The following table describes the fees and expenses you may pay if you buy and hold HealthShares™ shares in the fund for both Domestic and International. Transaction costs incurred by the fund for buying and selling securities are not reflected in the table. Operating expenses are expressed as a percentage of average daily net assets and are based upon estimated amounts for the current fiscal year.
Fees and Expenses for Domestic HealthShares ETFs
(fees paid directly from your investment)
| Sales Charge (Load) Imposed on Purchases: | None |
| Transaction Fee on Purchases and Redemptions: | Varies1 |
| Annual fund operating expenses (expenses deducted from the Fund's assets) |
|
| Advisory Fee:2 | 0.75% |
| 12b-1 Distribution Fee:3 | 0.25% |
| Other Expenses:4 | 0.09% |
| TOTAL ANNUAL FUND OPERATING EXPENSES: | 1.09% |
| Less: Expense Reduction/Reimbursement | (.34)% |
| NET ANNUAL FUND OPERATING EXPENSES: | 0.75% |
1 An investor purchasing or redeeming Creation Units of the Fund will pay to the Fund a transaction fee of $500, plus an additional fee of up to $2,500if the investor does not create or redeem through the NSCC (for a total of up to $3,000). An investor buying or selling the Fund in the secondary market will pay a commission to his broker in an amount established by the broker. Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above.
2 The Fund pays the Advisor a single, unified management fee for arranging for certain non-distribution related services necessary for the Fund to operate. For more information about the unified management fee, see "Investment Advisor" under "Fund Management".
3 The Fund has adopted a Distribution and Service (12b-1) Plan pursuant to which payments of up to .25% of average daily net assets may be made by the Fund. The Board of Directors of the Fund has determined that no such payments will be made for the twelve month period following commencement of operations.
4 "Other Expenses" are based on estimated amounts for the current fiscal year.
The fund sells and redeems HealthShares™ only in Creation Units and principally on an in-kind basis for portfolio securities of the Underlying Index. HEALTHSHARES™ IN LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. The following example is intended to help retail investors compare the cost of investing in the fund with the cost of investing in other funds. It illustrates the hypothetical expenses that such investors would incur over various periods if they invest $10,000 in the fund. The example assumes that the Fund provides a return of 5% a year and that operating expenses remain the same. This example does not include the brokerage commissions that retail investors will pay to buy and sell HealthShares™. It also does not include the transaction fees on purchases and redemptions of Creation Units because these fees will not be imposed on retail investors.
| 1 YEAR | $115 |
| 3 YEARS | $366 |
These examples should not be considered representative of actual expenses or past/future performance. Actual future expenses may be higher or lower than those shown.
CREATION UNIT TRANSACTIONS FEES AND REDEMPTION TRANSACTION FEES
The fund issues and redeems shares at NAV and only in Creation Unit blocks of 100,000. As a practical matter, only institutions or large investors purchase or redeem Creation Units. A standard Creation Unit transaction fee of $500 is charged for each purchase of Creation Units, regardless of the number of Creation Unit shares acquired. An investor redeeming Creation Unit shares will be charged a standard redemption transaction fee of $500, regardless of the number of Creation Unit shares redeemed.2 The value of a Creation Unit of the fund, as of the date of this prospectus, was approximately $2,500,000. Investors holding Creation Units will also pay the Annual Fund Operating Expenses described in the table above. Assuming an investment in a Creation Unit of $2,500,000, a 5% return, and assuming that the fund's operating expenses remain the same and the Creation Units are redeemed at the end of each period, a purchaser of will incur the following costs:
| 1 YEAR | $28,844 |
| 3 YEARS | $91,392 |
Fees and Expenses for International HealthShares ETFs
| Sales Charge (Load) Imposed on Purchases: | None |
| Transaction Fee on Purchases and Redemptions: | Varies1 |
| Annual fund operating expenses (expenses deducted from the Fund's assets) |
|
| Advisory Fee:2 | 0.95% |
| 12b-1 Distribution Fee:3 | 0.25% |
| Other Expenses:4 | 0.09% |
| TOTAL ANNUAL FUND OPERATING EXPENSES: | 1.29% |
| Less: Expense Reduction/Reimbursement | (.34)% |
| NET ANNUAL FUND OPERATING EXPENSES: | 0.95% |
1 An investor purchasing or redeeming Creation Units of the Fund will pay to the Fund a transaction fee of $500, plus an additional fee of up to $2,500 if the investor does not create or redeem through the NSCC (for a total of up to $3,000). An investor buying or selling the Fund in the secondary market will pay a commission to his broker in an amount established by the broker. Investors who hold Creation Units will also pay the annual fund operating expenses described in the table above.
