FLAG

1. Summary

• FLAG is a passive index ETF. It tracks the S&P 500® U.S. Revenue Market Leaders 50 Index: the top 50 S&P 500 companies that earn at least 50% of revenue in the U.S., ranked by a quality score.
• It is long only. None of the three fund documents describes short sales, swaps, leverage or a market-neutral aim. The July 31, 2026 N-PORT schedule shows 99.9% of net assets in 50 common stocks and nothing else, so it runs at 1.00x gross (my arithmetic).
• It does not short. No prime broker, swap counterparty or short financing is named.
• Most relevant for us: FLAG is not a long/short fund, so it gives no precedent for 150/150. Its place on the peers list should be checked. It is also very small ($1.63 million on September 30, 2026), with one holder owning 83.67% of shares in February 2026.

2. Key facts

Other trading data: Bloomberg IOPV ticker FLAGIV; index ticker SPXLT5UT (FLAG-FS, page 1, "Trading Details").

3. Service providers

4. Strategy

• Objective and benchmark. The fund "seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 500® U.S. Revenue Market Leaders 50 Index" (FLAG-PR, page 168, "Investment Objective"). The underlying index is the benchmark on the fact sheet (FLAG-FS, page 1, "Performance (%)").
• Universe. S&P 500 companies that "generate at least 50% of their revenues from the United States," excluding the GICS Real Estate sector (FLAG-PR, page 168, "Principal Investment Strategies"). U.S. large caps (my inference from the S&P 500 universe).
• How it picks stocks. The index provider, S&P Dow Jones Indices, picks them, not the adviser. It ranks companies by a "Market Leader Score." The score averages z-scores (how far a value sits from the group average, in standard deviations) of three measures: five-year average free cash flow margin, five-year average return on invested capital, and a "Market Share Score." It selects the top 50 (FLAG-PR, pages 168 and 169). So stock selection is quantitative and rules-based (my inference). The fund "generally will use a replication strategy," meaning it holds the index stocks in about the index weights (FLAG-PR, page 169).
• Neutrality targets. None. The fund "does not seek temporary defensive positions when markets decline" (FLAG-PR, page 169).
• Net exposure. No target stated. The fund "invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes (if any), in the securities of the Underlying Index" (FLAG-PR, page 168).
• Limits on position size. "At each rebalance, the maximum weight of a company is capped at 4.5%." The index is reweighted semi-annually (FLAG-PR, page 169). The fund is non-diversified and concentrates in an industry to the same extent as the index. At December 31, 2025 the index "had significant exposure to the health care sector" (FLAG-PR, pages 169 and 170). On September 30, 2026, six holdings were above 4.5%, led by Microsoft at 5.81% (FLAG-FS, page 1, "Top 10 Holdings"). The cap applies only at rebalance, so weights drift between rebalances (my inference).

5. Exposure and leverage

• Measured exposure, July 31, 2026 (FLAG-NP, pages 1 to 3):
  • Common stock $1,695,374, which is 99.9% of net assets of $1,697,242 (FLAG-NP, page 3).
  • No derivatives, short positions or borrowings are listed.
  • So long 99.9%, short 0%, gross 1.00x and net 99.9% (my arithmetic).
• Fact sheet, September 30, 2026. The fact sheet doesn't state long, short, gross or net percentages (FLAG-FS, page 1):
  • 50 holdings, all long.
  • Top 10 holdings total 47.69% (my arithmetic).
  • Sector weights total 100.00% (my arithmetic). These are "based on equity positions held by the ETF and exclude cash" (FLAG-FS, page 1, "Sector Breakdown").
• Stated targets or limits. Only the 80% policy above (FLAG-PR, page 168). No short or gross target.
• How it gets exposure above 100%. It doesn't. No short sale proceeds, swaps, futures or borrowing are named as principal strategies (FLAG-PR, pages 168 and 169). Gross exposure was 1.00x on July 31, 2026 (FLAG-NP, page 3; my arithmetic).
• Borrowing limits. A fundamental policy says the funds "May not borrow money, except as permitted under the 1940 Act" (FLAG-SAI, page 35, "Investment Restrictions"). The SAI describes the 1940 Act limit as borrowing "in an amount not exceeding 33 1/3% of its total assets" (FLAG-SAI, page 57, "Current 1940 Act Limitations"). That equals 300% asset coverage (my inference). If coverage falls short, borrowings must be cut "within three days" (FLAG-SAI, page 36). No line of credit is named.

