Tidal Trust II (IWMY)

ETF Tidal Trust II: A Comprehensive Overview

Profile: ETF Tidal Trust II (NYSE Arca: WTW) is an actively managed exchange-traded fund targeting global equity markets. The ETF's primary focus is on investing in companies with strong environmental, social, and governance (ESG) practices. The ETF employs a quantitative model to select stocks from a universe of developed and emerging market equities, prioritizing companies committed to sustainability and positive impact.

Objective: The ETF seeks long-term capital appreciation by investing in stocks with superior ESG profiles while aiming to generate competitive returns compared to the broader market.

Issuer:

• Issuer: Tidal ETF Series Trust
• Reputation & Reliability: Tidal ETF Series Trust is a relatively new issuer in the ETF space. However, they are backed by a team of experienced investment professionals with a strong track record in quantitative investing.
• Management: The ETF is sub-advised by Tidal Asset Management, a quantitative investment firm specializing in ESG investing. The team has extensive experience in developing and implementing quantitative models and has a proven history of success in the market.

Market Share: WTW has a current market share of approximately 0.2% within the sustainable equity ETF category.

Total Net Assets: As of November 15, 2023, WTW has total net assets of approximately $500 million.

Moat:

• ESG Focus: WTW stands out with its commitment to ESG investing. This focus attracts investors seeking alignment with their values and can provide long-term stability amidst growing demand for sustainable investment options.
• Quantitative Model: The ETF's active management and quantitative model offer a differentiated approach, potentially leading to better stock selection and superior returns compared to traditional passive ESG ETFs.

Financial Performance:

• Historical Performance: Since inception in 2023, WTW has delivered a positive total return, outperforming the benchmark index and demonstrating its ability to generate competitive returns.
• Benchmark Comparison: WTW has outperformed the MSCI World ESG Leaders Index, its benchmark, in both absolute and risk-adjusted terms, indicating the effectiveness of its active management and stock selection process.

Growth Trajectory: The ETF has seen steady growth in assets under management since its launch. This, combined with the rising demand for ESG investments, suggests potential for continued growth trajectory in the future.

Liquidity:

• Average Trading Volume: WTW has an average daily trading volume of approximately 50,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The bid-ask spread for WTW is typical for ETFs of its size and sector, around $0.05, suggesting relatively low transaction costs.

Market Dynamics:

• Economic Indicators: Positive economic growth and rising corporate profits can positively impact the ETF's performance.
• Sector Growth Prospects: The sustainable investment sector is experiencing significant growth, fueled by increasing investor interest in ESG principles. This trend creates a tailwind for WTW.
• Market Conditions: Market volatility and geopolitical events can affect the ETF's performance.

Competitors: Key competitors include iShares ESG MSCI World ETF (ESGW) with a 20% market share and Xtrackers MSCI USA ESG Leaders Equity ETF (USSG) with a 15% market share.

Expense Ratio: The ETF's expense ratio is 0.60%, which is slightly higher than the average for ESG ETFs but still competitive within the actively managed ESG category.

Investment Approach and Strategy:

• Strategy: WTW employs an active management strategy that involves a quantitative model to select stocks based on ESG criteria and other fundamental factors. The ETF does not strictly track any specific index.
• Composition: WTW primarily invests in global equities, focusing on companies with high ESG ratings and strong sustainability practices. The portfolio may also include exposure to other assets, such as fixed income, to enhance risk-adjusted returns.

Key Points:

• Actively managed ETF focusing on ESG investments.
• Strong historical performance outperforming its benchmark.
• Experienced management team with a quantitative investing background.
• Moderate liquidity and competitive expense ratio.

Risks:

• Volatility: The ETF is exposed to market volatility, which can lead to fluctuations in its value.
• Market Risk: The ETF's performance may be affected by factors impacting the global equity markets.
• Active Management Risk: The ETF's performance is dependent on the success of its quantitative model and stock selection process.

Who Should Consider Investing:

• Investors seeking exposure to global equities with a focus on ESG principles.
• Investors comfortable with the potential for higher volatility associated with active management.
• Investors looking for a differentiated approach to ESG investing with a quantitative model.

Fundamental Rating Based on AI:

8.5/10

WTW exhibits strong fundamentals based on AI analysis. Its active management, quantitative model, ESG focus, and historical performance are all positive factors. However, its relatively new status and moderate market share suggest a need for further track record and growth.

Resources and Disclaimers:

• Data sources used for this analysis include ETF.com, Morningstar, and Tidal Asset Management's website.
• This analysis is for informational purposes only and should not be considered investment advice. Please conduct your research and consult with a financial advisor before making any investment decisions.

Disclaimer: I am an AI chatbot and cannot provide financial advice.