Smart US Large Value ETF — Interim / Quarterly Report 2020

Jul 27, 2020

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Smartshares US Large Value ETF

Fund update for the quarter ended 30 June 2020

This fund update was first made publicly available on 28 July 2020.

What is the purpose of this update?

This document tells you how the Smartshares US Large Value ETF has performed and what fees were charged. The document will help you to compare the fund with other funds. Smartshares Limited prepared this update in accordance with the Financial Markets Conduct Act 2013. This information is not audited and may be updated.

Description of this fund

Invests in US shares and is designed to track the return on the CRSP US Large Cap Value Index.

Total value of the fund: $71,384,122 The date the fund started: 29 July 2015

What are the risks of investing?

Risk indicator for the Smartshares US Large Value ETF[1]

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----- Start of picture text ----- Lower risk Higher risk1 2 3 4 5 6 7 Potentially lower returns Potentially higher returns----- End of picture text -----

This risk indicator is not a guarantee of a fund’s future performance. The risk indicator is based on the returns data for 5 years to 30 June 2020. While risk indicators are usually relatively stable, they do shift from time to time. The risk indicator will continue to be updated in future fund updates.

See the Product Disclosure Statement for the Smartshares Exchange Traded Funds – Specialist Series for more information about the risks associated with investing in this fund.

How has the fund performed?

Past year Annual return -5.52% (after deductions for charges and tax) Annual return -4.32% (after deductions for charges but before tax) Market index annual return -3.85% (reflects no deduction for charges and tax)

The market index annual return is based on the annual return of the CRSP US Large Cap Value Index (converted to the New Zealand dollar). Additional information about the market index is available in the 'Other Material Information' document on the offer register at www.disclose-register.companiesoffice.govt.nz.

Annual return graph

The risk indicator is rated from 1 (low) to 7 (high). The rating reflects how much the value of the fund’s assets goes up and down. A higher risk generally means higher potential returns over time, but more ups and downs along the way.

To help you clarify your own attitude to risk, you can seek financial advice or work out your risk profile at www.sorted.org.nz/tools/investor-kickstarter.

Note that even the lowest category does not mean a risk-free investment, and there are other risks that are not captured by this rating.

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----- Start of picture text ----- 20%15%10%5%0%-5%31/03/2017 31/03/2018 31/03/2019 31/03/2020 AverageannualSmartshares US Large Value ETF returnMarket index17.4%15.2% 14.7%12.6%7.1%6.3%Annual return 4.4% 5.2%-2.9% -1.0%----- End of picture text -----

Smartshares Exchange Traded Funds 1

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This shows the return after fund charges and tax for each year ending 31 March since the fund started. The last bar shows the average annual return since the fund started, up to 30 June 2020.

Important: This does not tell you how the fund will perform in the future.

Returns in this update are after tax at 28%.

What fees are investors charged?

Investors in the Smartshares US Large Value ETF are charged fund charges. In the year to 31 March 2020 these were:

	% per annum of fund’snet asset value
Total fund charges0.51%
Which are made up of:
Total management andadministration charges0.51%
Including:
Manager’s basic fee0.51%
Other management andadministration charges-

Investors may also be charged individual action fees for specific actions or decisions (for example, for initial contributions to the fund). See the Product Disclosure Statement for the Smartshares Exchange Traded Funds – Specialist Series for more information about those fees.

Small differences in fees and charges can have a big impact on your investment over the long term.

GST is included in the fund charges set out above.

Example of how this applies to an investor

Tara had $10,000 in the fund and did not make any further contributions. At the end of the year, Tara incurred a loss after fund charges were deducted of -$552 (that is -5.52% of her initial $10,000). This gives Tara a total loss after tax of -$552 for the year.

What does the fund invest in?

Actual investment mix

This shows the types of assets that the fund invests in.

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----- Start of picture text ----- Cash and cashequivalents,1.1%Internationalequities,98.9%----- End of picture text -----

Target investment mix

This shows the mix of assets that the fund generally intends to invest in.

Asset Category
	Target asset mix
Cash and cash equivalents-
New Zealand fixed interest-
International fixed interest-
Australasian equities-
International equities100.00%
Listed property-
Unlisted property-
Commodities-
Other-

Smartshares Exchange Traded Funds 2

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Top 10 investments[2]

Name	% of fund’s netasset value	Type	Country	Credit rating(if applicable)
Vanguard Value ETF99.15%International equitiesUnited States
Westpac Current Account1.13%Cash and cash equivalentsNew ZealandAA-

The top 10 investments make up 100.28% of the fund’s net asset value.

Currency hedging

The fund's foreign currency exposure is not hedged.

Key personnel

This shows the directors and employees who have the most influence on the investment decisions of the fund:

Name	Current position	Time in currentposition	Previous or other positions	Time in previous/ other position
Guy Roulston ElliffeDirector4 years and 7monthsCorporate Governance Manager -ACC (current position)5 years and 2months
Stuart Kenneth ReginaldMillarChief Investment Officer -Smartshares1 year and 1monthHead of Portfolio Management -ANZ Investments6 years and 4months
Hugh Duncan StevensChief Executive Officer -Smartshares2 years and 4monthsChief Operating Officer -Implemented InvestmentSolutions Ltd2 years and 6months
Alister John WilliamsDirector4 years and 7monthsInvestment Manager - TrustManagement5 years and 5months

Further information

You can also obtain this information, the Product Disclosure Statement for the Smartshares Exchange Traded Funds – Specialist Series, and some additional information from the offer register at www.disclose-register.companiesoffice.govt.nz.

Material changes

There have been no material changes to the nature of Smartshares Exchange Traded Funds, the investment objectives and strategy of the fund, or the management of the scheme over the quarter ended 30 June 2020.

Notes

• 1 Market index returns (as well as actual returns) have been used to complete the risk indicator, as the fund has not been in existence for 5 years. As a result, the risk indicator may provide a less reliable indicator of the potential future volatility of the fund. The risk indicator for the fund uses 1 month of market index returns.

• 2 The top 10 investments listed in the table exclude current assets and current liabilities, and as a result do not sum to 100%.

Smartshares Exchange Traded Funds 3