Investment Managers Series Trust II (TSLW) N-CSR/ACertified annual shareholder report (management investment company) (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22894

INVESTMENT MANAGERS SERIES TRUST II

(Exact name of registrant as specified in charter)

235 W. Galena Street

Milwaukee, WI 53212

(Address of principal executive offices) (Zip code)

Diane J. Drake

Mutual Fund Administration, LLC

2220 E. Route 66, Suite 226

Glendora, CA 91740

(Name and address of agent for service)

(626) 385-5777

Registrant’s telephone number, including area code

Date of fiscal year end: March 31

Date of reporting period: March 31, 2024

EXPLANATORY NOTE - “The Registrant is filing this amendment to its Form N-CSR for the period ended March 31, 2024 , originally filed with the Securities and Exchange Commission on June 07, 2024, (Accession Number 0001398344-24-011430), to retroactively adjust the capital shares and values to the financial statements to reflect the stock split for AXS Astoria Inflation Sensitive ETF impacting the following components to the financial statements: Capital Shares and Values on Statements of Assets and Liabilities, Capital Shares Transactions on Statements of Changes in Net Assets and Financial Highlights with cross-referenced notes of the Form N-CSR. The effect of these adjustments had no impact to the net assets of the ETF. Other than the aforementioned revision, this Form N-CSR/A does not reflect events occurring after the filing of the original Form N-CSR, or modify or update the disclosures therein in any way.”

Item 1. Report to Stockholders.

The registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), is as follows:

AXS Astoria Inflation Sensitive ETF

(PPI)

AXS Change Finance ESG ETF

(CHGX)

AXS Green Alpha ETF

(NXTE)

AXS Esoterica NextG Economy ETF

(WUGI)

ANNUAL REPORT

MARCH 31, 2024

AXS ETFs

Each a series of Investment Managers Series Trust II

Table of Contents

This report and the financial statements contained herein are provided for the general information of the shareholders of the AXS ETFs. This report is not authorized for distribution to prospective investors in the ETFs unless preceded or accompanied by an effective prospectus.

www.axsinvestments.com

March 31, 2024

Dear Fellow Shareholders:

The AXS Astoria Inflation Sensitive ETF (PPI) returned 30.06% during the 1-year period ending 3/31/2024, while its benchmark (70% MSCI All Country World Index, 20% Bloomberg Commodity Index, and 10% Bloomberg US TIPS 1-3 Year) Index returned 16.32%. The ETF was incepted on 12/29/2021 and is an actively managed strategy.

Relevant Indicators: 1-Year Period Ending 3/31/2024

The S&P 500 Index returned 29.88% during the 1-year period ending 3/31/2024 and the MSCI All Country World Index was up 23.22%.

While the Bloomberg Composite Crude Oil Index increased by 21.29% and the S&P Energy Select Sector Index gained 18.03%, the Bloomberg Commodity Index fell 0.56%.

Longer duration assets such as the growth heavy NASDAQ-100 Index was up 39.65% while the S&P U.S. Government Bond 20+ Year Index declined 7.50%.

The bond market was up despite interest rates rising with the Bloomberg US Aggregate Bond Index increasing by 1.70%.

The yield on the US 10-year Treasury increased from 3.49% on 3/31/2023, to 4.20% on 3/31/2024, and the Bloomberg US Corporate Investment Grade Index was up 4.43%.

The VIX Index declined 30.43% for the period.

Inflation Readings

The CPI (Consumer Price Index) was up 3.2% year over year in February, printing slightly hotter than the 3.1% consensus and down slightly from January’s 3.1% increase. Month over month, February CPI rose by 0.4%, level with the forecast but increasing from the prior month’s 0.3% gain.

Core CPI (excluding food and energy) rose 3.8% year over year in February, just above the 3.7% expectation but down from January’s 3.9% print. Month over month, the February figure was up 0.4%, slightly exceeding the 0.3% estimate but in line with the previous month’s 0.4% reading.

The Personal Consumption Expenditure Index (commonly referred to as “PCE”) increased 2.5% year over year in February, matching the 2.5% consensus but increasing from January’s 2.4% measure. Month over month, February PCE rose 0.3%, just below both the 0.4% forecast and prior month’s 0.4% reading.

Core PCE (excluding food and energy) was up 2.8% year over year in February, level with the expectation and easing slightly from January’s 2.9% measure. The February number rose 0.3% month over month, in line with the estimate but down from the previous month’s 0.5%.

Fed Actions

The Federal Reserve kept interest rates unchanged at the March FOMC meeting, leaving the fed funds rate at the 5.25–5.50% range. Recent inflation readings for both January and February remain elevated, causing the bond market to slash its start of year rate cut forecast from six 25 bps cuts to just three.