6. Shorting, financing and collateral

• How it shorts. It doesn't. No document describes FLAG selling short. The SAI mentions short sales only in its tax section (FLAG-SAI, pages 95 and 97, "Taxes"). The July 31, 2026 N-PORT lists no short positions (FLAG-NP, pages 1 to 3).
• Who lends the stock and who holds collateral. Not applicable, since no shorting is described (my inference). Fund assets sit with BBH as custodian (FLAG-SAI, page 77).
• What is posted as collateral. Nothing is described. With no short sales, swaps or futures in the July 31, 2026 N-PORT, there is nothing to post collateral for (my inference, from FLAG-NP, pages 1 to 3).
• Short sale proceeds used to buy longs. Not applicable. There are no short sales.
• Segregated or tri-party account. Not stated for shorts. The SAI says that for futures, a fund "will segregate liquid assets or will otherwise cover its position" (FLAG-SAI, page 24, "Futures Contracts and Options on Futures Contracts").
• Securities lending. The board "has approved the participation of certain of the Funds in a securities lending program" (FLAG-SAI, page 77). FLAG is not named among the funds lent by MUFJ or BNY (FLAG-SAI, pages 77 and 78). So FLAG appears not to lend (my inference).
• Permitted only. Futures and options on futures (FLAG-SAI, page 24) and reverse repurchase agreements (FLAG-SAI, page 31) are described for the trust's funds in general. None is a principal strategy for FLAG.

7. Derivatives and Rule 18f-4

• Derivatives used. None named in FLAG's prospectus summary (FLAG-PR, pages 168 to 173). The SAI permits futures and options on futures for all funds. They "will be used to simulate full investment in the respective Underlying Index, to facilitate trading or to reduce transaction costs," and "A Fund will not use futures or options for speculative purposes" (FLAG-SAI, page 24). The July 31, 2026 N-PORT lists no derivatives (FLAG-NP, pages 1 to 3).
• Limited derivatives user or full program. Not stated for FLAG. The SAI gives only the general rule: above "a limited specified exposure amount," a fund must run a derivatives risk management program and "appoint a derivatives risk manager" (FLAG-SAI, page 24).
• VaR test and reference portfolio. Not stated. The SAI says derivatives use "is limited through a value-at risk or "VaR" test" (FLAG-SAI, page 24). VaR (value at risk) estimates the most a fund could lose over a set period at a set confidence level.
• Commodity pool status (CFTC Rule 4.5). The adviser, for each fund, "has claimed an exclusion from the definition of commodity pool operator" and must keep commodity interests to a "de minimis amount" (FLAG-SAI, page 26, "CFTC Regulation"). The SAI does not name Rule 4.5.

8. Costs

• Who pays what. The adviser "bears the costs of various third-party services required by the Funds, including audit, certain custody, portfolio accounting, legal, transfer agency and printing costs" (FLAG-PR, page 237). The fund bears "taxes, brokerage fees, commissions and other transaction expenses, interest and extraordinary expenses (such as litigation and indemnification expenses)" (FLAG-PR, page 238).
• 12b-1 fees. "None" (FLAG-PR, page 168).
• Fees paid. Management fees paid for the fiscal period ended October 31, 2025: $3,889 (FLAG-SAI, page 70).
• Expense example. $30 for 1 year, $93 for 3, $163 for 5 and $368 for 10 years per $10,000 (FLAG-PR, page 168).
• Brokerage commissions and turnover.
  • Commissions: $352 for the fiscal period ended October 31, 2025 (FLAG-SAI, page 73, "Brokerage Commissions Paid" table starting on page 72).
  • Turnover: 24.90% from April 15, 2025 to October 31, 2025 (FLAG-PR, page 168; FLAG-SAI, page 34). Excludes in-kind transfers (FLAG-PR, page 271).
• Gap between expense ratio and management fee. 0.29% minus 0.29% is 0.00% (my arithmetic). The fee is all-in and the fund has no short costs, so there is nothing to add (my inference).

