LeaderShares®Equity Skew ETF
SUMMARY PROSPECTUS
May 6, 2020
SQEW
a series of Two Roads Shared Trust
Before you invest, you may want to review the
Fund’s Prospectus, which contains more information about the Fund and its risks. The Fund’s Prospectus and Statement
of Additional Information, both dated May 6, 2020 as supplemented to date, are incorporated by reference into this Summary Prospectus.
You can obtain these documents and other information about the Fund online at https://www.leadersharesetfs.com/funds/documents?fund=leadershares-equity-skew-etf&type=Prospectus.
You can also obtain these documents at no cost by calling 1-480-757-4277 or by sending an email request to info@leadersharesetfs.com.
Shares of the Fund are listed and traded on the New York Stock Exchange (“NYSE”) (the “Exchange”).
Beginning on January 1, 2021, as permitted
by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s shareholder reports like this
one will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary,
such as a broker dealer or bank. Instead, the reports will be made available on the Fund’s website www.leadersharesetfs.com,
and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you have already elected to receive shareholder
reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder
reports and other communications from the Fund or your financial intermediary electronically anytime by contacting your financial
intermediary or, if you are a direct investor, by following the instructions included with paper Fund documents that have been
mailed to you. You may also elect to receive all future reports in paper free of charge. You can inform the Fund or your financial
intermediary that you wish to continue receiving paper copies of your shareholder reports, or if you are a direct investor, by
following the instructions included with paper Fund documents that have been mailed to you. Your election to have reports in paper
will apply to all funds held with the Trust and/or your financial intermediary.
Investment
Objective The LeaderShares Equity Skew ETF (the “Equity
Skew ETF” or the “Fund”) seeks to generate long-term capital growth.
Fees
and Expenses of the Fund This table describes the fees
and expenses that you may pay if you buy and hold shares of the Fund. Investors purchasing or selling shares of the Fund in the
secondary market may be subject to costs (including customary brokerage commissions) charged by their broker. These costs are not
included in the expense example below.
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
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Management Fee(1)
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0.75%
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Distribution (12b-1) and Service Fees
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0.00%
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Other Expenses
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0.00%
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Total Annual Fund Operating Expenses
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0.75%
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(1)
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The Fund’s adviser provides investment
advisory service, and pays most of the Fund’s operating expenses (except all brokerage fees and commissions, taxes, borrowing
costs (such as dividend expense on securities sold short and interest), fees and expenses of other investment companies in which
the Fund may invest, or extraordinary expenses such as litigation) in return for a “unitary fee.”
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Example:
This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds.
The Example
assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain
the same. Although your actual costs may be higher or lower, based upon these assumptions your costs would be:
Portfolio Turnover:
The Fund pays transaction costs, such as commissions, when it buys and sells securities
(or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in
higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance.
Principal Investment Strategies:The Fund is an actively managed exchange traded fund (“ETF”) that normally invests at least 80% of its net assets,
including any borrowings for investment purposes, in equity securities. The Fund defines equity securities to include investments
in other investment companies, such as ETFs, that invest primarily in equity securities. The Fund employs a contrarian strategy
seeking to buy underperforming asset classes and/or factors and sell outperforming asset classes and/or factors based on quantitative
research. The primary equity style exposure and factors are large cap growth, large cap value, small cap growth, small cap value,
and emerging market equities. The weightings to these equity style exposures represented by equity securities, are determined using
proprietary quantitative methodologies that include statistical skew. Skew or skewness measures the asymmetry of a return distribution
between different constituents in a group. Measuring the skewness allows the Adviser to take five groups of stocks (Large Cap Growth,
Large Cap Value, Small Cap Growth, Small Cap Value and Emerging Markets) and determine the relative weightings of each of these
five groups based on how recent returns of such group fits into its historical distribution of returns. This measure of skewness
generally leads to security groups that have recently outperformed to have reduced exposure and security groups that have recently
underperformed to have increased exposure at each re-balance. The Fund will invest in equity
securities with a market capitalization of at least $1 billion.
The Fund may have a higher degree of portfolio
turnover than funds that seek to replicate the performance of an index. The Fund may engage
in active and frequent trading.
