Strategy. The Fund will not invest in digital assets directly or through the use of derivatives. The Fund also will not invest in initial coin offerings. The Fund may, however, have indirect exposure to digital assets by virtue of its investments in companies that use one or more digital assets as part of their business activities or that hold digital assets as proprietary investments. Because the Fund will not invest directly in any digital assets, it will not track price movements of any digital assets. The Fund uses a passive management (or indexing) approach to track the performance, before fees and expenses, of the Index. Bloomberg Grayscale Future of Finance Index The Index is designed by Bloomberg Index Services Limited (the … Show more… The Fund will not invest in digital assets directly or through the use of derivatives. The Fund also will not invest in initial coin offerings. The Fund may, however, have indirect exposure to digital assets by virtue of its investments in companies that use one or more digital assets as part of their business activities or that hold digital assets as proprietary investments. Because the Fund will not invest directly in any digital assets, it will not track price movements of any digital assets. The Fund uses a passive management (or indexing) approach to track the performance, before fees and expenses, of the Index. Bloomberg Grayscale Future of Finance Index The Index is designed by Bloomberg Index Services Limited (the Index Provider) to consist of U.S. and non-U.S. equity securities of companies that have been classified by the Index Provider as providing exposure to the Future of Finance, as identified by the intersection of finance, technology and digital assets (collectively, Future of Finance Companies). In constructing the Index, the Index Provider identifies three core categories as the universe of Future of Finance Companies: 1) Financial Foundations companies involved in the enabling of buying, selling, and transacting in digital assets, including asset managers, exchanges, brokerages, and wealth managers; 2) Technology Solutions companies involved in the development of the infrastructure to create applications utilizing blockchain technology, including companies providing technology through data and transaction processing; and 3) Digital Asset Infrastructure companies involved in the supply of infrastructure around the digital asset ecosystem, including the mining of digital assets, hardware providers, and energy and resource management providers. The Index Provider determines eligible Future of Finance Companies based on a multistep process which is constructed to utilize both analyst expertise and data analytics. The process begins with the generation of a preliminary list of companies by Bloomberg Intelligence analysts and a list of key terms associated with Future of Finance Companies. Next, company filings are scraped for occurrences associated with the key terms related to Future of Finance Companies. This process also utilizes methods for synonym-matching to reduce variability in frequency counts due to corporate communication styles. Documents scraped include, but are not limited to, publicly available company filings such as 10-Ks, 10-Qs, 8-Ks, S-1s, S-3s, and similar documents for foreign securities, investor presentations, quarterly earnings reports, earnings call transcripts, press releases, news articles or media coverage. Additional steps are taken for the resulting list of equity securities to measure consistency in trading as a group. Daily price changes of the individual basket members are compared to the groups mean. This approach affirms companies with a strong correlation to Future of Finance Companies. Companies having a weak or indeterminate correlation may be re-evaluated for inclusion. In addition, the Index Provider assigns Future of Finance Companies a Revenue Score, Theme Score, and Regulatory Score ranging from high (1), medium (2), to low (3) (each as further described below). 1) Revenue Score measures the exposure each Future of Finance Company is anticipated to have to the Future of Finance theme over the next two years. 2) Theme Score measures the relative importance of a Future of Finance Company to the involvement and development of the Future of Finance theme. 3) Regulatory Score measures the risk associated with a Future of Finance Company to the current regulatory landscape as well as any potential changes in regulation. A company must have a score of high (1) or medium (2) in each of the three measures in order to qualify for inclusion in the Index, unless the Index would be comprised of fewer than 20 companies, in which case a company can have a score of low (3) for the Revenue Score. Revenue Score Description The Revenue Score uses the following revenue-based thresholds, which are based on the current or expected subsequent two-year (T+2) revenue of such company as a percentage of its overall revenue. The threshold for high (1) reflects revenue greater than or equal to 50%, medium (2) reflects revenue between 20-50%, and low (3) reflects revenue less than 20%. Theme Score Description The Theme Score takes into account key metrics for each company such as company outlooks, competitive advantages, current and prospective product pipelines, and brand and presence in the space to account for exposure to the theme. In addition, the Index compares the companys revenue from one of the three Index investment categories relative to the entire category. Note that this is distinct from the Revenue Score described above, which is solely with respect to the companys overall revenue itself as opposed to relative to the investment category in which that company falls under. The Theme Score is designed to reflect the breadth and