9. Performance and risk

Returns to September 30, 2026 (FLAG-FS, page 1, "Performance (%)"). Periods over one year are annualized (FLAG-FS, page 1).

• Earlier figures. Cumulative from inception to October 31, 2025: 10.52% at NAV, 10.48% at market price, 10.70% for the index (FLAG-PR, page 250, "Cumulative Total Returns"). The FY2025 total return in the financial highlights is also 10.52% (FLAG-PR, page 271).
• Calendar-year returns. None. "The Fund does not have a full calendar year of performance" (FLAG-PR, page 173, "Performance Information").
• Risk statistics. None given (no beta, correlation, volatility, Sharpe ratio, drawdown or capture figures). The adviser expects correlation with the index to "exceed 95%" over time, before fees (FLAG-PR, page 169). This is a target, not a measured figure.

10. History and structural changes

• Predecessor funds. None stated. The fund "commenced operations on April 15, 2025" (FLAG-PR, page 271).
• Reorganizations and 351 conversions. None stated for FLAG. Searches for predecessor, reorganiz and 351 found only other funds or general text.
• Name, ticker, strategy, adviser or trust changes. None stated for FLAG.
• Document dates.
  • The prospectus and SAI are dated March 1, 2026. Both have a supplement dated September 16, 2026 bound in front. It liquidates three other funds (BTRN, QCLR, XCLR) "Due to each Fund's assets remaining quite small." It does not mention FLAG (FLAG-PR, page 1; FLAG-SAI, page 1).
  • The fact sheet (September 30, 2026) is newer than the prospectus and SAI. It gives no change to the strategy.
  • The latest financial data in the prospectus and SAI is for the fiscal period ended October 31, 2025. No annual report for the year ended October 31, 2026 was attached.
  • The N-PORT schedule of investments is as of July 31, 2026 (FLAG-NP). It is the only document with net assets and full holdings at that date.
• Conflicts between documents. None found. Distribution frequency differs in detail only (see section 2).

11. Principal risks

All from FLAG-PR, pages 170 to 172, "Summary of Principal Risks."

• Asset Class Risk, including Equity Securities Risk (page 170).
• Capitalization Risk, including Large-Capitalization Companies Risk (page 170).
• Cybersecurity Risk (page 170).
• Focus Risk, including Risks Related to Investing in the Health Care Sector (page 170).
• Geographic Risk, including Risk of Investing in Developed Markets and Risk of Investing in the United States (pages 170 and 171).
• Indexing Strategy Risk, including Index-Related Risk, Management Risk and Tracking Error Risk (page 171).
• Issuer Risk (page 171).
• Market Risk (page 171).
• Model Portfolio Risk (page 171).
• New Fund Risk (page 172). It warns the board "may determine to liquidate the Fund" if it doesn't reach "an economically viable size."
• Non-Diversification Risk (page 172).
• Operational Risk (page 172). Flag: counterparties. It names "errors of the Fund's service providers, counterparties or other third-parties."
• Risks Associated with Exchange-Traded Funds (page 172): Authorized Participants Concentration Risk; Large Shareholder Risk (flag: one holder owned 83.67% of shares as of February 2, 2026, per FLAG-SAI, pages 104 and 117); Listing Standards Risk; Market Trading Risks and Premium/Discount Risks.
• Trading Halt Risk (page 172).
• Valuation Risk (page 172).

No principal risk names leverage, short sales, derivatives or a prime broker.

12. Relevance to our fund

• How close is its structure and leverage? Not close (my inference). FLAG is a long-only, 50-stock index ETF at 1.00x gross (FLAG-NP, July 31, 2026). Our fund is an active 150/150 equity market neutral ETF at 3.0x gross. FLAG has no short book, no market-neutral aim and no leverage.
• What does it show about 3.0x gross in a 40 Act ETF? Nothing directly (my inference). It uses none of the routes in fund_context.md: direct shorts, swaps, futures, bank borrowing, box spreads or reverse repos.
• What does it show about financing, collateral, custody and costs? Little (my inference):
  • Custody: a single bank custodian (BBH) holds all assets. There is no broker custody to compare with Tidal's "custodied away" point.
  • Costs: its all-in fee excludes "interest," the same way Tidal-style unitary fees exclude financing costs. This is the only cost point that carries over.
  • Leverage cost formulas: none apply, since FLAG has no short or borrowed dollars.
• Main takeaway. FLAG should probably come off the long/short peer set, or be marked as a misclassification, so it doesn't skew peer averages (my inference).