However, Fed Chairman Jerome Powell expressed the hotter inflation data has not changed Fed’s view on the broader disinflation trend. “I think they haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road toward 2%,” Powell stated.

Market participants were relieved that the updated median dot plot remained unchanged, still forecasting three cuts for the year, as there was anticipation one would be removed. The updated Summary of Economic Projections also revealed that the Fed expects real GDP to grow 2.1% in 2024, up from the December estimate of 1.4%, as the US economy remains resilient.

Moreover, when asked if continued strength in the labor market would alter the Fed’s path, Powell responded, “Strong hiring in and of itself would not be a reason to hold off on rate cuts.” As of March 31^st, 2024, there is a 61% chance that the first cut will occur in June per the CME FedWatch Tool.

Performance as of 3/31/2024

The performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. One cannot invest in an index. Inception date is 12/29/2021. *Since Inception returns are annualized. Benchmark represents 70% MSCI All Country World Index, 20% Bloomberg Commodity Total Return Index and 10% Bloomberg US TIPS 1-3 Year Index.

Performance Analysis: Q1 2024

The Fund returned 16.48% for the quarter. Equities positively contributed to the lion share of the ETF’s return, while both commodities and our fixed income positions marginally increased the ETF’s performance.

Equities

Below are the largest contributors and detractors to Fund performance from equities. EMCOR Group, Inc. (5.13% of PPI as of 3/31/2024) gained 62.69% for the period overall and accounted for 2.01% of the ETF’s performance.

The largest detractor was BHP Group Ltd (0% of PPI as of 3/31/2024¹), which fell 13.94% for the period overall and detracted 0.42% of the ETF’s performance.

Commodities

For the period, the SPDR Gold MiniShares Trust (GLDM; 4.78% of PPI as of 3/31/2024) was up 7.68% and contributed 0.37% to the ETF’s performance. Additionally, the WisdomTree Enhanced Commodity Strategy Fund (GCC; 0.94% of PPI as of 3/31/2024) rose 8.86%, adding 0.13% to the ETF’s return.

Fixed Income

TIPS (Treasury Inflation-Protected Securities) produced positive returns as both the iShares 0-5 Year TIPS Bond ETF (STIP; 3.19% of PPI as of 3/31/2024) and the Vanguard Short-Term Inflation-Protected Securities ETF (VTIP; 3.15% of PPI as of 3/31/2024) were up for the period (+0.85% and +0.84%, respectively), positively contributing to the ETF’s performance (adding 0.03% and 0.03%, respectively).

Portfolio Changes: Q1 2024

On January 25, 2024, we executed a rebalance in which our stock selection and screening process was reviewed.

Positions Sold

Given their quantitative ranking scores declined, we sold completely out of the following stocks (0% in PPI as of 3/31/2024):

Positions Purchased

As their quantitative ranking scores were superior, the following stocks were purchased (% represents weighting in PPI as of 3/31/2024):

Other stocks already in PPI were bought or sold to bring our sector weights, as well as our US and Non-US exposures, in accordance with their target ranges.

We slightly increased our overall equity allocation at the expense of a portion of commodities as we feel equities will fare well in the accommodative environment ahead. In doing so, we increased the number of stocks from 30 to 45 to for diversification. We also increased our US equity allocation relative to our Non-US equity allocation as many US macro-economic indicators have or are expected to improve in anticipation of lower rates and a Fed pivot. However, we still have strong views on Japan, and it is our largest country weight behind the US.

Additionally, we slightly increased our overall fixed income allocation at the expense of a portion of commodities as TIPS again have positive real rates and inflation is still not priced in as a resurging risk.

Within the remaining commodities allocation, we trimmed our more cyclical exposures and increased our outright gold exposures as the price of the yellow metal has recently broke out to a new high. The lower rate environment ahead should also bode well for the asset.

Current and Prospective Economic Outlook

We entered 2024 more bullish than we’ve been in the last two years. We believe better margins (due to artificial intelligence-enhanced productivity), an earnings recovery, and an accommodative Fed will be catalysts for equities, and we think these dynamics will continue to provide support throughout 2024.

In the past few years, the market has dealt with aggressive rate hikes, rampant inflation, fear of recession, and an earnings recession. Those variables have meaningfully improved and, in some cases, have reversed. Inflation has eased (granted, not conquered), the recession that seemed imminent now appears less likely to take place, and we’ve experienced two quarters of earnings growth. Additionally, many of the various economic indicators we monitor are now inflecting higher.

Moreover, we remain bullish on inflation sensitive/real assets, specifically industrials, energy, and materials. They maintain cheap valuations, have the potential to benefit from resurging inflation and deglobalization, and are significantly under owned versus history.

In the commodities space, we also still find gold attractive as uncertainty around rate cut timing remains and the asset has historically posted positive returns in the months after the first rate cut.