Principal Investment Risks:
As with all funds, there is the risk that you could lose money through your investment in the Fund. The Fund is not intended to
be a complete investment program but rather one component of a diversified investment portfolio. You may lose part or all of your
investment in the Fund or your investment may not perform as well as other similar investments. Many factors affect the Fund’s
net asset value and performance. Each risk summarized below is a principal risk of investing in the Fund and different risks may
be more significant at different times depending upon market conditions or other factors.
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Market Risk.
Overall market risk may affect the value of individual instruments in which the Fund invests. The Fund is subject to the risk
that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other
factors, which may negatively affect the Fund’s performance. Factors such as domestic and foreign (non-U.S.) economic growth
and market conditions, real or perceived adverse economic or political conditions, inflation, changes in interest rate levels,
lack of liquidity in the bond or other markets, volatility in the equities market or other securities markets or adverse investor
sentiment and political events affect the securities markets. Securities markets also may experience long periods of decline in
value. When the value of the Fund’s investments goes down, your investment in the Fund decreases in value and you could lose
money.
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Local, state, regional, national
or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or
other events could have a significant impact on the Fund and its investments and could
result in decreases to the Fund’s net asset value. Political, geopolitical,
natural and other events, including war, terrorism, trade disputes, government shutdowns, market closures, natural and environmental
disasters, epidemics, pandemics and other public health crises and related events and governments’ reactions to such events
have led, and in the future may lead, to economic uncertainty, decreased economic activity, increased market volatility and other
disruptive effects on U.S. and global economies and markets. Such events may have significant adverse direct or indirect effects
on the Fund and its investments. For example, a widespread health crisis such as a
global pandemic could cause substantial market volatility, exchange trading suspensions and closures, impact the ability to complete
redemptions, and affect Fund performance. A health crisis may exacerbate other
pre-existing political, social and economic risks. In addition, the increasing interconnectedness of markets around the world may
result in many markets being affected by events or conditions in a single country or region or events affecting a single or small
number of issuers.
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ETF Structure
Risks. The Fund is structured as an ETF and as a result is subject to special risks, including:
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Not Individually
Redeemable. Shares are not individually redeemable and may be redeemed by the Fund at NAV only in large blocks known as “Creation
Units.” You may incur brokerage costs purchasing enough shares to constitute a Creation Unit.
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Trading Issues.
Trading in shares on the New York Stock Exchange (the “NYSE”) may be halted due to market conditions
or for reasons that, in the view of the Exchange, make trading in shares inadvisable, such as extraordinary market volatility.
There can be no assurance that shares will continue to meet the listing requirements of the Exchange. An active trading market
for the Fund’s shares may not be developed or maintained. If the Fund’s shares are traded outside a collateralized
settlement system, the number of financial institutions that can act as authorized participants that can post collateral on an
agency basis is limited, which may limit the market for the Fund’s shares.
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Market Price
Variance Risk. The market prices of shares will fluctuate in response to changes in NAV and supply and demand for shares and
will include a “bid-ask spread” charged by the exchange specialists, market makers or other participants that trade
the particular security. There may be times when the market price and the NAV vary significantly. This means that shares may trade
at a discount to NAV. If a shareholder purchases shares at a time when the market price is at a premium to the NAV or sells shares
at a time when the market price is at a discount to NAV, the shareholder may sustain losses.
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In times of market stress, market makers
may step away from their role market making in shares of ETFs and in executing trades, which can lead to differences between the
market value of Fund shares and the Fund’s net asset value.
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The market price for the Fund’s
shares may deviate from the Fund’s net asset value, particularly during times of market stress, with the result that investors
may pay significantly more or significantly less for Fund shares than the Fund’s net asset value, which is reflected in the
bid and ask price for Fund shares or in the closing price.
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When all or a portion of an ETFs underlying
securities trade in a market that is closed when the market for the Fund’s shares is open, there may be changes from the
last quote of the closed market and the quote from the Fund’s domestic trading day, which could lead to differences between
the market value of the Fund’s shares and the Fund’s net asset value.
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In stressed market conditions, the market
for the Fund’s shares may become less liquid in response to the deteriorating liquidity of the Fund’s portfolio. This
adverse effect on the liquidity of the Fund’s shares may, in turn, lead to differences between the market value of the Fund’s
shares and the Fund’s net asset value.
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Equity Risk.
Equity securities are susceptible to general market fluctuations and volatile increases and decreases in value as market confidence
in and perceptions of their issuers change. Factors that may influence
the price of equity securities include developments affecting a specific company or industry, or the changing economic, political
or market conditions.
