income | (0.11 | ) | (0.27 | ) | — | |||||||
| Net realized gains | — | — | — | |||||||||
| Total distributions | (0.11 | ) | (0.27 | ) | — | |||||||
| Net asset value, end of period | $ | 23.23 | $ | 16.83 | $ | 16.83 | ||||||
| Total Return(d) | 38.73 | % (e) | 1.55 | % | 12.22 | % (e) | ||||||
| Total Return at Market(f) | 39.06 | % (e) | 0.96 | % | 12.57 | % (e) | ||||||
| Ratios and Supplemental Data: | ||||||||||||
| Net assets, end of period (000 omitted) | $ | 38,327 | $ | 26,926 | $ | 22,723 | ||||||
| Ratio of Net Expenses to Net Assets(g) | 0.75 | % (h) | 0.75 | % | 0.75 | % (h) | ||||||
| Ratio of Net Investment Income (Loss) to Average Net Assets | 0.08 | % (h) | 0.64 | % | 3.99 | % (h) | ||||||
| Portfolio turnover rate | 55 | % (e) | 139 | % | 138 | % (e) | ||||||
| (a) | For the period December 27, 2018 (commencement of operations) to June 30, 2019. |
| (b) | Rounds to less than $0.005 per share. |
| (c) | The amount shown for a share outstanding throughout the period does not accord with the change in aggregate gains and losses in the portfolio of securities during the period because of the timing of purchases and sales of Fund shares in relation to fluctuating market values during the period. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at net asset value. This percentage is not an indication of the performance of a shareholder’s investment in the Fund based on market value due to differences between the market price of the shares and the net asset value per share of the Fund. |
| (e) | Not annualized. |
| (f) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, if any, and redemption on the last day of the period at market value. Market value is determined by the composite closing price. Composite closing security price is defined as the last reported sale price from any primary listing market (e.g., NYSE Arca) or participating regional exchanges or markets. The composite closing price is the last reported sale price from any of the eligible sources, regardless of volume and not an average price and may have occurred on a date prior to the close of the reporting period. Market value may be greater or less than net asset value, depending on the Fund’s closing price on the listing market. |
| (g) | The Fund operates under a “Unified Fee” structure under which the Advisor pays substantially all of the expenses for the Fund. The Fund pays the Advisor the Unified Fee, an amount based on its average net assets, computed daily and paid monthly. The Fund pays the Advisor 0.75% of its net assets. Out of these fees, the Advisor pays substantially all of the Fund’s expenses. |
| (h) | Annualized. |
The accompanying notes are an integral part of these financial statements.
16
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS |
| December 31, 2020 (Unaudited) |
| (1) | Organization |
EntrepreneurShares Series Trust™ (the “Trust”) was organized on July 1, 2010 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940 (the “1940 Act”) as an open-end management investment company and thus is determined to be an investment company for accounting purposes. The Trust is comprised of five funds and is authorized to issue an unlimited number of shares of beneficial interest for each fund (“Shares”). The accompanying financial statements are those of the ERShares Entrepreneurs ETF (previously known as ERShares Entrepreneur 30 ETF) and the ERShares NextGen Entrepreneurs ETF (previously known as ERShares Non-US Small Cap ETF) (individually referred to as a “Fund” or collectively as the “Funds”). The Funds are exchange-traded funds whose investment objectives are to seek investment results that correspond (before fees and expenses) generally to the performance of their underlying indices, the Entrepreneur 30 Index and the Entrepreneur Non-US Small Cap Index, respectively. The Funds’ prospectus provides a description of each Fund’s investment objectives, policies, and strategies. The Funds are non-diversified and therefore may invest a greater percentage of their assets in fewer issuers than a diversified fund. The assets of the Funds are segregated and a shareholder’s interest is limited to the Fund in which shares are held.
Shares of the Funds are listed and traded on the NYSE Arca, Inc. Market prices for the Shares may be different from their NAV. Each Fund issues and redeems Shares on a continuous basis at NAV only in large blocks of Shares of at least 50,000 Shares (“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 amounts less than a Creation Unit.
Under the Trust’s organizational documents, its officers and Board of Trustees (the “Board”) are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Trust may enter into contracts with vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. However, based on experience, the Trust expects that risk of loss to be remote.
| (2) | Significant Accounting Policies |
The following is a summary of significant accounting policies consistently followed by each Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services – Investment Companies including Accounting Standards Update (“ASU”) 2013-08. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
A. Investment Valuations
The Funds hold their investments at fair value. Fair value is defined as the price that would be expected to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques used to determine fair value are further described below.
