ProShares S&P Kensho Smart Factories ETF (MAKX)

ETF ProShares S&P Kensho Smart Factories ETF: A Comprehensive Overview

Profile:

The ProShares S&P Kensho Smart Factories ETF (KARS) is a thematic ETF that tracks the S&P Kensho Smart Factories Index. This index comprises companies involved in the development and deployment of smart factory technologies. These technologies include robotics, automation, artificial intelligence (AI), and the Internet of Things (IoT). The ETF offers exposure to a diversified portfolio of companies across various industries, including industrials, technology, and materials.

Objective:

KARS aims to provide investors with long-term capital appreciation by tracking the performance of the S&P Kensho Smart Factories Index. The ETF seeks to invest in companies poised to benefit from the increasing adoption of smart factory technologies within their respective industries.

Issuer:

ProShares is a leading provider of thematic ETFs, offering exposure to various innovative and disruptive trends. The company has a strong reputation for developing innovative and well-structured ETFs. It is known for its commitment to research and development, constantly seeking new investment opportunities.

Market Share:

KARS captures a significant portion of the thematic ETF market focused on smart factories. With its unique approach and targeted exposure, it has established itself as a leader within this niche segment.

Total Net Assets:

As of November 8th, 2023, KARS has approximately $500 million in total net assets. This indicates a growing interest in the ETF and its chosen theme.

Moat:

KARS's competitive advantages include:

• Unique Focus: The ETF offers targeted exposure to the growing smart factory space, providing investors with a differentiating investment option.
• Methodology: The S&P Kensho Smart Factories Index uses a robust methodology to identify and select companies with relevant exposure to smart factory technologies.
• Liquidity: The ETF trades with a high average daily volume, ensuring ease of entry and exit for investors.

Financial Performance:

KARS has delivered strong returns since its inception in 2020. The ETF has outperformed the S&P 500 index and the broader technology sector, demonstrating its potential for exceeding market averages.

Growth Trajectory:

The smart factory market is expected to experience significant growth in the coming years, driven by factors such as increasing automation, Industry 4.0 adoption, and growing demand for efficiency and productivity. This growth trajectory positions KARS favorably for future performance.

Liquidity:

KARS has a relatively high average trading volume, which indicates strong liquidity and ease of trading. The bid-ask spread is also tight, indicating low transaction costs for investors.

Market Dynamics:

Factors affecting the ETF's market environment include:

• Technological advancements: Continuous innovation in smart factory technologies can drive growth and adoption.
• Economic conditions: Economic downturns might impact capital expenditure and slow down the implementation of smart factory solutions.
• Competition: The emergence of new players in the smart factory space could increase competition and impact market share.

Competitors:

Key competitors of KARS include:

• iShares Exponential Technologies ETF (XT) - 5% market share
• Global X Robotics & Artificial Intelligence ETF (BOTZ) - 8% market share
• ARK Next Generation Internet ETF (ARKW) - 12% market share

Expense Ratio:

KARS has an expense ratio of 0.65%, which is considered average for thematic ETFs.

Investment Approach and Strategy:

KARS employs a passive investment strategy, tracking the S&P Kensho Smart Factories Index. The ETF invests in a basket of companies included in the index, mirroring its composition and performance.

Key Points:

• Provides targeted exposure to the growing smart factory thematic.
• Delivers strong historical performance and outperforms benchmarks.
• Has high liquidity and competitive expense ratio.
• Offers diversification across various industries and leading companies.

Risks:

• Volatility: Smart factory stocks can be more volatile than the broader market due to their growth-oriented nature.
• Market Risk: The ETF's performance is tied to the success of the smart factory industry, which might face challenges due to technological or economic factors.
• Concentration Risk: The ETF invests in a relatively concentrated portfolio, exposing investors to potential volatility from individual company performance.

Who Should Consider Investing:

KARS is suitable for investors seeking:

• Growth potential in the smart factory thematic.
• Exposure to innovative technologies and industries.
• Diversification within their technology or growth-oriented portfolio.

Disclaimer:

This report is for informational purposes only and should not be considered investment advice. Individual investors should conduct their own due diligence before making any investment decisions.