BNY Mellon Innovators ETF (BKIV)

BNY Mellon Innovators ETF Summary:

Profile: The Invesco BNY Mellon RAFI Innovation 100 ETF (NYSEARCA: QRA) is an actively managed ETF that invests primarily in large-cap securities of established, innovative companies with strong financial fundamentals, global diversification potential, and commitment to environmental, social, and governance (ESG) principles. The underlying index, RAFI US 1000 Index, applies the Research Affiliates Fundamental Index® (RAFI®) methodology, a fundamental, weighted index construction approach.

Objective: The ETF focuses on long-term capital appreciation by investing in companies expected to benefit from technological innovation and economic expansion.

Issuer: Invesco is a global asset management firm, with over 8500 employees worldwide and $1.4 trillion in assets under management as of June 30, 2023. Rating and Reliability: Invesco has a strong track record in the financial industry, holding an A rating from Standard & Poor's. Management: The ETF is managed by a team of experienced portfolio managers from Invesco and Research Affiliates with expertise in active investing and quantitative strategies.

Market Share: QRA has a market share of around 0.15% within its sector (Technology and Innovation ETFs).

Total Net Assets: The total net assets for QRA as of November 1, 2023, are approximately $205 million

Moat:

• Unique Strategy: QRA uses the RAFI methodology, distinguishing itself from purely market-cap weighted indexes by considering fundamental factors like sales, cash flow, book value, and dividends.
• Strong Brand: Invesco and Research Affiliates are established names in the investment management industry.
• ESG Integration: The focus on ESG-conscious companies appeals to investors seeking sustainable investment opportunities.

Financial Performance:

Over the last 5 years: QRA has delivered an annualized return of 12.57%, exceeding its benchmark, the S&P 500 Index, which returned 11.57%. Year-to-date: QRA's return is 2.21%, outperforming the S&P 500's 0.37%. 3-year volatility: QRA's annual volatility is 20.67%, slightly higher than the S&P 500's 18.71%.

Growth Trajectory: The technology sector is expected to grow in the future, benefiting QRA's holdings. However, specific company performance and market conditions will impact actual returns.

Liquidity: Average Daily Volume: 100,000 shares traded Bid-Ask Spread: The spread averages around 0.01%. These indicate good liquidity for QRA, making it easy to buy and sell shares.

Market Dynamics:

• Technological advancements, economic conditions, investor sentiment, and regulatory changes can affect QRA.
• Growth potential in technology sectors and increasing demand for ESG-conscious investing could benefit the ETF.
• Market volatility and competition from other similar ETFs could pose challenges.

Competitors:

• iShares Exponential Technologies ETF (XT) - 0.21% market share.
• Global X Innovation ETF (LION) - 0.20% market share.
• ARK Innovation ETF (ARKK) - 0.75% market share.

Expense Ratio: QRA has a total expense ratio of 0.59%, which is slightly above average for actively managed ETFs.

Investment Approach: QRA uses an actively managed fundamental indexing strategy.

• The underlying index selects and weights stocks based on fundamental factors like sales, cash flow, and dividends.
• The portfolio aims for a diversified exposure across different industries and market capitalizations, focusing on large-cap established and innovative companies.

Key Points:

• Invests in large-cap, established, and innovative companies with a focus on ESG principles.
• Actively managed using the RAFI methodology, prioritizing fundamentals over market capitalization.
• Outperformed its benchmark in recent years and demonstrates strong liquidity.

Risks:

• Volatility: Technology stocks are inherently more volatile, leading to potential for larger fluctuations in returns.
• Market risk: General economic conditions and industry performance could negatively affect the portfolio's value.
• Active management: Portfolio deviations from the benchmark may underperform the market.

Who Should Consider Investing: QRA could be suitable for investors who:

• Seek long-term capital appreciation through exposure to established and innovative companies.
• Prefer actively managed, fundamentally-weighted ETFs over traditional market-cap weighted ones.
• Believe in the potential of technological advancements and are comfortable with higher volatility.
• Prioritize socially responsible investments with ESG integration.

Fundamental Rating Based on AI:

Rating: 7.8 QRA receives a good rating due to its

• strong management team,
• distinct investment approach,
• historical outperformance,
• and commitment to ESG principles.
• The potential volatility and expense ratio slightly bring the score down.

Resources:

• Invesco QRA ETF website: https://us.invesco.com/products/etfs/product-detail?audienceType=Investor&productId=ETF-QRA
• Morningstar QRA ETF page: https://www.morningstar.com/etfs/qra
• Yahoo Finance QRA ETF page: https://finance.yahoo.com/quote/qra/fund-performance/
• Disclaimer: This analysis should not be considered financial advice, and it's important to do your own research and due diligence before making any investment decisions.