U.S. Global Sea to Sky Cargo ETF (SEA)

U.S. Global Sea to Sky Cargo ETF (SKYW) Overview

Profile:

U.S. Global Sea to Sky Cargo ETF (SKYW) is an actively managed ETF that invests in companies involved in the global air cargo industry. This includes airlines, aircraft manufacturers, cargo handlers, logistics providers, and other related businesses. The ETF aims to provide investors with exposure to the growth potential of the air cargo sector, which is expected to benefit from increasing global trade and e-commerce.

Objective:

The primary investment goal of SKYW is to achieve long-term capital appreciation by investing in companies that are expected to benefit from the growth of the global air cargo industry.

Issuer:

The ETF is issued by U.S. Global Investors, a privately-owned investment management firm based in San Antonio, Texas. It was founded in 1996 and manages over $3 billion in assets.

• Reputation and Reliability: U.S. Global Investors has a strong reputation for managing thematic ETFs with a focus on emerging and niche markets. They have received multiple awards and recognitions for their investment performance and innovation.
• Management: The portfolio management team at U.S. Global Investors has extensive experience in the air cargo industry and in managing thematic ETFs. The team conducts in-depth research and analysis to identify high-potential companies within the sector.

Market Share:

SKYW is a relatively small ETF, with a market share of less than 1% in the air cargo sector. However, it is one of the few ETFs that specifically focus on this niche market.

Total Net Assets:

As of November 21, 2023, SKYW has total net assets of approximately $14 million.

Moat:

SKYW's competitive advantages include:

• Unique Strategy: Its focus on the air cargo sector provides investors with exposure to a specific and growing market that is often overlooked by other ETFs.
• Active Management: The actively managed approach allows the portfolio managers to select and adjust their holdings strategically based on their market insights.
• Experienced Management Team: The team's deep knowledge of the air cargo industry and successful track record in managing thematic ETFs contributes to the ETF's success.

Financial Performance:

SKYW has delivered strong historical performance since its inception in 2021. Its annualized total return since inception is over 20%, outperforming the market and its benchmark index.

Benchmark Comparison:

SKYW has outperformed its benchmark index, the Solactive Global Airfreight & Logistics Index, since its inception. This demonstrates the effectiveness of the ETF's active management strategy.

Growth Trajectory:

The air cargo industry is expected to grow steadily in the coming years, driven by factors such as increasing global trade, e-commerce expansion, and technological advancements. This bodes well for the future growth prospects of SKYW.

Liquidity:

SKYW has an average trading volume of approximately 100,000 shares per day, which provides decent liquidity for investors looking to buy or sell their shares.

Bid-Ask Spread:

The bid-ask spread for SKYW is typically around 0.5%, which is relatively tight compared to other ETFs in its category.

Market Dynamics:

The air cargo industry is influenced by various factors, including:

• Global Economic Growth: A strong global economy leads to increased demand for air cargo services.
• E-commerce Growth: The rapid growth of e-commerce drives the demand for faster and more efficient delivery services.
• Fuel Prices: Rising fuel prices can impact the profitability of air cargo companies.
• Regulations: Government regulations on air cargo operations can impact the industry's growth.

Competitors:

Key competitors of SKYW include:

• iShares Transportation Average ETF (IYT): Market share of 15%
• SPDR S&P Transportation ETF (XTN): Market share of 14%
• Invesco DB Commodity Index Tracking Fund (DBC): Market share of 11%

Expense Ratio:

SKYW has an expense ratio of 0.75%, which is considered average for actively managed thematic ETFs.

Investment Approach and Strategy:

SKYW uses an active management approach to select and invest in companies that are expected to benefit from the growth of the air cargo industry. The ETF's composition includes a mix of listed equities of companies across the air cargo value chain, including airlines, aircraft manufacturers, cargo handlers, and logistics providers.

Key Points:

• Focus on the niche air cargo sector
• Strong historical performance
• Active management with experienced team
• Decent liquidity

Risks:

• Volatility: The air cargo industry is cyclical and can be volatile, which can impact the ETF's performance.
• Market Risk: The ETF's performance is tied to the performance of the underlying air cargo companies, which can be affected by industry-specific factors.
• Management Risk: The ETF's success depends on the effectiveness of the portfolio management team.

Who Should Consider Investing:

SKYW is suitable for investors who:

• Have a long-term investment horizon
• Are comfortable with a higher level of volatility
• Believe in the growth potential of the air cargo industry
• Seek exposure to a niche market through an actively managed ETF

Fundamental Rating Based on AI:

Based on an AI-based rating system on a scale of 1 to 10, SKYW receives a rating of 7.5. This rating considers the ETF's financial health, market position, future prospects, and other relevant factors. The AI model highlights the ETF's strong performance, experienced management team, and niche market focus as its key strengths. However, it also acknowledges the risks associated with the air cargo industry and the relatively small size of the ETF.

Resources and Disclaimers:

• U.S. Global Sea to Sky Cargo ETF website: https://www.usginvestors.com/etf/skyw
• Morningstar Fund Report: https://www.morningstar.com/etfs/xnys/skyw
• Disclaimer: This information is for educational purposes only and should not be considered as investment advice. Please consult with a financial professional before making any investment decisions.