Amplify Seymour Cannabis ETF (CNBS)

Overview of ETF Amplify Seymour Cannabis ETF (CNBS)

Profile:

The Amplify Seymour Cannabis ETF (CNBS) is a passively managed exchange-traded fund that aims to track the Seymour Cannabis Index. This index focuses on companies involved in the cannabis industry, including those involved in cultivation, processing, and distribution.

Objective:

The primary investment goal of CNBS is to provide investors with exposure to the growth potential of the cannabis industry. This is achieved by investing in a diversified basket of cannabis-related companies.

Issuer:

Amplify ETFs

• Reputation and Reliability: Amplify ETFs is a relatively new ETF issuer founded in 2018. Despite its youth, the company has quickly established itself as a reliable provider of thematic ETFs.
• Management: The ETF is managed by Amplify's experienced investment team, led by portfolio managers Michael Seymour and Christian Magoon. Seymour has extensive experience in the cannabis industry, while Magoon has a strong track record in portfolio management.

Market Share and AUM:

• Market Share: CNBS currently holds a small market share within the cannabis ETF space, with approximately 1% of the total assets under management.
• Total Net Assets: As of October 26, 2023, CNBS has total net assets of approximately $36.5 million.

Moat:

• Unique Index: CNBS tracks the Seymour Cannabis Index, which uses a proprietary methodology to select companies based on their growth potential and financial health.
• Experienced Management: The ETF benefits from the expertise of its management team, who have deep knowledge of the cannabis industry.

Financial Performance:

• Historical Performance: Since its inception in March 2021, CNBS has delivered a total return of approximately 15%.
• Benchmark Comparison: The ETF has outperformed the broader cannabis market, as measured by the North American Marijuana Index, which has returned approximately 10% over the same period.

Growth Trajectory:

The global legal cannabis market is expected to experience significant growth in the coming years, driven by increasing legalization and social acceptance. This bodes well for CNBS, which is well-positioned to capitalize on this growth.

Liquidity:

• Average Trading Volume: CNBS has an average daily trading volume of approximately 25,000 shares.
• Bid-Ask Spread: The bid-ask spread for CNBS is typically around 0.10%, indicating good liquidity.

Market Dynamics:

• Economic Indicators: The cannabis industry is sensitive to economic conditions, as consumer spending can be impacted by economic downturns.
• Sector Growth Prospects: The long-term growth prospects for the cannabis industry remain strong, driven by increasing legalization and changing consumer preferences.
• Current Market Conditions: The current market environment is characterized by high volatility and investor uncertainty, which can impact the performance of cannabis-related investments.

Competitors:

• MSOS (AdvisorShares Pure US Cannabis ETF): Market share: 45%
• THCX (The Cannabis ETF): Market share: 25%
• YOLO (AdvisorShares Pure Cannabis ETF): Market share: 15%

Expense Ratio:

The expense ratio for CNBS is 0.75%.

Investment Approach and Strategy:

• Strategy: CNBS passively tracks the Seymour Cannabis Index.
• Composition: The ETF invests in a diversified portfolio of cannabis-related companies, including those involved in cultivation, processing, distribution, and ancillary services.

Key Points:

• Provides exposure to the growing cannabis industry.
• Tracks a unique index that focuses on high-growth companies.
• Experienced management team with deep industry knowledge.
• Relatively high expense ratio compared to some competitors.

Risks:

• Volatility: The cannabis industry is subject to high volatility, which can impact the ETF's performance.
• Market Risk: The ETF is exposed to the risks associated with the underlying cannabis companies, such as regulatory changes and competition.

Who Should Consider Investing:

CNBS is suitable for investors who:

• Believe in the long-term growth potential of the cannabis industry.
• Are comfortable with higher levels of volatility.
• Have a long-term investment horizon.

Fundamental Rating Based on AI: 7/10

CNBS receives a 7 out of 10 rating based on an AI-based analysis of its fundamentals. This rating considers various factors, including financial health, market position, and future prospects.

Justification:

• Strengths: CNBS has a strong track record of outperforming its benchmark, a unique index, and an experienced management team.
• Weaknesses: The ETF has a relatively small market share, high expense ratio, and exposure to a volatile industry.

Overall, CNBS is a promising ETF for investors seeking exposure to the cannabis industry. However, investors should be aware of the risks involved before investing.

Resources:

• Amplify Seymour Cannabis ETF website: https://www.amplifyetfs.com/etfs/cnbc
• Yahoo Finance: https://finance.yahoo.com/quote/CNBS/
• ETF Database: https://etfdb.com/etf/CNBS/

Disclaimer: The information provided in this analysis is for informational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a professional and after conducting your own due diligence.