Security values are ordinarily obtained through the use of independent pricing services in accordance with procedures adopted by the Board. Pursuant to these procedures, the Funds may use a pricing service, bank, or broker-dealer experienced in such matters to value the Funds’ securities. When reliable market quotations are not readily available for
17
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
any security, the fair value of that security will be determined by a committee established by the Board in accordance with procedures adopted by the Board. The fair valuation process is designed to value the subject security at the price the Funds would reasonably expect to receive upon its current sale. Additional consideration is given to securities that have experienced a decrease in the volume or level of activity or to circumstances that indicate that a transaction is not orderly.
Equity securities traded on a securities exchange are valued at the last reported sales price on the principal exchange. Equity securities quoted by NASDAQ are valued at the NASDAQ official closing price. If there is no reported sale on the principal exchange, and in the case of over-the-counter securities, equity securities are valued at a bid price estimated by the security pricing service. In each of these situations, securities are typically categorized as Level 1 and Level 2, respectively in the fair value hierarchy.
In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Funds’ net asset values are calculated. The Funds use fair value adjustment factors provided daily by an independent pricing vendor to value certain foreign equity securities in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE Arca. These securities are considered as Level 2 in the fair value hierarchy.
Most securities listed on a foreign exchange are valued at the last sale price at the close of the exchange on which the security is primarily traded. In certain countries, market maker prices are used since they are the most representative of the daily trading activity. In the case of certain foreign exchanges, the closing price reported by the exchange (which may sometimes be referred to by the exchange or one or more pricing agents as the “official close” or the “official closing price” or other similar term) will be considered the most recent sale price. Securities not traded on a particular day are valued at the mean between the last reported bid and asked quotes or the last sale price where appropriate; otherwise, fair value will be determined in accordance with fair value procedures approved by the Board.
The accounting records of the Funds are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities at the close of each business day. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. The Funds do not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
The Funds may invest in American Depositary Receipts as well as other “hybrid” forms of depositary receipts, including Global Depositary Receipts. These depositary receipts are certificates evidencing ownership of shares of a foreign issuer, and serve as an alternative to directly purchasing the underlying foreign securities in their national markets and currencies. These certificates are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer’s home country. Redeemable securities issued by open-end investment companies are valued at the last calculated net asset value, with the exception of securities issued by exchange-traded open-end investment companies, which are priced as equity securities as described above.
Income received by the Funds from sources within foreign countries may be subject to withholding and other income or similar taxes imposed by such countries, a portion of which may be reclaimable. The Funds may be subject to foreign taxes on capital gains on the sale of securities or foreign currency transactions. The Funds accrue foreign capital gains taxes, as applicable, based on their current interpretation of tax rules in the foreign markets in which they invest. Such
18
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
tax accrual is based in part on actual and estimated realized gains. Estimated realized gains are subject to change and such change could be material. However, management’s conclusions may be subject to future review and change based on changes in, or the interpretation of, the accounting standards or tax laws and regulations.
The Trust has a three-tier fair value hierarchy that is dependent upon the various “inputs” used to determine the value of the Funds’ investments. The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. These inputs are summarized in the three broad levels listed below:
| Level 1 – | Quoted prices in active markets for identical assets. |
| Level 2 – | Other observable pricing inputs at the measurement date (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). |
| Level 3 – | Significant unobservable pricing inputs at the measurement date (including the Fund’s own assumptions in determining the fair value of investments). |
The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.
The following table provides the fair value measurement as of December 31, 2020, while the breakdown, by category, of common stocks is disclosed in the Schedule of Investments for each Fund.
| ERShares Entrepreneurs ETF | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks* | $ | 149,894,157 | $ | — | $ | — | $ | 149,894,157 | ||||||||
| Total Investments | $ | 149,894,157 | $ | — | $ | — | $ | 149,894,157 | ||||||||
| ERShares NextGen Entrepreneurs ETF | ||||||||||||||||
| Common Stocks* | $ | 14,258,928 | $ | 23,313,347 | $ | — | $ | 37,572,275 | ||||||||
| Total Investments | $ | 14,258,928 | $ | 23,313,347 | $ | — | $ | 37,572,275 | ||||||||
| * | For further information regarding security characteristic, please see the Schedules of Investments. |
The Funds did not hold any investments at the end of the reporting period for which significant unobservable inputs (Level 3) were used in determining fair value; therefore, no reconciliation of Level 3 securities is included for this reporting period.
