Investors should carefully consider the investment objectives, risks, charges and expenses of the Humankind US Stock ETF. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 888-557-6692. The prospectus should be read carefully before investing. The Humankind US Stock ETF is distributed by Northern Lights Distributors, LLC member FINRA/SIPC. Humankind Investments, LLC and Northern Lights Distributors, LLC are not affiliated. 7929-NLD-1108023
Important Risk Information
The Fund is a recently organized, diversified management investment company with limited operating history.
There is no assurance that the Fund will achieve its investment objective, and you can lose money investing in this Fund. The Fund is subject to Socially Responsible Investment (SRI) risk, which is the chance that stocks screened by the Index Sponsor for SRI criteria generally will underperform the stock market as a whole or that the particular stocks selected for the Index will, in the aggregate, trail returns of other mutual funds or ETFs screened for SRI criteria. In tracking the Index, the Fund may, from time to time, invest more heavily in companies in a particular economic sector or sectors, which would subject the Fund to proportionately higher exposure to the risks of that sector. The profitability of companies in the healthcare sector, as traditionally defined, including healthcare equipment and services companies, may be affected by government regulations and government healthcare programs, increases or decreases in the cost of medical products and services, an increased emphasis on outpatient services, demand for medical products and services and product liability claims, among other factors.
Humankind Benefit Corporation (the “Company”), of which the Fund is a series of the Company, is structured as a Maryland Benefit Corporation in order to pursue the goal of making a material, positive impact on humanity. The purpose of the Company is, in part, to promote through its investments the creation of a general public benefit and the specific public benefit of supporting socially optimal economic outcomes. The Fund is subject to Benefit Corporation Risk. As such, the interest of investors, customers, employees, and members of society at large may be viewed or weighed differently. As a benefit corporation, there can be no assurance that the Company or the Fund will create (i) a material, positive impact on humanity, society or the environment, or (ii) a specific public benefit through the support of socially optimal economic outcomes.
Investors in small- and medium-sized companies typically take on greater risk and price volatility than they would by investing in larger, more established companies. The value of your investment in the Fund is based on the values of the Fund’s investments, which may change due to economic and other events that affect markets generally, as well as those that affect particular regions, countries, industries, companies or governments. Although the Fund’s shares are approved for listing on the NYSE Arca (the “Exchange”), there can be no assurance that an active trading market will develop and be maintained for Fund shares. Although Fund shares are listed for trading on the Exchange, there can be no assurance that an active trading market for such shares will develop or be maintained. The Fund is not actively managed and therefore would not sell an equity security due to current or projected underperformance of a security, industry or sector, unless that security is removed from the Index.
A company’s Humankind Value is an estimate of how much value the company creates for humankind and is published annually. It is based on a quantitative analysis that calculates the comprehensive economic value of a company based not only upon its financial performance metrics but also on the costs and benefits to society from conducting its business. This calculation also attempts to take into account the Humankind Value of the company’s critical supply chain partners. The components of the calculation include: (i) Investor Value, which is the estimated value to investors on the basis of multi-year profitability; (ii) Consumer Value, which is the estimated value to customers based on the offering of a product or service; (iii) Employee Value, which is the estimated value to employees based on their salaries, bonuses and benefits; and (iv) Societal Value, which is the estimated unaccounted costs and benefits to society from the operation of the company’s business. A company’s Humankind Value is estimated in the aggregate for each top company and is not reflective of the percentage of ownership of the top company by the Fund. The Humankind Values posted on the Humankind US Stock ETF site are representative of the equity component of each company’s capital structure alone.
Humankind Investments calculates a single dollar value of a company’s Humankind Value, which is intended to capture the aggregate worth of a company based upon its economic impact on humanity, defined as investors, customers, employees, and society at large. It’s important to understand that this single dollar value of Humankind Value for a company is not a precise measurement of the economic impact that companies have on humanity – rather, it represents a best faith estimate based on our internal model of how these companies behave and what the estimated impact on humanity of their behavior is. In other words, we’ve created a simplified mathematical representation of the real world, and are using that to derive this single dollar value for a company.
Humankind Investments believes that certain themes, including but not limited to hygienic products, industrial crop production, clean water, healthcare R&D, pharmaceuticals, and medical devices, all contribute to maintaining and extending human life. The Humankind Research Team works to estimate how many lives each of these themes, and other themes, are maintaining and lengthening, by synthesizing a broad range of independent data sources, such as nationally recognized data providers, scientific and academic papers, data gathered by government agencies, non-government organizations (NGOs), other research entities, as well as financial statements and other public disclosures released by companies (10-K, 10-Q, presentations, conference calls), etc. Our researchers first estimate a human impact for a particular theme – estimates for the particular number of life-years added by the top companies noted above are derived from proprietary Humankind Research Team work, described in the preceding sentence. Responsibility for the impact of that theme is then assigned to the companies that, according to the Humankind Research Team’s work, are contributing to the theme, either directly or indirectly. Our research process works to quantify the value of a human life and the value of a year of life well-lived, based on economics research that aims to create an economic estimate of the value of a human life. This dollarization, or quantification, allows the impact of the themes we research to be compared in like-terms. Estimates for the number of life-years maintained and lengthened by the top companies for a particular theme are provided in the aggregate for each top company and are not reflective of the percentage of ownership of the top companies by the Fund. We have provided examples of the estimates of the numbers of life-years maintained and lengthened for some, but not all, of the themes studied by our researchers. Other themes studied by our researchers can result in different estimates of life-years maintained and lengthened.
Additional disclosure for NYSE's What's the Fund video: This communication is provided for informational purposes only and expresses views of Humankind Investments, LLC (Humankind), an Investment Adviser. There is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses. Humankind’s social responsibility based approach to investing may not produce desired results and could result in underperformance compared with other investments. Any reference to the “Humankind Value” approach is provided for illustrative purposes only and indicates a general framework of guiding principles that inform Humankind’s overall investment process. Investing involves risk including possible loss of principal. Past performance does not guarantee future results.