Invesco Multi-Strategy Alternative ETF (LALT)

Invesco Multi-Strategy Alternative ETF (BATS: OMEN)

Profile

OMEN is a multi-strategy alternative ETF that seeks to provide capital appreciation and downside risk protection through a combination of actively managed alternative investment strategies. It invests in a diversified portfolio of alternative assets across hedge fund-like strategies, including long/short equity, relative value, event-driven, and credit. The ETF aims to generate returns that are uncorrelated with traditional asset classes, potentially offering diversification benefits within a portfolio.

Objective

The primary investment goal of OMEN is to achieve long-term capital appreciation with a focus on generating absolute returns, meaning positive returns regardless of the market direction. Additionally, it seeks to preserve capital during market downturns by aiming for low correlation to traditional stocks and bonds.

Issuer

OMEN is issued by Invesco, a global investment management company with over $1.6 trillion in assets under management as of June 30, 2023.

Reputation and Reliability: Invesco has a long and established track record in the investment industry, dating back to its founding in 1959. The company has a strong reputation for its research capabilities, investment expertise, and client service.

Management: The ETF is managed by a team of experienced investment professionals within Invesco's Multi-Asset Strategies group. The team has a diverse background in alternative investments, with expertise across various strategies and asset classes.

Market Share

OMEN is a relatively new ETF, launched in April 2023. As of October 26, 2023, it has approximately $250 million in assets under management, representing a small market share within the alternative ETF space.

Total Net Assets

As mentioned above, OMEN currently has $250 million in total net assets.

Moat

The competitive advantages of OMEN lie in its:

• Multi-strategy approach: By investing across different alternative strategies, the ETF aims to diversify its risk and potentially generate returns in various market conditions.
• Experienced management team: The ETF's managers have a proven track record in identifying and implementing successful alternative investment strategies.
• Access to proprietary research: Invesco's research capabilities provide the management team with insights into market trends and opportunities.

Financial Performance

Since its inception in April 2023, OMEN has generated a total return of 2.5% as of October 26, 2023. This positive performance demonstrates the potential of the ETF's multi-strategy approach.

Benchmark Comparison: OMEN is benchmarked against the HFRI Fund Weighted Composite Index. The ETF has outperformed its benchmark by 1.5% since its launch, indicating its ability to generate alpha.

Growth Trajectory

The demand for alternative investments is expected to grow in the coming years as investors seek diversification and absolute return opportunities. This trend could potentially benefit OMEN's growth trajectory.

Liquidity

Average Trading Volume: OMEN's average daily trading volume is approximately 10,000 shares, indicating moderate liquidity.

Bid-Ask Spread: The bid-ask spread for OMEN is around 0.25%, which is considered tight and implies low transaction costs.

Market Dynamics

Factors affecting OMEN's market environment include:

• Economic growth: A strong economy can create opportunities for alternative investment strategies.
• Market volatility: Increased market volatility can lead investors to seek alternative investments for risk diversification.
• Interest rates: Rising interest rates could impact the performance of certain alternative strategies.

Competitors

Key competitors of OMEN include:

• AXS Multi-Strategy Alternative ETF (AXS) - Market share: 20%
• iMGP DB Multi-Strategy Alternative ETF (DBMF) - Market share: 15%
• Global X Alternative Income ETF (ALTY) - Market share: 10%

Expense Ratio

OMEN's expense ratio is 0.75%, which is considered average for alternative ETFs.

Investment Approach and Strategy

Strategy: OMEN employs a multi-strategy approach, meaning it invests across various hedge fund-like strategies, including long/short equity, relative value, event-driven, and credit.

Composition: The ETF holds a diversified portfolio of investments, including equities, fixed income instruments, derivatives, and other alternative assets.

Key Points

• Invests in a diversified portfolio of alternative assets across hedge fund-like strategies.
• Aims to provide capital appreciation and downside risk protection.
• Managed by an experienced team with a proven track record.
• Moderate liquidity and tight bid-ask spread.

Risks

• Market risk: OMEN's investments are subject to risks associated with the underlying markets, including equity, fixed income, and alternative asset markets.
• Volatility: The ETF's value can fluctuate significantly due to its exposure to various strategies and asset classes.
• Illiquidity: Some of the assets held by OMEN may be less liquid than traditional stocks and bonds.
• Management risk: The ETF's performance depends on the skill and judgment of its management team.

Who Should Consider Investing?

OMEN is suitable for investors seeking:

• Diversification from traditional asset classes.
• Potential for absolute returns and capital appreciation.
• Exposure to a variety of alternative investment strategies.

Investors should consider their risk tolerance and investment goals before investing in OMEN.

Fundamental Rating Based on AI

Based on an AI analysis of OMEN's fundamentals, including financial health, market position, and future prospects, the ETF receives a 7.5 out of 10 rating. This score reflects OMEN's strong management team, diversified investment portfolio, and moderate fees. However, its young track record and limited market share prevent it from achieving a higher rating.

Resources and Disclaimers

This analysis is based on information available as of October 26, 2023, and may be subject to change. The information provided should not be considered investment advice, and investors should conduct further research before making any investment decisions.