REDP ETF | Republican President Odds with REDP | Roundhill Prediction Markets

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In the event that a member of the Republican Party is not the winner of the 2028 Presidential Election, the Fund will lose substantially all of its value. This makes an investment in the Fund highly risky. An investment in the Fund is not appropriate for investors who do not wish to invest in a highly risky investment product or who do not fully understand the Fund's investment strategy. Such investors are urged not to purchase Fund Shares.

The fund has filed a registration statement with the Securities and Exchange Commission but it is not yet effective. An investment in the fund cannot be made, nor money accepted, until the registration statement is effective. An investor should consider the investment objectives, risks, and charges and expenses of the fund carefully before investing. A preliminary prospectus which contains this and other information about the fund may be obtained by calling 1-855-561-5728 or visit the website at www.roundhillinvestments.com/etf/REDP. The information in the preliminary prospectus is not complete and may be changed. The final prospectus should be read carefully before investing, and when available may be obtained from the same source. This communication is not an offer to sell fund shares and is not soliciting an offer to buy fund shares in any state where the offer or sale is not permitted.

Event Contracts Risk. The Fund’s investment performance is closely tied to the behavior of event contracts, a novel class of derivative instruments whose values are derived from the occurrence or non-occurrence of specified, objectively verifiable events. Event contracts may not develop the depth, liquidity, or trading efficiency associated with more established derivatives markets, and their pricing may be influenced by factors unrelated to fundamental probability assessments, including speculative activity, behavioral biases, regulatory headlines or concentrated participation by a limited number of traders. Because event contracts typically feature binary payouts at expiration, the value of a position may decline rapidly or even become worthless if the referenced event ultimately does not occur, regardless of prior market pricing. Exchanges may alter contract specifications, suspend trading, impose position limits, or take other actions that affect how these instruments trade or settle, and the legal and regulatory treatment of certain types of event contracts remains subject to ongoing review and potential change. In addition, event contracts may react sharply to news, polling data, or other developments, but may not provide continuous price discovery during periods of stress or uncertainty. As a result, investments in event contracts involve unique risks that differ from those associated with traditional futures, options, or securities, and could lead to significant losses, valuation uncertainty, and deviations from the Fund’s investment objective.

Concentrated Exposure Risk. The Fund’s investment strategy results in concentrated exposure to a single event, the outcome of the 2028 Presidential Election. Unlike diversified funds that spread risk across multiple asset classes, sectors or issuers, the Fund’s performance is primarily driven by developments related to this particular event and the market’s evolving assessment of its likely result. As a result, the Fund is more susceptible to adverse political developments, polling shifts, legal disputes, regulatory actions, changes in exchange rules, or unexpected news that directly or indirectly influence expectations regarding the election. Concentration also amplifies structural risks inherent in the trading venue, including position limits, liquidity constraints and clearinghouse disruptions. If conditions in the market for the relevant event contracts deteriorate or the contracts become unavailable, the Fund may be unable to find substitute investments that provide similar exposures, which could force the Fund to hold cash or other instruments with materially different profiles. This degree of concentration will likely increase volatility in the Fund’s NAV, heighten the likelihood of significant losses over short periods, and cause the Fund’s returns to diverge substantially from those of more diversified investments.

Timing Of Settlement Risk. The Fund will exit its positions tied to the outcome of the 2028 Presidential Election based upon the market’s determination (as reflected in the market price of the Republican President Contracts) that the winner of the 2028 Presidential Election has been decided pursuant to the Early Determination mechanism described above. The Fund will exit the positions based upon the market implied probability (as reflected in the market price of the Republican President Contracts) that a member of the Republican Party has won the 2028 Election exceeds 99.5% (in the case of a Republican victory) or less than 0.005% (in the case of a Republican loss) for five consecutive trading days. HOWEVER, IT IS POSSIBLE THAT THE MARKET’S DETERMINATION THAT THE OUTCOME OF THE ELECTION HAS BEEN DECIDED WILL SUBSEQUENTLY BE FOUND TO BE INCORRECT. UNDER SUCH CIRCUMSTANCES, THE FUND WILL GENERALLY HAVE EXITED ITS POSITIONS TIED TO THE OUTCOME OF THE 2028 PRESIDENTIAL ELECTION AND INVESTED IN POSITIONS TIED TO THE U.S. PRESIDENTIAL ELECTION TAKING PLACE ON NOVEMBER 2, 2032. THEREFORE, A SUBSEQUENT DETERMINATION THAT THE MARKET WAS INCORRECT ABOUT THE WINNER OF THE 2028 PRESIDENTIAL ELECTION WILL NOT BE REFLECTED IN THE VALUE OF FUND SHARES. INVESTORS THAT WISH TO HAVE ECONOMIC EXPOSURE TO THE DEFINITIVE OUTCOME OF THE 2028 PRESIDENTIAL ELECTION SHOULD UNDER NO CIRCUMSTANCES PURCHASE FUND SHARES. BY PURCHASING FUND SHARES, YOU ARE ACCEPTING THE RISK THAT THE MARKET’S DETERMINATION THAT THE OUTCOME OF THE 2028 PRESIDENTIAL ELECTION HAS BEEN DETERMINED MAY SUBSEQUENTLY BE FOUND TO BE INCORRECT AND THAT UNDER SUCH CIRCUMSTANCES THERE WILL BE NO RECOURSE.