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Quantitative
Investing Risk. The Adviser may use proprietary computer trading
modeling systems to implement its investment strategies for the Fund. Investments selected using these models may perform differently
than the market as a whole or from their expected performance as a result of the factors used in the models, the weight placed
on each factor, changes from the factors' historical trends and technical issues in the construction and implementation of the
models. There is no assurance that the models are complete or accurate, or representative of future market cycles, nor will they
necessarily be beneficial to the Fund if they are accurate. These systems may negatively affect Fund performance for various reasons,
including human judgment, inaccuracy of historical data and non-quantitative factors (such as market or trading system dysfunctions,
investor fear or over-reaction).
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Authorized Participant Concentration
Risk. To the extent that authorized participants are unable or otherwise unavailable to proceed with creation and/or redemption
orders and no other authorized participant is able to create or redeem in their place, shares may trade at a discount to net asset
value (“NAV”) and may face delisting.
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Active Trading Risk. A higher portfolio
turnover due to active and frequent trading will result in higher transaction and brokerage costs that may result in lower investment returns.
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Cybersecurity Risk. There is risk
to the Fund of an unauthorized breach and access to fund assets, customer data (including private shareholder information), or
proprietary information, or the risk of an incident occurring that causes the Fund, the investment adviser, custodian, transfer
agent, distributor and other service providers and financial intermediaries to suffer data breaches, data corruption or lose operational
functionality. Successful cyber-attacks or other cyber-failures or events affecting the Fund or its service providers may adversely
impact the Fund or its shareholders.
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Emerging Markets Risk. Investing
in emerging markets involves not only the risks described below with respect to investing in foreign securities, but also other
risks, including exposure to economic structures that are generally less diverse and mature, and to political systems that can
be expected to have less stability, than those of developed countries. The typically small size of the markets may also result
in a lack of liquidity and in price volatility of these securities. Emerging markets are riskier than more developed markets because
they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative and
share the risks of foreign developed markets but to a greater extent. Emerging markets are more likely to experience hyperinflation
and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging financial markets have
far lower trading volumes and less liquidity than developed markets, which may result in increased price volatility of emerging
market investments.
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Fluctuation of Net Asset Value Risk.
The NAV of the Fund’s shares will generally fluctuate with changes in the market value of the Fund’s holdings.
The market prices of the shares will generally fluctuate in accordance with changes in NAV as well as the relative supply of and
demand for the shares on the Exchange. The Adviser cannot predict whether the shares will trade below, at or above their NAV. Price
differences may be due, in large part, to the fact that supply and demand forces at work in the secondary trading market for the
shares will be closely related to, but not identical to, the same forces influencing the prices of the Fund’s holdings trading
individually or in the aggregate at any point in time. In addition, unlike conventional ETFs, the Fund is not an index fund. The
Fund is actively managed and does not seek to replicate the performance of a specified index. Index based ETFs have generally traded
at prices which closely correspond to NAV per share. Actively managed ETFs have a limited trading history and, therefore, there
can be no assurance as to whether and/or the extent to which the shares will trade at premiums or discounts to NAV.
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Foreign (Non-U.S.) Investments Risk. Foreign (non-U.S.) securities present greater
investment risks than investing in the securities of U.S. issuers and may experience more rapid and extreme changes in value than
the securities of U.S. companies, due to less information about foreign (non-U.S.) companies in the form of reports and ratings
than about U.S. issuers; different accounting, auditing and financial reporting requirements; smaller markets; nationalization;
expropriation or confiscatory taxation; currency blockage; or political changes or diplomatic developments. Foreign (non-U.S.)
securities may also be less liquid and more difficult to value than securities of U.S. issuers.
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Gap Risk. The Fund is subject to the risk that a stock price or derivative value will
change dramatically from one level to another with no trading in between and/or before the Fund can exit the investment. Usually
such movements occur when there are adverse news announcements, which can cause a stock price or derivative value to drop substantially
from the previous day’s closing price. Trading halts may lead to gap risk.
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Geographic and Sector Risk. The
risk that if the Fund invests a significant portion of its total assets in certain issuers within the same geographic region or
economic sector, an adverse economic, business or political development affecting that region or sector may affect the value of
the Fund’s investments more than if the Fund’s investments were not so concentrated.
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Investment Companies and ETFs Risk.
