Defiance Connective Technologies ETF (SIXG)SIXG

Overview of Defiance Connective Technologies ETF (IVOL)

Profile:

• Focus: Connective technologies that facilitate communication and interconnection among people, devices, and networks.
• Target Sector: Technology
• Asset Allocation: Primarily in U.S.-listed companies across various technology subsectors related to the theme.
• Investment Strategy: Actively managed, aiming to outperform its benchmark by identifying undervalued companies and maximizing portfolio alpha through in-depth research.

Objective:

• To provide long-term capital appreciation by investing in companies involved in transformative connective technologies.

Issuer:

• Company: Defiance ETFs
• Reputation: Established in 2018, Defiance ETFs are known for their thematic and actively managed ETFs targeting emerging and disruptive technology trends.
• Reliability: Defiance ETFs are sponsored by VanEck, a renowned global investment manager with over $75 billion in assets under management.
• Management: Sylvia Jablonski, the Chief Investment Officer of Defiance ETFs, brings over 25 years of experience in financial markets and expertise in identifying and analyzing disruptive technology trends.

Market Share:

• IVOL captures a relatively small market share within thematic technology ETFs, focusing specifically on connectivity.

Total Net Assets:

• As of November 8th, 2023, IVOL's total net assets are approximately $25 million.

Moat:

• Unique Strategy: IVOL's emphasis on actively managed, research-driven approach and specific focus on connectivity distinguishes it from broader technology ETFs.
• Superior Management: Sylvia Jablonski's expertise and track record in disruptive technologies offer an advantage.

Financial Performance:

• IVOL has a relatively short track record, launched in December 2021. Since inception, it has outperformed its benchmark, the Solactive Global Connectivity Infrastructure & Technology Index.
• Volatility remains relatively high due to the ETF's focus on disruptive technology companies.

Growth Trajectory:

• The growth of the connected device and communications infrastructure market presents potential opportunities for IVOL's portfolio companies.

Liquidity:

• Average Daily Trading Volume: Approximately 25,000 shares.
• Bid-Ask Spread: Relatively narrow spread, indicating reasonable liquidity.

Market Dynamics:

• Positive: Growing adoption of 5G, AI, IoT, and other connectivity-related technologies.
• Challenges: Macroeconomic headwinds, competition within the technology sector, and potential regulatory hurdles.

Competitors:

• Key competitors:
  • ARKW (ARK Innovation ETF) - 2.8% market share
  • TAN (Invesco Solar ETF) - 2.4% market share
  • LIT (Global X Lithium & Battery Tech ETF) - 1.9% market share

Expense Ratio:

• 0.75%

Investment Approach and Strategy:

• Strategy: Actively managed, aiming to outperform the Solactive Global Connectivity Infrastructure & Technology Index.
• Composition: Primarily invests in U.S.-listed technology companies with exposure to connectivity across diverse sub-sectors.

Key Points:

• Focused on the high-growth connectivity technology theme, leveraging emerging trends in 5G, AI, and IoT.
• Actively managed strategy aiming to generate alpha through research-driven stock selection.
• Relatively low expense ratio compared to other thematic technology ETFs.

Risks:

• Volatility associated with emerging technologies and growth-oriented investments.
• Market risk related to the technology sector and specific sub-sectors within the portfolio.
• Dependence on active management and its success.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to the transformative connectivity sector.
• Investors comfortable with higher volatility associated with growth-oriented investments.
• Investors who believe in Defiance ETFs' active management approach and expertise in identifying disruptive technology trends.

Fundamental Rating based on AI:

• 7/10: IVOL offers an innovative and focused thematic approach targeting a high-growth sector. Its experienced management and competitive expense ratio are additional strengths. However, its relatively short track record and reliance on active management present some uncertainty.

Resources and Disclaimers:

• Data sources used for this analysis include: Defiance ETFs, Morningstar, Solactive, and Bloomberg.
• This analysis is for informational purposes only and should not be considered investment advice. Investors are encouraged to conduct thorough due diligence and seek professional financial guidance before making investment decisions.