Neuberger Berman Next Generation Connected Consumer ETF (NBCC)

ETF Neuberger Berman Next Generation Connected Consumer ETF (NBCC)

Profile:

NBCC is an actively managed exchange-traded fund that invests in companies globally that cater to the evolving needs and behaviors of the next generation of consumers, particularly those born between the mid-1980s and early 2010s. It focuses on sectors like technology, healthcare, consumer discretionary and staples, with a specific emphasis on companies that leverage technology to disrupt traditional industries and cater to changing consumer preferences.

Objective:

The primary investment goal of NBCC is to achieve long-term capital appreciation by investing in companies poised to benefit from the evolving consumption patterns and preferences of the next-generation consumer.

Issuer:

Neuberger Berman is a global investment management firm founded in 1939. It has a strong reputation with over $473 billion in assets under management, a long history in the industry, and a proven track record of success.

• Reputation and Reliability: Neuberger Berman has a strong reputation for its investment expertise and has been recognized by various organizations for its performance and client service.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in global equities and thematic investing, led by Michael Baker, a veteran in the industry with over two decades of experience at Neuberger Berman.

Market Share:

NBCC has a market share of approximately 0.1% in the Connected Consumer sector. While not the largest, it has experienced significant growth since its inception in 2021.

Total Net Assets:

As of November 15th, 2023, NBCC has approximately $750 million in total net assets.

Moat:

The competitive advantages of NBCC include:

• Unique Strategy: Its focus on the next generation consumer and leveraging technology for disruption sets it apart from other ETFs in the Connected Consumer space.
• Experienced Management: The management team's deep understanding of the global equity market and thematic investing allows them to identify and invest in promising companies early on.
• Active Management: The active management approach enables the portfolio managers to adapt to changing market dynamics and identify new investment opportunities, potentially leading to outperformance compared to passively managed funds.

Financial Performance:

NBCC has delivered strong performance since its inception, outperforming its benchmark and other ETFs in the Connected Consumer sector. However, it is important to remember that past performance does not guarantee future results.

Benchmark Comparison:

The ETF has consistently outperformed its benchmark, the MSCI ACWI Consumer Discretionary Index, over various timeframes.

Growth Trajectory:

The Connected Consumer sector is expected to experience significant growth due to the rising influence of the next generation of consumers and their evolving preferences. NBCC is well-positioned to benefit from this long-term trend.

Liquidity:

• Average Trading Volume: NBCC has an average daily trading volume of approximately 100,000 shares, indicating good liquidity.
• Bid-Ask Spread: The ETF has a relatively tight bid-ask spread, making it easy to buy and sell shares at a competitive price.

Market Dynamics: Factors affecting NBCC's market environment:

• Economic Indicators: A strong global economy with rising consumer confidence can positively impact NBCC's performance.
• Sector Growth Prospects: The Connected Consumer sector is expected to experience continued growth due to technological advancements, changing consumer behavior, and rising disposable incomes.
• Market Volatility: Market volatility can impact NBCC's returns, as the ETF invests in growth stocks which tend to be more volatile than value stocks.

Competitors:

Key competitors in the Connected Consumer ETF space with their market share percentage include:

• Global X Telemedicine & Digital Health ETF (EDOC): 0.5% market share.
• VanEck Video Gaming and eSports ETF (ESPO): 0.3% market share
• Roundhill Streaming Services & Technology ETF (SUBZ): 0.2% market share

Expense Ratio:

NBCC has an expense ratio of 0.75%, which is relatively low compared to other actively managed thematic ETFs in the Connected Consumer sector.

Investment Approach and Strategy:

• Strategy: NBCC employs an active management approach to identify and invest in companies that cater to the evolving preferences of next-generation consumers.
• Composition: The ETF primarily invests in stocks of companies across various industries, including technology, healthcare, consumer discretionary and staples, with a focus on those leveraging technology for disruption and innovation.

Key Points:

• Invests in companies catering to next-generation consumers and leveraging technology for disruption.
• Actively managed by an experienced portfolio management team.
• Strong track record of outperformance.
• Well-positioned to benefit from long-term growth in the Connected Consumer sector.
• Relatively low expense ratio.

Risks:

The main risks associated with NBCC include:

• Market Risk: As the ETF invests in growth stocks, it is susceptible to market volatility and downturns, which can lead to significant losses.
• Concentration Risk: The ETF's focus on specific sectors and themes could lead to heightened volatility compared to more diversified investments.
• Competition: The Connected Consumer space is becoming increasingly crowded, with new ETFs and investment strategies emerging, posing a challenge to NBCC's market share and performance.

Who Should Consider Investing:

NBCC is suitable for investors seeking:

• Exposure to growth stocks within the Connected Consumer space.
• Active management and a team with strong expertise in thematic investing.
• Potentially high returns and long-term capital appreciation.
• Tolerance for volatility and higher risk compared to traditional broad-market investments.

Fundamental Rating Based on AI:

Based on an AI analysis of NBCC's fundamentals, the ETF receives a 7 out of 10. This rating considers various factors, including financial health, market position, future prospects, and risk profile. The AI model factored in its strong track record, experienced management, focus on a high-growth sector, and reasonable expense ratio to arrive at the rating. However, investors should acknowledge the inherent risks associated with thematic investing and market volatility before making an investment decision.

Resources and Disclaimer:

This analysis was compiled using data from Neuberger Berman, Morningstar, and ETF.com, as of November 15th, 2023. Please remember that this information should not be considered financial advice, and investors should conduct their due diligence and consult with a qualified financial advisor before investing in any ETF, including NBCC.