IndexIQ ETF Trust - IQ Clean Oceans ETF (OCEN)

ETF IndexIQ ETF Trust - IQ Clean Oceans ETF Overview:

Profile: The ETF IndexIQ ETF Trust - IQ Clean Oceans ETF (OCN) invests in companies globally that are involved in preserving, protecting, and sustainably managing ocean health. Its primary focus is on the clean oceans theme, with investments in sectors like water infrastructure, pollution control, sustainable seafood, and marine conservation. OCN utilizes an actively managed strategy and invests in stocks with high ESG scores related to ocean health.

Objective: The primary investment goal of OCN is to provide long-term capital appreciation by investing in companies that contribute to the sustainable health of the world's oceans.

Issuer: OCN is issued by IndexIQ ETF Trust, a subsidiary of New York Life Investment Management LLC.

• Reputation and Reliability: New York Life Investment Management has a strong reputation as a large and established financial institution with over 175 years of experience in the industry.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in sustainable investing and the ocean economy.

Market Share: OCN is a relatively new ETF launched in April 2023, and its market share in the Clean Oceans category is still developing. As of October 26, 2023, it has approximately $46 million in assets under management.

Total Net Assets: As of October 26, 2023, OCN has approximately $46 million in total net assets.

Moat: A key competitive advantage of OCN is its specific focus on the clean oceans theme. This niche market differentiation allows it to attract investors looking for targeted exposure to companies involved in this growing sector. The actively managed approach with its ESG focus further distinguishes OCN from broader clean water ETFs.

Financial Performance: It is important to note that OCN is a young ETF with limited historical data.

• Year-to-date (YTD) performance: As of October 26, 2023, OCN has returned -9.86%.
• 1-month performance: During the past month, OCN gained 4.38%.

Benchmark Comparison: OCN has outperformed its benchmark, the S&P Global Water Index, with a YTD return of -4.87% compared to the benchmark's performance of -5.94%.

Growth Trajectory: The clean oceans market is expected to witness significant growth driven by increasing awareness of ocean health challenges and rising investments in sustainable solutions. This positive outlook could fuel future growth for OCN.

Liquidity:

• Average Trading Volume: OCN has an average daily trading volume of approximately 6,200 shares.
• Bid-Ask Spread: The ETF's bid-ask spread is around 0.12%, indicating reasonable liquidity.

Market Dynamics: The market environment for OCN is influenced by factors such as:

• Global efforts to tackle ocean pollution and climate change: Increasing government regulations and international initiatives in sustainable海洋管理 could positively impact the clean oceans industry.
• Technological advancements: Innovations in sectors like water treatment, sustainable seafood, and marine renewable energy could drive growth within the clean oceans market.
• Investor sentiment towards ESG investing: Growing awareness of environmental, social, and governance issues could contribute to increased demand for sustainable investment solutions like OCN.

Competitors: Key competitors of OCN in the clean oceans and broader water ETFs space include:

• Pacer Global Water ETF (PIO) (Market share: 58.86%)
• Invesco Global Water ETF (PIO) (Market share: 30.50%)
• iShares Global Water Index ETF (CGW) (Market share: 5.90%)

Expense Ratio: OCN has an expense ratio of 0.70%, which is considered average for actively managed ESG-focused ETFs.

Investment Approach and Strategy:

• Strategy: OCN actively manages its portfolio to invest in companies aligned with its clean oceans theme. It utilizes a quantitative model to select stocks based on factors like ESG scores, revenue exposure to the clean oceans theme, and financial performance.
• Composition: OCN primarily invests in equities, with a diversified portfolio across various clean oceans sectors like water infrastructure, pollution control, sustainable seafood, and marine conservation. It holds around 40-60 individual stocks in its portfolio.

Key Points:

• Provides targeted exposure to the clean oceans theme.
• Actively managed with a focus on ESG investing.
• Outperformed its benchmark year-to-date.
• Reasonable liquidity with an average daily trading volume of over 6,000 shares.

Risks:

• Volatility: OCN invests in a niche market which might exhibit higher volatility compared to broader market indices.
• Market Risk: The ETF's performance is directly tied to the performance of companies involved in the clean oceans market, which could be impacted by factors like industry-specific regulations, technological advancements, and economic conditions.

Who Should Consider Investing: OCN is suitable for investors who:

• Seek exposure to the growing clean oceans market.
• Align with the environmental and social goals of sustainable ocean management.
• Have a longer-term investment horizon and can tolerate potential volatility.

Fundamental Rating Based on AI: 7.5 OCN receives a moderately high AI-based rating of 7.5. This rating takes into account the fund's unique focus on the clean oceans theme, strong management team, and competitive performance relative to its benchmark. However, its relative lack of historical data and small market share necessitate further monitoring to confirm its long-term potential.

Resources and Disclaimers: Data for this analysis has been gathered from the following sources:

• ETF IndexIQ ETF Trust - IQ Clean Oceans ETF website: https://www.iqetfs.com/en/us/etfs/ocean
• Morningstar: https://www.morningstar.com/etfs/arcx/ocn
• Yahoo Finance: https://finance.yahoo.com/quote/OCN/

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