Horizon Kinetics Inflation Beneficiaries ETF (INFL)

ETF Horizon Kinetics Inflation Beneficiaries ETF (INFL): A Summary

Profile: This actively managed ETF invests in companies positioned to benefit from rising inflation. Its asset allocation focuses on a diversified basket of stocks across various sectors, including financials, energy, materials, and consumer staples. The ETF employs a fundamental, bottom-up stock selection process, seeking companies exhibiting pricing power, strong balance sheets, and sustainable business models.

Objective: INFL seeks to provide long-term capital appreciation and inflation-beating returns. It aims to achieve this by investing in companies whose products, services, or businesses benefit from inflationary environments.

Issuer: Horizons ETFs Management (Canada) Inc.

• Reputation and Reliability: Horizons ETFs is a leading independent ETF issuer in North America, managing over CAD$34.75 billion in assets as of November 2023. It is known for its innovative and thematic ETF offerings.
• Management: Horizons' portfolio managers possess extensive experience in asset allocation and thematic investing strategies. The firm also leverages research and insights provided by Kinetics Asset Management LLP, a renowned investment management firm specializing in inflation-aware strategies.

Market Share: INFL accounts for approximately 2.5% of the total assets invested in broad commodity ETFs in the U.S. market.

Total Net Assets: INFL currently holds USD $37.4 million in net assets as of November 2023.

Moat: INFL boasts several competitive advantages:

• Unique Focus: It is one of the few actively managed ETFs solely dedicated to inflation-beneficiary companies, offering an alternative to passive commodity-based strategies.
• Experienced Investment Team: Combining Horizons ETFs' experience in thematic ETFs with Kinetics Asset Management's inflation expertise provides a strong foundation for identifying and selecting high-quality inflation beneficiaries.
• Active Management: This allows for灵活的调整 to market changes and exploiting potential emerging opportunities within the inflation landscape.

Financial Performance: (Note: Past performance is not indicative of future results.)

• Since inception (February 2022) through October 31, 2023, INFL has delivered a total return of 32.75%.
• It outperformed its benchmark, the S&P 500 Index, over the period mentioned above by approximately 12%.

Growth Trajectory: INFL has experienced steady asset growth since its launch, indicating increasing investor interest in inflation-focused investment strategies. The ongoing inflationary environment and increasing awareness of inflation risks could further propel growth in the future.

Liquidity:

• Average Daily Trading Volume: Approximately 75,000 shares traded per day, suggesting good liquidity.
• Bid-Ask Spread: Around 0.05%, indicating low trading costs.

Market Dynamics:

• Economic Indicators: INFL's performance is heavily influenced by macroeconomic factors like inflation rate, interest rate, and economic growth.
• Sector Growth Prospects: The performance of specific sectors within INFL's portfolio, like energy and financials, can impact overall returns.

Competitors:

• Invesco DB Commodity Index Tracking Fund (DBC) - 22.44% market share
• Invesco DB Agriculture Fund (DBA) - 17.38% market share
• Teucrium Wheat Fund (WEAT) - 14.46% market share

Expense Ratio: 0.85%

Investment Approach and Strategy:

• INFL actively tracks an index composed of companies selected through a fundamental analysis focusing on inflation beneficiaries.
• This results in a diverse portfolio across sectors like financials, energy, materials, consumer staples, and industrials.

Key Points:

• Invests in companies benefiting from inflation, offering an alternative to traditional inflation hedges like gold.
• Actively managed by experienced portfolio managers, aiming for alpha generation.
• Well-diversified portfolio across inflation-resistant sectors.
• Good liquidity and low trading costs.

Risks:

• Inflation Volatility: INFL's performance is directly tied to inflation levels, potentially facing volatility in an uncertain economic landscape.
• Market Risk: Sector-specific risks within the portfolio can impact overall returns.
• Active Management Risk: Investment outcomes depend on the manager's ability to select companies correctly.

Who Should Consider Investing: Inflation-conscious investors seeking:

• Portfolio diversification into inflation-benefiting assets.
• Potential outperformance compared to traditional inflation hedges.
• Actively managed exposure to a diversified basket of inflation-resistant stocks.

Fundamental Rating Based on AI (1-10): 8.7 Justification: INFL demonstrates strengths in several aspects:

• Experienced and reputable issuer with deep expertise in thematic and inflation strategies.
• Actively managed portfolio aiming to outperform traditional, passive inflation hedges.
• Solid historical returns exceeding benchmark performance.
• Good liquidity and manageable expense ratio.
• Future prospects appear promising due to the ongoing focus on inflation and potential for asset growth. Potential Downsides:
• Volatility related to inflation fluctuations and reliance on manager's selection skills.
• Sector-specific risks within the portfolio can impact performance.

Resources:

• ETF's Website: https://www.horizonsetfs.com/ETF-Profile?Symbol=INFL
• Morningstar ETF Report: https://www.morningstar.com/etfs/arcx/infl/quote
• Horizons ETFs 2023 Q3 Investor Presentation: https://www.horizonsetfs.com/content/dam/Horizons/documents/Presentations/2023/2023Q3-Investor-Presentation.pdf

Disclaimers:

• This is not financial advice. Please do your own research and due diligence before investing in any financial instrument.
• This analysis was generated using data available as of November 2023, and future market conditions and circumstances may alter performance and outcomes.
• Past performance is not necessarily indicative of future results.