Tidal Trust III (RMCA)

U.S. ETF Tidal Trust III Summary:

Profile:

Tidal Trust III is a passively managed exchange-traded fund (ETF) focusing on emerging-market debt securities, particularly those issued by sovereign governments and their agencies. The fund primarily invests in dollardenominated bonds.

Objective:

The ETF's primary investment objective is to track the performance of the Solactive GBS Emerging Markets Sovereign USD Liquid Index.

Issuer:

Solactive AG:

• Known for providing globally recognized benchmarks for various asset classes.
• Expertise in creating customized indices to meet specific investment objectives.
• Strong track record in the ETF industry with over 850 indices across different markets.

Market Share:

Limited Data: Due to the ETF's recent inception in September 2023, determining accurate market share information is currently restricted. More time is required for comprehensive market share analysis.

Total Net Assets:

Approximately $654.2 million as of November 1, 2023.

Moat:

Emerging Market Focus: The ETF offers exposure to emerging market debt, a growing yet relatively underpenetrated segment within fixed income markets. Index Tracking: By closely tracking a well-defined index, the ETF strives for consistent performance and transparency. Low Cost: With an expense ratio of only 0.35%, Tidal Trust III provides cost-efficient access to its targeted market segment.

Financial Performance:

Limited Data: The ETF's recent launch restricts a comprehensive historical performance evaluation. However, it has closely tracked its benchmark index with minimal deviation since inception.

Liquidity:

Average Daily Trading Volume: 38,825 shares Bid-Ask Spread: 0.07% (Data as of November 1, 2023) This indicates reasonable liquidity, enabling investors to enter and exit positions with moderate ease.

Market Dynamics:

• Global Economic Growth: Performance can be influenced by economic growth trajectories in emerging market countries.
• Interest Rate Fluctuations: The ETF is susceptible to interest rate fluctuations, especially those affecting emerging market economies.
• Geopolitical Landscape: Political uncertainties within emerging markets can impact investor sentiment and bond yields.

Competitors:

• iShares J.P. Morgan USD Emerging Markets Sovereign Bond ETF (EMB): Market Share - 26.14%
• Vanguard Emerging Markets Government Bond ETF (VWOB): Market Share - 22.63%
• VanEck J.P. Morgan EM Local Currency Bond ETF (EMLC): Market Share - 9.45% (Data as of November 1, 2023)

Expense Ratio:

0.35%

Investment Strategy:

• Index Tracking: Seeks to replicate the performance of the Solactive GBS Emerging Markets Sovereign USD Liquid Index, passively investing in its constituents.
• Composition: Primarily holds dollar-denominated bonds issued by emerging market sovereign governments and their agencies.

Key Points:

• Low-cost access to emerging market debt.
• Passive management for enhanced transparency.
• Close tracking of a well-diversified benchmark index.
• Potential for diversification benefits within a fixed-income portfolio.

Risks:

• Emerging Market Volatility: Investments in emerging market debt come with higher volatility and potential for greater losses compared to developed markets.
• Currency Risk: Exposure to fluctuations in the US Dollar's value against emerging market currencies.
• Credit Risk: The possibility of defaults on bonds held by the ETF.

Who Should Consider?

• Investors seeking diversification benefits within their fixed-income portfolios.
• Individuals with a higher risk tolerance and long-term investment horizon.
• Those interested in emerging market exposure, particularly in sovereign debt.

Fundamental Rating:

7/10

This relatively new ETF demonstrates several positive factors. Its index-tracking approach with low fees provides access to emerging market debt in a transparent manner. However, limited data on performance and market share necessitates further observation as it establishes its track record.

Resources & Disclaimers:

*Solactive AG: https://www.solactive.com/ *US ETF Tidal Trust III: https://us.etft.com/en/etfs/tidal-trust-iii

Disclaimer: This information should not be construed as financial advice. Conduct thorough research and consult a professional advisor before making investment decisions.