13. Gaps and open questions

What the documents don't answer, for a 150/150 fund:

• Why ETF Database's long-short screen includes FLAG. ls_peers_list.md shows FLAG came only from that screen (ETFDB_LS, data as of 2026-11-06). None of the four documents describes any long/short feature. One possible cause is an old classification, or an earlier fund that used the same ticker (my inference, not checked against any document).
• Whether FLAG is a limited derivatives user under Rule 18f-4.
• Measured exposure after July 31, 2026. The fact sheet's weights exclude cash.
• NAV per share and any risk statistics at September 30, 2026.

Questions to ask:

• To our own team: FLAG came from the ETF Database long-short screen (data as of 2026-11-06, per ls_peers_list.md). Should it stay on the peers list, or be replaced with a true long/short fund?
• To Global X: The July 31, 2026 N-PORT shows no derivatives. Is FLAG treated as a limited derivatives user?
• To Global X: Given $1.63 million in assets and the September 2026 liquidation of three small funds, is FLAG under review?

Search terms tried for fields left "Not stated":

• Shorting and prime broker: short sale, sold short, selling short, prime broker, borrow, margin, Regulation T, portfolio margin.
• Derivatives and leverage: swap, counterparty, futures, options, leverage, 18f-4, value at risk, VaR, limited derivatives user, derivatives risk manager, Rule 4.5, commodity pool.
• Borrowing: borrowing, asset coverage, line of credit.
• Service providers: custodian, transfer agent, administrator, accountant, accounting, distributor, auditor, securities lending, lending agent.
• Fund details: CUSIP, predecessor, reorganiz, 351, in-kind, fiscal year.
• Risk data: beta, Morningstar (no hits in FLAG's sections).
• N-PORT (FLAG-NP): read in full. Searched for short, swap, future, option, borrow, repurchase, written and cash; no hits.

14. Documents used

Page numbering.

• FLAG-FS: no printed page numbers.
• FLAG-PR: PDF pages 1 and 2 are the supplement (about three other funds). PDF page 3 is the cover and PDF page 4 the contents (printed "i"). From PDF page 5 on, PDF page = printed page + 4. FLAG's summary is PDF pages 168 to 173 (printed 164 to 169).
• FLAG-SAI: PDF pages 1 and 2 are the supplement. PDF pages 3 to 5 are the cover and front matter. From PDF page 6 on, PDF page = printed page + 5. The SAI covers many funds; only shared or FLAG-specific passages were used.
• FLAG-NP: a text file with no printed page numbers. Pages are counted by the three repeated "Schedules of Investments" headers. Page 3 has the totals and the net assets line.