We are grateful for your continued trust and support.

Sincerely, The Investment Team at Astoria Portfolio Advisors LLC.

The views in this letter were as of March 31, 2024, and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund’s investment methodology and do not constitute investment advice.

Commentary provided by Astoria Portfolio Advisors, who serves as the Sub-Adviser for AXS Astoria Inflation Sensitive ETF and is not affiliated with AXS Investments. Holdings are subject to change and should not be considered investment advice.

Disclosures

This material must be preceded or accompanied by a prospectus

There is no guarantee the sectors or asset classes the advisor identifies will benefit from inflation. Fund may invest a larger portion of its assets in one or more sectors than many other funds, and thus will be more susceptible to negative events affecting those sectors.

Equity Securities Risk: Equity securities may be particularly sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase. Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or in only a particular country, company, industry or sector of the market.

Commodities Risk: Commodity prices can have significant volatility, and exposure to commodities can cause the value of the Fund’s shares to decline or fluctuate in a rapid and unpredictable manner. The values of commodities may be affected by changes in overall market movements, real or perceived inflationary trends, commodity index volatility, changes in interest rates or currency exchange rates, population growth and changing demographics, international economic, political and regulatory developments, and factors affecting a particular region, industry or commodity.

Futures Contracts Risk: The Fund expects that certain of the Underlying ETFs in which it invests will utilize futures contracts for its commodities investments. The risk of a position in a futures contract may be very large compared to the relatively low level of margin the Underlying ETF is required to deposit. In many cases, a relatively small price movement in a futures contract may result in immediate and substantial loss or gain to the investor relative to the size of a required margin deposit. The prices of futures contracts may not correlate perfectly with movements in the securities or index underlying them.

TIPS Risk: Principal payments for Treasury Inflation-Protection Securities are adjusted according to changes in the Consumer Price Index (CPI). While this may provide a hedge against inflation, the returns may be relatively lower than those of other securities. Similar to other issuers, changes to the financial condition or credit rating of the U.S. government may cause the value of the Fund’s exposure to U.S. Treasury obligations to decline.

Index descriptions

The following descriptions, while believed to be accurate, are in some cases abbreviated versions of more detailed or comprehensive definitions available from the sponsors or originators of the respective indices. Please refer to each such sponsor’s website for more detailed index information.

The past performance of an index is not a guarantee of future results.

Each index reflects an unmanaged universe of securities without any deduction for advisory fees or other expenses that would reduce actual returns, as well as the reinvestment of all income and dividends. An actual investment in the securities included in the index would require an investor to incur transaction costs, which would lower the performance results.

Indices are not actively managed, and investors cannot invest directly in the indices.

NASDAQ-100 Index: The Nasdaq 100 Index is a basket of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks.

S&P 500^® Index: The S&P 500^® Index is an unmanaged, capitalization-weighted index designed to measure the performance of the broad US economy through changes in the aggregate market value of 500 stocks representing all major industries.

S&P 500^® Energy: The S&P 500^® Energy index comprises those companies included in the S&P 500 that are classified as members of the GICS^® energy sector.

MSCI All Country World Index: The MSCI All Country World Index is designed to represent performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 24 emerging markets. As of June 2021, it covers more than 2,900 constituents across 11 sectors and approximately 85% of the free float-adjusted market capitalization in each market. The index is built using MSCI’s Global Investable Market Index (GIMI) methodology, which is designed to take into account variations reflecting conditions across regions, market cap sizes, sectors, style segments and combinations.

Bloomberg Commodity Index: The Bloomberg Commodity Index (“BCOM” or the “Index”) is designed to be a highly liquid and diversified benchmark for commodity investments. BCOM provides broad-based exposure to commodities and no single commodity or sector dominates the Index. The indices use a consistent, systematic process to represent the commodity markets. A commodity index should fairly represent the importance of a diversified group of commodities to the world economy. To achieve a fair representation, BCOM uses both liquidity data and U.S. -dollar-weighted production data in determining the relative quantities of included commodities. BCOM Index purports to provide diversified exposure to commodities as an asset class.

Bloomberg Composite Crude Oil Index: The Bloomberg Composite Crude Oil Index Formerly known as Dow Jones-UBS Composite Crude Oil Subindex (DJUBSCR), the index is composed of futures contracts on WTI and Brent Crude Oil.

Bloomberg US Aggregate Bond Index: The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency).

Bloomberg U.S. 1-3 Year Treasury Bond Index: The Bloomberg U.S. 1-3 Year Treasury Bond Index measures the performance of the US government bond market and includes public obligations of the U.S. Treasury with a maturity between 1 and up to (but not including) 3 years.

S&P U.S. Government Bond 20+ Year Index: The S&P U.S. Treasury Bond 20+ Year Index is designed to measure the performance of U.S. Treasury bonds maturing in 20 or more years.

