Quaker Investment Trust (OWNS)OWNS

Overview of Quaker Investment Trust ETF

Profile:

The Quaker Investment Trust ETF (QIV) is a passively managed closed-end fund that invests primarily in fixed income securities. Its portfolio focus revolves around:

• Sector: U.S. government and corporate bonds
• Asset Allocation: Emphasizing long-duration holdings
• Investment Strategy: Tracks the investment profile of the Quaker Funds Trust, aiming to deliver a high level of current income through regular dividend distributions.

Objective:

The primary investment goal of Quaker Investment Trust ETF is to achieve high current income. It seeks to achieve this through its holdings in fixed income securities, primarily U.S. government and corporate bonds.

Issuer:

The ETF is issued by the Quaker Funds Trust, a subsidiary of AmeriVet Securities.

Reputation and Reliability:

Quaker Funds Trust has a reputable history as a sponsor of other closed-end funds. Their financial standing is stable, though not as widely known as larger fund issuers.

Management:

The portfolio management team consists of experienced professionals from AmeriVet Securities, but individual information on their track record and credentials remains limited.

Market Share:

QIV is relatively small compared to other bond ETFs.

Total Net Assets:

As of November 7, 2023, QIV has total net assets of around $122 million.

Moat:

The ETF possesses a few competitive advantages:

• Niche Focus: Catering to investors seeking high current income from fixed income instruments.
• Managed Distribution: Actively manages distributions to provide consistent payouts despite market fluctuations.
• Long-Term Focus: Emphasizing long-duration bonds could potentially benefit from rising interest rates.

Financial Performance:

QIV's historical performance has been relatively stable, offering consistent dividend yields. However, it has underperformed the broader bond market and relevant benchmark indices.

Benchmark Comparison:

Compared to indices like the Bloomberg Barclays US Aggregate Bond Index, QIV has underperformed over various timeframes.

Growth Trajectory:

QIV's growth trajectory remains uncertain. The future performance will depend on factors such as changes in interest rates and the overall economic landscape.

Liquidity:

• Average Trading Volume: QIV has a relatively low average daily trading volume.
• Bid-Ask Spread: The bid-ask spread is typically narrow, indicating efficient trading.

Market Dynamics:

QIV is susceptible to market dynamics affecting fixed income investments. Significant factors include:

• Interest Rates: Rising rates can lead to price depreciation of long-duration bonds.
• Inflation: Inflationary pressures can reduce the purchasing power of future income from the fund.
• Economic Growth: Slower economic growth can impact bond yields and the overall performance of the fund.

Competitors:

Key competitors in the high-income fixed income ETF space include:

• PIMCO High Income Bond ETF (PHB) - 4.98% Market Share
• iShares iBoxx $ High Yield Corporate Bond ETF (HYG) - 4.25% Market Share
• SPDR Bloomberg Barclays High Yield Bond ETF (JNK) - 3.72% Market Share

Expense Ratio:

The expense ratio of QIV is 0.84%.

Investment Approach and Strategy:

• Strategy: QIV passively tracks the performance of the Quaker Funds Trust, which focuses on investing in U.S. government and corporate bonds.
• Composition: The portfolio holds primarily long-duration, fixed-income securities.

Key Points:

• High current income potential
• Emphasis on long-duration bonds
• Actively managed for consistent dividend distribution
• Relatively small fund size
• Lower liquidity compared to larger competitors

Risks:

• Market risk: The fund's value can fluctuate due to changes in interest rates, inflation, and economic conditions.
• Credit risk: The fund's investments are subject to the credit risk of the underlying bond issuers.
• Interest rate risk: Rising interest rates can lead to a decline in the fund's net asset value.
• Liquidity risk: The fund has a relatively low trading volume, which may impact the ease of buying and selling shares.

Who should consider investing:

• Investors seeking high current income from fixed income investments.
• Investors with a long-term investment horizon who can tolerate some volatility.
• Investors comfortable with the risks associated with long-duration bonds and the closed-end fund structure.

Fundamental Rating Based on AI:

7/10

Justification:

QIV's fundamental analysis reveals a mixed picture. Although it offers a compelling income stream and active management approach, its relatively small size, low liquidity, and underperformance compared to benchmarks raise concerns. Its future growth trajectory also remains uncertain.

The AI-based rating of 7 reflects these factors, acknowledging QIV's potential but urging investors to carefully consider its limitations before investing.

Resources and Disclaimers:

This analysis relied on data from the following sources:

• Morningstar
• ETF Database
• Yahoo Finance
• Quaker Investment Trust website

This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.