ETFs (exchange traded funds) offer many advantages over mutual funds. ETFs tend to be more transparent and tax efficient, have lower overall fees and allow you to buy and sell shares throughout the day on an exchange at a certain price. With a mutual fund you purchase and sell shares based on the next calculated net asset value (NAV), which is calculated once per day.

Below are some key differences between ETFs and mutual funds.

ETFs Mutual Funds
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Ordinary brokerage commissions apply.

Hypothetical Example For Illustrative Purposes Only

As a group, on average, ETFs have lower fees than mutual funds. When considering the long-term tax efficiencies and lower fees, ETFs become a compelling investment. Let us consider a hypothetical example of Sonia Patel, who is 22 years old, makes $40,000 a year and saves 15% of her income in a retirement savings plan (like a 401(k) or IRA). Sonia receives 3% in annual salary raises and, over 50 years, averages a 5% annualized return before fees, investing in an ETF with 0.75% annual fees. In this scenario, Sonia would theoretically net $200,000 more investing in an ETF than in investing in a mutual fund with the exact same strategy but with a 1.25% annual fee1. (In the above hypothetical illustration, at age 72, this diligent saver and investor would have $1.74 million had he invested in the ETF versus $1.53 million in the mutual fund.)

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1 http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2015/03/04/the-mutual-fund-fees-we-dont-talk-about

This is provided to you for informational purposes only, and should not be considered investment advice. Please consult your investment advisor for further assistance.

Ordinary brokerage commissions apply.

No. Exchange-traded funds (ETFs) trade on an exchange and are similar to buying stock. The minimum investment is the price of buying one share, which may vary throughout the trading day.

An ETF’s market price is determined by the market supply and demand for shares of the ETF, but typically is closely tied to the ETF’s net asset value (NAV), which is calculated based on the total value of the securities that comprise the ETF.

An ETF’s market price may fluctuate slightly above or below the NAV throughout the day due to supply and demand; these fluctuations may be significant if market volatility is high.

The Dhandho Junoon Index (the Index) reinvests all dividends and cash proceeds pursuant to its methodology. Under normal conditions, the Fund generally will invest in all of the securities that comprise the Index in proportion to their weightings in the Index. Therefore, dividends and cash proceeds from the fund’s underlying holdings will likewise be reinvested.

Although dividends are reinvested, any income dividends earned by the Fund, net of expenses, are passed along to Fund shareholders as “income dividend distributions.

ETFs tend to benefit from tax efficiencies due to the method by which shares are purchased and redeemed. Creation units purchased from and redeemed by the ETF typically involve in-kind transactions. In contrast, a fund that redeems shares for cash may result in adverse tax consequences to taxable shareholders because the fund would need to sell fund holdings and potentially incur capital gains to meet the redemptions. Any such capital gains are passed on to its shareholders at the end of the year.

Although, the structure of ETF’s tends to be tax-advantaged, shareholders incur capital gains if they sell ETF shares above the cost that they paid for them. However, those tax consequences are not passed on to other ETF shareholders.

This is provided to you for informational purposes only, and should not be considered tax advice. Please consult your tax adviser for further assistance.

The Fund (NYSE Arca:JUNE) trades on the NYSE ARCA intraday, like a stock, and can be bought through brokers.