Bloomberg US Corporate Investment Grade Index: The Index measures the performance of the long-dated, investment grade U.S. corporate bond market. Only bonds that have a maturity of more than ten years are included. Securities must be fixed rate, U.S. dollar denominated, taxable and rated investment grade as defined by the Index methodology.

VIX^® Index: Cboe Global Markets revolutionized investing with the creation of the Cboe Volatility Index^® (VIX^® Index), the first benchmark index to measure the market’s expectation of future volatility. The VIX Index is based on options of the S&P 500^® Index, considered the leading indicator of the broad U.S. stock market. The VIX Index is recognized as the world’s premier gauge of U.S. equity market volatility. The VIX Index is used as a barometer for market uncertainty, providing market participants and observers with a measure of constant, 30-day expected volatility of the broad U.S. stock market. The VIX Index is not directly tradable, but the VIX methodology provides a script for replicating volatility exposure with a portfolio of SPX options, a key innovation that led to the creation of tradable VIX futures and options.

Glossary

Price to Earnings Ratio (P/E): The price-to-earnings ratio (P/E ratio) is a ratio used by analysts for valuing a company. The P/E ratio measures a company’s current share price relative to its earnings per share (EPS). The P/E ratio is also referred to as the price multiple or the earnings multiple.

Consumer Price Index (CPI): This index is an inflation measure that calculates the weighted average of prices of a basket of consumer goods and services. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. The CPI measures items such as food, beverages, housing, apparel, transportation, medical care, recreation, education, communication, and other personal goods and services, such as tobacco and smoking products, and haircuts.

Producer Price Index (PPI): This index is an inflation measure that looks at the prices that producers pay and measures changes in the sale prices for the entire domestic market of raw goods and services. These goods and services are bought by consumers from their primary producers, bought indirectly from retail sellers, or purchased by producers themselves. The industries that comprise the PPI include mining, manufacturing, agriculture, fishing, forestry, natural gas, electricity, construction, waste, and scrap materials.

Personal Consumption Expenditure Index (PCE): The index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior. It is a primary measure of consumer spending on goods and services in the U.S. economy. It accounts for about two-thirds of domestic final spending, and thus it is the primary engine that drives future economic growth. PCE shows how much of the income earned by households is being spent on current consumption as opposed to how much is being saved for future consumption. PCE also provides a comprehensive measure of types of goods and services that are purchased by households. Thus, for example, it shows the portion of spending that is accounted for by discretionary items, such as motor vehicles, or the adjustments that consumers make to changes in prices, such as a sharp run-up in gasoline prices.

Dear Shareholders,

As we reflect on the fiscal year from April 1, 2023, to March 31, 2024 which the AXS Change Finance ESG ETF (the “Fund”) closed with $127.4 million in assets under management, we extend our deepest gratitude for your continued trust and support in the AXS Change Finance ESG ETF. Your investment underscores a shared commitment to not only fostering financial growth but also to advancing a sustainable future. This period has been marked by significant milestones and challenges alike, yet our dedication to our mission remains steadfast.

The fiscal year presented a complex tapestry of economic signals, from the initial grim forecasts to a remarkable turnaround marked, ultimately, by a very strong return of 28.14% for the AXS Change Finance ESG ETF (the “Fund”), just a bit shy of the benchmark S&P 500 which returned 29.88%. This resilience, spurred by strategic policy shifts and robust economic indicators, underscores the dynamic nature of the markets we navigate. Despite periods of volatility, catalyzed by consumer pressures and global uncertainties, the subsequent recovery highlights the inherent potential for growth and renewal within the economy.

The AXS Change Finance ESG ETF has continued to embody our ethos of sustainability, innovation, and ethical corporate behavior. Our fossil fuel-free methodology, despite facing the short-term fluctuations inherent in the energy sector, affirms our long-term vision. This year, strong selection in Information Technology, Industrials, and Materials helped balance selection in Communication Services and Financials that were weaker relative to the benchmark. Our commitment to equal weighting and focus on emerging game-changers aligns us with the next wave of sustainable growth.

Our efforts beyond the trading floor have been equally impactful. Through engagements with portfolio companies and policymakers alike, we’ve championed transparency, ethical governance, and environmental stewardship. Notably, our initiatives around privacy, political transparency, and supply chain integrity have set new benchmarks for corporate responsibility. Our advocacy for robust data protection and ethical sourcing reflects our belief in the power of conscientious investment to drive systemic change.

The SEC’s recent ruling on climate-related disclosures marks a watershed moment in our journey towards transparent and sustainable capital markets. While celebrating this progress, we remain cognizant of the need for comprehensive Scope 3 GHG emissions disclosure. Our advocacy for these standards underscores our belief in the necessity of a full spectrum view of a company’s environmental impact. As ESG investing continues to gain momentum, we are poised to leverage these developments to enhance our fund’s sustainability profile further.

