BNY Mellon Enhanced Dividend and Income ETF (BEDY)

ETFs trade like stocks, are subject to investment risk, including possible loss of principal.

Equities are subject to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees. Value stocks involve the risk that they may never reach their expected full market value, either because the market fails to recognize the stock's intrinsic worth or the expected value was misgauged. They also may decline in price even though in theory they are already undervalued. There is no guarantee that dividend-paying stocks will continue to pay, or increase their dividends in the future.

The Fund may invest in equity-linked notes (“ELNs”) that include some or all of the following characteristics: writing (selling) call options on a reference security; purchasing corresponding call options on the reference security at a higher strike price than the written call option; executing a futures strategy designed to help offset the opportunity cost to the fund of not being fully invested in the equity market (i.e., the amount allocated to the ELN); and investing in a fixed income component paying a stated interest rate. Each ELN will be structured such that the Fund’s maximum potential loss on the ELN will be capped at an amount equal to or less than the principal invested in the ELN.

ELNs expose the fund to a variety of risks, associated with underlying components. Options and Futures Risks: The writing of call options on reference securities, while collecting premiums, also risks losses if the security’s price rises above the strike price. To seek to minimize such losses, ELNs may buy offsetting call options (at the cost of an additional premium) or utilize futures contracts, which however can suffer from imperfect price correlation. In addition, adverse price movements in the reference security can lead to losses—including loss of principal—on both the written-option and futures strategies. Credit/Counterparty Risk: ELNs are unsecured notes; if the issuer’s credit quality deteriorates, the ELN’s value and any payments due may be impaired. Liquidity Risk: the ELNs held by the fund are unlisted, and resale will depend on the issuer’s willingness to repurchase the security. Limited secondary markets can make ELNs hard to value or sell, potentially forcing sales at unfavorable prices. Structural and Operational Considerations: ELNs have fixed terms and expiration dates, unlike direct equity holdings, which may increase the fund’s turnover, transaction costs and tax liabilities.

Taken together, these factors mean ELNs can be more complex and potentially riskier than more typical securities, with exposures to market, credit, liquidity and operational dynamics.