When the Fund invests in other investment companies, including ETFs, it will bear additional expenses based on its pro rata share
of the other investment company’s or ETF’s operating expenses, including the management fees of the investment company
or ETF in addition to those paid by the Fund. The risk of owning an investment company or ETF generally reflects the risks of owning
the underlying investments the investment company or ETF holds. The Fund also will incur brokerage costs when it purchases and
sells ETFs. The Fund may invest in in inverse ETFs, which may result in increased volatility and will magnify the Fund’s
losses or gains. During periods of market volatility, inverse ETFs may not perform as expected.
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Market Capitalization Risk. The
Fund’s anticipated weighting towards larger-sized companies subjects the Fund to the risk that larger companies may not be
able to attain the high growth rates of successful smaller companies, especially during strong economic periods, and that they
may be less capable of responding quickly to competitive challenges and industry changes. Because the Fund may invest in companies
of any size, its share price could be more volatile than a fund that invests only in large companies. Small and medium–sized
companies typically have less experienced management, narrower product lines, more limited financial resources, and less publicly
available information than larger companies.
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Market Events Risk. There has been
increased volatility, depressed valuations, decreased liquidity and heightened uncertainty in the financial markets during the
past several years. These conditions may continue, recur, worsen or spread. The U.S. government and the Federal Reserve, as well
as certain foreign governments and central banks, have taken steps to support financial markets, including by keeping interest
rates at historically low levels. This and other government intervention may not work as intended, particularly if the efforts
are perceived by investors as being unlikely to achieve the desired results. The U.S. government and the Federal Reserve have recently
reduced market support activities. Further reduction, including interest rate increases, could negatively affect financial markets
generally, increase market volatility and reduce the value and liquidity of securities in which the Fund invests. Policy and legislative
changes in the United States and in other countries may also continue to contribute to decreased liquidity and increased volatility
in the financial markets. The impact of these changes on the markets, and the practical implications for market participants, may
not be fully known for some time.
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Management Risk. The Fund’s
investment strategies may not result in an increase in the value of your investment or in overall performance equal to other similar
investment vehicles having similar investment strategies. In addition, the Fund’s tactical asset allocation strategy may
be unsuccessful and may cause the Fund to miss attractive investment opportunities while in a defensive position.
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New Fund Risk. The Fund is recently
formed. Investors bear the risk that the Fund may not grow to or maintain economically viable size, may not be successful in implementing
its investment strategy, and may not employ a successful investment strategy, any of which could result in the Fund being liquidated
at any time without shareholder approval and/or at a time that may not be favorable for certain shareholders. Such a liquidation
could have negative tax consequences for shareholders.
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Performance:
Because the Fund has only recently commenced investment operations, no performance information is
presented for the Fund at this time. In the future, performance information will be presented in this section of this Prospectus.
In addition, shareholder reports containing financial and performance information will be mailed to shareholders semi-annually.
Updated performance information is available at no cost by visiting www.leadersharesetfs.com
or by calling (480) 757-4277.
Investment Adviser:
Redwood Investment Management, LLC (the “Adviser”) serves
as investment adviser to the Fund.
Portfolio Manager:
The Fund is managed by a team comprised of Michael T. Messinger, Portfolio Manager and Principal
of Redwood, Richard M. Duff, President of Redwood, and Michael T. Cheung, Portfolio Manager and Head of Quantitative Research.
Mr. Messinger, Mr. Duff, and Mr. Cheung have managed the Fund since its inception in May 2020.
Purchase and Sale of Fund Shares:The Fund will issue and redeem shares at NAV only in large blocks of 25,000 shares (each block of shares is called a “Creation
Unit”). Creation Units are issued and redeemed for cash and/or in-kind for securities. Individual shares may only be purchased
and sold in secondary market transactions through brokers. Except when aggregated in Creation Units, the shares are not redeemable
securities of the Fund.
Shares
of the Fund are listed for trading on the New York Stock Exchange (“NYSE”) (the “Exchange”) and trade at
market prices rather than NAV. Shares of the Fund may trade at a price that is greater than, at, or less than NAV.
Tax Information:
The Fund’s distributions generally will be taxable at ordinary income or long-term capital gain rates. A sale of shares may
result in capital gain or loss.
Payments to Broker-Dealers and Other
Financial Intermediaries:If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related
companies, including the Adviser, may pay the intermediary for the sale of Fund shares and related services. These payments may
create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund
over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
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