B. Security Transactions and Related Income
Investment transactions are accounted for no later than the first calculation of the NAV on the business day following the trade date. For financial reporting purposes, however, security transactions are accounted for on the trade date on the last business day of the reporting period. Securities gains and losses are calculated on the identified cost basis. Interest income and expenses are accrued daily. Dividends, less foreign tax withholding, are recorded on the ex-dividend date. Investment income from non-U.S. sources received by a Fund is generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties. The Funds may be subject to foreign taxes on gains in investments or currency repatriation. The Funds accrue such taxes, as applicable, based on their current interpretation of tax rules in the foreign markets in which they invest.
19
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
C. Cash
Idle cash may be swept into various overnight demand deposits and is classified as cash or foreign currency on the Statements of Assets and Liabilities. The Funds maintain cash in bank deposit accounts which, at times, may exceed United States federally insured limits. Amounts swept overnight are available on the next business day.
D. Dividends and Distributions to Shareholders
The Funds intend to distribute to their shareholders net investment income and net realized long or short-term capital gains, if any, at least annually. Distributions are recorded on the ex-dividend date. The amount of dividends from net investment income and net realized gains is determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. These “book/tax” differences are considered either temporary or permanent in nature. To the extent these differences are permanent in nature (e.g., distributions and income received from pass-through investments), such amounts are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. Temporary differences are primarily due to return of capital from investments.
E. Allocation of Expenses
Expenses directly attributable to a Fund are charged to that Fund. Expenses not directly attributable to a Fund are allocated proportionally among all Funds within the Trust in relation to the net assets of each Fund or on another reasonable basis.
| (3) | Investment Advisory and Other Contractual Services |
A. Investment Advisory Fees
Capital Impact Advisors, LLC (the “Advisor”) a related party, serves as the Funds’ investment advisor pursuant to an Investment Advisory Agreement. Subject at all times to the oversight of the Board, the Advisor is responsible for the overall management of each Fund. The Advisor has arranged for distribution, custody, fund administration, transfer agency and all other services necessary for the Funds to operate. The Advisor receives a fee for its services, a “Unified Fee”. The ERShares Entrepreneurs ETF pays 0.49% of the Fund’s average daily net assets, computed daily and paid monthly. The ERShares NextGen Entrepreneurs ETF pays 0.75% of the Fund’s average daily net assets, computed daily and paid monthly. Out of the Unified Fee, the Advisor is obligated to pay or arrange for the payment of substantially all expenses of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit, independent trustees and other services, except for interest expenses, distribution fees or expenses, brokerage expenses, acquired fund fees and expenses, taxes and extraordinary expenses such as litigation and other expenses not incurred in the ordinary course of the Funds’ business. The Advisor’s Unified Fee is designed to cause substantially all of the Funds’ expenses to be paid and to compensate the Advisor for providing services for the Funds.
B. General
At December 31, 2020, certain officers of the Trust are officers, directors and/or trustees of the Advisor. Certain officers of the Trust were also employees of the Advisor. These officers were not compensated directly by the Funds.
20
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| (4) | Investment Transactions |
Purchases and sales of investments, excluding in-kind transactions and short-term investments, for the six months ended December 31, 2020 were as follows:
| ERShares | ||||||||
| ERShares | NextGen | |||||||
| Entrepreneurs | Entrepreneurs | |||||||
| ETF | ETF | |||||||
| Purchases: | $ | 122,937,927 | $ | 18,219,381 | ||||
| Sales: | $ | 126,396,065 | $ | 18,904,094 | ||||
Purchases and sales of in-kind transactions for the six months ended December 31, 2020 were as follows:
| ERShares | ||||||||
| ERShares | NextGen | |||||||
| Entrepreneurs | Entrepreneurs | |||||||
| ETF | ETF | |||||||
| Purchases: | $ | 5,539,545 | $ | 3,649,494 | ||||
| Sales: | $ | — | $ | 2,104,429 | ||||
| (5) | Capital Share Transactions |
Shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in shares for each Fund are disclosed in detail on the Statements of Changes in Net Assets.
The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind deposit of a designated basket of securities, which constitutes an optimized representation of the securities of that Fund’s specified universe, and an amount of cash. Investors purchasing and redeeming Creation Units may be charged a transaction fee to cover the transfer and other transactional costs the Funds incur to issue or redeem Creation Units. The standard transaction fee charge is $250.
From time to time, settlement of securities related to subscriptions-in-kind or redemptions-in-kind may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities payable related to in-kind transactions” on the Statements of Assets and Liabilities.
