NSI

National Security Emerging Markets index ETF

Inception Date
12/06/2023

Benchmark Index
MSCI Emerging Markets

Listing Exchange
Nasdaq

Management Fees
0.75%

Total Operating Expense
1.00%

NSI Intel

Wall Street's largest emerging markets indexes include national security threats and human rights violators. Our veteran owned company is doing something about it.

Fund Objective & Principal Strategy

The National Security Emerging Markets Index ETF (the "Fund") seeks to track the results, before fees and expenses, of the Alerian National Security Emerging Markets Index (the "Index"). The Index is subject to a National Security Governance (NSG) process that filters out companies that test positive for at least one of nine investment screens:

  1. Subject to U.S. Government sanctions
  2. Defense contractor in a country of concern
  3. Provider of sensitive dual-use items to a hostile military
  4. Participant in state-sponsored influence operations against the U.S. or its allies
  5. Strategic threat
  6. Cybersecurity threat
  7. Espionage threat
  8. Human rights violator
  9. Operator in disputed areas of the South China Sea or East China Sea
Fact Sheet

NSG Process

The National Security Governance Investing Process behind NSI is modeled on the U.S. Intelligence Cycle:

  • Professional Open Source Intelligence tools and methods
  • Intelligence Community Analytic Standards
  • Continual evaluation and feedback cycle

Why NSI?

NSI seeks to:

  • Invest in emerging markets without compromising U.S. national security and human rights interests
  • Deny capital to foreign companies that endanger American forces
  • Protect shareholder value by reducing geo-political risks associated with bad actors

NSI Intel

China CSSC Holdings

Critical Intelligence

  • Owns and operates shipyard where China’s new aircraft carriers are built
  • Parent China State Shipbuilding Corporation (CSSC) is a Chinese Military-Industrial Complex Company under U.S. sanctions
  • CSSC calls itself the “main force” in advancing Chinese naval power

Major Index Holders (as of 11.30.2023)

  • FTSE All-World Emerging (101270)
  • FTSE Custom Emerging Markets All Cap China A Inclusion Net Tax (FQEACRXX)
  • MSCI Emerging Markets (891800)
  • MSCI Emerging Markets IMI (MS664220)
  • S&P Emerging Markets BMI (SBBREM)
Sources

1. MarketScreener, “China CSSC Holdings Limited agreed to acquire in Jiangnan Shipyard Co., Ltd. from a group of shareholders for CNY 23.3 billion,” 4 April 2019.

2. U.S. Department of State, “Communist Chinese Military Companies Listed Under E.O. 13959 Have More Than 1,100 Subsidiaries,” 14 January 2021.
3. Center for Strategic & International Studies, “In the Shadow of Warships: How foreign companies help modernize China’s navy,” 2022.
4. U.S. Department of Treasury, Office of Foreign Asset Control, "Non-SDN Chinese Military-Industrial Complex Companies List," 16 December 2021.

AviChina Industry & Technology

Critical Intelligence

  • Provides aircraft, parts, and services for military and civilian use in China
  • Parent Aviation Industry Corporation of China (AVIC) is a Chinese Military-Industrial Complex Company under U.S. sanctions
  • AVIC produces next-generation military aircraft, like the J-31 “Gyrfalcon,” a stealth fighter reportedly modeled with stolen U.S. technology

Major Index Holders (as of 11.30.2023)

  • FTSE All-World Emerging (101270)
  • FTSE Custom Emerging Markets All Cap China A Inclusion Net Tax (FQEACRXX)
  • MSCI Emerging Markets (891800)
  • MSCI Emerging Markets IMI (MS664220)
  • S&P Emerging Markets BMI (SBBREM)
Sources

1. U.S. Department of State, “Communist Chinese Military Companies Listed Under E.O. 13959 Have More Than 1,100 Subsidiaries,” 14 January 2021.

2. U.S. Department of Treasury, Office of Foreign Asset Control, "Non-SDN Chinese Military-Industrial Complex Companies List," 16 December 2021.
3. Federal Register, "Addition of 'Military End User' (MEU) List to the Export Administration Regulations and Addition of Entities to the MEU List," Document No. 2020-28052, 23 December 2020.

AECC Aviation Power

NSI Company Report

  • Manufactures engines for Chinese military and civilian aircraft
  • Parent Aero Engine Corporation of China (AECC) is a Chinese Military-Industrial Complex Company under U.S. sanctions
  • AECC engines power next-generation aircraft, including the Chengdu J-20 “Mighty Dragon,” a stealth fighter reportedly designed with stolen U.S. technology

Major Index Holders (as of 11.30.2023)

  • FTSE All-World Emerging (101270)
  • FTSE Custom Emerging Markets All Cap China A Inclusion Net Tax (FQEACRXX)
  • MSCI Emerging Markets (891800)
  • MSCI Emerging Markets IMI (MS664220)
  • S&P Emerging Markets BMI (SBBREM)
Sources

1. U.S. Department of State, “Communist Chinese Military Companies Listed Under E.O. 13959 Have More Than 1,100 Subsidiaries,” 14 January 2021.

