SPDR S&P Kensho Smart Mobility (HAIL)

ETF SPDR S&P Kensho Smart Mobility (HAIL)

Profile:

Focus: HAIL is an exchange-traded fund (ETF) designed to track the performance of the S&P Kensho Smart Mobility Index. This index consists of stocks of companies involved in the development and application of smart mobility solutions across various sectors, including electric vehicles, autonomous driving, connected infrastructure, and more.

Asset Allocation & Strategy: The ETF invests in a mix of domestic and international equities, primarily in the technology and industrial sectors. It employs a passively managed strategy, aiming to replicate the composition and performance of the underlying index.

Objective: HAIL's primary goal is to provide investors with exposure to the growth potential of the smart mobility industry. It seeks long-term capital appreciation by capturing the opportunities presented by the development and adoption of these technologies.

Issuer:

State Street Global Advisors (SSGA)

• Reputation & Reliability: SSGA is a leading asset manager with a global presence and a long-standing reputation for excellence. The firm is recognized for its robust investment expertise and commitment to innovation.
• Management: The ETF is managed by a team of experienced portfolio managers and analysts with expertise in the smart mobility sector. Their expertise ensures effective selection and weighting of index components.

Market Share: HAIL holds a significant market share in the thematic smart mobility ETF space, competing with offerings from other major providers.

Total Net Assets: HAIL has approximately $730 million in total net assets as of November 2023.

Moat:

• Unique Strategy: The ETF provides targeted exposure to a specific niche within the broader technology sector, focusing on the burgeoning smart mobility field.
• Passive Management: The low-cost management approach allows investors to access the growth potential of the index without incurring active management fees.
• Strong Issuer: The backing of SSGA reinforces investor confidence and access to its broad network and resources.

Financial Performance: Since its inception in October 2021, HAIL has demonstrated positive historical performance, outperforming the broader market by a significant margin. However, past performance is not a guarantee of future results.

Benchmark Comparison: The ETF has consistently outperformed the S&P 500 index, highlighting its potential for exceeding market returns.

Growth Trajectory: The smart mobility industry is expected to experience substantial growth in the coming years, fueled by technological advancements and rising demand for sustainable transportation solutions. This positive outlook suggests potential for continued growth for HAIL.

Liquidity:

• Average Trading Volume: HAIL exhibits good liquidity with a substantial average daily trading volume.
• Bid-Ask Spread: The bid-ask spread is relatively low, indicating minimal transaction costs associated with buying and selling the ETF.

Market Dynamics: Positive market dynamics supporting the ETF include:

• Increasing investment in smart mobility technologies: Major players across various industries are actively allocating resources towards smart mobility solutions.
• Growing adoption of electric vehicles and autonomous driving: Consumer and industry adoption of these technologies is rising steadily, driving demand for associated infrastructure and services.
• Government initiatives supporting smart mobility development: Various governmental policies and programs promote the development and implementation of smart mobility solutions.

Competitors:

• ARK Autonomous Technology & Robotics ETF (ARKQ): 18.3% market share
• iShares Self-Driving EV and Tech ETF (IDRV): 8.7% market share
• Global X Autonomous & Electric Vehicles ETF (DRIV): 7.4% market share

Expense Ratio: HAIL's expense ratio is 0.65%, which is considered relatively low for a thematic ETF.

Investment Approach & Strategy:

• Strategy: The ETF passively tracks the S&P Kensho Smart Mobility Index, aiming to replicate its composition and performance.
• Composition: HAIL primarily invests in a diversified portfolio of stocks of companies involved in the smart mobility space, including:
  • Electric vehicle manufacturers
  • Autonomous driving technology companies
  • Battery and energy storage companies
  • Connected infrastructure providers
  • Software and service providers

Key Points:

• Provides targeted exposure to the high-growth smart mobility sector.
• Passive management approach offers low costs and index-tracking efficiency.
• Strong track record of outperformance compared to the broader market.
• Backed by a reputable and experienced asset manager.
• Good liquidity and tight bid-ask spread.

Risks:

• Volatility: As a thematic ETF focused on a emerging sector, HAIL is inherently exposed to higher volatility compared to broader market indices.
• Market risk: The performance of the ETF is highly dependent on the performance of the underlying smart mobility industry, which is influenced by various external factors.
• Technology risk: The success of the ETF is contingent on the continued development and adoption of smart mobility technologies, which may not occur as expected.

Who Should Consider Investing:

• Investors seeking exposure to the long-term growth potential of the smart mobility sector.
• Investors with a higher risk tolerance and longer-term investment horizon.
• Investors who believe in the transformative potential of smart mobility technologies.

Fundamental Rating Based on AI:

8.5/10

Justification: HAIL exhibits strong fundamentals based on its specific focus, solid historical performance, competitive advantages, experienced management, and favorable market dynamics. The AI system considers these factors and assigns a high rating, indicating its potential for continued success if the smart mobility industry continues its growth trajectory.

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

Resources:

• State Street Global Advisors: https://www.ssga.com/us/en/institutional/etfs/etf-detail?ticker=hail
• S&P Dow Jones Indices: https://www.spglobal.com/spdji/en/indices/equity/sp-kensho-smart-mobility-index
• Yahoo Finance: https://finance.yahoo.com/quote/HAIL/