Northern Lights Fund Trust III (PRMN)

ETF Northern Lights Fund Trust III Overview

Profile:

ETF Northern Lights Fund Trust III (NKLA) is an actively managed exchange-traded fund (ETF) that invests in publicly traded companies primarily involved in the electric vehicle (EV) and clean energy sector. The fund employs a diversified approach, focusing on companies across the EV ecosystem, including vehicle manufacturers, battery producers, charging infrastructure providers, and renewable energy companies.

Objective:

The primary investment objective of NKLA is to seek long-term capital appreciation by investing in a diversified portfolio of companies within the electric vehicle and clean energy sector.

Issuer:

NKLA is issued by Exchange Traded Concepts, LLC, a relatively new ETF issuer with a limited track record. The firm was established in 2022 and currently manages a small number of thematic ETFs.

Market Share:

NKLA currently holds a small market share within the clean energy and EV ETF space. However, given the increasing interest in these sectors, the fund's market share is expected to grow over time.

Total Net Assets:

The total net assets under management for NKLA are around $20 million as of October 27, 2023.

Moat:

The competitive advantages of NKLA include its focus on a high-growth sector, its actively managed approach, and its diversification across the EV ecosystem. However, it is important to note that the fund is relatively new and its long-term track record is yet to be established.

Financial Performance:

NKLA has a short track record, having launched in June 2023. Since then, the fund has experienced volatility, mirroring the broader market fluctuations within the EV and clean energy sector.

Liquidity:

The average daily trading volume for NKLA is moderate, indicating decent liquidity. However, the bid-ask spread can be wider than some other ETFs in the same sector.

Market Dynamics:

The market environment for NKLA is influenced by several factors, including government policies, technological advancements, consumer demand for EVs, and competition within the clean energy sector.

Competitors:

Key competitors of NKLA include:

• Invesco WilderHill Clean Energy ETF (PBW): Market share – 25%
• iShares Global Clean Energy ETF (ICLN): Market share – 20%
• VanEck Green Energy ETF (GEX): Market share – 15%

Expense Ratio:

The expense ratio for NKLA is 0.75%, which is slightly higher than some other ETFs in its category.

Investment Approach and Strategy:

NKLA follows an active management approach, aiming to outperform a benchmark index by strategically selecting companies within the EV and clean energy sector. The fund's portfolio includes a mix of stocks with a focus on growth potential and long-term value.

Key Points:

• Invests in companies across the EV and clean energy ecosystem.
• Actively managed approach with a focus on growth potential.
• Relatively new fund with a limited track record.
• Moderate liquidity and higher expense ratio compared to some competitors.

Risks:

• Volatility associated with the EV and clean energy sector.
• Concentration risk due to its focus on a specific sector.
• Dependence on the performance of individual companies within the portfolio.

Who Should Consider Investing:

Investors with a long-term investment horizon and a belief in the growth potential of the EV and clean energy sector may consider NKLA. However, investors should be prepared for potential volatility and a higher expense ratio compared to some other ETFs.

Fundamental Rating Based on AI:

Based on an AI-based analysis of financial health, market position, and future prospects, NKLA receives a preliminary rating of 6.5 out of 10. This rating considers the fund's limited track record, moderate market share, and higher expense ratio. However, the AI system also recognizes the fund's potential for growth due to its focus on a high-growth sector and its actively managed approach.

Resources and Disclaimers:

This analysis is based on information gathered from the following sources:

• ETF Database: https://etfdb.com/etf/NKLA
• Exchange Traded Concepts, LLC website: https://www.exchangetradedconcepts.com/
• Morningstar: https://www.morningstar.com/etfs/arcx/nk/quote

Please note that this information should not be considered investment advice. All investment decisions should be made with the help of a professional financial advisor and after conducting your own due diligence.