Horizon Kinetics Japan Owner Operator ETF (JAPN US) – Portfolio Construction Methodology

The investment strategy steering the actively managed Horizon Kinetics Japan Owner Operator ETF seeks long-term capital growth by owning 30–50 Japanese companies operated by significant owner-operators. The adviser defines owner-operator status as founders or key leaders with meaningful policymaking roles and generally >5% ownership. At least 80% of net assets are invested in companies located in Japan (common or preferred shares and depository receipts), with the investable universe skewing toward issuers with market capitalizations below approximately JPY 1.4 trillion; the fund may invest up to 20% in other Asian markets. Security selection is bottom-up and value-driven, emphasizing asset-light, cash-generative businesses with locally driven revenues. The portfolio is non-diversified and concentrated by issuer and, at times, by sector. Sell decisions follow thesis changes, diminished owner-operator alignment, ownership/management changes, or unattractive valuation, with fair-valuation and liquidity procedures applied as needed.

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