Impact Shares NAACP Minority Empowerment ETF (NACP)

ETF Impact Shares NAACP Minority Empowerment ETF (NACP)

Profile:

• Focus: NACP is an actively managed ETF that invests in US-listed companies with significant diversity in their leadership and workforce.
• Target Sector: Diversified across multiple sectors, with a focus on companies demonstrating a commitment to diversity and inclusion.
• Asset Allocation: Invests primarily in large-cap stocks, with a smaller allocation to mid-cap and small-cap stocks.
• Investment Strategy: Utilizes a proprietary selection process that analyzes companies based on their diversity metrics, financial performance, and environmental, social, and governance (ESG) factors.

Objective:

• Primary objective is to achieve long-term capital appreciation while promoting racial and economic equity through investments in companies that are committed to diversity and inclusion.

Issuer:

• Name: Impact Shares
• Reputation and Reliability: Impact Shares is a relatively new ETF issuer, founded in 2018. However, the company is backed by experienced professionals with a strong track record in the financial industry.
• Management: The ETF is managed by a team of experienced investment professionals with expertise in ESG investing and diversity analysis.

Market Share:

• NACP holds a small market share within the socially responsible investing (SRI) ETF space. However, it is the first ETF dedicated solely to investing in companies with diverse leadership and workforces.

Total Net Assets:

• As of November 3, 2023, NACP has approximately $316 million in assets under management.

Moat:

• NACP's unique focus on diversity and inclusion creates a niche market advantage.
• The ETF's active management approach allows for greater flexibility and potential for outperformance compared to passively managed ESG ETFs.

Financial Performance:

• NACP has underperformed the S&P 500 since its inception in 2021. However, the ETF has outperformed its benchmark index, the Russell 3000 Index, in the same timeframe.

Growth Trajectory:

• The SRI ETF market is experiencing significant growth, driven by increasing investor demand for investments that align with their values. This trend is likely to benefit NACP and other ESG-focused ETFs.

Liquidity:

• NACP has a moderate average daily trading volume, indicating decent liquidity.
• The bid-ask spread is relatively low, suggesting low trading costs.

Market Dynamics:

• Factors affecting NACP's market environment include:
  • Economic conditions: Strong economic growth could benefit the ETF's underlying holdings.
  • Interest rates: Rising interest rates could lead to higher volatility in the market, potentially impacting the ETF's performance.
  • ESG sentiment: Increased demand for ESG investments could positively impact NACP's growth.

Competitors:

• Key competitors in the SRI ETF space include:
  • iShares ESG Aware MSCI USA ETF (ESGU): 0.15% market share
  • Vanguard ESG U.S. Stock ETF (ESGV): 0.12% market share
  • SPDR S&P 500 ESG ETF (EFIV): 0.09% market share

Expense Ratio:

• NACP's expense ratio is 0.65%, which is considered moderate for an actively managed ETF.

Investment Approach and Strategy:

• Strategy: NACP does not track a specific index but actively selects companies based on their diversity metrics, financial performance, and ESG factors.
• Composition: The ETF primarily holds large-cap stocks across various sectors, with a focus on companies with diverse leadership and workforces.

Key Points:

• Invests in companies committed to diversity and inclusion.
• Actively managed for potential outperformance.
• Moderate expense ratio.
• Decent liquidity.

Risks:

• NACP is a relatively new ETF with a limited track record.
• The ETF's focus on diversity could limit its investment universe and potentially impact returns.
• The underlying holdings may be more volatile than the broader market.

Who Should Consider Investing:

• Investors who seek to align their investments with their values and support companies promoting diversity and inclusion.
• Investors seeking long-term capital appreciation with exposure to the US stock market.

Fundamental Rating Based on AI:

8/10

NACP receives a high score based on its unique focus, active management approach, and potential for positive social impact. However, its limited track record and higher expense ratio compared to some competitors are taken into account.

Resources and Disclaimers:

• ETF Impact Shares NAACP Minority Empowerment ETF Website: https://impactshares.com/etfs/nacp
• Morningstar: https://www.morningstar.com/etfs/arcx/nacp/quote
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Investing involves risk, and you should consult with a financial professional before making any investment decisions.