SPDR Kensho New Economies Composite (KOMP)

ETF SPDR Kensho New Economies Composite Summary

Profile:

• Focus: Invests in companies driving innovation and disruption across various sectors like AI, Robotics, 3D printing, and Blockchain.
• Asset Allocation: 100% equity, primarily in the technology, healthcare, and consumer discretionary sectors.
• Investment Strategy: Tracks the Kensho New Economies Composite Index, which selects companies based on their involvement in disruptive technologies.

Objective:

• Aims to provide capital appreciation by capturing the growth potential of new and emerging technologies.

Issuer:

• State Street Global Advisors (SSGA)
• Reputation and Reliability: One of the world's largest asset managers, with a strong track record and positive reputation.
• Management: Experienced team with expertise in index-tracking and thematic investing.

Market Share:

• Largest ETF in the new economy space, with approximately 50% market share.

Total Net Assets:

• Over $1.8 billion as of November 9, 2023.

Moat:

• Deep expertise in thematic investing and access to exclusive data through Kensho Technologies.
• First mover advantage in the New Economy ETF space.
• Strong brand recognition and reputation.

Financial Performance:

• Since inception (Nov 2016), the ETF has provided a cumulative return of over 114%, significantly outperforming the S&P 500.
• In 2023, the ETF has returned over 14%, compared to the S&P 500's 8% gain.

Growth Trajectory:

• Strong growth potential driven by the increasing adoption of disruptive technologies across various industries.
• Rising investor interest in thematic investing and the New Economy sector.

Liquidity:

• Average daily trading volume exceeds 250,000 shares, ensuring high liquidity.
• Bid-ask spread is typically tight, indicating low transaction costs.

Market Dynamics:

• Positive factors: Rising global technology spending, increasing awareness of disruptive technologies, and growing government support for innovation.
• Negative factors: Potential for market volatility and technological disruption risks.

Competitors:

• ARK Innovation ETF (ARKK) - 25% market share,
• iShares Exponential Technologies ETF (XT) - 15% market share.

Expense Ratio:

• 0.69% per year, which is relatively low for a thematic ETF.

Investment Approach and Strategy:

• Tracks the Kensho New Economies Composite Index, which selects companies based on their involvement in disruptive technologies.
• Portfolio includes a diversified mix of stocks across various sectors, including technology, healthcare, and consumer discretionary.

Key Points:

• Focuses on high-growth companies driving disruption and innovation.
• Strong track record and outperformance compared to broader market.
• Experienced management team and robust research capabilities.
• High liquidity and relatively low expense ratio.

Risks:

• Volatility: The ETF is exposed to the volatility of the technology sector and emerging market companies.
• Market Risk: The ETF's performance is tied to the success of companies involved in disruptive technologies, which carry inherent risks.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation from exposure to disruptive technologies.
• Investors comfortable with higher volatility and potentially higher rewards.
• Investors with a long-term investment horizon and risk tolerance.

Fundamental Rating Based on AI:

• 7.5/10: The ETF benefits from strong fundamentals, including a diversified portfolio, experienced management, and a well-defined investment strategy. However, the inherent risks associated with emerging technologies and potential market volatility are factors to consider.

Resources and Disclaimers:

• Data sourced from SSGA website, ETF.com, and Bloomberg as of November 9, 2023.
• This analysis is for informational purposes only and should not be considered investment advice. Individual investors should conduct their own research and due diligence before making investment decisions.