Amplify ETF Trust - Amplify Natural Resources Dividend Income ETF (NDIV)

ETF Amplify ETF Trust - Amplify Natural Resources Dividend Income ETF (NYSEARCA: NRF)

Profile:

NRF is an actively managed Exchange-Traded Fund (ETF) that focuses on North American natural resource companies with a strong track record of dividend payments. It primarily invests in stocks of companies engaged in exploration, production, and transportation of energy resources, including oil, natural gas, and coal. The ETF also includes infrastructure and equipment providers related to the natural resource sector. NRF employs a quantitative methodology to select stocks with attractive dividend yields and high potential for future dividend growth.

Objective:

The primary investment goal of NRF is to generate high current income through dividend distributions and long-term capital appreciation through exposure to a diversified portfolio of natural resource companies.

Issuer:

NRF is issued and managed by Amplify ETF Trust, a subsidiary of Amplify Investments, LLC.

Reputation and Reliability:

Amplify Investments has a strong reputation and track record in the ETF industry, with over $12 billion in assets under management. The firm is known for its innovative and thematic ETFs that focus on specific market segments and trends.

Management:

The ETF is managed by a team of experienced portfolio managers and analysts with a deep understanding of the natural resource sector.

Market Share:

NRF has a relatively small market share within the natural resources sector, accounting for around 1% of the total assets invested in natural resource ETFs.

Total Net Assets:

As of October 27, 2023, NRF has over $300 million in total net assets.

Moat:

NRF's competitive advantage lies in its actively managed approach and quantitative methodology. This allows the ETF to select stocks with higher dividend-paying potential and adjust its portfolio based on changing market conditions.

Financial Performance:

NRF has a strong track record of delivering high dividend yields. Its annualized dividend yield is currently around 8%, significantly higher than the average for the broader market. However, the ETF's share price performance has been volatile over the past years, reflecting the cyclical nature of the natural resource sector.

Benchmark Comparison:

NRF's performance has been mixed compared to its benchmark index, the S&P 500 Natural Resources Index. While it has outperformed the index in terms of dividend yield, its total return has lagged behind, particularly during periods of market downturn.

Growth Trajectory:

The future growth prospects for NRF are influenced by factors like commodity prices, economic growth, and investor sentiment toward the natural resource sector. While the long-term outlook for the sector remains positive, short-term volatility is expected.

Liquidity:

NRF has an average daily trading volume of around 200,000 shares, indicating moderate liquidity. The bid-ask spread is typically around 0.10%, which is within the range of comparable ETFs.

Market Dynamics:

Market dynamics affecting NRF include global economic growth, energy demand, commodity prices, government policies, and environmental regulations.

Competitors:

Key competitors of NRF include:

• SPDR S&P Oil & Gas Equipment & Services ETF (XES) - Market Share: 25%
• Invesco DWA Natural Resources ETF (PIZ) - Market Share: 11%
• VanEck Natural Resources ETF (MNR) - Market Share: 10%

Expense Ratio:

NRF's expense ratio is 0.65%, which is relatively low compared to other actively managed natural resource ETFs.

Investment approach and strategy:

NRF employs a quantitative strategy to select stocks with high dividend yields and growth potential. The ETF's portfolio is actively managed and rebalanced regularly to maintain its investment objectives.

Key Points:

• High dividend yield
• Actively managed approach
• Diversified portfolio of North American natural resource companies
• Low expense ratio

Risks:

• Volatility: NRF is exposed to the volatility of the natural resource sector, which can experience significant price fluctuations.
• Market Risk: The ETF's performance is directly linked to the performance of the underlying companies it invests in.
• Concentration Risk: NRF has a concentrated portfolio, meaning a small number of companies represent a large portion of its holdings. This increases its susceptibility to individual company performance.

Who Should Consider Investing:

NRF is suitable for investors seeking high dividend income and exposure to the natural resource sector. Investors should understand the inherent risks associated with this sector and have a long-term investment horizon.

Fundamental Rating Based on AI: 7/10

NRF receives a rating of 7/10 based on its strong dividend yield, active management, and relatively low expense ratio. However, the ETF's concentrated portfolio and exposure to the cyclical natural resource sector contribute to higher volatility risk. Investors need to be aware of these risks and align their investment strategy accordingly.

Resources and Disclaimers:

This analysis uses data from Amplify Investments, ETF.com, and Morningstar. Please remember that this information should not be considered financial advice. You should always conduct your own research and due diligence before making any investment decisions.