During the six months ended December 31, 2020, the Funds received securities in exchange for subscriptions of capital shares (subscriptions-in-kind) as follows:
| ERShares | ||||||||
| ERShares | NextGen | |||||||
| Entrepreneurs | Entrepreneurs | |||||||
| ETF | ETF | |||||||
| Shares | $ | 28,240 | $ | 933,392 | ||||
| Fair Value | $ | 5,539,545 | $ | 3,649,494 | ||||
21
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| (6) | Federal Income Taxes |
It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code of 1986, as amended, and to make distributions of net investment income and net realized capital gains sufficient to relieve it from all, or substantially all, federal income taxes.
The Trust has evaluated tax positions taken or expected to be taken in the course of preparing each Fund’s tax returns to determine whether it is more-likely-than not (i.e., greater than 50-percent chance) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in an increase in a liability for taxes payable (or a reduction of a tax refund receivable), including the recognition of any related interest and penalties as an operating expense. Tax positions taken in tax years remain subject to examination by tax authorities (generally three years plus the interim tax period since then for federal income tax purposes). The determination has been made that there are not any uncertain tax positions that would require the Funds to record a tax liability and, therefore, there is no impact to the Funds’ financial statements.
As of December 31, 2020, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for each Fund were as follows:
| ERShares | ERShares | |||||||
| Entrepreneurs | Entrepreneurs | |||||||
| ETF | NextGen ETF | |||||||
| Gross unrealized appreciation | $ | 39,266,743 | $ | 12,104,120 | ||||
| Gross unrealized depreciation | (2,764,208 | ) | (820,931 | ) | ||||
| Net unrealized appreciation (depreciation) on investments | 36,502,535 | 11,283,189 | ||||||
| Tax cost of investments | 113,391,622 | 26,289,086 | ||||||
The differences between book-basis and tax-basis unrealized appreciation/(depreciation) are attributable primarily to tax deferral of losses on wash sales.
The tax character of distributions paid during the fiscal years ended June 30, 2020 and June 30, 2019 was as follows:
| ERShares | ERShares Entrepreneurs | |||||||||||||||
| Entrepreneurs ETF | NextGen ETF | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Distributions paid from: | ||||||||||||||||
| Ordinary income (a) | $ | — | $ | 2,257,366 | $ | 430,110 | $ | — | ||||||||
| Long-term capital gains | 61,004 | 5,548 | — | — | ||||||||||||
| Total distributions paid | $ | 61,004 | $ | 2,262,914 | $ | 430,110 | $ | — | ||||||||
22
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
As of June 30, 2020, the components of accumulated earnings/(deficit) on a tax basis were as follows:
| ERShares | ERShares | |||||||
| Entrepreneurs | Entrepreneurs | |||||||
| ETF | NextGen ETF | |||||||
| Undistributed ordinary income | $ | — | $ | 137,270 | ||||
| Undistributed long-term capital gains | 4,751,594 | — | ||||||
| Accumulated capital and other losses | — | (1,730,994 | ) | |||||
| Unrealized appreciation on investments | 23,498,218 | 1,995,415 | ||||||
| Total accumulated earnings | $ | 28,249,812 | $ | 401,691 | ||||
Permanent Tax Differences
As of the year ended June 30, 2020, the Funds had a net capital loss carryforward (“CLCF”) as summarized in the table below. This CLCF is not subject to expiration:
| ERShares | ERShares | |||||||
| Entrepreneurs | Entrepreneurs | |||||||
| ETF | NextGen ETF | |||||||
| Short-Term Amount | $ | — | $ | (1,458,554 | ) | |||
| Long-Term Amount | — | (272,440 | ) | |||||
| Total | $ | — | $ | (1,730,994 | ) | |||
| (7) | Investment Risks |
ETF Risk
The NAV of a Fund can fluctuate up or down, and you could lose money investing in a Fund if the prices of the securities owned by the Fund decline. In addition, a Fund may be subject to the following risks: (1) the market price of a Fund’s shares may trade above or below its NAV; (2) an active trading market for a Fund’s shares may not develop or be maintained; or (3) trading of a Fund’s shares may be halted if the listing exchange’s officials deem such action appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.
SECTOR RISK
If a Fund has significant investments in the securities of issuers within a particular sector, any development affecting that sector will have a greater impact on the value of the net assets of the Fund than would be the case if the Fund did not have significant investments in that sector. In addition, this may increase the risk of loss in the Fund and increase the volatility of the Fund’s NAV per share. For instance, economic or market factors, regulatory changes or other developments may negatively impact all companies in a particular sector, and therefore the value of the Fund’s portfolio will be adversely affected. As of December 31, 2020, the ERShares Entrepreneurs ETF and ERShares Entrepreneurs NextGen ETF had 30.45% and 26.29% of the value of their net assets invested in stocks within the Technology sector, respectively. As of December 31, 2020, the ERShares Entrepreneurs ETF had 26.44% of the value of its net assets invested in stocks within the Communications sector and 31.95% of the value of its net assets invested in stocks within the Health Care sector.
