AXS Esoterica NextG Economy ETF (WUGI US) – Portfolio Construction Methodology

The investment strategy underpinning the actively managed AXS Esoterica NextG Economy ETF targets capital appreciation by investing primarily in domestic and foreign equities tied to the 5G-enabled digital economy, spanning network infrastructure, edge devices and 5G-enabled services. Under normal conditions at least 80% of net assets are in equity securities, including ADRs and GDRs, across micro-, small-, mid- and large-capitalization issuers, with deliberate concentration in internet, computer, semiconductor and software industries and exposure to both developed and emerging markets. A thematic top-down framework sizes end-market opportunities and technological cycles, while a bottom-up process evaluates valuation, growth, profitability and quantitative indicators to rank candidates within three groups: infrastructure, edge devices and services. The portfolio reflects the sub-advisor’s highest-conviction ideas, with active risk budgeting by industry and issuer. Sell decisions arise from thesis degradation, adverse fundamentals, valuation discipline or better opportunities, and the strategy allows for relatively high turnover.

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