The Macro Compass: March 2025

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The Macro Compass: March 2025

By Clough Capital

3/6/2025

The Controversial Impact of Tariffs: Inflationary or Deflationary?

Disclosures:

Investors should consider the investment objectives, risks, charges and expenses of the Clough Hedged Equity ETF and Clough Select Equity ETF (each an “ETF” and collectively, the “Clough Capital ETFs” or the “ETFs”), which are managed by Clough Capital Partners L.P. ("Clough Capital"), carefully before investing. This and other information are contained in the ETFs’ prospectuses, which may be obtained by clicking here. Please read the prospectus carefully before you invest.

The Clough Capital ETFs are NYSE listed ETFs and may trade at a price above or below an ETF’s NAV. Shares of the ETFs may trade at a premium or discount to NAV and may be bought and sold throughout the day at their market price on the exchange on which they are listed. The market price may be at, above or below an ETF’s NAV and will fluctuate with changes in the NAV as well as supply and demand in the market for the shares. The market price of an ETF’s shares may differ significantly from its NAV during periods of market volatility. Shares of the ETFs may only be redeemed directly at NAV by Authorized Participants, in very large creation units. There can be no guarantee that an active trading market for the ETFs’ shares will develop or be maintained, or that their listing will continue or remain unchanged. Buying or selling shares of the ETFs on an exchange may require the payment of brokerage commissions and frequent trading may incur brokerage costs that detract significantly from investment returns.

Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. Diversification does not eliminate the risk of market loss. A long-term investment approach cannot guarantee a profit. All financial products have an element of risk and may experience loss. Past performance is not indicative of, nor does it guarantee future results. Purchases are subject to suitability, risk tolerance and any other investment limitations.

The Clough Capital ETFs are distributed by Paralel Distributors LLC. Clough Capital is not affiliated with Paralel Distributors LLC.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

© 2025 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results

Risk Factors:

Investing involves risk. Principal loss is possible. The equity securities held in the portfolio may experience sudden, unpredictable drops in value or long periods of decline in value. This may occur because of factors that affect securities markets generally or factors affecting specific issuers, industries or sectors in which the ETFs invest.

Short selling involves the sale of securities borrowed from a third party. The short seller profits if the borrowed security’s price declines. If a shorted security increases in value, a higher price must be paid to buy the stock back to cover the short sale, resulting in a loss. The ETFs may incur expenses related to short selling, including compensation, interest or dividends, and transaction costs payable to the security lender, whether the price of the shorted security increases or decreases. The amount the ETFs could lose on a short sale is theoretically unlimited. Short selling also involves counterparty risk – the risk associated with the third-party ceasing operations or failing to sell the security back.

Hedging Risk. Options used by the ETFs to reduce volatility and generate returns may not perform as intended. There can be no assurance that the ETFs’ option strategy will be effective. It may expose the ETFs to losses, e.g., option premiums, to which it would not have otherwise been exposed. Further, the option strategy may not fully protect the ETFs against declines in the value of its portfolio securities.

Definitions:

Indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index.

S&P 500 Index : a free-float capitalization-weighted index that measures the performance of 500 of the largest U.S. equities representing all major indices.

Dow Jones Industrial Average : a price-weighted average index of 30 blue-chip stocks that are generally the leaders in their industry.

NASDAQ Composite Index : a broad-based capitalization-weighted index of stocks that includes almost all stocks listed on the NASDAQ stock exchange, including both domestic and international companies.

Fed : the U.S. Federal Reserve

FOMC : the Federal Open Market Committee is the main monetary policy-making body of the U.S. Federal Reserve.

Basis point : a unit of measure equal to 1/100th of a percentage point.

Alpha : compares risk-adjusted performance relative to an index. Positive alpha means outperformance on a risk-adjusted basis

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