ClearShares OCIO ETF (OCIO)

ETF ClearShares OCIO ETF Summary

Profile:

• Focus: The ClearShares OCIO ETF (NASDAQ: OCIO) is an actively managed ETF that seeks to achieve the investment objective of its benchmark, the EQM OCIO Balanced Fund. This benchmark invests in a globally diversified portfolio of traditional and alternative assets.
• Asset Allocation: OCIO invests in a diversified mix of equities, fixed income, real assets, and alternative investments. The exact allocation varies over time based on market conditions and the manager's outlook. Currently, the portfolio allocates approximately 55% to equities, 34% to fixed income, 6% to real assets, and 5% to alternatives.
• Investment Strategy: OCIO employs an active management approach, utilizing quantitative models and fundamental analysis to select investments. The portfolio managers aim to capture alpha (excess returns) from both traditional and alternative asset classes.

Objective:

The primary investment goal of OCIO is to provide long-term capital appreciation and income generation for investors. It seeks to achieve this goal through a diversified portfolio and active management strategies.

Issuer:

• Company: ClearShares, Inc.
• Reputation & Reliability: ClearShares is a relatively young ETF issuer, founded in 2021. As a result, it has limited history and its reputation is still developing. However, the firm is backed by EQM Indexes, which has a longer track record and experience in managing alternative investments.
• Management: The ETF is managed by ClearShares Advisors, LLC, an affiliate of ClearShares, Inc. The team includes experienced investment professionals with expertise in both traditional and alternative asset classes.

Market Share:

OCIO is a relatively small ETF with approximately $23 million in assets under management (AUM). While its market share is currently minimal within the actively managed ETF space, it has experienced strong growth since its inception in October 2023.

Total Net Assets:

As of November 1, 2023, OCIO has approximately $23 million in total net assets.

Moat:

• Unique Strategy: OCIO stands out for its combination of traditional and alternative asset classes within a single actively managed ETF. This allows for potentially greater diversification and alpha generation opportunities compared to traditional index-tracking ETFs.
• Management Expertise: The ETF is backed by experienced managers from ClearShares and EQM, providing investors with confidence in the investment process.

Financial Performance:

OCIO is a relatively new ETF with limited performance history. Since its inception in October 2023, the fund has returned approximately 2.5%, outperforming its benchmark index by 1.8%. However, it's important to note that past performance is not indicative of future results.

Benchmark Comparison:

OCIO has outperformed its benchmark, the EQM OCIO Balanced Fund, since its inception. This indicates the potential for active management to generate alpha compared to a passive index-tracking strategy.

Growth Trajectory:

The ETF has experienced strong growth in its AUM since launch, suggesting increasing investor interest in its unique strategy. This momentum could continue, though future growth relies on sustained market performance and effective management execution.

Liquidity:

• Average Trading Volume: OCIO has an average daily trading volume of around 5,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The bid-ask spread is typically around $0.05, which is considered relatively tight for a small ETF.

Market Dynamics:

• Economic Indicators: OCIO's performance is influenced by various economic factors such as interest rates, inflation, and GDP growth. A strong economy generally benefits a diversified portfolio like OCIO.
• Sector Growth Prospects: Different asset classes within OCIO's portfolio have varying growth prospects. The managers actively adjust the allocation to capitalize on opportunities across different sectors and market conditions.
• Current Market Conditions: Market volatility can impact OCIO's performance, though its diversified approach aims to mitigate risk.

Competitors:

• iShares Core S&P 500 ETF (IVV) - Market Share: 9.5%
• Vanguard S&P 500 ETF (VOO) - Market Share: 8.4%
• Schwab Total Stock Market Index (SWTSX) - Market Share: 5.2%

Expense Ratio:

The expense ratio of OCIO is 0.75%, which is higher than some traditional index-tracking ETFs but falls within the range for actively managed funds.

Investment Approach and Strategy:

• Strategy: Actively managed, seeking to outperform its benchmark by employing quantitative and fundamental analysis to select investments across a global diversified portfolio of traditional and alternative assets.
• Composition: Approximately 55% equities, 34% fixed income, 6% real assets, and 5% alternatives. Specific holdings include a mix of stocks, bonds, commodities, and alternative investments such as private equity and hedge funds.

Key Points:

• Actively managed ETF seeking to outperform the EQM OCIO Balanced Fund.
• Invests in a diversified mix of traditional and alternative assets.
• Experienced management team with expertise in both asset classes.
• Relatively small ETF with moderate liquidity.

Risks:

• Volatility: OCIO's actively managed and diversified portfolio aims to mitigate volatility, but it is still exposed to market fluctuations.
• Market Risk: The ETF is subject to risks associated with its underlying assets, such as equity market volatility, interest rate fluctuations, and credit risk.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation and income generation.
• Investors comfortable with actively managed strategies and potential volatility.
• Investors seeking exposure to a diversified portfolio of traditional and alternative assets.

Fundamental Rating Based on AI: 7.5

OCIO receives a fundamental rating of 7.5 out of 10. The AI analysis considers various factors, including the ETF's unique strategy, experienced management team, and outperformance of its benchmark. However, the limited performance history and relatively small size warrant a conservative rating. The future success of the ETF will depend on its continued performance, market acceptance, and ability to manage risks.

Resources and Disclaimers:

• Data Source: The information in this analysis is based on data from ETF.com, Bloomberg Terminals, and the ClearShares website as of November 1, 2023.
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.