The landscape for ESG investing in 2024 is vibrant with potential. The confluence of regulatory clarity, growing investor demand, and the demonstrable financial merits of ESG-focused strategies heralds a year of significant growth and innovation. As we navigate these promising yet complex waters, we remain committed to our principles of sustainability, equity, and corporate responsibility.

In closing, we extend our heartfelt thanks for your partnership in this journey. Together, we are not only witnessing but actively shaping the evolution of investing towards a model that values people, planet, and profit equally. We look forward to continuing this journey with you, armed with the conviction that our collective actions today will forge a more sustainable and equitable tomorrow.

info@change-finance.com | www.change-finance.com | 303.339.0524

With gratitude,

The Change Finance Team

The views in this letter were as of March 31, 2024 and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund’s investment methodology and do not constitute investment advice.

IMPORTANT RISK DISCLOSURE

ETFs involve risk including possible loss of principal. There is no assurance that the Fund will achieve its investment objective. Fund holdings are subject to risk and should not be considered recommendations to buy or sell any security.

The Fund may invest a larger portion of its assets in one or more sectors than many other funds, and thus will be more susceptible to negative events affecting those sectors. Market and Equity Risk: The value and market price of an equity security may decline due to general market conditions that may or may not be specifically related to a particular company or industry. Passive investment risk: The Fund invests in securities included in the Index regardless of investment merit. It is not actively managed and generally will not attempt to take defensive positions in declining markets. ESG Investing Risk: The Fund’s ESG policy could cause it to make or avoid investments that could result in the portfolio underperforming similar funds that do not have such policies. Market Cap Risks: Companies with larger capitalization may be unable to attain the high growth rates of successful, smaller companies during periods of economic expansion. The securities of mid-capitalization companies may be subject to more abrupt or erratic market movements and may have lower trading volumes or more erratic trading than securities of larger, more established companies. Real Estate Risk: Investments in Real Estate Investment Trusts (REITs) involve risks such as declines in the value of real estate and increased susceptibility to adverse economic or regulatory developments.

Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns. NAVs are calculated using prices as of 4:00 PM Eastern Time. The closing price is the midpoint between the bid and ask price as of the close of exchange. Closing price returns do not represent the returns you would receive if you traded shares at other times.

Investors should carefully consider the investment objectives, risks, charges and expenses of AXS Change Finance ESG ETF. This and other important information about the Fund is contained in the Prospectus, which can be obtained by visiting www.axsinvestments.com. The Prospectus should be read carefully before investing.

Distributed by ALPS Distributors, Inc., which is not affiliated with AXS.

info@change-finance.com | www.change-finance.com | 303.339.0524

AXS Green Alpha ETF

Management’s Discussion of Fund Performance

FYE March 31, 2024

Dear Fellow Shareholders,

The AXS Green Alpha ETF (NXTE) completed its fiscal year of operations on March 31, 2024. The year was in many ways a continuation of the previous (partial) fiscal year in that it was characterized by a continued period of higher-than-expected inflation in the US, higher-for-longer interest rates than many market observers had been anticipating, and a very dynamic and uncertain geopolitical environment of wars, protectionism, and climate-related shocks. All this has contributed to an environment of market volatility, particularly for growth-stage and more innovative companies, which of course are key areas of focus for Green Alpha’s thesis-driven style of portfolio construction. While we are far from pleased with the trailing fiscal year of relative underperformance, we retain a very high level of conviction in the quality, innovative potential, and market share gaining characteristics of the underlying portfolio companies. In Green Alpha’s signature investing style⁠—combining macro trajectory analysis, identification of risk-mitigating companies, fundamental data, and active, benchmark-agnostic portfolio construction⁠—we benefitted from upside volatility, took advantage of downside volatility, and helped our clients gain market exposure to the Next Economy.

The first quarter of 2024 continued to reveal a more-persistent-than-hoped picture of inflation. While showing significant deceleration compared to 2023 peaks, inflation rates remained stubbornly above central bank targets. This defied earlier expectations of a rapid return to price stability, forcing a retrenchment in interest rate expectations. This, in turn, caused a reversal in NXTE returns during Q1, after a strong performance period in Q4 2023, when markets were anticipating a series of Federal Reserve rate cuts in 2024. But in Q1, the Federal Reserve, and its global counterparts, signaled that rates will likely stay higher for longer than previously anticipated. Stock markets, with their fixation on immediate, and even incorrect but narrative-promoted results, entered a realm of extreme short-termism. Share prices became increasingly volatile, exhibiting rapid reactions to the smallest shifts in inflation data or monetary policy announcements. The focus on short-term fluctuations often overshadowed longer-term trends during the period; therefore, overlooked potential growth opportunities. Disruptive sectors like electric vehicles (EVs) and renewable energy faced misleading criticisms in Q1. Despite visible growth and advancements, narratives emerged suggesting a slowdown in EV demand and the failure of the renewable energy transition. These narratives circulated primarily among market commentators, who focused on short-term share price dips. This underscores a dangerous disconnect between on-the-ground business results and their corresponding stock performance.

