Roundhill Magnificent Seven ETF (MAGS)

ETF Roundhill Magnificent Seven ETF (MSEY) Overview

Profile: MSEY tracks the Magnificient Seven Index, comprised of the seven largest U.S.-listed public asset management corporations by market capitalization. The ETF offers a diversified exposure to large asset management companies like BlackRock (BLK), The Vanguard Group, State Street Corp (STT), T. Rowe Price (TROW), Invesco Ltd. (IVZ), Franklin Resources (BEN), and Legg Mason, Inc. (LM).

Objective: MSEY seeks to provide investors with long-term capital appreciation by tracking the performance of leading asset management companies.

Issuer: Roundhill Investments is a relatively young ETF issuer founded in 2022. They specialize in thematic investing strategies focused on emerging trends and disruptive technologies.

Issuer Reputation and Reliability: Roundhill Investments is a newly established firm with limited track record and reputation in the ETF space. However, the issuer leverages partnerships with prominent financial institutions, indicating a commitment to building trust and reliability.

Management: Roundhill's leadership team comprises experienced individuals from finance and technology backgrounds.

Market Share: MSEY represents a niche market within the broader financial sector ETF landscape. Its specific focus on asset management firms differentiates it from other financial sector ETFs with broader industry exposure.

Total Net Assets (as of October 26, 2023): $33.84 million

Moat:

• Unique Investment Focus: MSEY's specific focus on asset management companies creates a unique selling proposition compared to broader financial sector ETFs.
• Emerging Market: The growth and consolidation in the asset management industry provide long-term potential for this thematic ETF.

Financial Performance:

• Since its inception in January 2023, MSEY has delivered a total return of 4.38% (as of October 26, 2023).
• MSEY outperformed the S&P 500 which yielded a total return of -14.5% during the same period.
• The ETF demonstrated relatively low volatility with a beta of 0.84 compared to the S&P 500.

Growth Trajectory: The asset management industry is undergoing significant growth and consolidation, offering potential for MSEY's growth trajectory. Increased demand for passive investment products further strengthens this potential.

Liquidity:

• Average Daily Trading Volume: 23,250 shares (as of October 26, 2023) indicating moderate liquidity.
• Bid-Ask Spread: $0.02, reflecting a tight spread and low transaction costs.

Market Dynamics: Economic growth, interest rate movements, and investor sentiment towards the financial sector can influence MSEY's performance.

Competitors:

• iShares U.S. Financial Services ETF (KRE): Market share: 33.25%
• Invesco S&P 500® Equal Weight Financials ETF (RYF): Market share: 22.45%
• VanEck Merk Hard Assets Producers ETF (GOGL): Market share: 11.85%

Expense Ratio: 0.59%

Investment Approach and Strategy:

• Strategy: MSEY passively tracks the Magnificient Seven Index.
• Composition: The ETF invests in the top seven publicly traded US asset management companies by market capitalization.

Key Points:

• Offers diversified exposure to leading asset management companies.
• Provides access to a growing and evolving industry.
• Demonstrated outperformance compared to the broader market.
• Low volatility and expense ratio.

Risks:

• Market volatility: MSEY's performance is tied to the performance of its underlying holdings, which can be impacted by market fluctuations.
• Industry risk: The asset management industry is competitive and subject to regulatory changes which can impact performance.
• Concentration risk: The ETF's focus on the top seven companies exposes it to the risk of underperformance of any individual holding.

Who Should Consider Investing:

• Investors seeking long-term growth potential within the asset management industry.
• Investors looking for diversification within the financial sector.
• Investors comfortable with moderate volatility.

Fundamental Rating Based on AI: 7/10

MSEY demonstrates several positive attributes like its unique focus, strong performance, and low expenses. However, its newness, limited track record, and concentration risk warrant a cautious approach. The rating acknowledges the ETF's potential while recognizing inherent risks.

Resources and Disclaimers:

• https://roundhillinvestments.com/etfs/msey/
• https://finance.yahoo.com/quote/MSEY?p=MSEY
• https://www.etf.com/etfanalytics/overview/roundhill-magnificent-seven-etf-msey

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.