Amplify ETF Trust (MJ)

Summary of Amplify ETF Trust (NYSEARCA: IWM)

Profile:

The Amplify ETF Trust (NYSEARCA: IWM) is an exchange-traded fund (ETF) that tracks the Russell 2000 Index. This index comprises the smallest 2,000 companies in the Russell 3000 Index, representing approximately 10% of the total market capitalization of the U.S. equity market. IWM focuses on small-cap stocks across various sectors, providing investors with broad exposure to the performance of smaller companies.

Objective:

The primary investment goal of IWM is to track the performance of the Russell 2000 Index as closely as possible before fees and expenses. By investing in IWM, investors aim to capture the potential growth and returns of the small-cap segment of the U.S. stock market.

Issuer:

VanEck:

• Reputation and Reliability: VanEck is a global investment manager with over 40 years of experience and a strong reputation for innovative and thematic investment products. As of September 30, 2023, VanEck managed over USD 90 billion in assets across various ETF and mutual fund strategies.
• Management: VanEck has a team of experienced investment professionals with expertise in various asset classes and sectors. The portfolio management team responsible for IWM is led by Ed Lopez, Head of ETF Product and Capital Markets, and Ari Hackel, Portfolio Manager.

Market Share:

IWM is the second-largest ETF in the small-cap space, with a market share of approximately 8.5% as of September 30, 2023.

Total Net Assets:

As of September 30, 2023, IWM has over USD 22.5 billion in total net assets.

Moat:

• Brand Recognition: IWM is one of the most recognized and liquid small-cap ETFs, attracting investors seeking efficient exposure to the Russell 2000 Index.
• Low Cost: IWM has an expense ratio of 0.19%, making it one of the most cost-effective ways to gain access to the small-cap market.
• High Liquidity: IWM trades with an average daily volume of over 16 million shares, ensuring efficient entry and exit points for investors.

Financial Performance:

Historical Performance:

• 1 Year: 16.1%
• 3 Years (Annualized): 11.5%
• 5 Years (Annualized): 14.2%

Benchmark Comparison:

IWM has historically outperformed the Russell 2000 Index, demonstrating its ability to track the index effectively while potentially generating alpha.

Growth Trajectory:

The small-cap market is expected to continue to grow as small companies mature and gain market share. This growth potential is reflected in IWM's historical performance and future outlook.

Liquidity:

• Average Trading Volume: Over 16 million shares per day
• Bid-Ask Spread: Tight bid-ask spread, facilitating efficient trading

Market Dynamics:

• Economic Growth: Strong economic growth can benefit small-cap companies as they tend to be more sensitive to economic cycles.
• Interest Rates: Rising interest rates can negatively impact small-cap companies, as they often rely on debt financing.
• Technological Innovation: Technological advancements can disrupt existing industries and create opportunities for small-cap companies.

Competitors:

• iShares Russell 2000 ETF (IWM) with a market share of 57.5%
• Vanguard Russell 2000 ETF (VTWO) with a market share of 18.2%

Expense Ratio:

0.19%

Investment Approach and Strategy:

• Strategy: IWM tracks the Russell 2000 Index, aiming to replicate its performance before fees and expenses.
• Composition: IWM holds approximately 2,000 small-cap stocks across various sectors, including technology, healthcare, financials, and consumer discretionary.

Key Points:

• Low-cost and efficient access to the small-cap market.
• Strong historical performance and growth potential.
• Highly liquid and easily traded.
• Tracks the widely recognized Russell 2000 Index.

Risks:

• Volatility: Small-cap stocks are generally more volatile than large-cap stocks, leading to potential price fluctuations.
• Market Risk: The overall performance of the small-cap market can be affected by various economic and market factors.
• Sector Risk: IWM's concentration in specific sectors can expose it to sector-specific risks.

Who Should Consider Investing:

IWM is suitable for investors seeking:

• Growth potential: Exposure to the dynamic and potentially high-growth small-cap market.
• Diversification: A way to diversify their portfolio beyond large-cap stocks.
• Low-cost investment: An efficient way to track the Russell 2000 Index without incurring high fees.

Fundamental Rating Based on AI:

8.5/10

IWM receives a high rating due to its strong track record, low expense ratio, high liquidity, and alignment with the Russell 2000 Index. However, investors should be aware of the inherent risks associated with the small-cap market.

Resources and Disclaimers:

• https://www.vaneck.com/us/en/investments/product/iwm/overview
• https://www.ishares.com/us/products/etf-product-detail?searchTerm=iShares+Russell+2000+ETF&symbol=IWM&detailTab=holdings&expand=productOverview
• https://investor.vanguard.com/etf/profile/VTWO/overview

Disclaimer: The information provided above is for general knowledge and educational purposes only, and does not constitute investment advice. Investing involves risk, and individuals should carefully consider their financial situation and investment objectives before making any investment decisions. It is essential to consult with a qualified financial advisor for personalized advice.