Some Key Observations and Themes from the most recent Quarter:

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www.greenalphaadvisors.com

EVs and the Green Transition: A Reality Check

The skepticism directed towards EVs and renewable energy in Q1 stems from a misunderstanding of long-term transformational trends. While short-term fluctuations in demand or input costs exist, the broader trajectory remains undeniably clear:

The Stock Market Disconnect

The negative narratives around promising sectors contrasted starkly with their business fundamentals. Many EV manufacturers reported record production and sales in Q1, with strong growth projections. Renewable energy companies announced major capacity expansions. This performance was decoupled from stock valuations, suggesting that the market remains fixated on immediate returns, missing the potential of future growth.

Conclusion

The trailing year, but particularly Q1 2024 demonstrated that taming inflation would be a more arduous task than many had hoped. It also highlighted a market environment where short-term noise reigns, threatening to overshadow promising long-term economic shifts. Discerning investors can navigate this landscape by grounding their decisions on verifiable data–as opposed to on narrative–and a recognition of the transformational forces at play in the global economy.

Performance and Analysis

For the fiscal year ending March 31, 2024, the AXS Green Alpha ETF returned 3.86% vs the MSCI ACWI Investable Market Index return of 22.45%.

On a sector basis, Fund returns were most negatively impacted by Energy and Health Care. Within the Energy Sector, which was responsible for the great majority of underperformance, with the entire set of diversified renewable energy exposure delivering negative contributions. Of the 13 Sector names, representing 15.5% average portfolio weighting for the year, none had positive share price performance, despite many exhibiting very positive business results. Overall, renewables, including portfolio constituents from wind turbine manufacture, solar PV manufacture, battery storage, advanced materials and grids, continued to gain market share away from legacy energy systems, and the trend could clearly be seen to be accelerating. In light of this, it seems improbable to us that narrative-driven negative market sentiment towards the renewables industry can endure indefinitely; on the contrary, we expect appropriate growth-like valuations to be awarded to these companies and their results continue to impress.

Health Care was affected by losses in biotech, with 13 of the 15 positions down for the year (Crispr Therapeutics AG and Arcturus Therapeutics Holdings Inc were the two that were up for the year) as persistently high inflation and interest rates kept markets nervous about growth names over the period. As with Energy, this selling pressure was not driven by intrinsic company news or results; these names are among the leaders and top intellectual property holders in transformative medicine.

The Fund benefited most from investments in the Technology and Real Estate Sectors.

Within Technology, the semiconductor value chain contributed the most to returns, including gains from front-end capital equipment makers, chip designers, and foundry manufacturing. Catalysts for Semis in the period included growing recognition of the importance of semis to the global economy, notably AI and the need for a proliferation of advanced data centers and multiple announcements related to expansion of global production capacity, particularly from Taiwan Semiconductor Manufacturing and Samsung, although only the former is a holding. Gains were also provided by exposure to IBM, which is an innovation powerhouse across AI, digital security, blockchain software and applications, supercomputing, and quantum computing R&D.

From the Real Estate Sector, returns were derived from data center REITs (see Technology, above), and also from select office REITs as the remote work narrative was tempered by return-to-office and hybrid work trends, and as expectations for moderating interest rates contributed to optimism for the industry. In descending order, the top REIT contributors by name were SL Green Realty Corp (a sustainable office leader), Digital Realty Trust (a global leader in data centers), Vornado Realty Trust, Equinix (data centers), and Boston Properties. We will continue to maintain significant exposure in the portfolio to leading real estate owners and operators, as these companies are often first to rally in a plateauing or declining interest rate environment.

At the portfolio level overall, in descending order, the top contributors by name were Applied Materials Inc, Lam Research Corp, Taiwan Semiconductor Manufacturing, Crispr Therapeutics AG, and IBM. The biggest detractors from performance were Pacific Biosciences of California Inc, TPI Composites Inc, Moderna Inc, JinkoSolar Holding Co., Ltd, and Maxeon Solar Technologies Ltd.

Green Alpha Investments in 2024 and Beyond

Green Alpha believes that by year-end 2024 markets are likely to enter a period where our approach has returned to favor. Plateauing and ultimately falling interest rate cycles are extremely positive for a significant portion the portfolio by weight: REITs, renewable energies, biotech (45.14% together, as of March 31, 2024), and accelerating innovation in general. Given this exposure set, we’d argue that our relative underperformance in the trailing year was well moderated by our careful stock selection process, and that when growth returns to favor the strategy is very well positioned. Global slowing will cause interest rate easing, not just the end of tightening, because slowing will cause deflation and also a slowing in hiring.

