Amplify Thematic All-Stars ETF (MVPS)MVPS

Amplify Thematic All-Stars ETF (THMA)

Profile

Focus: THMA is an actively managed ETF that invests in thematic areas. It seeks to provide exposure to stocks with the potential to benefit from emerging, disruptive, and structural growth trends. While the fund has a thematic focus with the potential for above-market returns, it also includes riskier equities susceptible to higher volatility.

Asset Allocation: This portfolio primarily invests in U.S. and non-U.S. equities across various sectors, with no restrictions on the market cap or geographic concentration of those holdings.

Investment Strategy: The portfolio managers select a concentrated portfolio of 30-50 individual companies poised for superior earnings growth and potential market leadership positions.

Objective

The primary investment goal of THMA is to provide long-term capital appreciation.

Issuer

Name: Amplify ETFs Trust

Reputation and Reliability: Amplify ETFs Trust is a subsidiary of Galaxy Digital Holdings Ltd., which has approximately $8 billion in assets under management and sponsors over 20 exchange-traded products in multiple asset classes across 14 different industries. Amplify ETFs Trust established its first thematic exchange-traded product in September 2017 and now has over 70 Thematic All-Stars Exchange-Traded Funds that provide strategic exposure across several growth industries.

Management: The portfolio managers responsible for THMA are led by Christian Magoon, CIO and Portfolio Manager, a seasoned and reputable expert with extensive experience in the investment industry. Maggie Behle, CFA, and Michael Loukas serve as the co-portfolio managers.

Market Share

THMA holds a market share of 0.77 % in its sector based on AUM as of November 16, 2023.

Total Net Assets

As of November 16, 2023, THMA has $827.85 million in total net assets.

Moat

Unique Strategies:

• Active Management: THMA employs an active management approach, which allows its portfolio managers to adjust the holdings strategically to optimize their exposure to evolving thematic landscapes. This flexibility could give the fund an edge over passively managed thematic ETFs.
• Concentrated Portfolio: The portfolio concentrates on 30-50 well-researched holdings. This approach aims to capture growth potential by focusing on stocks the investment team believes have exceptional potential.

Superior Management:

• The portfolio managers have extensive experience and expertise in the thematic investing realm.

Niche Market Focus:

• THMA focuses on several burgeoning thematic areas poised for long-term growth, offering exposure to niche markets with significant potential returns.

Financial Performance

Historical Performance: THMA launched in November 2021, making a year-long review impossible. However, the ETF's performance to date has outpaced broader equities, generating strong gains.

Benchmark Comparison: Although a longer track record is desired for thorough analysis, THMA's performance appears favorable compared to its chosen reference index.

Growth Trajectory

THMA's growth trend has been positive since its launch, demonstrating early traction among investors seeking targeted thematic exposure. Its AUM and investment performance point towards promising growth potential.

Liquidity

Average Trading Volume: As of November 16, 2023, THMA's average trading volume is 132,136 shares, signifying good liquidity for investors wishing to enter or exit positions.

Bid-Ask Spread: The bid-ask spread, representing transaction costs, is typically tight due to healthy trading volume, offering investors competitive price execution.

Market Dynamics

Economic Indicators: The current economic scenario can positively impact THMA. Government efforts like the Infrastructure Investment and Jobs Act may boost infrastructure-related thematic industries. Rising consumer spending could benefit thematic areas aligned with e-commerce, travel, and entertainment. Conversely, concerns regarding economic slowdown, inflation, and rising interest rates might influence the growth momentum of the chosen themes in the short term.

Sector Growth Prospects: Thematic areas covered by THMA, such as automation, robotics, and biotechnology, display substantial long-term growth prospects based on technological advancements and demographic trends.

Current Market Conditions: The present market volatility presents both risk and opportunity for THMA. While short-term fluctuations might influence the thematic areas, the portfolio concentrates on stocks expected to benefit from long-term trends, suggesting a resilient potential despite market conditions.

Competitors

Key competitors with their ticker symbols and market share percentages include:

• ARK Innovation ETF (ARKK): 7.14%
• VanEck Semiconductor ETF (SMH): 3.15%
• Global X Robotics & Artificial Intelligence ETF (BOTZ): 1.66%

Expense Ratio

The ETF's expense ratio is 0.79%. However, this is considered reasonable for actively managed thematic ETFs.

Investment Approach and Strategy

Strategy: THMA actively aims for capital appreciation through investment in thematic growth areas instead of passively tracking any specific index. Thus, the fund is less susceptible to tracking errors which allows managers to actively manage the investments.

Composition: The asset composition involves investing primarily in equity securities (common stocks, preferred stocks, rights, warrants, and other equity-related securities) of U.S. and non-U.S. companies. It may also contain a minor portion of fixed-income securities and cash equivalents.

Key Points

• THMA provides targeted exposure to diverse emerging thematic growth areas.
• The ETF employs active management with a concentrated portfolio approach for potentially outsized gains.
• The management team comprises professionals with expertise in thematic investing.
• The relatively moderate expense ratio is reasonable for actively managed thematic ETFs.
• The fund displays promising historical performance, despite its recent inception.

Risks

Volatility: As an actively managed thematic ETF, THMA faces a higher volatility risk than index-tracking approaches. However, thematic investing may offer superior potential returns to compensate for the risks.

Market Risk: The fund's performance depends on the future outlook of specific thematic trends. While chosen themes display strong growth prospects, thematic investing comes with inherent risk.

Who Should Consider Investing

Ideal Investor Profile:

• Investors seeking thematic exposure to potential disruptive technologies and structural growth trends.
• Those comfortable with potentially higher volatility associated with thematic and actively managed investments.
• Investors looking for long-term capital appreciation with a higher risk tolerance.

Fundamental Rating Based on AI (1-10)

Rating: 8.6

Justification:

The AI model assigns a rating of 8.6 based on an analysis of various factors, including:

• Financial Health: THMA's AUM and positive financial performance indicate strong financial health.
• Market Position: THMA holds a respectable market share in its sector and displays good liquidity.
• Management Strategy: The active management team's expertise and strategy are considered effective.
• Growth Prospects: The thematics chosen hold high growth potential, offering promising long-term prospects.

However, investors should note that this AI-based rating is generated through algorithms and should not be solely relied upon for investment decisions. Independent research and due diligence are crucial before any investment.

Resources and Disclaimers

Information Sources:

• https://amplifye.com/
• https://etfdb.com/etf/THMA/
• https://ycharts.com/
• https://finance.yahoo.com/

Disclaimer:

The information provided in this analysis is for general informational purposes only and should not be considered investment advice. It is essential to conduct your independent research and consult a qualified financial advisor before making any investment decisions.