2. Federal Register, “Addition of ‘Military End User’ (MEU) List to the Export Administration Regulations and Addition of Entities to the MEU List,” Document No. 2020-28052, 23 December 2020.
3. Federal Register, "Executive Order 14032 of June, 2021," Document No. 2021-12019, 7 June 2021.
4. Brad Lendon, “China has upgraded its best stealth fighter jet with domestic-made engines,” CNN, 28 September 2021.
5. Bill Gertz, “NSA Details Chinese Cyber Theft of F-35, Military Secrets,” The Washington Free Beacon, 22 January 2015.

China National Nuclear Power

Critical Intelligence

  • Subsidiary of China’s main nuclear weapons builder
  • Parent China National Nuclear Corporation (CNNC) is a Chinese Military-Industrial Complex Company under U.S. sanctions.
  • CNNC provides oversight and nuclear fuel for China’s strategic nuclear forces

Major Index Holders (as of 11.30.2023)

  • FTSE All-World Emerging (101270)
  • FTSE Custom Emerging Markets All Cap China A Inclusion Net Tax (FQEACRXX)
  • MSCI Emerging Markets (891800)
  • MSCI Emerging Markets IMI (MS664220)
Sources

1. U.S. Department of State, “Communist Chinese Military Companies Listed Under E.O. 13959 Have More Than 1,100 Subsidiaries,” 14 January 2021.
2. U.S.-China Economic and Security Review Commission, “Hearing on China’s Nuclear Forces,” 10 June 2021
3. Nuclear Threat Initiative, “China Nuclear Facilities,” 15 July 2013.
4. International Atomic Energy Association, “Country Nuclear Power Profiles: China,” 2022.
5. “Ocean-going nuclear plants for South China Sea,” Asia Times, 21 March 2019.
6. U.S. Department of Treasury, Office of Foreign Asset Control, "Non-SDN Chinese Military-Industrial Complex Companies List," 16 December 2021.
7. U.S. Department of Defense, “DOD Releases List of People’s Republic of China (PRC) Military Companies in Accordance With Section 1260H of the National Defense Authorization Act for Fiscal Year 2021,” 5 October 2022.

Dongfeng Motor Group

Critical Intelligence

  • Supplies PLA with tactical vehicles, truck-mounted artillery systems, and other armored platforms
  • Put on Chinese Military Company Subsidiary list by U.S. Government
  • Dongfeng “Mengshi” next-generation vehicles used in sea-crossing exercises simulating a Taiwan landing

Major Index Holders (as of 11.30.2023)

  • FTSE All-World Emerging (101270)
  • FTSE Custom Emerging Markets All Cap China A Inclusion Net Tax (FQEACRXX)
  • MSCI Emerging Markets (891800)
  • MSCI Emerging Markets IMI (MS664220)
  • S&P Emerging Markets BMI (SBBREM)
Sources

1. U.S. Department of State, “Communist Chinese Military Companies Listed Under E.O. 13959 Have More Than 1,100 Subsidiaries,” 14 January 2021.

2. OE Data Integration Network, U.S. Army Training and Doctrine Command, “Dongfeng EQ2050 (Mengshi) Chinese 4x4 Light Utility Vehicle," 2024.
3. “PLA practices cross-sea troop transfport with large civilian ferry,” People’s Daily Online, 18 October 2021.
4. OE Data Integration Network, U.S. Army Training and Doctrine Command, “Dongfeng CTL-181A Chinese 6x6 Unmanned Aerial Vehicle (UAV) Launcher," 2024.
5. OE Data Integration Network, U.S. Army Training and Doctrine Command, “Dongfeng CSK-141 Chinese 4x4 Light Tactical Vehicle," 2024.

ZTE Corporation

Critical Intelligence

  • Designated “a national security threat” by Federal Communications Commission
  • Subsidiary of China Aerospace Science and Industry Corporation, a Chinese Military-Industrial Complex Company under U.S. sanctions
  • Pleaded guilty to conspiring to violate U.S. sanctions by illegally shipping sensitive communications technology to Iran

Major Index Holders (as of 11.30.2023)

  • FTSE All-World Emerging (101270)
  • FTSE Custom Emerging Markets All Cap China A Inclusion Net Tax (FQEACRXX)
  • MSCI Emerging Markets (891800)
  • MSCI Emerging Markets IMI (MS664220)
  • S&P Emerging Markets BMI (SBBREM)
Sources

1. Federal Communications Commission, “FCC Designates Huawei and ZTE as National Security Threats,” 30 June 2020.
2. U.S. Department of State, “Communist Chinese Military Companies Listed Under E.O. 13959 Have More Than 1,100 Subsidiaries,” 14 January 2021.
3. U.S. Department of Treasury, Office of Foreign Asset Control, "Non-SDN Chinese Military-Industrial Complex Companies List," 16 December 2021.
4. U.S. Department of Justice, “ZTE Corporation Pleads Guilty for Violating U.S. Sanctions by Sending U.S.-Origin Items to Iran,” 22 March 2017.