Swap Agreements Risk. The Fund will utilize swap agreements to derive exposure to the 2028 Presidential Election. Swap agreements may involve greater risks than direct investment in securities as they may be leveraged and are subject to credit risk, counterparty risk and valuation risk. A swap agreement could result in losses if the underlying reference or asset does not perform as anticipated. In addition, many swaps trade over-the-counter and may be considered illiquid. It may not be possible for the Fund to liquidate a swap position at an advantageous time or price, which may result in significant losses.

Regulatory Risk. The regulatory framework governing event contracts tied to political outcomes is evolving and subject to significant uncertainty, and any change in how such contracts are classified, permitted, supervised or restricted under the CEA or by the CFTC could materially and adversely affect the Fund. Although the event contracts in which the Fund invests are listed for trading on a CFTC-regulated DCM and are subject to exchange and clearing rules, the CFTC retains broad authority to determine whether particular contracts are consistent with the CEA and the public interest, including authority to disapprove or direct an exchange to delist contracts that the CFTC determines involve gaming, are unlawful, or otherwise run contrary to the purposes of the CEA. Political outcome event contracts have been the subject of heightened regulatory scrutiny and debate, and regulators may conclude that some or all of such contracts should be limited, suspended, modified or prohibited. The CFTC or the listing exchange could, at any time and without advance notice, impose new conditions, margin or position-limit requirements, reporting obligations, trading halts, settlement adjustments or delisting actions. Any such changes could, among other things, (i) impair the Fund’s ability to establish, maintain or close positions; (ii) require the Fund to liquidate positions at disadvantageous prices; (iii) alter the economic characteristics on which the Fund relies; or (iv) render the Fund’s principal investment strategy impractical and achievement of investment objective impossible. In addition, future legislative, judicial or administrative developments, reinterpretations of existing law or changes in enforcement priorities could retroactively affect the permissibility, settlement mechanics or availability of political-outcome event contracts. These developments may occur abruptly and may not provide mechanisms for investor recourse or for the orderly unwind of positions. As a result, regulatory actions or uncertainty surrounding such actions could lead to significant losses, tracking error, increased transaction costs or the suspension or termination of the Fund. There can be no assurance whatsoever that the regulatory environment for political-outcome event contracts will remain stable or favorable. Investors that do not wish to invest in an investment product subject to significant regulatory uncertainty are urged not to purchase Fund Shares.

Settlement Risk. Event contracts to which the Fund has exposure are settled pursuant to the rules and procedures of the listing DCM and its clearing structure, and the Fund is subject to the risk that settlement may not occur as expected. Settlement depends on the DCM’s determination that the referenced event has occurred (or not occurred) in accordance with contract specifications, as well as on the timely performance of the clearinghouse and its members. Errors, ambiguities, disputes or reinterpretations regarding the definition of the underlying event, the applicable data sources, or the timing of the determination may delay or alter settlement outcomes. In the case of contested or uncertain events, the DCM may exercise discretion to postpone final determination, apply alternative settlement procedures, or adjust settlement values, any of which could diverge from market participants’ expectations and adversely affect the value of the Fund’s positions. Operational or financial issues at the DCM or clearinghouse, such as systems failures, member defaults, or insufficient financial resources, could also interfere with the orderly completion of settlement and potentially lead to loss allocation measures that impact market participants, including the Fund. In extreme cases, settlement may be suspended, cancelled or subject to regulatory review, leaving the Fund unable to realize anticipated gains.

