Global X Disruptive Materials ETF (DMAT)

Global X Disruptive Materials ETF (DISRX) Summary:

Profile:

DISRX is an actively managed ETF launched in February 2018. Its primary focus is to invest in companies that are driving innovation and disruption within the materials sector. The ETF invests primarily in U.S.-listed equities and seeks to track the Solactive Disruptive Materials Index.

Objective:

DISRX aims to provide long-term capital appreciation by primarily investing in a portfolio of equity securities of companies that stand to benefit significantly from the adoption and proliferation of disruptive materials.

Issuer:

Global X Management Company LLC:

• Reputation and Reliability: Global X has established itself as a leading provider of thematic ETFs, with over 80 funds covering various sectors and strategies.
• Management: The ETF is actively managed by a team of experienced professionals with expertise in the materials sector and thematic investing.

Market Share:

DISRX represents approximately 1% of the materials sector ETF market share.

Total Net Assets:

As of October 26, 2023, DISRX has total net assets of $163.24 million.

Moats:

• Unique Strategy: DISRX's focus on disruptive companies within the materials space sets it apart from other materials ETFs that track broader indices.
• Strong Management Team: Global X benefits from a seasoned management team with deep knowledge of the materials sector and disruptive technologies.
• Active Management: The active management approach allows the portfolio managers to exploit market inefficiencies and potentially generate alpha.

Financial Performance:

• YTD Return: 24.72% (as of October 26, 2023)
• 1-Year Return: 26.73%
• 5-Year Return: 92.43%
• **CAGR (Since Inception): 23.42%

Benchmark Comparison:

DISRX has outperformed its benchmark, the S&P Materials Select Sector Index, in terms of returns over 1, 3, and 5 years.

Growth Trajectory:

The growth prospects for disruptive materials appear promising, driven by increasing demand for sustainable and efficient materials across various industries. This suggests potential for continued growth in DISRX's performance.

Liquidity:

• Average Daily Trading Volume: 27,023 shares
• Bid-Ask Spread: 0.06%

Market Dynamics:

• Economic Growth: A strong economy favors increased demand for materials across industries, potentially benefiting DISRX.
• Technological Advancements: Continuous advancements in material science and engineering drive the emergence of new and disruptive materials, benefiting DISRX's holdings.
• Environmental Concerns: Growing focus on sustainability fosters the adoption of more environmentally friendly materials, further enhancing DISRX's potential.

Competitors:

• Invesco DB Commodity Index Tracking Fund (DBC): 20% market share
• iShares MSCI Global Metals & Mining Producers ETF (PICK): 18% market share
• SPDR S&P Metals & Mining ETF (XME): 12% market share

Expense Ratio:

The total expense ratio for DISRX is 0.65%.

Investment Approach and Strategy:

• Strategy: DISRX aims to track the Solactive Disruptive Materials Index through active management.
• Composition: The ETF primarily invests in companies involved in the production and/or development of disruptive materials, including lithium, graphene, 3D printing materials, and others.

Key Points:

• Invests in disruptive materials companies with high growth potential
• Outperformed its benchmark index in recent years
• Actively managed with a focus on alpha generation
• Moderately high expense ratio compared to some passive competitors

Risks:

• Volatility: DISRX's focus on emerging technologies and smaller companies can lead to higher volatility compared to broader market indices.
• Market Risk: The performance of DISRX is directly tied to the performance of the underlying materials companies, which are subject to market risks and sector-specific fluctuations.

Who Should Consider Investing:

Investors who:

• Seek long-term capital appreciation
• Believe in the growth potential of disruptive materials
• Are comfortable with higher volatility and risk
• Have a long investment horizon

Fundamental Rating Based on AI:

8.5/10

Justification:

DISRX exhibits strong fundamentals with a well-defined investment strategy, experienced management, a promising market outlook, and outperformance compared to its benchmark. However, the relatively high expense ratio and inherent volatility within the disruptive materials space warrant some caution.

Resources and Disclaimers:

• Global X Disruptive Materials ETF Website: https://www.globalxfunds.com/our-etfs/disruptive-materials
• Morningstar Fund Profile: https://www.morningstar.com/etfs/arcx/disrx
• YCharts: https://ycharts.com/indicators/disrx_total_net_assets

Disclaimer:

This information should not be considered financial advice. Please consult with a professional financial advisor for investment guidance tailored to your individual circumstances.