Fund Description: Etho Climate Leadership U.S. ETF is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the FactorShares Trust, an open-end investment management company. INVESTMENT OBJECTIVE: The Etho Climate Leadership U.S. ETF seeks to provide investment returns that closely correspond to the price and yield performance of the Etho Climate Leadership Index. INDEX DESCRIPTION: The Etho Climate Leadership Index tracks the performance of the equity securities of a diversified set of U.S. companies that are leaders in their industry with respect to their carbon impact. Carbon impact is calculated based on the total greenhouse gas (GHG) emissions from a company’s operations, fuel use, supply chain and business activities, divided by the company’s market capitalization. The Index primarily includes each company with a carbon impact at least 50% better (i.e., lower) than the average carbon impact for a given company’s industry (Carbon Leaders). The Index generally excludes companies in industries or sub-industries or specific companies that are broadly associated with negative environmental, social, or corporate governance (ESG) profiles. The Index Provider, Etho Capital, LLC, created the Index to identify a diverse portfolio of companies with a carbon impact at least 50% better than commonly used broad-based securities indices. The Index is reconstituted annually in November. At the time of each reconstitution, the companies in the Index are equal weighted. The Index may include companies of any market capitalization. FUND STRATEGY: The Fund uses a passive or indexing approach to try to achieve the Fund’s investment objective. Unlike many investment companies, the Fund does not try to beat the Index and does not seek temporary defensive positions when markets decline or appear overvalued. A replication strategy is an indexing strategy that that is used which involves investing in the securities of the Index in approximately the same proportions as in the Index. However, the Fund may utilize a representative sampling strategy with respect to the Index when a replication strategy might be detrimental to shareholders. The Fund will invest at least 80% of its total assets in the component securities of the Index. As a result, under normal circumstances, the Fund will invest at least 80% of its total assets in U.S. companies that are leaders in their industry with respect to their carbon impact. FUND MANAGEMENT: Factor Advisors, LLC serves as the investment adviser to the Fund. Penserra Capital Management, LLC serves as the sub-adviser to the Fund. The Adviser has retained the Sub-Adviser to be responsible for the day-to-day management of the Fund, subject to the supervision of the Adviser and the Board.