Valuation Risk. The Fund values its event contract positions based on market prices. However, such values may not fully reflect the prices at which positions could be liquidated, especially in thin or stressed markets. Event contracts tied to political outcomes can trade with limited depth, episodic activity and wide bid-ask spreads, which increases the potential for stale or unrepresentative pricing. Market prices may also be influenced by short-term sentiment, regulatory headlines or speculative behavior that deviates from fundamental assessments of probability. Prices may move rapidly near election dates or following material news developments, and intraday volatility may cause significant swings in the Fund’s NAV. If reliable market quotations are not readily available, the Fund may employ fair value methodologies that rely on models, estimates or subjective judgments. These methodologies may differ from those used by other market participants and may produce valuations that subsequently prove inaccurate. Differences between estimated values and realized transaction prices could adversely affect Fund performance, create dilution among shareholders or give rise to realized or unrealized losses when positions are sold. Furthermore, unexpected changes in settlement procedures, exchange rule interpretations, or the timing and recognition of election results could cause contract values to move in ways not anticipated by existing valuation approaches. As a result, valuation risk may contribute to NAV volatility and tracking error.

Volatility Risk. Event contracts tied to political outcomes can exhibit pronounced and unpredictable price volatility, particularly as new information emerges or as critical milestones approach. Because these contracts have binary payouts that converge toward either $1.00 or $0.00 at settlement, relatively small changes in the perceived probability of an outcome can translate into large percentage price swings. Market expectations may shift rapidly in response to polling data, debates, policy announcements, legal challenges, election-administration developments, or unexpected geopolitical or economic events, as well as rumors or sentiment-driven trading. Volatility often increases near key dates, such as party conventions, court rulings, election day, and certification deadlines, and may be further magnified by liquidity constraints, trading halts or changes in position limits on the designated contract market. Sharp price movements can occur even when the broader financial markets are stable, and may result in significant fluctuations in the Fund’s NAV over short periods. Elevated volatility also increases the likelihood of the inability to execute trades at expected prices. In addition, following the apparent resolution of the election, volatility may persist until final settlement if uncertainties remain about certification, recounts or succession. The Fund’s exposure to these dynamics means that investors should be prepared for substantial NAV variability, including the possibility of large and sudden losses that may not be predictable based on historical patterns or traditional risk metrics.

Active Market Risk. Although Fund Shares are listed for trading on the Exchange, there can be no assurance that an active trading market for Fund Shares will develop or be maintained. Fund Shares trade on the Exchange at market prices that may be below, at or above the Fund’s net asset value. Securities, including Fund Shares, are subject to market fluctuations and liquidity constraints that may be caused by such factors as economic, political, or regulatory developments, changes in interest rates, and/or perceived trends in securities prices. Fund Shares could decline in value or underperform other investments.

Counterparty Risk. Fund transactions involving a counterparty are subject to the risk that the counterparty will not fulfill its obligation to the Fund. Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. The Fund may be unable to recover its investment from the counterparty or may obtain a limited recovery, and/or recovery may be delayed.

Cybersecurity Risk. Failures or breaches of the electronic systems of the Fund, the Fund’s adviser, sub-adviser, distributor and other service providers, market makers, Authorized Participants or the issuers of securities in which the Fund invests have the ability to cause disruptions, negatively impact the Fund’s business operations and/or potentially result in financial losses to the Fund and its shareholders. While the Fund has established business continuity plans and risk management systems seeking to address system breaches or failures, there are inherent limitations in such plans and systems. Furthermore, the Fund cannot control the cybersecurity plans and systems of the Fund’s other service providers, market makers, Authorized Participants or issuers of securities in which the Fund invests.

Liquidity Risk. Event contracts tied to political outcomes may experience periods of limited or uneven liquidity. To the extent the Fund invests directly in event contracts, this may adversely affect the Fund’s ability to establish, maintain or close positions at desired times or prices. Although such contracts are listed on a DCM, trading volumes and depth of order book may be concentrated in relatively short windows, such as immediately following major news events, or may decline significantly during period of uncertainty, regulatory review or when market participants reduce activity following the occurrence of the election but before the settlement of the contracts. Bid-ask spreads can widen significantly, particularly in larger position sizes, near contract expiration, or, especially, when market sentiment becomes one-sided. At times, there may be few or no willing counterparties at prices close to last trade, forcing the Fund to transact at disadvantageous prices or hold positions longer than intended. Liquidity conditions may deteriorate rapidly in response to polling shifts, litigation, recounts, trading halts, position-limit constraints, DCM rule changes or CFTC actions affecting the DCM or the contracts themselves. The Fund could also face significant challenges rolling positions to provide exposure to the next election if successor contracts have not yet developed robust liquidity or if the DCM imposes limits that restrict participation by larger participants, such as the Fund. In stressed conditions, the DCM may suspend trading or otherwise limit market activity, which could impair price discovery and delay the Fund’s ability to manage exposure. These factors may increase transaction costs and volatility or cause deviations between the Fund’s performance and the behavior of the market-implied probabilities the contracts reflect. Liquidity constraints could require forced liquidation at unfavorable prices or prevent the Fund from executing its strategy as intended.