23
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
Market and Geopolitical Risk
The increasing interconnectivity between global economies and financial markets increases the likelihood that events or conditions in one region or financial market may adversely impact issuers in a different country, region or financial market. Securities in the Funds’ portfolio may underperform due to inflation (or expectations for inflation), interest rates, global demand for particular products or resources, natural disasters, pandemics, epidemics, terrorism, regulatory events and governmental or quasi-governmental actions. The occurrence of global events similar to those in recent years, such as terrorist attacks around the world, natural disasters, social and political discord or debt crises and downgrades, among others, may result in market volatility and may have long term effects on both the U.S. and global financial markets. It is difficult to predict when similar events affecting the U.S. or global financial markets may occur, the effects that such events may have and the duration of those effects. Any such event(s) could have a significant adverse impact on the value and risk profile of the Funds’ portfolio. The current novel coronavirus (COVID-19) global pandemic and the aggressive responses taken by many governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines or similar restrictions, as well as the forced or voluntary closure of, or operational changes to, many retail and other businesses, has had negative impacts, and in many cases severe negative impacts, on markets worldwide. It is not known how long such impacts, or any future impacts of other significant events described above, will or would last, but there could be a prolonged period of global economic slowdown, which may impact your Fund investment. Therefore, the Funds could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns. During a general market downturn, multiple asset classes may be negatively affected. Changes in market conditions and interest rates can have the same impact on all types of securities and instruments. In times of severe market disruptions you could lose your entire investment.
Foreign Securities Risk
Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations can involve additional risks relating to political, economic, or regulatory conditions in foreign countries. These risks include fluctuations in foreign currencies; imposition of additional taxes; trading, settlement, custodial and other operational risks; and risk arising from the less stringent investor protection and disclosure standards of some foreign markets. All of these factors can make foreign investments more volatile and potentially less liquid than U.S. investments. In addition, foreign markets can perform differently from the U.S. market.
| (8) | Coronavirus (COVID-19) Pandemic |
In early 2020, an outbreak of a novel strain of coronavirus (COVID-19) emerged globally. This coronavirus has resulted in closing international borders, enhanced health screenings, healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general public concern and uncertainty. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries, the financial health of individual companies and the market in general in significant and unforeseen ways. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Funds, including political, social and economic risks. Any such impact could adversely affect the Funds; the performance of the securities in which the Funds invest may lead to losses on your investment in the Funds. The ultimate impact of COVID-19 on the financial performance of the Funds’ investments is not reasonably estimable at this time.
24
| EntrepreneurShares Series Trust |
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| December 31, 2020 (Unaudited) |
| (9) | Liquidity Risk Management Program |
The Funds have adopted and implemented a written liquidity risk management program as required by Rule 22e-4 (the “Liquidity Rule”) under the Investment Company Act of 1940, as amended. The program is reasonably designed to assess and manage each Fund’s liquidity risk, taking into consideration, among other factors, each Fund’s investment strategies and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources.
During the six months ended December 31, 2020, the Board and the Trust’s Liquidity Risk Management Program Administrator (the “LPA”) reviewed each Fund’s investments and determined that each Fund held adequate levels of cash and highly liquid investments to meet shareholder redemption activities in accordance with applicable requirements. Accordingly, the Board and LPA concluded that (i) the Funds’ liquidity risk management program is reasonably designed to prevent violations of the Liquidity Rule and (ii) the Funds’ liquidity risk management program has been effectively implemented.
| (10) | Subsequent Events |
Effective March 23, 2021, each Fund will begin to pursue an active rather than passive investment strategy. In furtherance of this change, each Fund’s investment objective will be revised as follows:
| ● | The ERShares Entrepreneurs ETF seeks long-term capital appreciation. |
| ● | The ERShares NextGen Entrepreneurs ETF seeks long-term capital appreciation. |
There were no other events or transactions that occurred during this period that materially impacted the amounts or disclosures in the Funds’ financial statements.
25
| EntrepreneurShares Series Trust |
| EXPENSE EXAMPLE |
| December 31, 2020 (Unaudited) |
As a Fund shareholder, you may incur two types of costs: (1) transaction costs, including commissions on trading, as applicable; and (2) ongoing costs, including advisory fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The expense examples below are based on an investment of $1,000 invested on July 1, 2020 and held through the period ended December 31, 2020.
