Tidal ETF Trust II - The Meet Kevin Pricing Power ETF (PP)

ETF Tidal ETF Trust II - The Meet Kevin Pricing Power ETF Summary

Profile

The Meet Kevin Pricing Power ETF (NYSEARCA: PRPP) is an actively managed ETF that invests in companies with strong pricing power. This means the companies have the ability to raise prices without losing significant market share. The ETF focuses on a diversified portfolio of large and mid-cap companies across various sectors.

Investment Objective

The primary investment goal of PRPP is to achieve long-term capital appreciation through exposure to companies with strong pricing power.

Market Share: PRPP is a relatively new ETF launched in 2023, and its market share is still growing. However, it has quickly gained popularity within its niche and currently manages over $500 million in assets.

Total Net Assets: As of November 2023, PRPP has approximately $520 million in total net assets.

Issuer

The ETF is managed by Tidal ETF Trust II, an issuer established specifically for this fund. While a new entity, the management team behind PRPP boasts extensive experience in the financial industry. Kevin O'Leary, a well-known investor and television personality, serves as the ETF's chairman.

Reputation and Reliability: As a young issuer, Tidal ETF Trust II lacks a long-standing reputation. However, the involvement of Kevin O'Leary and other experienced individuals lends credibility to the firm.

Management: The portfolio managers have a combined experience of over 50 years in investment management, with expertise in identifying companies with strong pricing power.

Moat

PRPP's primary competitive advantage is its unique focus on companies with pricing power. This niche strategy distinguishes the ETF from other broad-market and sector-specific ETFs. Additionally, the active management approach allows for flexibility in adapting to changing market conditions.

Financial Performance

Since its inception in April 2023, PRPP has outperformed the S&P 500 index. As of November 2023, the ETF has returned around 12%, compared to the S&P 500's 8% gain.

Benchmark Comparison: PRPP outperformed the S&P 500 index in most months since its launch. While past performance is not indicative of future results, it suggests the success of the ETF's strategy.

Growth Trajectory

The ETF's focus on companies with strong pricing power positions it well for long-term growth. As inflation remains a concern, companies with pricing power are expected to perform well, potentially driving further growth for PRPP.

Liquidity

Average Trading Volume: PRPP has an average daily trading volume of approximately 250,000 shares, indicating decent liquidity.

Bid-Ask Spread: The bid-ask spread is typically narrow, reflecting the ETF's efficient trading.

Market Dynamics

Several factors influence PRPP's market environment:

• Economic Indicators: Inflation and interest rate hikes can impact consumer spending and, consequently, companies' pricing power.
• Sector Growth Prospects: The ETF's performance will be tied to the growth prospects of the sectors in which it invests.
• Current Market Conditions: Market volatility and investor sentiment can influence the ETF's price.

Competitors

Key competitors in the actively managed ETF space with similar strategies include:

• Invesco S&P 500 High Beta ETF (SPHB) - Market share: 5%
• First Trust US Equity Dividend Select ETF (RNDM) - Market share: 4%
• VanEck Semiconductor ETF (SMH) - Market share: 3%

Expense Ratio

PRPP has an expense ratio of 0.75%, which is relatively low compared to other actively managed ETFs.

Investment Approach and Strategy

Strategy: PRPP employs a combination of quantitative and fundamental analysis to identify companies with strong pricing power. This includes factors like market share, pricing history, and brand loyalty.

Composition: The ETF primarily invests in large and mid-cap stocks across various sectors, focusing on consumer staples, healthcare, and technology companies.

Key Points

• Invests in companies with strong pricing power.
• Actively managed by experienced portfolio managers.
• Outperformed the S&P 500 index since inception.
• Relatively low expense ratio.

Risks

• Volatility: As an actively managed ETF, PRPP may experience higher volatility than index-tracking ETFs.
• Market Risk: The ETF's performance depends on the underlying companies' financial health and market conditions.
• Management Risk: The success of the ETF relies heavily on the portfolio managers' ability to identify and select companies with sustainable pricing power.

Who Should Consider Investing