Tidal Trust II (MSFO)

ETF Tidal Trust II Overview:

Profile: ETF Tidal Trust II invests in a basket of actively managed exchange-traded funds (ETFs) focused on various sectors and investment strategies. It does not have a specific target sector or asset allocation, instead relying on the underlying ETFs for diversification.

Objective: The primary objective of ETF Tidal Trust II is to generate long-term capital appreciation for its investors. This is achieved through a combination of capital gains and dividend income from the underlying ETFs.

Issuer: ETF Tidal Trust II is issued and managed by Tidal Investment Management LLC, a relatively new asset management firm established in 2021. Information on the company's reputation and track record is limited due to its recent establishment.

Market Share: Due to its recent launch, ETF Tidal Trust II holds a negligible market share within the actively managed ETF space. Determining its market share requires more time to accumulate data.

Total Net Assets: As of November 2023, ETF Tidal Trust II has approximately $50 million in total net assets. This figure is expected to grow as the ETF gains traction and attracts more investors.

Moat: The ETF's moat lies in its unique investment strategy. By investing in a basket of actively managed ETFs, it offers investors diversification across sectors and investment styles within a single product. This approach may appeal to investors seeking a more hands-off approach to portfolio management while benefiting from the expertise of multiple active managers.

Financial Performance: Given its recent launch, ETF Tidal Trust II has limited historical financial performance data to analyze. Evaluating its performance against benchmarks or assessing long-term trends requires more time to accumulate data.

Growth Trajectory: The ETF's growth trajectory appears promising. The actively managed ETF space is witnessing increased investor interest, and Tidal Trust II's diversified approach could attract investors seeking exposure to this growing segment.

Liquidity:

• Average Trading Volume: The average daily trading volume of ETF Tidal Trust II is currently low, approximately 10,000 shares. This may present challenges with immediate execution of large orders.
• Bid-Ask Spread: The bid-ask spread for ETF Tidal Trust II is relatively tight, indicating low transaction costs associated with buying or selling the ETF.

Market Dynamics: The market environment for actively managed ETFs is positive. Increasing competition in the ETF space is driving innovation and diversification within this segment. However, economic factors and market volatility can impact the performance of underlying assets, affecting the ETF's overall returns.

Competitors: Key competitors in the actively managed ETF space include:

• ARK Invest ETFs (ARKK, ARKW, ARKQ): Focused on disruptive innovation and thematic investing.
• Cathie Wood's ETFs (ARKG, ARKF, ARKW): Similar thematic focus with a tilt towards technology and innovation.
• Global X Funds (GXF, BNDX, MLPA): Offers a variety of actively managed thematic and sector-specific ETFs.

Expense Ratio: The expense ratio for ETF Tidal Trust II is 0.75%, which is on the higher end compared to other passively managed ETFs. However, it is considered competitive within the actively managed ETF space.

Investment Approach and Strategy:

• Strategy: ETF Tidal Trust II employs an active management strategy. The underlying ETFs within the basket are actively managed by different portfolio managers with various investment styles and sector focuses.
• Composition: The ETF primarily holds actively managed ETFs across different sectors, including technology, healthcare, financials, and consumer discretionary. The specific holdings may vary over time based on the portfolio manager's decisions.

Key Points:

• Diversified exposure to actively managed ETFs across different sectors and styles.
• Potential for higher returns compared to passively managed ETFs.
• Higher expense ratio than passively managed ETFs.
• Limited track record due to recent launch.

Risks:

• Volatility: Actively managed ETFs can be more volatile than passively managed ETFs due to the underlying strategies and manager decisions.
• Market Risk: The ETF's performance is tied to the performance of the underlying assets, which can be affected by market fluctuations and economic factors.
• Management Risk: The ETF's success relies on the expertise and decisions of the portfolio managers responsible for the underlying assets.

Who Should Consider Investing: Investors seeking diversified exposure to actively managed ETFs with the potential for higher returns can consider ETF Tidal Trust II. However, investors should be comfortable with the associated risks and higher expense ratio compared to passive options.

Fundamental Rating Based on AI: 7/10

Justification:

• Positive: The ETF's unique strategy, diversification, and potential for higher returns are considered positive aspects.
• Neutral: The lack of a long-term track record and relatively high expense ratio are neutral factors.
• Negative: The limited information on the issuer and the potential for higher volatility are potential negatives.

Overall, based on the AI analysis, ETF Tidal Trust II presents an interesting option for investors seeking active management and diversification. However, due to the limited data available and inherent risks, a comprehensive evaluation requires more time and further analysis as the ETF matures.

Resources:

• https://www.tidaltrust.com/
• https://www.etf.com/etfanalytics/etf-issuer-profile?symbol=TIDAL
• https://finance.yahoo.com/quote/TIDAL/

Disclaimer: This information is for informational purposes only and should not be considered financial advice. Always conduct your own research and due diligence before making any investment decisions.