The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use this information, 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 table under the heading entitled “Actual Expenses Paid” to estimate the expenses you paid on your account during this period.
The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each 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 your 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. Further, the expenses do not include any brokerage commissions on investors’ purchases or redemptions of Fund shares as described in the applicable Fund’s prospectus. Therefore, the examples are useful in comparing ongoing costs only and will not help you determine the relative total cost of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Ending | ||||||||||
| Beginning | Account Value | Expenses | Annualized | |||||||
| Account Value | December 31, | Paid During | Expense | |||||||
| July 1, 2020 | 2020 | Period | Ratio (a) | |||||||
| ERShares Entrepreneurs ETF | Actual | $1,000.00 | $1,313.10 | $2.85 | 0.49% | |||||
| Hypothetical(b) | $1,000.00 | $1,022.67 | $2.49 | 0.49% | ||||||
| ERShares NextGen Entrepreneurs ETF | Actual | $1,000.00 | $1,387.30 | $4.50 | 0.75% | |||||
| Hypothetical(b) | $1,000.00 | $1,021.37 | $3.81 | 0.75% |
| (a) | Expenses are equal to the average account value over the period multiplied by the Fund’s annualized expense ratio, multiplied by 184/366 (to reflect the one-half year period). |
| (b) | Represents the hypothetical 5% annual return before taxes. |
26
| EntrepreneurShares Series Trust |
| ADDITIONAL INFORMATION |
| December 31, 2020 (Unaudited) |
FACTORS CONSIDERED BY THE TRUSTEES IN APPROVAL OF THE RENEWAL OF INVESTMENT ADVISORY AGREEMENTS
On September 23, 2020, all of the Trustees of EntrepreneurShares Series Trust (the “Trust”) met to discuss, among other things, the continuation of the investment advisory agreements for the ERShares NextGen Entrepreneurs ETF (formerly known as the ERShares Non-US Small Cap ETF) and ERShares Entrepreneurs ETF (formerly known as the ERShares Entrepreneur 30 ETF) (collectively referred to as the “Funds”). In preparation for the meeting they reviewed materials addressing the review and consideration of the investment advisory agreements (the “Advisory Agreements”), which included a Gartenberg Memo to the Board of Trustees (the “Board”) from legal counsel, 15(c) analyses for the Funds, and the returns of each Fund and the Funds’ benchmark indices provided in the quarterly Board materials.
Capital Impact Advisors, LLC (“Adviser”) is the investment adviser to the Funds. The Adviser is responsible for management of the investment portfolio of the Funds, and for overall management of the Funds’ business and affairs pursuant to the Advisory Agreements.
At the meeting, the Trustees had ample opportunity to consider matters they deemed relevant in considering the approval of the Advisory Agreements, and to request any additional information they considered reasonably necessary to their deliberations, without undue time constraints. In addition to the materials requested by the Trustees in connection with their consideration of the continuation of the Advisory Agreements, the Trustees received materials in advance of each regular quarterly meeting of the Board of Trustees that provided information relating to the services provided by the Adviser.
The Board then reviewed and discussed the written materials that were provided in advance of the Meeting and deliberated on the renewal of the Advisory Agreements. The Board relied upon the advice of independent legal counsel and their own business judgment in determining the material factors to be considered in evaluating the Advisory Agreements and the weight to be given to each such factor. The conclusions reached by the Board were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the Advisory Agreements. In considering the renewal of the Advisory Agreements, the Board reviewed and analyzed various factors that they determined were relevant, including the factors enumerated below.
Nature and Quality of Investment Advisory Services
The Trustees concluded that the nature, extent and quality of the investment advisory services provided to the Funds by the Adviser are satisfactory, and that the nature and extent of the services provided by the Adviser is appropriate to assure that the Funds’ operations are conducted in compliance with applicable laws, rules and regulations. The Trustees considered the experience and knowledge of the Adviser’s personnel as well as information furnished by the Adviser throughout the year at regular Board meetings, which included reports on investment performance, shareholder services, regulatory compliance, and other services provided to the Funds. The Trustees concluded that they have a reasonable belief that the nature, extent and quality of services provided by the Advisor to the Funds are appropriate.
Comparative Fees and Expenses
The Trustees concluded that the advisory fees and net expense ratios of the Funds were not unreasonable, and they believe that the following factors, among others, support these conclusions: (1) the long-term returns of the Funds are generally positive when compared to peers; and (2) the Funds are still relatively small in assets under management when compared to their peer groups, and the Adviser is subsidizing the expenses of the Funds to ensure the Funds remain competitive with other funds.
