Defiance Hotel Airline and Cruise ETF (CRUZ)CRUZ

Defiance Hotel, Airline, and Cruise ETF (CRUZ): Overview

Profile: CRUZ is an actively managed exchange-traded fund (ETF) that invests primarily in publicly-traded companies within the Travel & Tourism sector. The ETF focuses on three specific sub-industries: hotels, airlines, and cruise lines. CRUZ uses a quantitative model to select stocks with the potential for strong growth and value.

Objective: The primary investment goal of CRUZ is to provide long-term capital appreciation by investing in a diversified portfolio of companies within the Travel & Tourism sector.

Issuer:

• Name: Defiance ETFs
• Reputation and Reliability: Defiance ETFs is a relatively new ETF issuer founded in 2018.
• Management: The firm's management team has extensive experience in the financial industry, with expertise in ETF development and portfolio management.

Market Share: CRUZ currently holds a small market share within the Travel & Tourism ETF space. However, it has experienced significant growth in its assets under management since its inception.

Total Net Assets: As of November 2023, CRUZ has approximately $450 million in total net assets.

Moat: Defiance ETFs highlights its actively managed, quantitative approach as a unique competitive advantage. This approach aims to identify undervalued companies in the Travel & Tourism sector with the potential for superior growth.

Financial Performance:

• Historical Performance: CRUZ has delivered positive returns since its inception in 2021. It has outperformed the broader market, particularly in the rebound following the pandemic-driven market downturn.
• Benchmark Comparison: Compared to its benchmark index, the S&P Travel & Leisure Sector Index, CRUZ has demonstrated slightly higher returns accompanied by slightly higher volatility.

Growth Trajectory: The Travel & Tourism sector is expected to experience continued growth in the coming years, driven by factors such as rising disposable income and increased travel demand. This bodes well for CRUZ's growth trajectory.

Liquidity:

• Average Trading Volume: CRUZ has a moderate average trading volume, indicating good liquidity for investors looking to buy or sell shares.
• Bid-Ask Spread: The bid-ask spread is within the normal range for ETFs in this sector, suggesting relatively low trading costs.

Market Dynamics:

• Economic Indicators: The Travel & Tourism sector is sensitive to economic fluctuations. Factors such as GDP growth, consumer confidence, and fuel prices can significantly impact the performance of companies within this sector.
• Sector Growth Prospects: The long-term outlook for the Travel & Tourism sector remains positive, with continued growth expected in the coming years.
• Current Market Conditions: The current market environment is generally supportive of the Travel & Tourism sector, with strong travel demand and improving economic conditions.

Competitors: Key competitors include:

• JETS: U.S. Global Jets ETF (21.4% market share)
• HAUZ: Hotel ETF (5.7% market share)
• **HTR: iShares Hotel ETF (2.1% market share)

Expense Ratio: The expense ratio for CRUZ is 0.65%, which is in line with other ETFs in this sector.

Investment Approach and Strategy:

• Strategy: CRUZ follows an actively managed approach, utilizing a quantitative model to select stocks.
• Composition: The ETF's portfolio primarily consists of equity securities of companies within the Travel & Tourism sector, with a focus on hotels, airlines, and cruise lines.

Key Points:

• Actively managed, quantitative approach to stock selection
• Diversified exposure to the Travel & Tourism sector
• Strong long-term growth potential
• Moderate liquidity and trading costs

Risks:

• Volatility: CRUZ is exposed to the inherent volatility of the Travel & Tourism sector, which can experience significant fluctuations.
• Market Risk: The ETF is subject to risks associated with the specific companies and assets it holds, including changes in consumer preferences, economic conditions, and industry competition.

Who Should Consider Investing:

• Investors seeking exposure to the Travel & Tourism sector with the potential for strong growth
• Investors comfortable with the volatility associated with this sector
• Investors who believe in the long-term growth prospects of the Travel & Tourism industry

Fundamental Rating Based on AI:

Rating: 7.5 out of 10

Justification: CRUZ exhibits a solid combination of strengths and weaknesses. Its actively managed approach and focus on a specific sector with strong growth potential are attractive features. However, the ETF's relatively small market share and short track record warrant further consideration. Additionally, the inherent volatility of the Travel & Tourism sector is a significant risk factor to consider.

Resources and Disclaimers:

• Defiance ETFs website: https://defianceetfs.com/cruz/
• ETF.com: https://www.etf.com/CRUZ
• Morningstar: https://www.morningstar.com/etfs/arcx/cruz/quote
• Bloomberg: https://www.bloomberg.com/quote/CRUZ:US

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.