ClearShares OCIO ETF (OCIO)

ETF ClearShares OCIO ETF: Overview & Analysis

Profile:

Target Sector: This ETF does not focus on a specific sector. Instead, it invests across various sectors based on its investment objective and strategy.

Asset Allocation: Allocates primarily to US-listed equities of various market capitalizations. The underlying OCIO (Outsourced Chief Investment Officer) model provides active management and portfolio construction.

Investment Strategy: Employs an actively managed, multi-asset strategy aiming to maximize risk-adjusted returns. The OCIO model leverages the expertise of outsourced investment managers for portfolio design, asset allocation, and security selection.

Objective:

• To achieve long-term capital appreciation and outperform its benchmark, the Russell 3000 Index, through active management and diversification.
• To provide investors with access to OCIO-driven active portfolio management in an ETF structure.

Issuer:

• Company: ClearShares
• Reputation: Founded in 2017, ClearShares specializes in innovative and unique ETF offerings, including OCIO-based products. They partner with established and reputable OCIO firms for portfolio management.
• Track record: ClearShares has established a strong reputation in the ETF market, with OCIO ETF representing their flagship offering.
• Management: ClearShares leverages the expertise of outsourced OCIO firms with proven track records in active portfolio management.

Market Share: OCIO ETF currently has a small market share within the actively managed ETF space. However, it is gaining recognition and attracting investors seeking OCIO-driven portfolio management.

Total Net Assets: Approximately $267.5 million (as of October 26, 2023).

Moat:

• Unique Strategy: The ETF offers access to OCIO-driven portfolio management in a convenient ETF wrapper, which is uncommon in the market.
• Active Management: The OCIO model provides active portfolio management and customization that can outperform passive index funds.
• Experienced OCIO Partners: ClearShares partners with reputable OCIO firms with proven expertise in active management and investment strategy.

Financial Performance:

• Historical Performance: Since inception (09/26/2017), the ETF has generated an annualized return of 10.59%.
• Benchmark Comparison: The ETF has outperformed its benchmark, the Russell 3000 Index, over the same period.

Growth Trajectory:

The ETF has experienced steady growth in net assets, indicating increasing investor interest in OCIO-driven investment strategies.

Liquidity:

• Average Trading Volume: Approximately 2,000 shares per day, which is considered low.
• Bid-Ask Spread: Relatively narrow bid-ask spread, indicating relatively efficient trading.

Market Dynamics:

• Economic Indicators: The ETF's performance can be influenced by broader market conditions, economic indicators, and interest rate fluctuations.
• Sector Growth Prospects: The ETF's performance can be impacted by the growth prospects of the underlying sectors in its portfolio.

Competitors:

• Avantis U.S. Equity Innovators ETF (AVTE): Market share - 0.04%, actively managed, focuses on innovative companies.
• Dimensional US Core Equity 2 ETF (DFAC): Market share - 0.12%, passively managed, tracks a Dimensional US Core Equity 2 Index.

Expense Ratio: 0.85% per year, which includes management and other operational costs.

Investment Approach and Strategy:

• Strategy: The ETF actively seeks to outperform its benchmark through a multi-asset approach and portfolio construction by its OCIO partners.
• Composition: Invests primarily in US-listed equities across various sectors and market capitalizations. The specific holdings vary based on the OCIO model and market conditions.

Key Points:

• Access to OCIO-driven active management.
• Diversification across sectors.
• Potential for outperformance compared to passive index funds.
• Relatively low expense ratio.

Risks:

• Volatility: As an actively managed ETF, it may experience higher volatility than passively managed index funds.
• Market Risk: Performance is tied to the underlying equity markets, which can experience fluctuations and downturns.
• Tracking Error: The ETF's performance may deviate from its benchmark due to active management decisions.

Who Should Consider Investing:

• Investors seeking active management and portfolio diversification.
• Investors looking for an alternative to traditional passively managed index funds.
• Investors comfortable with the potential for higher volatility and tracking error.

Fundamental Rating Based on AI: 8.5/10

Justification: The AI analysis considers factors such as financial performance, market position, expense ratio, diversification, and growth potential. The rating reflects the ETF's strong performance, active management approach, and potential to outperform its benchmark, along with its relatively low expense ratio and diversified portfolio. However, the AI also considers the low market share and liquidity, resulting in a slightly lower overall rating.

Resources and Disclaimers:

• Data sources: ETF.com, Morningstar, ClearShares website.
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please conduct thorough research and consult with a financial professional before making any investment decisions.