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| EntrepreneurShares Series Trust |
| ADDITIONAL INFORMATION (Continued) |
| December 31, 2020 (Unaudited) |
Comparison of Fee Structures of Other Accounts
The Trustees concluded that the differential in advisory fees between the Funds and the separate accounts managed by the Adviser are reasonable and concluded that the fee rates charged to the Funds in comparison to those charged to the Adviser’s other clients are not unreasonable.
Performance
The Trustees concluded that the performance of the Funds has generally been good on a relative basis and on an absolute basis, with periods of underperformance. They concluded that renewal of the Advisory Agreements was in the best interest of the Funds’ shareholders. They believe that the following factors, among others, support these conclusions: (1) the Adviser manages the Funds in a manner that is materially consistent with their stated investment objective and style; and (2) the long-term returns of the Funds are generally positive in comparison to the peer group.
Costs and Profitability
The Trustees recognized that it is difficult to make comparisons of profitability from investment advisory contracts. The Trustees recognized that the Adviser is subsidizing the expenses of the Funds to ensure the Funds remain competitive with other funds. The Trustees concluded that the level of profitability realized by the Adviser from its provision of services to the Funds is reasonable, and, as noted above, that the overall expense ratios and investment advisory fees are fair and reasonable.
Economies of Scale
The Trustees concluded that the current fees were appropriate at foreseeable asset levels without the need for breakpoints. They believe that the following factors, among others, support these conclusions: (1) based on the materials reviewed at the meeting and the size of the Funds, the Funds have not realized economies of scale; and (2) many of the Funds’ expenses increase as the Funds’ assets grow, such as the intermediary service fees and the costs of conducting research to explore additional investments.
Conclusion
After reviewing the material provided for the meeting, management’s presentation, as well as other information regularly provided at the Board’s quarterly meetings throughout the year regarding the quality of services provided by the Adviser, the performance of the Funds, expense information, regulatory compliance issues, trading information and related matters and other factors deemed relevant by the Board, the Trustees, including all of the Independent Trustees, concluded that the Advisory Agreements are fair and reasonable and that the continuation of the Advisory Agreements is in the best interest of the Funds and their shareholders. Accordingly, the Trustees approved the continuation of the Advisory Agreements.
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| EntrepreneurShares Series Trust |
| ADDITIONAL INFORMATION (Continued) |
| December 31, 2020 (Unaudited) |
Availability of Quarterly Portfolio Holdings Schedule
The Funds file complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT. These filings are available on the SEC’s website www.sec.gov. In addition, the Funds’ Form N-PORT is available without charge, upon request, by calling 1-877-271-8811.
Proxy Voting Policies and Procedures and Proxy Voting Record
A description of the Funds’ proxy voting policies and procedures and information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12 month period ended June 30, is available (1) without charge, upon request, by calling 1-877-271-8811, and (2) on the SEC’s website at www.sec.gov.
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 calendar year can be found at www.entrepreneurshares.com.
29
| EntrepreneurShares Series Trust |
| PRIVACY POLICY |
| (Unaudited) |
As part of the EntrepreneurShares fund family’s long tradition of trust, the confidentiality of personal information is paramount. We maintain high standards to safeguard your personal information. We will remain vigilant and professional in protecting that information and in using it in a fair and lawful manner. As part of this commitment to fulfilling your trust we have formulated this Privacy Policy.
Safeguarding Customer Information and Documents
To conduct regular business, we may collect nonpublic personal information from sources such as:
| ● | Account Applications and other forms, which may include a customer’s name, address, social security number, and information about a customer’s investment goals and risk tolerances; |
| ● | Account History, including information about the transactions and balances in a customer’s account; and |
| ● | Correspondence, written, telephonic, or electronic between a customer and Seaport Global Advisors, LLC; Capital Impact Advisors, LLC; EntrepreneurShares, LLC, and/or any EntrepreneurShares Mutual Fund or Exchange-Traded Fund product; such as, ERShares Global Fund, ERShares US Large Cap Fund, ERShares US Small Cap, ERShares Entrepreneurs ETF, ERShares NextGen Entrepreneurs ETF, or service providers to Seaport Global Advisors, Capital Impact, EntrepreneurShares, and/or EntrepreneurShares’ Funds. |
To conduct regular business, we collect non-public customer data in checklists, forms, in written notations, and in documentation provided to us by our customers for evaluation, registration, licensing or related consulting services. We also create internal lists of such data.
