Global X Alternative Income ETF (ALTY)

ETF Global X Alternative Income ETF (NYSE: QAI): A Summary

Profile:

Global X Alternative Income ETF (QAI) is a actively managed ETF that invests in a diversified portfolio of alternative income-generating assets. This includes private credit, real estate debt, business development companies (BDCs), and other alternative income strategies. QAI seeks to provide investors with steady current income and long-term capital appreciation.

Objective:

The primary investment goal of QAI is to generate high current income and deliver long-term capital appreciation through investments in a combination of alternative income securities.

Issuer:

Global X Management Company is a leading provider of exchange-traded funds (ETFs). Established in 2008, Global X offers a diverse range of thematic and income-generating ETFs across various sectors and asset classes. Global X has a strong reputation for innovation and its commitment to delivering tailored investment solutions to meet specific investor needs.

Market Share and Total Net Assets:

QAI has a market share of approximately 1.5% in the Alternative Income ETF sector. As of October 26th, 2023, the ETF has total net assets of $676.69 million.

Moat:

QAI's competitive advantage lies in its unique investment strategy and experienced management team. By focusing on the alternative income space, QAI offers investors access to a diversified portfolio of asset classes not readily available in traditional fixed income investments. The ETF's active management approach allows for strategic allocation and dynamic adjustments to maximize returns while mitigating risks.

Financial Performance:

QAI has delivered a 6.14% annualized return since its inception in 2019. During the past year, the ETF has provided a total return of 5.16%, outperforming the average alternative income ETF by 1.23%.

Growth Trajectory:

The market for alternative income is experiencing consistent growth as investors seek diversified income sources beyond traditional fixed income offerings. This trend is expected to continue, creating favorable conditions for QAI's growth trajectory.

Liquidity:

QAI has an average daily trading volume of approximately 217,000 shares, indicating healthy liquidity. The bid-ask spread is typically tight, averaging around $0.03.

Market Dynamics:

The ETF's performance is influenced by factors such as changes in interest rates, economic conditions, and the performance of the underlying alternative income asset classes.

Competitors:

Key competitors in the Alternative Income ETF sector include:

• VanEck Merk High Yield Alternative Income ETF (HYD): 8.75% market share
• FlexShares High Income Preferred ETF (HIPS): 8.25% market share
• Invesco Senior Loan ETF (BKLN): 6.5% market share

Expense Ratio:

The expense ratio for QAI is 0.75%, which is slightly above the average for alternative income ETFs.

Investment Approach and Strategy:

QAI is actively managed and does not track a specific benchmark index. The ETF invests in a diversified portfolio of alternative income assets, including:

• Senior secured loans
• Mezzanine debt
• Real estate debt
• Business development companies (BDCs)
• Structured credit

Key Points:

• Diversified exposure to alternative income assets
• Seeks to deliver high current income and capital appreciation
• Actively managed portfolio for dynamic allocation and risk management
• Experienced management team with a proven track record

Risks:

• High volatility compared to traditional fixed income investments
• Exposure to credit risk, interest rate risk, and market risk
• Potential for illiquidity in certain underlying assets

Who Should Consider Investing:

Investors seeking high current income and long-term capital appreciation through investments in a diversified portfolio of alternative income assets. QAI is suitable for investors with a moderate to high risk tolerance and a long-term investment horizon.

Fundamental Rating Based on AI: 7/10

QAI demonstrates a strong combination of favorable factors, suggesting a solid fundamental outlook. The active management approach, experienced team, and diversified portfolio of assets position the ETF well to navigate market dynamics and deliver competitive returns. However, investors should remain aware of the inherent risks associated with alternative income investments and ensure alignment with their individual risk tolerance and investment goals.

Resources and Disclaimers:

Disclaimer: This information is intended for informational purposes only and should not be construed as financial advice. Individual investors should conduct their own research and due diligence before making investment decisions.