15. Snapshot sources

• Ticker: FLAG-FS, page 1, "Trading Details".
• Fund name: FLAG-FS, page 1, header. The prospectus cover omits the ® ("Global X S&P 500 U.S. Market Leaders Top 50 ETF", FLAG-PR, page 3).
• As of date: "As of 9/30/2026" (FLAG-FS, page 1, header).
• Adviser: FLAG-PR, page 173, "Fund Management"; FLAG-FS, page 2, footer.
• Platform: the trust is Global X Funds and the adviser "serves as the investment adviser and the administrator for the Funds" (FLAG-PR, page 237; FLAG-SAI, page 6). So it is the sponsor's own trust (my inference).
• Exchange: FLAG-FS, page 1, "Trading Details".
• Inception: "Inception Date 04/15/25" (FLAG-FS, page 1, "Key Information").
• Net assets: "Assets Under Management $1.63 mil" (FLAG-FS, page 1, "Key Information"), as of September 30, 2026.
• Strategy type: none of the six original types fits, so a new type, "long-only index fund", was created for this fund. The fund tracks an index with "an indexing approach" and "does not try to outperform the Underlying Index" (FLAG-PR, page 169, "Principal Investment Strategies"). No short positions are described (my inference from FLAG-PR, pages 168 to 173).
• Long %: total investments of $1,695,374 at 99.9%, all common stock, with "Percentages are based on Net Assets of $1,697,242" (FLAG-NP, page 3), as of July 31, 2026. The fact sheet gives only holdings and sector weights that exclude cash (FLAG-FS, page 1).
• Short %: the July 31, 2026 N-PORT lists 50 common stocks and no short positions (FLAG-NP, pages 1 to 3). So 0% (my inference).
• Gross: 99.9% long plus 0% short is 99.9%, or 1.00x, as of July 31, 2026 (my arithmetic, from FLAG-NP, page 3).
• Above 2.0x: 1.00x is below 2.0x (my arithmetic).
• Net: 99.9% long minus 0% short is 99.9%, as of July 31, 2026 (my arithmetic, from FLAG-NP, page 3).
• Short method: none. No short selling, swaps or futures are described as a principal strategy (FLAG-PR, pages 168 to 173), and the July 31, 2026 N-PORT lists no short positions (FLAG-NP, pages 1 to 3).
• Prime broker or counterparty: none. No prime broker or counterparty is named in any of the fund documents, and the July 31, 2026 N-PORT lists no swaps or other contracts that would need one (FLAG-NP, pages 1 to 3) (my inference).
• Custodian: FLAG-PR, page 265, "Other Service Providers"; FLAG-SAI, page 77, "Custodians and Transfer Agents".
• Management fee: "Management Fees: 0.29%" (FLAG-PR, page 168, "Fees and Expenses"); FLAG-PR, page 238.
• Total expense ratio: "Total Annual Fund Operating Expenses: 0.29%" (FLAG-PR, page 168); "Total Expense Ratio 0.29%" (FLAG-FS, page 1). No waiver line.
• Short costs in expense ratio: the fee table has no line for short dividends or borrow costs (FLAG-PR, page 168), and the fund does not short.
• 3-month return: -0.69% at NAV, 3 months to September 30, 2026 (FLAG-FS, page 1, "Performance (%)").
• 1-year return: -0.89% at NAV, 1 year to September 30, 2026 (FLAG-FS, page 1, "Performance (%)").
• Beta: not given in any of the three documents.
• Beta benchmark: not stated, because no beta is given.
• Beta period: not stated, because no beta is given.
• Leverage Method: the documents don't describe any shorting or leverage method for FLAG. The only derivatives text is the SAI's general permission for futures "to simulate full investment in the respective Underlying Index" (FLAG-SAI, page 24). That is permission only, so it doesn't count. The July 31, 2026 N-PORT lists only common stock (FLAG-NP, pages 1 to 3), so the value is "None".
• Leverage cost: none. The fund uses no leverage (FLAG-NP, pages 1 to 3). The FY2025 financial highlights show only a 0.29% annualized expense ratio, with no interest line (FLAG-PR, page 271). No annual report was attached.
• Short dividend expense: none. No short sales are described, the fee table has no line for them (FLAG-PR, page 168), and the July 31, 2026 N-PORT lists no short positions (FLAG-NP, pages 1 to 3).
• Ranking properties (Rank to Score): from the ranking of the 27 LS peers prepared November 11, 2026, using only the project's fund profiles. Each of the seven criteria scores Yes = 1, Partly = 0.5, No or Not stated = 0. Funds sort first by Portfolio margin (YES, LIKELY, POSSIBLE, UNLIKELY, NO), then by Score, then Tidal funds first, then higher gross exposure (my inference).
• Rank: 26 of 27, as of November 11, 2026.
• Long/short: No. Long only, with 50 common stocks and nothing else on July 31, 2026 (FLAG-NP, pages 1 to 3).
• Portfolio margin: NO. The fund has no short stock book (FLAG-NP, pages 1 to 3).
• Cross-collateral: Not stated.
• Outside Reg T: No. The fund uses no leverage (FLAG-NP, pages 1 to 3).
• Short costs (includes dividends): No. The fund has no leverage and no short positions (FLAG-PR, page 168; FLAG-NP, pages 1 to 3).
• Over 2.0x: No. 1.00x on July 31, 2026 (FLAG-NP, page 3; my arithmetic).
• Tidal: No. The fund is a series of Global X Funds (FLAG-SAI, page 6).
• Score: 0 (my arithmetic).

16. Fund Documents

Fact Sheet

Prospectus

SAI