Executive SummaryThe ETFMG Prime Mobile Payments ETF (IPAY) returned -0.62% for the quarter ended September 30, 2019, which was in line with its benchmark index. The mobile payments theme was muted primarily due to weak returns in the Financial Services and Industrials sectors. These weak returns were partially offset by the Information Technology Sector having positive performance. The Prime Mobile

Payments Index is heavily weighted to the Information Technology which was up +0.4% for the quarter. The positive return contribution was offset by the Financials sector (-8.1%), and Industrials sector (-13.8%).

The mobile payments theme continues to have positive momentum. eMarketer.com recently forecasted that the number of proximity mobile payment users in the US will exceed 61 million this year, up 12% over the prior year.

QUARTERLY COMMENTARY2019 Q3

02

COMMENTARY

According to data from Vibes, a mobile wallet customer loyalty platform, 28% of smartphone owners said they were currently using a mobile wallet, an increase from 22% in 2018. Also, 20% of non-users expressed an interest in mobile wallets. The number one issue that may be holding back users from adopting mobile wallets is security concerns, at 65% of respondents.

EXECUTIVE SUMMARY (CONTINUED)

Fund PerformanceThe ETFMG Prime Mobile Payments ETF (IPAY) returned -0.62% for the quarter ended September 30, 2019, which was in line with its benchmark index. The mobile payments theme was muted primarily due to weak returns in the Financial Services and Industrials sectors. These weak returns were partially offset by the Information Technology Sector having positive performance. The Prime Mobile Payments Index is heavily weighted to the Information Technology which was up +0.4% for the quarter. The positive return contribution was offset by the Financials sector (-8.1%), and Industrials sector (-13.8%).

SECTOR CONTRIBUTORS AVG. WEIGHT (%) TOTAL RETURN (%) SECTOR CONTRIBUTION (%)

Financials 10.96 -8.13 -0.89

Industrials 0.47 -13.78 -0.06

Information Technology 88.11 0.39 0.34

Not Classified 0.45 -1.01 0.00

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COMMENTARY

FUND PERFORMANCE (CONTINUED)

At the security level, IPAY had a mixed quarter. First Data Corp (FDC, +17.1%) and Fiserv Inc. (FISV, +13.6%) were two of the best performers benefiting from a merger on 7/29 Pagseguro Digital (PAGS, +18.8%) and Worldpay, Inc. (WP, +10.2%) also contributed positively for the quarter. Companies that detracted from performance in Q3 included Adyen NV (ADYEN, -14.5%), Paypal Holdings, Inc (PYPL, -8.7%), and Green Dot Corp (GDOT, -49.4%).

TOP 10 POSITIVE CONTRIBUTORS AVG. WEIGHT (%) TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)

FIRST DATA CORP- CLASS A 1.08 17.07 0.58

FISERV INC 8.27 13.64 0.50

PAGSEGURO DIGITAL LTD-CL A 3.13 18.84 0.50

WORLDPAY INC-CLASS A 1.54 10.16 0.45

WESTERN UNION CO 2.25 19.05 0.40

CIELO SA 2.02 19.67 0.39

STONECO LTD-A 2.50 17.58 0.35

MASTERCARD INC - A 5.92 2.79 0.23

INGENICO GROUP 2.09 10.18 0.22

DISCOVER FINANCIAL SERVICES 3.51 6.82 0.22

TOP 10 NEGATIVE CONTRIBUTORS AVG. WEIGHT (%) TOTAL RETURN (%)CONTRIBUTION TO RETURN (%)

ACI WORLDWIDE INC 1.71 -6.92 -0.13

AMERICAN EXPRESS CO 5.63 -2.29 -0.13

I3 VERTICALS INC-CLASS A 0.41 -31.78 -0.16

EVO PAYMENTS INC-CLASS A 1.64 -11.09 -0.21

EURONET WORLDWIDE INC 2.05 -13.00 -0.29

WORLDLINE SA 2.44 -14.58 -0.40

SQUARE INC - A 3.54 -11.78 -0.42

ADYEN NV 3.01 -14.49 -0.49

PAYPAL HOLDINGS INC 5.34 -8.67 -0.49

GREEN DOT CORP-CLASS A 1.34 -49.40 -0.91

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COMMENTARY

FUND PERFORMANCE (CONTINUED)

In terms of fundamental factor returns, factors contributing positively were the portfolio’s exposure to the to the US Consumer Finance Sector as well as the overall markets. Having a small cap bias in the portfolio detracted slightly from return.

TOP 6 FACTOR CONTRIBUTORS

ACTIVE EXPOSURE

FACTOR RETURN

FACTOR CONTRIBUTION

NorthAm:US Market 0.83 1.08 0.82

WestrnEurp:EU Market 0.11 2.18 0.21

Style:US Leverage 0.1 0.68 0.17

Style:US Volatility -0.05 -1.98 0.16

Style:EU TradeAct 0.11 1.23 0.15

AsiaPac-Dev:JP Marke 0.03 4.65 0.12

BOTTOM 6 FACTOR CONTRIBUTORS

ACTIVE EXPOSURE

FACTOR RETURN

FACTOR CONTRIBUTION

Industry:US ConsFinc 0.77 -1.23 -1.15

Style:US Momentum 0.46 -0.82 -0.6

Currency:EUR 0.11 -4.85 -0.52

Style:US Size -0.68 0.77 -0.51

Style:US TradeAct 0.23 -1.76 -0.39

Style:LA Momentum -0.05 2.31 -0.16

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COMMENTARY

FUND PERFORMANCE (CONTINUED)

Drilling down to look at the impact of style factors in Q3, IPAY was helped last quarter by its underweight to Value and overweight Profitability and Financial Leverage, The portfolio was negatively affected, having a positive exposure to momentum and a negative exposure (small cap) to size.