2 The Fund pays the Advisor a single, unified management fee for arranging for certain non-distribution related services necessary for the Fund to operate. For more information about the unified management fee, see "Investment Advisor" under "Fund Management".
3 The Fund has adopted a Distribution and Service (12b-1) Plan pursuant to which payments of up to .25% of average daily net assets may be made by the Fund. The Board of Directors of the Fund has determined that no such payments will be made for the twelve month period following commencement of operations.
4 "Other Expenses" are based on estimated amounts for the current fiscal year.
5 The Advisor has contractually agreed to reduce its fees and/or pay Fund expenses (excluding interest, taxes and extraordinary expenses) in order to limit Net Annual Operating Expenses for shares of the Fund to 0.95% of the Fund's average net assets (the "Expense Cap"). The Expense Cap will remain in effect until at least September 30, 2007. The Advisor is permitted to be reimbursed for fee reductions and/or expense payments made in the prior three fiscal years. This reimbursement may be requested by the Advisor if the aggregate amount actually paid by the Fund toward operating expenses for such fiscal year (taking into account the reimbursement) does not exceed the Expense Cap.
The Fund sells and redeems HealthShares™ only in Creation Units and principally on an in-kind basis for portfolio securities of the Underlying Index. HEALTHSHARES™ IN LESS THAN CREATION UNIT AGGREGATIONS ARE NOT REDEEMABLE. The following example is intended to help retail investors compare the cost of investing in the Fund with the cost of investing in other funds. It illustrates the hypothetical expenses that such investors would incur over various periods if they invest $10,000 in the Fund. The example assumes that the Fund provides a return of 5% a year and that operating expenses remain the same. This example does not include the brokerage commissions that retail investors will pay to buy and sell HealthShares™. It also does not include the transaction fees on purchases and redemptions of Creation Units, because these fees will not be imposed on retail investors.
| 1 YEAR | $115 |
| 3 YEARS | $366 |
These examples should not be considered to represent actual expenses or performance from the past or for the future. Actual future expenses may be higher or lower than those shown.
CREATION UNIT TRANSACTIONS FEES AND REDEMPTION TRANSACTION FEES
The Fund issues and redeems shares at NAV and only in Creation Unit blocks of 100,000. As a practical matter, only institutions or large investors purchase or redeem Creation Units. A standard Creation Unit transaction fee of $500 is charged for each purchase of Creation Units, regardless of the number of Creation Unit shares acquired. An investor redeeming Creation Unit shares will be charged a standard redemption transaction fee of $500, regardless of the number of Creation Unit shares redeemed.* The value of a Creation Unit of the Fund, as of the date of this Prospectus, was approximately $2,500,000. Investors holding Creation Units will also pay the Annual Fund Operating Expenses described in the table above. Assuming an investment in a Creation Unit of $2,500,000, a 5% return, and assuming that the Fund's operating expenses remain the same and the Creation Units are redeemed at the end of each period, a purchaser of Creation Units will incur the following costs:
| 1 YEAR | $28,844 |
| 3 YEARS | $91,392 |
* If a Creation Unit is purchased or redeemed outside of usual process through the NSCC or for cash an additional variable fee of up to five times the standard creation or redemption transaction fee will be charged.