Overview
The Fund uses a “passive management” (or indexing) approach to track the performance, before fees and expenses, of the Index. The Index is constructed using a rules-based methodology that identifies companies in the upstream segment of the oil and gas industry value chain with publicly traded ordinary shares listed on major stock exchanges in developed markets, as classified by BITA GmbH (the “Index Provider”).
Index Overview:
The Index’s initial universe consists of all publicly listed equity securities for which sufficient relevant information is available from public sources. The initial universe is screened using the following criteria, which are based on each company’s financial information for the most recent quarter:
| A. | Oil and Gas Exploration and Production Industry: To be eligible for inclusion, a company must be classified as operating within the oil and gas exploration and production industry according to a rules-based methodology defined by the Index Provider. This classification is determined by applying the following predefined criteria: |
According to BITA’s thematic data methodology, to be eligible companies must have a Thematic Exposure Score of at least 50%. A company’s total Thematic Exposure Score is equivalent to the sum of the revenue derived by the company from each relevant PSA, as a proportion of the company’s total revenue.
BITA approaches the construction and research of Themes through the mapping of products, services, and business activities (“PSA”) into a set of granular “Sub-Themes” designed to facilitate the construction of heavily focused index and data products.
The universe includes companies whose Products, Services, and Activities (“PSA”) are integral to the upstream oil & gas ecosystem. These companies operate across the following Sub-Themes:
| ● | Crude Oil Exploration & Extraction: Companies that focus on the upstream discovery and extraction of crude oil resources. This includes geological surveying, exploratory drilling, well development, and the operation of oilfields. These companies typically generate revenue through the direct sale of crude oil produced from their own reserves or acreage. |
| ● | Natural Gas Exploration & Extraction: Companies that are primarily engaged in locating and extracting natural gas reserves. This includes both conventional and unconventional sources such as shale gas, tight gas, and coalbed methane. Companies in this Sub-Theme often operate gas wells and processing facilities and sell natural gas into industrial, utility, and commercial markets. |
| ● | Integrated Energy Producers: Companies that operate across the oil and gas value chain—including refining, marketing, transportation, or petrochemicals—but maintain significant upstream production activities. These firms manage large-scale reserves, diversified geographic exposure, and often engage in strategic capital deployment across segments, while continuing to derive a material portion of their value from exploration and production. |
| ● | Reserve Management & Recovery Optimization: Companies that manage large hydrocarbon reserves and focus on maximizing long-term output through enhanced recovery techniques, advanced drilling technologies, and strategic reserve management. This includes both independent and integrated players optimizing lifecycle economics from proven and probable reserves. |
| B. | Market Capitalization: Companies with a market capitalization of at least $10 billion. |
| C. | Developed Markets: To be eligible for inclusion, a company’s shares must be listed on a major stock exchange in a developed market. For the purposes of the Index, “major stock exchanges in developed markets” are defined as the following (listed alphabetically by country): Australia (Australian Stock Exchange); Austria (Wiener Börse); Belgium (Euronext Brussels); Canada (Canadian Securities Exchange, Toronto Stock Exchange, and TSX Venture Exchange); Denmark (Nasdaq Copenhagen); Finland (Nasdaq Helsinki); France (Euronext Paris Exchange); Germany (Deutsche Börse); Ireland (Euronext Irish Stock Exchange); Israel (Tel-Aviv Stock Exchange); Italy (Borsa Italiana); Japan (Tokyo Stock Exchange); Netherlands (Euronext Amsterdam); New Zealand (New Zealand Stock Exchange); Norway (Euronext Oslo Børs); Portugal (Euronext Lisbon); Singapore (Singapore Exchange); Spain (Bolsas y Mercados Españoles); Sweden (Nasdaq Stockholm); Switzerland (SIX Swiss Exchange); United Kingdom (London Stock Exchange); and Unites States (Nasdaq and New York Stock Exchange). |
| D. | Ordinary Shares: The Index includes only ordinary shares of eligible companies. Ordinary shares represent ownership in a company and typically give shareholders the right to vote and receive dividends. |
Companies that meet the foregoing screens are included in the Index. The Index is expected to be comprised of between 30 and 60 constituents, however, the number of constituents will vary over time. As of market close October 9, 2025, the Index contained 46 constituents.
The Index is reconstituted and rebalanced quarterly (reconstitution means the Index is updated with new eligible companies based on current data; rebalancing means the weights of the companies in the Index are adjusted). In addition, the Index Provider may determine to substitute an Index constituent or make an extraordinary adjustment to the Index if it determines an extraordinary event has occurred. The determination date for regular adjustments takes place on the first Friday of the rebalancing month. On each determination day, Index constituents are weighted according to their free-float market capitalization (i.e., the total market value of a company’s shares that are readily available for public trading, excluding shares held by insiders or controlling shareholders). In addition, the Index methodology includes the following capping constraints to limit the amount that an issuer or issuers can make up of the Index: (1) no single issuer may exceed 25% of the Index weight; and (2) all issuers with individual weights above 4.5% may not, in the aggregate, exceed 45% of the total Index weight.
To the extent the Index is concentrated in a particular industry or industries, the Fund is expected to be concentrated in that industry or industries. It is expected that the Index will be concentrated in the oil and gas industry or group of industries.
The Index is owned, calculated, administered, and disseminated by the Index Provider. The Index Provider is not affiliated with the Fund’s investment adviser, Tidal Investments LLC (the “Adviser”).
The Fund’s Investment Strategy
Under normal circumstances, the Fund will invest at least 80% of the Fund’s net assets (plus borrowings for investment purposes) in component securities that make up the Index.
The Fund attempts to invest all, or substantially all, of its assets in the component securities that make up the Index. The Fund will generally use a “replication” strategy to achieve its investment objective, meaning it generally will invest in all of the component securities of the Index. However, the Fund may use a “representative sampling” strategy, meaning it may invest in a sample of the securities in the Index whose risk, return and other characteristics closely resemble the risk, return and other characteristics of the Index as a whole, when the Adviser believes it is in the best interests of the Fund. For example, representative sampling may be used when replicating the Index involves practical difficulties or substantial costs, an Index constituent becomes temporarily illiquid, unavailable, or less liquid, or as a result of legal restrictions or limitations that apply to the Fund but not to the Index.
The Fund will invest in listed equity securities, which may include common stocks, business trust shares, American Depositary Receipts (“ADRs”), which are securities listed on US exchanges that represent shares of foreign companies, and other equity investments or ownership interests in business enterprises.
The Fund is classified as “non-diversified,” which means the Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund.
