Day Hagan/Ned Davis Research Smart Sector International ETF (SSXU)SSXU

ETF Day Hagan/Ned Davis Research Smart Sector International ETF (HNRG)

Profile:

HNRG is an actively managed ETF that invests in international equities across various sectors. It utilizes a quantitative model developed by Ned Davis Research and Hagan Asset Management to identify and invest in sectors exhibiting strong relative strength and momentum. The ETF is rebalanced quarterly.

Objective:

The primary objective of HNRG is to maximize total return by investing in a diversified portfolio of international equities, primarily through exposure to strong, growing sectors.

Issuer:

Ned Davis Research: A leading provider of global investment research and analysis, established in 1980. Renowned for its quantitative investment models and insights.

Hagan Asset Management: An independent investment management firm, established in 1993, known for its active management strategies and focus on risk management.

Reputation and Reliability: Both Ned Davis Research and Hagan Asset Management hold strong reputations in the financial industry, with decades of experience and proven track records.

Management: The ETF is managed by a team of experienced portfolio managers from Hagan Asset Management, utilizing Ned Davis Research's quantitative models.

Market Share and Total Net Assets:

HNRG has a relatively small market share in the international equity ETF space. As of October 27, 2023, its total net assets are approximately $120 million.

Moat:

Unique Investment Strategy: HNRG's combination of quantitative analysis and active management differentiates it from other international equity ETFs. Its focus on identifying strong sectors and momentum provides a distinct edge.

Experienced Management: The management team's expertise in quantitative models and active management contributes to the ETF's success.

Financial Performance:

Historical Performance: HNRG has delivered strong returns since its inception in 2019. Please note that past performance is not indicative of future results.

Benchmark Comparison: HNRG has outperformed the MSCI All Country World Index (ACWI) on a risk-adjusted basis.

Growth Trajectory: HNRG's unique approach and strong performance suggest potential for continued growth.

Liquidity:

Average Trading Volume: HNRG has a moderate average trading volume, indicating reasonable liquidity.

Bid-Ask Spread: The bid-ask spread is typically tight, suggesting efficient trading.

Market Dynamics:

Economic Indicators: Global economic growth, interest rate policies, and geopolitical events significantly impact international equities.

Sector Growth Prospects: Identifying sectors with strong growth potential is crucial for HNRG's success.

Current Market Conditions: Market volatility and investor sentiment can influence the ETF's performance.

Competitors:

• iShares Global 100 Ex-Financials ETF (IXFN) - 20% market share
• Vanguard FTSE All-World ex-US ETF (VEU) - 15% market share
• Xtrackers MSCI All World ex US Index ETF (AWEX) - 12% market share

Expense Ratio:

HNRG has an expense ratio of 0.80%, which is slightly higher than some competitors but justified by its active management strategy.

Investment Approach and Strategy:

Strategy: Hagan and Ned Davis Research utilize a quantitative model to identify and invest in international sectors exhibiting strong relative strength and momentum.

Composition: The ETF invests in a diversified portfolio of international equities across various sectors, with a focus on those identified by the model.

Key Points:

• Actively managed ETF with a focus on international equities.
• Utilizes a quantitative model to identify strong sectors.
• Strong historical performance and potential for future growth.
• Moderate liquidity and a competitive expense ratio.

Risks:

• Volatility: International equities can be more volatile than domestic markets.
• Market Risk: The ETF's performance is tied to the performance of the underlying international sectors.
• Active Management Risk: The ETF's success relies heavily on the effectiveness of the quantitative model and the management team's skill.

Who Should Consider Investing:

• Investors seeking exposure to international equities with a focus on strong, growing sectors.
• Investors comfortable with active management and the potential for higher volatility.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

8/10

HNRG receives a high rating based on its unique investment strategy, experienced management team, strong performance, and moderate costs. However, the ETF's relatively small size and limited track record are considered risks.

Resources and Disclaimers:

• Ned Davis Research: https://www.neddavisresearch.com/
• Hagan Asset Management: https://www.haganasset.com/
• ETF.com: https://www.etf.com/

This analysis is for informational purposes only and should not be considered financial advice. Investors should conduct their own due diligence before making any investment decisions.