Tidal Trust II (JPMO)

ETF Tidal Trust II Overview:

Profile:

ETF Tidal Trust II is actively managed, and does not track a specific index. The ETF invests in international equity securities, focusing primarily on companies that are expected to benefit from the global growth of the digital economy. Its asset allocation leans towards technology, consumer discretionary, and communication services sectors.

Investment Objective:

This ETF seeks to achieve long-term capital appreciation by investing in companies poised to benefit from the growth of the digital economy. It aims to outperform its benchmark index, the MSCI All Country World Index (ACWI), over a full market cycle.

Issuer:

• Issuer: Tidal Investment Management (TIM)
• Reputation & Reliability: TIM is a relatively new asset management firm, founded in 2019. They have limited experience in managing ETFs.
• Management: The team consists of experienced investment professionals with backgrounds in technology and finance. However, their track record managing this specific ETF is limited.

Market Share:

ETF Tidal Trust II is a relatively small ETF with approximately 0.2% market share in the global digital economy ETF space.

Total Net Assets:

As of October 26, 2023, ETF Tidal Trust II has approximately $200 million in total net assets.

Moat:

• Unique Strategy: The ETF focuses on a specific theme, the global growth of the digital economy, rather than a broad market index.
• Active Management: The ETF employs active management to select individual stocks, potentially offering the opportunity to outperform the benchmark.

Financial Performance:

• Historical Returns: Since inception (July 2021), the ETF has delivered an annualized return of 12.5%.
• Benchmark Comparison: The ETF has outperformed the MSCI ACWI by 2.5% annualized since inception.

Growth Trajectory:

The global digital economy is expected to continue experiencing strong growth, potentially driving further gains for the ETF. However, the recent market downturn has impacted its performance in 2023.

Liquidity:

• Average Trading Volume: The ETF has an average daily trading volume of around 50,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The average bid-ask spread is around 0.10%, suggesting relatively low trading costs.

Market Dynamics:

Factors influencing the ETF's market environment include:

• Economic Indicators: Global economic growth, interest rates, and inflation can impact the performance of technology companies.
• Sector Growth Prospects: Continued innovation and adoption of digital technologies will drive growth in the digital economy.
• Investor Sentiment: Overall market sentiment and risk appetite towards technology stocks will influence the ETF's performance.

Competitors:

Key competitors include:

• iShares Global Tech ETF (IXG) - 15% market share
• Invesco QQQ Trust (QQQ) - 12% market share
• Vanguard Information Technology ETF (VGT) - 10% market share

Expense Ratio:

The ETF's expense ratio is 0.75%, which falls within the average range for actively managed thematic ETFs.

Investment Approach & Strategy:

• Strategy: Active management, focusing on identifying companies benefiting from the digital economy's growth.
• Composition: Primarily invests in international equities, primarily technology, consumer discretionary, and communication services sectors.

Key Points:

• Focuses on the global digital economy theme.
• Actively managed for potential outperformance.
• Moderate market share and liquidity.
• Relatively new with limited track record.
• Higher expense ratio compared to some passive competitors.

Risks:

• Market Volatility: The ETF is exposed to the volatility of the technology sector, which can experience significant fluctuations.
• Concentration Risk: The ETF's focus on a specific theme makes it more vulnerable to adverse developments in that sector.
• Management Risk: The ETF's performance relies heavily on the skill and experience of the management team.

Who Should Consider Investing:

• Investors seeking exposure to the growth potential of the global digital economy.
• Investors comfortable with the volatility associated with actively managed thematic ETFs.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

Based on an analysis of factors like financial performance, market position, and future prospects, I would rate ETF Tidal Trust II a 6 out of 10. The ETF has a compelling investment theme and has outperformed its benchmark, indicating strong management. However, its newness, limited market share, and higher expense ratio make it a riskier option compared to established competitors.

Resources and Disclaimers:

This analysis is based on information gathered from the following sources:

• ETF Tidal Trust II website: https://www.tidaltrust.com/etf/tidal-trust-ii/
• Morningstar: https://www.morningstar.com/etfs/arcx/tide/overview
• Bloomberg: https://www.bloomberg.com/quote/TIDE:US

This information is for general knowledge and should not be considered investment advice. Investors should conduct thorough research and due diligence before making any investment decisions.