size of each investment category, as each investment category has a different number of companies and varying market sizes. The threshold for high (1) reflects the top quartile of companies in a given investment category, medium (2) reflects the second and third quartile of companies in a given investment category, and low (3) reflects the bottom quartile of companies in a given investment category. Regulatory Score Description The Regulatory Score seeks to measure how much revenue exposure a given company has to a geographic region and/or single country that exercises a high level of regulatory, political or policy scrutiny with respect to the core investment categories. The Regulatory Score takes into account applicable laws, rules and regulations, including, but not limited to, those related to digital mining and exchanges as well as financial services within the relevant geographic region or country in which the company resides. The threshold for high (1) reflects little to no geographic and industry risk associated with the companys revenue, medium (2) reflects uncertain geographic and industry risk associated with the companys revenue, and low (3) reflects high geographic and industry risk associated with the companys revenue. Further, for inclusion in the Index, companies that are identified as part of the universe described above must be a U.S. and/or non-U.S. common stock, ordinary share, or depositary receipt and must have a 90-day average value traded of at least $1 million. Companies included in the Index must have a market capitalization of at least US$100 million. The foregoing liquidity and market capitalization thresholds are reduced as necessary to seek a minimum of 20 Index components. The Index includes companies in developed and emerging markets. The Index is reconstituted and rebalanced quarterly after the close of business on the last trading day (Effective Date) of each March, June, September, and December, based on data as of the last week of each month prior to the applicable reconstitution and rebalance period of the Index. At the time of each reconstitution and rebalance of the Index, the Index components are market capitalization-weighted, subject to a maximum weight of 8% per issuer for the five largest components by market capitalization and 4% for each other component. Any excess weight due to the foregoing adjustments will be reallocated proportionally to the unaffected securities. If the number of Index components is less than or equal to twenty, then the three largest components by market capitalization will be subject to a maximum weight of 15% and each other component will be subject to a maximum weight of 4.5%. If the excess weight cannot be fully allocated, then all Index components will be equally weighted. Component weights and index shares are finalized ten business days prior to the applicable reconstitution and rebalance of the Index. A blockchain is a digital series of records stored across a decentralized network that uses cryptography to create a secure and verified history of transactions. The decentralized nature of a blockchain utilizes and relies on multiple nodes to continuously update and certify the accuracy of information in the chain, mitigating the risks associated with centralized networks, where a single source can be tampered with to change information across a network. Blockchain technology can be used to record transactions involving tangible, intangible, and digital assets, and a blockchain may be constrained to certain users or companies or open to the public. Blockchain networks may also be used to track the purchase, sale, or exchange of digital assets. Digital assets are a form of digital currency that can be used to purchase goods or services from certain vendors or can be purchased or sold like an investment asset. Digital assets generally rely on a blockchain to maintain the integrity of their transaction histories, and new amounts of a digital asset are added to the available supply based on the completion of certain complex mathematical problems a process known as digital asset mining. Future of Finance Companies may include small- and medium-capitalized companies and may also include foreign and emerging market issuers. As of March 31, 2024, the Index was composed of 22 constituents. The Index was established in 2021 and is owned and maintained by the Index Provider. The Index Provider has partnered with the Funds investment adviser to co-develop the methodology used to determine the securities included in the Index. As of March 31, 2024, the Information Technology and Financials sectors represented a significant portion of the Index. The Funds Investment Strategy Under normal circumstances, at least 80% of the Funds net assets, plus borrowings for investment purposes, will be invested in the component securities of the Index. The Fund will generally use a replication strategy to achieve its investment objective, meaning the Fund will generally invest in all of the component securities of the Index in the same approximate proportions as in 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 Funds sub-adviser believes it is in the best interests of the Fund ( e.g. , 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 is classified as a non-diversified fund under the Investment Company Act of 1940 (the 1940 Act) and, therefore, may invest a greater percentage of its assets in a particular issuer than if it were a diversified fund. To the extent the Index concentrates ( i.e. , allocates more than 25% of its holdings) in the securities of a particular industry or group of related industries, the Fund will concentrate ( i.e. , invest more than 25% of its total assets) its investments to approximately the same extent as the Index. Show less