GlobalX Equity Income

Methodology

We manage this portfolio as five segments; Core & Dividend Growth, Covered Calls, High Dividend Yield, Preferreds and Sector Specific. Three of these five segments are predominantly focused on providing a good yield while the Core & Dividend Growth and Sector Specific portions of the portfolio are intended to round out the exposures, ensuring that the portfolio is not lacking exposure to any key sectors or segments of the market. Within each of the five segments that the portfolio provides exposure to, we do a semiannual due diligence process on all the ETFs that could provide that exposure. This is done to ensure that we remain satisfied with the exposures that we currently have in the portfolio. Additionally, whenever new positions are added to the portfolio, they first go through our due diligence process. This is used to ensure that the ETF provides the desired exposure, is affordable and has good liquidity. There are no specific cut offs for the different metrics that we look at, as they are all relative to their peer group. Once we have selected the exposures for the Core & Dividend Growth, Covered Calls, High Dividend Yield and Preferreds segments, we assess what exposures we are lacking or only have minimal exposure to. While doing this, we also think about where we only have downside potential due to the Cover Call exposure. It is during this process of adding back sector exposures that we strive to round out the exposures in order to reduce the sector skews within the portfolio (to the extent possible) so that these skews do not detract from the portfolios performance during periods of market performance dominated by specific sectors or growthier factors. This sector diversity is especially important during periods where high yielding strategies are out of favor.