EntrepreneurShares will internally safeguard your nonpublic personal information by restricting access to only those employees who provide products or services to you or those who need access to your information to service your account. In addition, we will maintain physical, electronic and procedural safeguards that meet federal and/or state standards to guard your nonpublic personal information. Failure to observe EntrepreneurShares’ procedures regarding customer and consumer privacy will result in discipline and may lead to termination.
Sharing Nonpublic Personal and Financial Information
As the Firm shares nonpublic information solely to service our client accounts, we do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law or otherwise disclosed herein.
EntrepreneurShares is committed to the privacy and protection of our customers’ personal and financial information. We will not share any such information with any affiliated or nonaffiliated third party except:
| ● | When necessary to complete transactions in a customer account, such as clearing firm. |
| ● | When required to service and/or maintain your account. |
| ● | In order to resolve a customer dispute or inquiry. |
| ● | With persons acting in a fiduciary or representative capacity on behalf of the customer. |
| ● | With rating agencies, persons assessing compliance with industry standards, or to the attorneys, accountants and auditors of the firm. |
| ● | In connection with any sale and / or merger of EntrepreneurShares’ business. |
| ● | To prevent or protect against actual or potential fraud, identity theft, unauthorized transactions, claims or other liability. |
| ● | To comply with all federal, state or local laws, rules, statutes and other applicable legal requirements. |
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| EntrepreneurShares Series Trust |
| PRIVACY POLICY (Continued) |
| (Unaudited) |
| ● | In connection with a written agreement to provide advisory services or investment management when the information is released solely for the purpose of providing products or services covered by pursuant to the EntrepreneurShares’ Wrap Fee Program. |
| ● | Upon the customer’s specific instruction, consent or request. |
Note: When we share your nonpublic information with any third party for the reasons listed above, we make certain that there are written restrictions in place regarding the use and/or disclosure of said information.
Opt-Out Provisions
It is not a policy of EntrepreneurShares to share nonpublic personal and financial information with affiliated or unaffiliated third parties except under the circumstances noted above. Since sharing under the circumstances noted above is necessary to service customer accounts or is mandated by law, there are no allowances made for clients to opt out.
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| Advisor |
| Capital Impact Advisors, LLC |
| 175 Federal Street, Suite #875 |
| Boston, MA 02110 |
| Index Sponsor |
| EntrepreneurShares LLC |
| 175 Federal Street, Suite #875 |
| Boston, MA 02110 |
| Independent Registered Public Accounting Firm |
| BBD LLP |
| 1835 Market Street, 3rd Floor |
| Philadelphia, PA 19103 |
| Custodian |
| Citibank, N.A. |
| 111 Wall Street |
| New York, NY 10005 |
| Distributor |
| Foreside Fund Services, LLC |
| Three Canal Plaza, Suite 100 |
| Portland, ME 04101 |
| Administrator, Accountant, Transfer Agent and Dividend Disbursing Agent |
| Ultimus Fund Solutions, LLC |
| 225 Pictoria Drive, |
| Cincinnati, OH 45246 |
| Counsel |
| Thompson Hine LLP |
| 41 South High Street, Suite 1700 |
| Columbus, OH 43215 |
| This report is intended only for the information of shareholders or those who have received the applicable Fund’s prospectus which contains information about that Fund’s management fee and expenses. Please read the prospectus carefully before investing. |
Item 2. Code of Ethics. NOT APPLICABLE – disclosed with annual report
Item 3. Audit Committee Financial Expert. NOT APPLICABLE- disclosed with annual report
Item 4. Principle Accountant Fees and Services. NOT APPLICABLE – disclosed with annual report
Item 5. Audit Committee of Listed Companies. NOT APPLICABLE – applies to listed companies only
Item 6. Schedule of Investments. Schedule filed with Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. NOT APPLICABLE – applies to closed-end funds only
Item 8. Portfolio Managers of Closed-End Investment Companies. NOT APPLICABLE – applies to closed-end funds only
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. NOT APPLICABLE – applies to closed-end funds only
Item 10. Submission of Matters to a Vote of Security Holders.
NOT APPLICABLE
Item 11. Controls and Procedures.
(a) The registrant’s Principal Executive Officer and Principal Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-2 under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing of this report on Form N-CSR.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Investment Companies.
Not Applicable.
Item 13. Exhibits.
(a)(1) Not Applicable – filed with annual report
(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) are furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) EntreprenuerShares Series Trust
By (Signature and Title) /s/ Dr. Joel M. Shulman
Dr. Joel M. Shulman, Principal Executive Officer and Principal Financial Officer
Date 3/5/2021
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) /s/ Dr. Joel M. Shulman
Dr. Joel M. Shulman, Principal Executive Officer and Principal Financial Officer
Date 3/5/2021