ETRACS Alerian Midstream Energy Total Return Index ETN (AMTR)AMTR

ETF ETRACS Alerian Midstream Energy Total Return Index ETN (AMNA)

Profile

AMNA is an exchange-traded note (ETN) that tracks the Alerian Midstream Energy Total Return Index (AMNA TR). This index comprises a select group of US midstream energy companies involved in the transportation and storage of natural gas, crude oil, and refined products. AMNA seeks to provide investors with exposure to the midstream energy sector by replicating the price and yield performance of the underlying index.

Objective

AMNA's primary investment goal is to provide a total return, consisting of capital appreciation and income generation, that tracks the performance of the Alerian Midstream Energy Total Return Index (AMNA TR).

Issuer

Issuer: UBS AG

Reputation and Reliability: UBS AG is a global financial services firm with a long and reputable history, founded in 1862. It is considered a reliable and established issuer in the financial markets.

Management: UBS Asset Management oversees the management of AMNA. The team comprises experienced professionals with expertise in index tracking and midstream energy markets.

Market Share

AMNA holds a relatively small market share within the midstream energy ETN and ETF space. However, it is one of the few ETNs solely focused on the midstream energy sector.

Total Net Assets

As of November 9, 2023, AMNA's total net assets were approximately $118 million.

Moat

AMNA's competitive advantages include:

• Unique Focus: It provides investors with a focused exposure to the midstream energy sector, specifically targeting companies involved in the transportation and storage of energy commodities.
• Index Tracking: AMNA passively tracks a well-established index, potentially reducing the risks associated with active management.
• Liquidity: While not the most heavily traded ETN, AMNA offers decent liquidity for investors looking to enter or exit positions.

Financial Performance

Historical Performance: AMNA has delivered a total return of approximately 15% year-to-date as of November 9, 2023. However, its performance has fluctuated over the past years, highlighting the inherent volatility of the energy sector.

Benchmark Comparison: Compared to the Alerian Midstream Energy Index, AMNA has closely tracked the index's performance, demonstrating its effectiveness in replicating its target benchmark.

Growth Trajectory

The future growth of AMNA is likely tied to the performance of the midstream energy sector. Factors such as energy demand, infrastructure development, and regulatory changes will influence the sector's growth trajectory.

Liquidity

Average Trading Volume: AMNA's average daily trading volume is around 3,000 shares, indicating moderate liquidity.

Bid-Ask Spread: The bid-ask spread for AMNA typically ranges between 0.05% and 0.10%, signifying a relatively low cost of trading.

Market Dynamics

Factors affecting AMNA's market environment include:

• Energy Prices: Fluctuations in oil and gas prices directly impact the profitability of midstream energy companies and, consequently, the performance of AMNA.
• Infrastructure Development: Expansion or limitations in energy transportation infrastructure influence the midstream sector's growth potential.
• Regulations: Regulatory changes impacting the energy industry can significantly impact the operating environment for midstream companies.

Competitors

Key competitors to AMNA include:

• ALPS Alerian MLP ETF (AMLP): This ETF offers similar exposure to the midstream energy sector but holds a more diversified portfolio.
• VanEck Vectors Midstream MLP ETF (MLPA): MLPA also offers broad exposure to the midstream energy sector with a slightly different composition than AMNA.

Expense Ratio

AMNA's expense ratio is 0.85%, which is relatively low compared to other midstream energy ETFs.

Investment Approach and Strategy

Strategy: AMNA tracks the Alerian Midstream Energy Total Return Index (AMNA TR), passively replicating its performance.

Composition: AMNA holds a portfolio of debt securities issued by midstream energy companies included in the underlying index.

Key Points

• Focused exposure to midstream energy: Provides targeted investment in companies involved in energy transportation and storage.
• Index tracking: Offers passive exposure with lower management fees compared to actively managed funds.
• Moderate liquidity: Offers sufficient trading volume but may not be suitable for large investors requiring high liquidity.

Risks

• Volatility: The midstream energy sector is inherently volatile, leading to potential fluctuations in AMNA's price.
• Market risk: AMNA's performance is tied to the underlying energy market, making it susceptible to broader market risks and economic conditions.
• Credit risk: The ETN holds debt securities, carrying the risk of issuer default.

Who Should Consider Investing

AMNA may be suitable for investors seeking:

• Exposure to the midstream energy sector with a focus on transportation and storage companies.
• A passively managed investment with lower fees compared to actively managed funds.
• Tolerance for volatility associated with the energy sector.

Fundamental Rating Based on AI

Based on an AI-based analysis of various factors, including financial health, market position, and future prospects, AMNA receives a fundamental rating of 7 out of 10. This rating indicates that AMNA possesses a solid profile with a strong track record and competitive advantages. However, investors should be aware of the inherent risks associated with the volatile energy sector before investing.

Resources and Disclaimers

Resources:

• UBS ETRACS ETN website: https://www.ubs-etn.com/en/americas/products/etns/14490115691/overview.html
• Alerian Midstream Energy Total Return Index: https://www.alerian.com/index/amir/
• Morningstar: https://www.morningstar.com/etfs/arcx/amna/quote.html

Disclaimer: This analysis is provided for informational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a qualified financial advisor and after conducting thorough due diligence. Please consult the relevant resources and disclaimers on the referenced websites for further information.