The Fund is an actively managed exchange-traded fund (“ETF”) that seeks current income. In particular, the Fund seeks a 4% target annual income level (the “Annual 4% Target”). This target reflects the distribution of income generated from dividends, interest, and other earnings, such as those from real estate or derivatives, and excludes capital gains from asset sales. It represents the anticipated recurring income produced by the Fund’s underlying assets.

FIRE Philosophy

The FIRE (Financial Independence, Retire Early) movement encourages individuals to achieve financial independence by aggressively saving and investing, often with the goal of retiring early. Participants typically aim to reduce expenses and accumulate substantial wealth through a combination of disciplined saving, investing in growth-oriented assets, and maximizing returns over time. The movement promotes a long-term approach to financial freedom, allowing individuals to retire or pursue other life goals at an earlier stage than traditional retirement timelines.

The FIRE Retirement (Distribution) phase shifts the focus from wealth accumulation to generating a steady income while preserving capital. The FIRE Funds™ Income Target ETF is designed to seek to provide consistent income without anticipating ongoing withdrawals or returning capital to investors. The Fund seeks to achieve the Annual 4% Target, in line with the “4% Retirement Rule,” which suggests a sustainable income level for retirees. However, unlike traditional retirement strategies, the Fund aims to provide income through investment returns without requiring investors to withdraw from their principal or deplete their capital over time.

Strategy Overview

As a “fund of funds,” it invests its assets in shares of other ETFs. The Fund primarily invests in affiliated ETFs managed by Tidal Investments LLC (the “Adviser”), but it may also invest in unaffiliated ETFs (collectively, “Underlying ETFs”). The Fund will not invest in ETFs that are also structured as fund-of-funds or in ETFs that invest more than 10 percent of their assets in other investment companies and private funds.

The Adviser employs a barbell approach in implementing the Fund’s investment strategy, balancing two key components:

The Adviser seeks to optimize the balance between risk and return by allocating the Fund’s portfolio between two primary components: high-yielding assets, which generate income, and cash equivalents, which focus on capital preservation and liquidity for tactical opportunities. The allocation to each component is flexible, with high-yielding assets comprising 30% to 70% of the Fund’s portfolio and cash equivalents making up the remaining 30% to 70%. This range allows the Adviser to adjust allocations based on market conditions and investment opportunities.

The Adviser selects the Underlying ETFs for each asset class using a rigorous qualitative and quantitative evaluation process. This process considers factors such as active share (the percentage of an Underlying ETF’s holdings that differs from its benchmark index), active management process (for actively managed ETFs, the approach and strategies used by the Underlying ETF’s portfolio managers to seek to achieve the ETF’s investment objective), index methodology (for passively managed ETFs, the rules and criteria used to construct the index that the ETF tracks), and tax impacts (effects on after-tax returns). For higher-yielding assets, the Adviser evaluates the Underlying ETFs based on price-to-earnings ratios (valuation measure), sales (revenue figures), return on equity (profitability measure), yield (income return), and credit quality (creditworthiness of issuers) to optimize the construction of the basket’s portfolio. For cash equivalents, the Adviser focuses on the following metrics: yield, duration (sensitivity to interest rate changes), credit quality, volatility and drawdown risk (potential for a significant decline in value), and expense ratios.

The Adviser will primarily select affiliated ETFs. It will select unaffiliated ETFs if it determines that there is not an appropriate affiliated ETF in which to invest the Fund’s assets.

On daily basis, the Adviser evaluates each of the Underlying ETFs, considering their income profiles, investment philosophy, and performance consistency.

The Underlying ETFs strategies are not limited to traditional long-only investing. Rather, Underlying ETFs may take long and short positions in a wide range of securities, derivatives and other instruments. These more sophisticated and dynamic methods may improve the Fund’s risk-adjusted performance and provide additional protection during volatile markets.

4% Annual Target Considerations

The Adviser continuously monitors the projected yield of the Fund’s portfolio in relation to its Annual 4% Target. If the Fund’s projected yield falls below 4%, the portfolio managers may adjust the Fund’s allocation by increasing its exposure to higher-yielding assets or replacing certain Underlying ETFs with others that offer better income potential. Conversely, if the Fund’s projected yield significantly exceeds 4%, the portfolio managers may reduce its exposure to higher-yielding assets and increase the Fund’s allocations to cash equivalents or other lower-risk positions to manage risk while maintaining the target income level.

For example, if the income generated by current Underlying ETF holdings falls below the target, the Fund may sell those ETFs and purchase higher-yielding Underlying ETFs. If the Fund’s income exceeds the target, the Fund may reduce its high-yielding ETFs and increase its cash equivalent ETFs to preserve stability.

Portfolio Construction

The Fund will typically hold between 10 and 25 Underlying ETFs. The Fund may invest in both actively managed and passively managed Underlying ETFs.

The Fund’s portfolio is reallocated to seek to achieve the minimum target yield on a monthly basis. The Fund will distribute income on a monthly basis.

Under normal circumstances, the Fund will invest at least 80% of its net assets, plus borrowings for investment purposes, in Underlying ETFs that generate income.

The Fund is classified as “non-diversified” under the 1940 Act, which means that it may invest a greater percentage of its assets in the securities of a single issuer or a smaller number of issuers than if it was a diversified fund.

Underlying ETF Exposures

In pursuing the Fund’s investment objective across the two components, the Fund may invest in Underlying ETFs that invest in a range of securities and financial instruments and that are managed using various strategies. The Underlying ETF may invest in derivative instruments, take short positions, and use leverage, each of which carries its own risks. In addition to more traditional Underlying ETFs that invest in portfolios of stocks or bonds, the Fund may invest in: