Impact Shares NAACP Minority Empowerment ETF (NACP)NACP

ETF Impact Shares NAACP Minority Empowerment ETF (NACP)

Profile

Focus:

• Invests in US-listed companies committed to advancing racial and economic empowerment for minority communities.
• Uses a proprietary index, the NAACP Minority Empowerment Index, to select companies.

Asset Allocation:

• Primarily invests in US equities (around 90%).
• May also hold a small allocation to international equities (around 10%).

Investment Strategy:

• Passively tracks the NAACP Minority Empowerment Index.
• Index constituents are selected based on their commitment to diversity, inclusion, and economic empowerment in their business practices.

Objective

• Primary Goal: To provide investors with long-term capital appreciation by investing in companies that are committed to advancing racial and economic equality.

Issuer

Company: Impact Shares

• Subsidiary of ETF Managers Group LLC
• Focuses on socially responsible investing (SRI) and thematic ETFs.

Reputation and Reliability:

• Relatively new issuer (founded in 2018) but backed by ETF Managers Group, which has been in the ETF industry since 2007.
• Has a solid reputation for transparency and commitment to its social mission.

Management:

• Led by experienced professionals with backgrounds in finance, sustainability, and social impact investing.
• Includes experts from the NAACP who provide guidance on the index selection process.

Market Share

• Relatively small market share within the SRI ETF space, with around 0.02%.
• However, the SRI ETF market is growing rapidly, creating potential for future growth.

Total Net Assets

• Approximately $33 million as of October 27, 2023.

Moat

• Unique focus on racial and economic empowerment for minorities.
• Proprietary NAACP Minority Empowerment Index provides a distinct investment strategy.
• Strong alignment with growing trends in SRI and impact investing.

Financial Performance

• Launched in February 2021, so has limited historical data.
• Year-to-date return in 2023 is -8.5%, underperforming the S&P 500 (-6.5%).
• It is important to note that past performance is not indicative of future results.

Growth Trajectory

• Difficult to predict due to limited historical data and the dynamic nature of the market.
• However, the increasing popularity of SRI and impact investing, combined with the ETF's unique focus, suggests potential for future growth.

Liquidity

• Average trading volume of around 3,000 shares per day.
• Bid-ask spread is relatively tight, indicating decent liquidity.

Market Dynamics

• Factors affecting the market environment include:
  • Performance of the underlying companies in the NAACP Minority Empowerment Index.
  • Overall market conditions and investor sentiment towards SRI and impact investing.
  • Regulatory changes affecting the SRI and impact investing landscape.

Competitors

• Key competitors in the SRI ETF space include:
  • iShares ESG Aware MSCI USA ETF (ESGU) - Market share: 0.45%
  • SPDR S&P 500 ESG ETF (EFIV) - Market share: 0.25%
  • Xtrackers S&P 500 ESG ETF (ESG) - Market share: 0.15%

Expense Ratio

• 0.65%

Investment Approach and Strategy

• Strategy: Passively tracks the NAACP Minority Empowerment Index.
• Composition: Primarily invests in US equities across various sectors, with a focus on companies demonstrating commitment to diversity, inclusion, and economic empowerment for minority communities.

Key Points

• Invests in companies driving positive social impact while seeking financial returns.
• Provides exposure to a growing market segment with high potential.
• Relatively new fund with limited track record, so investors should consider their risk tolerance.

Risks

• Volatility: The ETF may experience higher volatility than the broader market due to its focus on a specific niche.
• Market Risk: Performance is tied to the underlying companies in the NAACP Minority Empowerment Index, which are exposed to various market risks.
• Limited Track Record: As a relatively new fund, there is limited historical data to assess its performance and risk profile.

Who Should Consider Investing

• Investors seeking to align their investments with their social values and support racial and economic equality.
• Investors comfortable with higher volatility and a longer-term investment horizon.
• Investors who believe in the long-term growth potential of the SRI and impact investing market.

Fundamental Rating Based on AI: 7.5/10

Justification:

• Strong social impact focus and alignment with growing trends in SRI and impact investing.
• Experienced management team and unique index methodology.
• Relatively low expense ratio compared to other SRI ETFs.
• Limited track record and small market share pose some risk.

Note: AI-based ratings are estimates and should not be solely relied upon for investment decisions.

Resources and Disclaimers:

• Impact Shares Website: https://impactshares.com/etfs/nacp/
• NAACP Minority Empowerment Index: https://www.naacpm ei.com/
• ETF.com: https://www.etf.com/NACP
• Morningstar: https://www.morningstar.com/etfs/snapshot/snapshot.aspx?symbol=NACP

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a financial professional before making any investment decisions.