For 2024, Green Alpha is evaluating economic conditions based on, first, clear evidence that innovation (in select areas) is increasing both economic productivity and environmental sustainability, and second, the sober awareness that the world is in many ways still failing to affect energy and sustainability transitions rapidly enough to prevent irreversible, deleterious outcomes. Within those dynamics and our thesis, we look for opportunities to invest for long-term growth and maximum impact.

Stocks benefiting from multiple tailwinds, and trading at what are now very inexpensive valuations, will continue to be our focus, even though—and even because—this does not correlate with the present environment of short-term market volatility exploitation. The time horizon mismatch between our investment approach and the markets’ is ultimately beneficial: we are simultaneously disappointed in a year of underperformance and excited by the opportunity to invest in compelling Next Economy companies at steep discounts, relative to the future results we expect from them.

Sincerely,

The views in this letter were as of March 31, 2024, and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund’s investment methodology and do not constitute investment advice.

During the fiscal year ending March 31, 2024, WUGI returned 56.53% (NAV) and delivered an annualized return of 24.72% since inception. The fund is benchmark agnostic but outperformed the broad equity market S&P 500 Index (29.88%) and the growth-focused Nasdaq 100 Index (39.65%) during the year.

As of March 31, 2024, the semiconductor exposure accounted for 39.0% of the Fund’s total net assets, contributing 43.28% of the total gain during the fiscal year. Being the second-largest dollar allocation in the Fund, the software’s contribution to the performance continued to be underwhelming (12.72%). Internet companies weighed 15.82% of the Fund but only contributed 3.72% of the total return. Auto Manufacturers accounted for 3.9% of the Fund’s total net assets with a -0.49% contribution. 

Within the equity exposure, we continued to be positioned toward the large-cap, high-quality growth companies that we believe could weather the market volatilities relatively better. We continue to position the Fund to capture the investment opportunities presented by LLM/GPT as well as broader digital transformation. We anticipate a stable performance of growth technologies equities after a great fiscal year while recognizing that the macro headwinds could be persistent. Having a reasonable amount allocation to cash leaves the fund great flexibility to navigate the macro uncertainty in the near term.

Signature:

Date:

05/7/2024

The views in this letter were as of March 31, 2024 and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the fund’s investment methodology and do not constitute investment advice.

AXS Astoria Inflation Sensitive ETF

ETF PERFORMANCE at March 31, 2024 (Unaudited)

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the AXS Astoria Blended Benchmark Index, Bloomberg Commodity Total Return Index, Bloomberg U.S. TIPS 1-3 Year Index, and MSCI ACWI Index. Results include the reinvestment of all dividends and capital gains.

The AXS Astoria Blended Benchmark Index is composed of 70% MSCI ACWI Index, 20% Bloomberg Commodity Total Return Index, and 10% Bloomberg U.S. TIPS 1-3 Year Index. The Bloomberg Commodity Total Return index is composed of futures contracts and reflects the returns on a fully collateralized investment in the BCOM. The Bloomberg U.S. TIPS 1-3 Year Index measures the performance of the US government bond market and includes public obligations of the U.S. Treasury with a maturity between 1 and up to (but not including) 3 years. The MSCI ACWI Index is a stock index designed to track broad global equity-market performance. The indexes do not reflect expenses, fees, or sales charge, which would lower performance. The indexes are unmanaged and are not available for investment.

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. The most recent month end performance may be obtained by calling (303) 623-2577.

The ETF’s shares are listed on an exchange. The price of the ETF’s shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

The expense ratio was 0.76% which was stated in the current prospectus dated July 31, 2023. For the ETF’s current one year expense ratios, please refer to the Financial Highlights section of this report.

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

AXS Change Finance ESG ETF

ETF PERFORMANCE at March 31, 2024 (Unaudited)

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the Change Finance U.S. Large Cap Fossil Fuel Free Index and S&P 500 Index. Results include the reinvestment of all dividends and capital gains.

The Change Finance U.S. Large Cap Fossil Fuel Free Index is the underlying index for CHGX, it measures the performance of an equal-weighted portfolio of approximately 100 large to mid-cap equity securities of U.S. listed companies that meet a diverse set of ESG standards. The S&P 500 Index is a broad unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. The indexes do not reflect expenses, fees, or sales charge, which would lower performance. The indexes are unmanaged and are not available for investment.

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. The most recent month end performance may be obtained by calling (303) 623-2577.

The ETF’s shares are listed on an exchange. The price of the ETF’s shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

The expense ratio was 0.49% which was stated in the current prospectus dated July 31, 2023. For the ETF’s current one year expense ratios, please refer to the Financial Highlights section of this report.