STYLE RETURN CONTRIBUTION

Momentum -0.88

Value 0.17

Dividend Yield -0.13

Size -0.58

Trading Activity -0.24

Earnings Variability -0.13

Profitability 0.14

Volatility 0.14

Growth -0.06

Leverage 0.19

Total Return: Q3 2019

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COMMENTARY

CUMULATIVE ANNUALIZED

1 MONTH 3 MONTH YTD SINCE INCEP. 1 YEAR 3 YEARS 5 YEARS 10 YEARS SINCE INCEP.

MARKET PRICE -3.32% -0.62% 33.36% 88.69% 9.35% 23.21% 16.27%

NAV -3.39% -0.63% 33.06% 88.70% 9.49% 23.46% 16.28%

PMOBILE INDEX -3.40% -0.52% 33.73% 93.51% 10.20% 24.24% 16.97%

Performanceas of 9/30/19

Performance data quoted represents past performance and does not guarantee future results. The 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 of the Funds may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477), or by visiting www.etfmg.com/IPAY. Performance is annualized for periods greater than 1 year.

Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477), or by visiting www.etfmg.com/IPAY. Read the prospectus carefully before investing.

Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility. Mobile Payment Companies face intense competition, both domestically and internationally, and are subject to increasing regulatory constraints, particularly with respect to fees, competition and anti-trust matters, cybersecurity and privacy. Mobile Payment Companies may be highly dependent on their ability to enter into agreements with merchants and other third parties to utilize a particular payment method, system, software or service, and such agreements may be subject to increased regulatory scrutiny. Additionally, certain Mobile Payment Companies have recently faced increased costs related to class-action litigation challenging such agreements. Such factors may adversely affect the profitability and value of such companies. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Investments in smaller companies tend to have limited liquidity and greater price volatility than large-capitalization companies. The Fund’s return may not match or achieve a high degree of correlation with the return of the Prime Mobile Payments Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Index. Diversification does not guarantee a profit, nor does it protect against a loss in a declining market.

The Prime Mobile Payments Index (PMOBILE) is designed to provide a benchmark for investors interested in tracking the mobile and electronic payments industry. The stocks are screened for liquidity and weighted according to a modified linear-based capitalization-weighted methodology. The Index generally is comprised of 25–40 securities. An investment cannot be made directly in an index.

ETF Managers Group LLC is the investment adviser to the Fund.

The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG Financial LLC is not affiliated with Prime Indexes.

The Fund’s benchmark before 8/1/17 was the ISE Mobile Payments Index. On 8/1/17, the Fund’s benchmark became the Prime Mobile Payments Index.

Fund Inception: 7/15/15 Expense Ratio: 0.75%

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COMMENTARY

STYLE FACTOR DESCRIPTION DATA USED

MomentumSeparates stocks that have outperformed over the past year and those that have underperformed.

Cumulative return over one year (averaged), skipping the most recent two weeks

ValueA composite metric that differentiates “rich” and “cheap” stocks. Bloomberg combines fundamental and analyst consensus data to calculate this factor.

Book to Price, Earnings to Price, Cash Flow to Price, Sales/EV, EBITDA/EV, Forecast Earnings to Price,

Dividend Yield

Most recently announced net dividend (annualized) divided by the current market price

Most recently announced net dividend (annualized) divided by the current market price

SizeA composite metric distinguishing between large and small stocks.

Market Capitalization, Sales, Total Assets

Trading Activity

A turnover based measure. Bloomberg focuses on turnover which is trading volume normalized by shares outstanding. This indirectly controls for the Size effect.

The exponential weighted average (EWMA) of the ratio of shares traded to shares outstanding

Earnings Variability

Gauges how consistent earnings, cash flows, and sales have been in recent years.

Earnings Volatility to Total Assets, Cash Flow Volatility to Total Assets, Sales Volatility to Total Assets

ProfitabilityStudies firms’ profit margins to differentiate between money makers and money losers.

Return on Equity, Return on Assets, Return on Capital Employed, EBITDA Margin

VolatilityDifferentiates more volatile stocks and less volatile ones by quantifying “volatile” from several different angles.

Rolling Volatility, Rolling CAPM Beta, Historical Sigma, Cumulative Range

GrowthAims to capture the difference between high and low growers by using historical fundamental and forward-looking analyst data.

Total Asset Growth, Sales Growth, Earnings Growth, Forecast of Earnings Growth, Forecast of Sales Growth

LeverageA composite metric to gauge a firm’s level of leverage.

Book Leverage, Market Leverage, Debt to Total Assets

Definitions