New Fund Risk. The Fund is a recently organized investment company with a limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision.

Non-Diversification Risk. As a “non-diversified” fund, the Fund may hold a smaller number of portfolio securities than many other funds. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers. The value of the Fund Shares may be more volatile than the values of shares of more diversified funds.

Operational Risk. The Fund is subject to risks arising from various operational factors, including, but not limited to, human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. The Fund relies on third-parties for a range of services, including custody. Any delay or failure relating to engaging or maintaining such service providers may affect the Fund’s ability to meet its investment objective. Although the Fund and the Adviser seek to reduce these operational risks through controls and procedures, there is no way to completely protect against such risks.

Position Limits Risk. Event contracts listed on DCMs are subject to position limits. These limits may be imposed by the DCM or directed by the CFTC, and may change over time, sometimes without advance notice. To the extent the Fund invests directly in event contracts, position limits can constrain the Fund’s ability to initiate or increase positions, require the Fund to reduce existing positions when limits are tightened or reinterpreted, or prevent the Fund from maintaining desired exposure as the election approaches or as market conditions evolve. In certain circumstances, the DCM may also require the Fund to provide additional information, demonstrate the bona fide nature of its positions, or liquidate positions deemed inconsistent with exchange rules or risk-management objectives. Because political event contracts often concentrate liquidity in specific expirations or outcomes, position limits may become binding more quickly than in broader commodity or financial futures markets. If the Fund is forced to rebalance or liquidate positions to comply with applicable limits, it may incur transaction costs, realize unfavorable gains or losses, experience deviations from its investment strategy, or be unable to replicate market-implied probabilities. Moreover, new or more restrictive position limits imposed in response to regulatory developments, market stress, or exchange policy changes could materially impair the Fund’s ability to pursue its investment objective.

Reverse Repurchase Agreements Risk. Reverse repurchase agreements involve both counterparty risk and the risk that the value of securities that the Fund is obligated to repurchase under the agreement may decline below the repurchase price. Reverse repurchase agreements involve leverage risk; the Fund may lose money as a result of declines in the values both of the security subject to the reverse repurchase agreement and the instruments in which the Fund invested the proceeds of the reverse repurchase agreement.

Special Tax Risk. Because Republican President Contracts and swap agreements on Republican President Contracts produce non-qualifying income for purposes of the Fund qualifying as a RIC, the Fund makes its investments in Republican President Contracts and swap agreements on Republican President Contracts through the Subsidiary. The Fund intends to treat any income it may derive from the Republican President Contracts and swap agreements on Republican President Contracts received by the Subsidiary as “qualifying income” under the provisions of the Code applicable to RICs. The Internal Revenue Service has issued numerous private letter rulings (“PLRs”) provided to third parties not associated with the Fund or its affiliates (which only those parties may rely on as precedent) concluding that similar arrangements resulted in qualifying income. Many of these PLRs have now been revoked by the Internal Revenue Service. In March of 2019, the Internal Revenue Service published regulations that concluded that income from a corporation similar to the Subsidiary would be qualifying income, if the income is related to the Fund’s business of investing in stocks or securities. Although the regulations do not require distributions from the Subsidiary, the Fund intends to cause the Subsidiary to make distributions that would allow the Fund to make timely distributions to its shareholders. The Fund generally will be required to include in its own taxable income the income of the Subsidiary for a tax year, regardless of whether the Fund receives a distribution of the Subsidiary’s income in that tax year, and this income would nevertheless be subject to the distribution requirement for qualification as a regulated investment company and would be taken into account for purposes of the 4% excise tax. If the Fund did not qualify as a RIC for any taxable year and certain relief provisions were not available, the Fund’s taxable income would be subject to tax at the Fund level and to a further tax at the shareholder level when such income is distributed. In such event, in order to re-qualify for taxation as a RIC, the Fund might be required to recognize unrealized gains, pay substantial taxes and interest and make certain distributions. This would cause investors to incur higher tax liabilities than they otherwise would have incurred and would have a negative impact on Fund returns. In such event, the Fund’s Board of Trustees may determine to reorganize or close the Fund or materially change the Fund’s investment objective and strategies. In the event that the Fund fails to qualify as a RIC, the Fund will promptly notify shareholders of the implications of that failure.

Roundhill Financial Inc. serves as the investment advisor. The Funds are distributed by Foreside Fund Services, LLC which is not affiliated with Roundhill Financial Inc., U.S. Bank, or any of their affiliates.

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REDP Roundhill Republican President ETF

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