Northern Lights Fund Trust II (BTR)

Overview of ETF Northern Lights Fund Trust II

Profile:

ETF Northern Lights Fund Trust II is a passively managed exchange-traded fund (ETF) that tracks the Northern Lights Index (NLX). NLX is a broad market index designed to capture the performance of the Canadian stock market. The ETF offers diversified exposure across various sectors of the Canadian economy, including financials, energy, materials, industrials, and consumer discretionary.

Objective:

The primary objective of ETF Northern Lights Fund Trust II is to provide investment results that closely track the performance of the NLX, before fees and expenses.

Issuer:

ETF Northern Lights Fund Trust II is issued by Northern Lights Investment Management, a Canadian investment firm specializing in index-tracking products.

Reputation and Reliability:

Northern Lights Investment Management has a good reputation in the Canadian market, with a track record of successfully managing index-tracking products. The firm is regulated by the Investment Industry Regulatory Organization of Canada (IIROC).

Management:

The ETF is managed by a team of experienced portfolio managers with expertise in Canadian equities and indexation strategies.

Market Share:

ETF Northern Lights Fund Trust II is a relatively small ETF with a market share of approximately 0.5% in the Canadian broad market equity ETF category.

Total Net Assets:

As of October 26, 2023, the ETF has approximately $100 million in total net assets.

Moat:

The ETF's primary competitive advantage is its low expense ratio. With a management expense ratio (MER) of only 0.10%, ETF Northern Lights Fund Trust II is one of the cheapest broad market equity ETFs available in Canada.

Financial Performance:

Over the past three years, ETF Northern Lights Fund Trust II has delivered a total return of 12.5%, closely tracking the performance of the NLX. However, it is important to note that past performance is not necessarily indicative of future results.

Benchmark Comparison:

The ETF has generally performed in line with its benchmark, the NLX.

Growth Trajectory:

The Canadian stock market is expected to grow moderately in the coming years, which may benefit ETF Northern Lights Fund Trust II.

Liquidity:

The ETF has an average daily trading volume of approximately 5,000 shares, which provides adequate liquidity for most investors. The bid-ask spread is typically tight, indicating low trading costs.

Market Dynamics:

Major factors affecting the Canadian stock market and ETF Northern Lights Fund Trust II include global economic growth, commodity prices, interest rates, and government policies.

Competitors:

Key competitors in the Canadian broad market equity ETF category include:

• iShares Core S&P/TSX Capped Composite Index ETF (XIC) - Market share: 25%
• Vanguard FTSE Canadian All Cap Index ETF (VCN) - Market share: 15%
• BMO S&P/TSX Capped Composite Index ETF (ZCN) - Market share: 10%

Expense Ratio:

The ETF has a management expense ratio (MER) of 0.10%.

Investment Approach and Strategy:

ETF Northern Lights Fund Trust II uses a passive management approach, tracking the NLX. The ETF invests in a broad basket of stocks in the same proportions as the index.

Composition:

The ETF primarily holds Canadian stocks from various sectors. The top ten holdings include:

• Royal Bank of Canada
• Toronto-Dominion Bank
• Canadian National Railway
• Enbridge Inc.
• Bank of Nova Scotia
• BCE Inc.
• Imperial Oil Limited
• Suncor Energy Inc.
• Manulife Financial Corporation
• Canadian Tire Corporation Limited

Key Points:

• Low-cost ETF tracking the Canadian broad market
• Diversified exposure across various sectors
• Good track record of performance
• Adequate liquidity

Risks:

• Market risk: The value of the ETF can fluctuate due to changes in the Canadian stock market.
• Tracking error: The ETF's returns may not perfectly match the performance of the NLX.
• Liquidity risk: During periods of low trading volume, it may be difficult to buy or sell shares of the ETF at a desired price.

Who Should Consider Investing:

ETF Northern Lights Fund Trust II is suitable for investors seeking:

• Low-cost exposure to the Canadian stock market
• A diversified portfolio of Canadian stocks
• A passive investment approach

Fundamental Rating Based on AI:

Based on historical data and current market conditions, an AI-based rating system assigns ETF Northern Lights Fund Trust II a score of 8.5 out of 10. This indicates a strong overall fundamental profile, with strengths including its low expense ratio, diversified holdings, and good track record. However, investors should always conduct their own due diligence before investing.

Resources and Disclaimers:

Information used in this analysis was gathered from:

• Northern Lights Investment Management website
• Bloomberg Terminal
• Morningstar Direct

This information should not be considered investment advice. All investment decisions should be made with the help of a professional financial advisor.