Strategy. The Fund is an actively-managed exchange-traded fund (ETF) that blends active and passive investment strategies to optimize costs, tracking and potential return over the Funds benchmark index, the CRSP U.S. Total Market Index (the Benchmark Index). Under normal market conditions, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities included in the CRSP U.S. Total Market Index. Up to 20% of the Funds net assets may be held in non-index constituents traded on a U.S. exchange and denominated in U.S. dollars. The Benchmark Index captures broad U.S. equity market coverage and includes securities traded on NYSE, NYSE American, NYSE ARCA, NASDAQ, Bats Global Markets, and the Investors Exchange. The sponsor … Show more… The Fund is an actively-managed exchange-traded fund (ETF) that blends active and passive investment strategies to optimize costs, tracking and potential return over the Funds benchmark index, the CRSP U.S. Total Market Index (the Benchmark Index). Under normal market conditions, the Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities included in the CRSP U.S. Total Market Index. Up to 20% of the Funds net assets may be held in non-index constituents traded on a U.S. exchange and denominated in U.S. dollars. The Benchmark Index captures broad U.S. equity market coverage and includes securities traded on NYSE, NYSE American, NYSE ARCA, NASDAQ, Bats Global Markets, and the Investors Exchange. The sponsor of the Benchmark Index determines the composition of the Benchmark Index and relative weightings of the securities in the Benchmark Index and publishes information regarding the market value of the Benchmark Index. Neither the Fund nor the Adviser is affiliated with the sponsor of the Benchmark Index. The Benchmark Index includes nearly 4,000 constituents across mega, large, small and micro capitalizations, representing nearly 100% of the U.S. investable equity market. To be eligible to be added for Benchmark Index inclusion, a company must have more than $15 million in total market capitalization, the companys float shares must be greater than 12.5% of the total shares outstanding, the average of the adjusted trading volume over the last 125 days divided by float shares on the ranking date must be at least 0.001, the company must not have a sequence of 10 or more consecutive non-trading days, and not be suspended from trading on the ranking day. Securities will be removed from the Benchmark Index if, at ranking, they fall below $10 million in total market capitalization, the companys float shares falls below 10% of the total shares outstanding, the average of the adjusted trading volume over the last 125 days divided by float shares on the ranking date falls below 0.0008 for two consecutive rankings, fails the 10-day rule for consecutive non-trade days and if the security has been suspended for at least 40 days. New securities must have been trading for 20 days, unless the market capitalization is greater than the lower breakpoint of the CRSP US Small Cap Index, then securities must have been trading for 5 days. The Benchmark Index is weighted according to free-float market capitalization and is recalculated quarterly. The Fund may also utilize a strategic beta strategy for a portion of the Funds active investment portfolio. The Adviser generally rebalances the Funds portfolio between the active and passive investment strategies on an annual basis but may rebalance the portfolio more frequently if market conditions warrant or the allocation between active and passive drifts significantly from the target allocation. The ratio of the Funds assets that are allocated to active versus passive investment strategies is determined by Envestnet Asset Management, Inc., the Funds investment adviser, (the Adviser), and is based on a variety of factors, including the Advisers proprietary research that looks at the likelihood of active managers outperforming or underperforming within the asset classes in which the Fund invests, the Advisers research and due diligence on available investment sub-advisers (each, a Sub-Adviser) within the different asset classes in which the Fund invests and the Advisers assessment of how different Sub-Advisers will contribute to overall Fund performance. Historically the Adviser has found that large cap companies in the U.S. are more researched and attract more scrutiny and research coverage than smaller capitalization companies. The Adviser generally allocates more to active management for investments in smaller companies and use more passive management for larger companies. The portion of the Funds investment portfolio that is actively-managed by any Sub-Advisers and Adviser ranges from 15% to 65% of the Funds net assets and is expected to shift over time as economic conditions change and the available information about the asset classes in which the Fund invests evolves. The remaining portion of the Funds portfolio is allocated to the passive strategy. The Fund invests at least 60% of its net assets in equity securities of U.S. companies with large market capitalizations. The Funds investment in equity securities may include common stock and preferred stock. The Adviser quantitatively manages the passive and strategic beta portion of the Funds investment portfolio. Quantitative investing, also known as systematic investing, is an investment approach that uses mathematical modeling, computer systems and data analysis to evaluate a specific universe of potential investments. Quantitative investing uses data to build portfolios that either attempt to track an index or provide exposure to specific investment style factors. The Advisers quantitative strategy with respect to the Fund seeks to construct the passive allocation of the portfolio to provide investment results that, before expenses, correspond to the price and performance of the CRSP U.S. Large Cap Index (the Underlying Index). The sponsor of the Underlying Index determines the composition of the Underlying Index and relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index. Neither the Fund nor the Adviser is affiliated with the sponsor of the Underlying Index. The Underlying Index includes mega and large U.S. companies that comprise the top 85% of investable market capitalization and represents the top 85% by market capitalization of the Benchmark Index. The Underlying Index captures broad U.S. equity market coverage and includes securities traded on NYSE, NYSE American, NYSE ARCA, NASDAQ, Bats Global Markets, and the Investors Exchange. The Underlying Index is weighted according to free-float market capitalization and is recalculated quarterly. The Adviser manages the passive allocation utilizing a representative sampling strategy, meaning that the Fund may not purchase all of the securities represented in the Underlying Index, but it will attempt to construct the passive allocation of the Fund to hold a portfolio of securities that, in the aggregate, have risk, return and quality characteristics that resemble the risk, return and quality characteristics of the Underlying Index. As part of the passive allocation, the Fund may invest in passively-managed ETFs in trying to construct the passive allocation to track the Underlying Index. Strategic beta investing involves screening the Funds investment universe for securities with specified characteristics that the Adviser believes offer opportunities for better returns. Strategic beta is a quantitative approach that emphasizes exposure to investment style factors, such as value, momentum and quality, that academic research has linked to higher expected returns. For the strategic beta portion of the Funds portfolio, the Adviser generally invests in large capitalization stocks and ETFs that primarily invest in small capitalization stocks. Investing in ETFs that provide exposure to small capitalization stocks will give the Fund exposure to a distinct asset class from the rest of the Funds portfolio with a unique risk profile. Value investing aims to capture excess returns from stocks that have low prices relative to their fundamental value. This is commonly tracked by price to book, price to earnings, dividends, and free cash flow. Momentum investing employs the thesis that stocks that have outperformed in the past tend to exhibit strong returns for a period of time going forward. Quality investing is often captured through exposure to companies having low debt, stable earnings, consistent asset growth, and strong corporate governance. Quality stocks are identified by using common financial metrics like a return to equity, debt to equity and earnings variability. The combined active and passive allocations will have similar characteristics ( e.g. , average market capitalization) to the Benchmark Index. The Adviser also believes that the Funds reward and risk characteristics can be enhanced by employing one or more Sub-Advisers, with complementary styles and approaches, who actively manage distinct segments of a market, asset class or investment style for the Fund. The Fund currently employs one Sub-Adviser to manage the Funds qualitative active allocation, The London Company of Virginia, LLC d/b/a The London Company (London Co.). London Co. seeks to purchase financially stable companies that it believes are consistently generating high returns on unleveraged operating capital, run by shareholder oriented management, and trading at a discount to our estimate of intrinsic value. Guiding principles of London Co.s philosophy include: (1) a focus on cash return on tangible capital, not earnings per share, (2) balance sheet strength, (3) a focused investment approach, and (4) low portfolio turnover enhances returns. Show less