Hoshine Silicon Industry

Critical Intelligence

  • Sanctioned for accepting or utilizing forced labor in Xinjiang and for contributing to human rights abuses against ethnic minorities
  • Put on Uyghur Forced Labor Prevention Act (UFLPA) Entity List
  • Silica-based products subject to detention by U.S. Customs & Border Patrol over forced labor concerns

Major Index Holders (as of 11.30.2023)

  • FTSE All-World Emerging (101270)
  • FTSE Custom Emerging Markets All Cap China A Inclusion Net Tax (FQEACRXX)
  • MSCI Emerging Markets (891800)
  • MSCI Emerging Markets IMI (MS664220)
  • S&P Emerging Markets BMI (SBBREM)
Sources

1. Federal Register, "Notice on the Addition of Entities to the Uyghur Forced Labor Prevention Act Entity List," Document No. 2022-16754, 4 August 2022.

2. U.S. Customs and Border Protection, “The Department of Homeland Security Issues Withhold Release Order on Silica-Based Products Made by Forced Labor in Xinjiang,” 24 June 2021.
3. Federal Register, "Addition of Certain Entities to the Entity List," Document No. 2021-13395, 24 June 2021.

Zhejiang Dahua Technology

Critical Intelligence

  • Sanctioned for involvement in human rights violations and abuses in China’s campaign of repression against ethnic minorities
  • Federal Communications Commission banned Dahua surveillance equipment over national security risks
  • Reportedly uses ethnic-focused identification technology to alert police when Uyghurs are caught on camera

Major Index Holders (as of 11.30.2023)

  • FTSE All-World Emerging (101270)
  • FTSE Custom Emerging Markets All Cap China A Inclusion Net Tax (FQEACRXX)
  • MSCI Emerging Markets (891800)
  • MSCI Emerging Markets IMI (MS664220)
  • S&P Emerging Markets BMI (SBBREM)
Sources

1. Federal Register, “Addition of Certain Entities to the Entity List,” Document No. 2019-22210, 9 October 2019.
2. Johana Bhuiyan, “Major camera company can sort people by race, alert police when it spots Uighurs,” The Los Angeles Times, 9 February 2021.
3. Federal Register, “Protecting Against National Security Threats to the Communications Supply Chain Through the Equipment Authorization Program,” Document No. 2022-28263, 6 February 2023.
4. Federal Register, “Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification,” Document No. 2022-21658, 7 October 2022.

Nav & Market Price

(as of 03/27/2024)

NAV$26.42
NAV Change-0.02
Market Price$26.47
Market Price
Change
-0.01
Day's Trading
Volume
700 Shares
Median BID/ASK
Spread (30 day)
0.34% (as of 03/27/2024)
Premium Discount0.05%
Number of days atQ1 2024
(as of 03/27/2024)
Q4 2023
2023
Premium601515
Discount022

Performance Disclosure: The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. A fund's NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The market price is the most recent price at which the fund was traded. Past performance is no guarantee of future results. For performance data current to the most recent month end, please call toll-free 833-906-5569.

Performance

(as of 03/27/2024)

Name1MO3MOYTD1YR3YR5YR10YRSince InceptionInception Date
National Security Emerging Markets Index ETF12/06/2023
NAV (%)0.191.340.966.04
Market Price (%)0.151.301.076.24
MSCI EM (EMERGING MARKETS) Net (USD) (%)1.173.101.7010.44-5.032.373.086.9812/29/2000
Name1MO3MO1YR3YR5YR10YRSince InceptionInception Date
National Security Emerging Markets Index ETF
NAV (%)5.04
Market Price (%)5.12
MSCI EM (EMERGING MARKETS) Net (USD) (%)

Past performance is no guarantee of future results.

Top 10 Holdings

(as of 03/27/2024)

TickerNameMarket Value ($)Shares% Net Assets
TSMTAIWAN SEMIC-ADR543342.7539758.22
SMSN LISAMSUN-GDR REG S334825.002275.07
BBH SWEEP VEHICLE324684.553246854.92
PDDPDD HOLDINGS INC320815.0027504.86
HDBHDFC BANK-ADR239295.0043003.62
RIGD LIRELIANC-GDR 144A168246.0023402.55
IBNICICI BANK-ADR142835.0055002.16
CHTCHUNGHWA TEL-ADR128805.7532751.95
INFYINFOSYS LTD-ADR123195.7569251.86
MELIMERCADOLIBRE INC114198.75751.73

Download All Holdings



Portfolio Breakdown

(as of 03/27/2024)

Sectors% Net Assets
TECHNOLOGY20.91
FINANCIALS19.97
CONSUMER DISCRETIONARY14.44
COMMUNICATIONS12.89
MATERIALS6.99
ENERGY5.91
BANKS SAVINGS-DEPOSIT ACCOUNT4.92
CONSUMER STAPLES4.44
INDUSTRIALS3.56
HEALTH CARE2.91
UTILITIES2.29
REAL ESTATE0.57
CURRENCY0.19
Country% Net Assets
US92.38
GB7.61

Contact Us

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540-755-7563

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