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

AXS Green Alpha ETF

ETF PERFORMANCE at March 31, 2024 (Unaudited)

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the MSCI ACWI IMI Index. Results include the reinvestment of all dividends and capital gains.

The MSCI ACWI IMI Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.  The index does not reflect expenses, fees, or sales charge, which would lower performance. The index is unmanaged and is not available for investment.

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. The most recent month end performance may be obtained by calling (303) 623-2577.

The ETF’s shares are listed on an exchange. The price of the ETF’s shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

The expense ratio was 1.00% which was stated in the current prospectus dated July 31, 2023. For the ETF’s current one year expense ratios, please refer to the Financial Highlights section of this report.

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

AXS Esoterica NextG Economy ETF

ETF PERFORMANCE at March 31, 2024 (Unaudited)

This graph compares a hypothetical $10,000 investment in the ETF, made at its inception, with a similar investment in the MSCI All Country World Index and S&P 500 Index. Results include the reinvestment of all dividends and capital gains.

The MSCI All Country World Index is a market-cap-weighted global equity index that tracks emerging and developed markets. It currently monitors nearly 3,000 large-and mid-cap stocks in 49 countries. The S&P 500 Index is a broad unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. The indexes do not reflect expenses, fees, or sales charge, which would lower performance. The indexes are unmanaged and are not available for investment.

The performance data quoted here represents past performance and past performance is not a guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. The most recent month end performance may be obtained by calling (303) 623-2577.

The ETF’s shares are listed on an exchange. The price of the ETF’s shares is based on market price, and because exchange-traded fund shares trade at market prices rather than net asset value, shares may trade at a price greater than net asset value (premium) or less than net asset value (discount).

Gross and net expense ratios were 1.23% and 0.75%, respectively, which were stated in the current prospectus dated July 31, 2023. For the ETF’s current one year expense ratios, please refer to the Financial Highlights section of this report. The ETF’s Advisor has contractually agreed to waive its fees and/or pay for operating expenses of the ETF to ensure that the total annual ETF’s operating expenses (excluding any taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses (as determined in accordance with SEC Form N-1A), expenses incurred in connection with any merger or reorganization, and extraordinary expenses such as litigation expenses) do not exceed 0.75% of the ETF’s average daily net assets. This agreement is in effect until December 16, 2024, and it may be terminated before that date only by the Trust’s Board of Trustees. In the absence of such waivers, the ETF’s returns would be lower.

AXS Esoterica NextG Economy ETF

ETF PERFORMANCE at March 31, 2024 (Unaudited) - Continued

Returns reflect the reinvestment of distributions made by the ETF, if any. The graph and the performance table shown do not reflect the deduction of taxes that a shareholder would pay on ETF distributions or the redemption of ETF shares.

AXS Astoria Inflation Sensitive ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2024

AXS Astoria Inflation Sensitive ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2024

AXS Astoria Inflation Sensitive ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2024

PLC – Public Limited Company

ETF – Exchange-Traded Fund

See accompanying Notes to Financial Statements.

AXS Astoria Inflation Sensitive ETF

SUMMARY OF INVESTMENTS

As of March 31, 2024

See accompanying Notes to Financial Statements.

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2024

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2024

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2024

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2024

AXS Change Finance ESG ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2024

PLC – Public Limited Company

See accompanying Notes to Financial Statements.

AXS Change Finance ESG ETF

SUMMARY OF INVESTMENTS

As of March 31, 2024

See accompanying Notes to Financial Statements.

AXS Green Alpha ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2024

AXS Green Alpha ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2024

AXS Green Alpha ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2024

ADR – American Depository Receipt

See accompanying Notes to Financial Statements.

AXS Green Alpha ETF

SUMMARY OF INVESTMENTS

As of March 31, 2024

See accompanying Notes to Financial Statements.

AXS Esoterica NextG Economy ETF

SCHEDULE OF INVESTMENTS

As of March 31, 2024

AXS Esoterica NextG Economy ETF

SCHEDULE OF INVESTMENTS - Continued

As of March 31, 2024

ADR – American Depository Receipt

ETF – Exchange-Traded Fund

See accompanying Notes to Financial Statements.

AXS Esoterica NextG Economy ETF

SUMMARY OF INVESTMENTS

As of March 31, 2024

See accompanying Notes to Financial Statements.

AXS Funds

STATEMENTS OF ASSETS AND LIABILITIES

As of March 31, 2024

See accompanying Notes to Financial Statements.

AXS Funds

STATEMENTS OF ASSETS AND LIABILITIES - Continued

As of March 31, 2024

See accompanying Notes to Financial Statements.

AXS Funds

STATEMENTS OF OPERATIONS

For the Year Ended March 31, 2024