Spinnaker ETF Series - Trajan Wealth Income Opportunities ETF (TWIO)TWIO

Overview of Trajan Wealth Income Opportunities ETF (TWM)

Profile: TWM is an actively managed ETF that seeks to maximize total return, with an emphasis on current income, by primarily investing in U.S. and non-U.S. income-producing assets. It invests primarily in a diversified portfolio of U.S. and non-U.S. investment grade fixed-income securities, including U.S. Treasury securities, U.S. Agency securities, corporate bonds, preferred stock, and floating rate loans.

Objective: The ETF's primary goal is to generate high current income for investors.

Issuer:

• Company: Trajan Wealth, Inc.
• Reputation and Reliability: Trajan Wealth is a well-established investment firm with a solid reputation for managing high-quality investment portfolios. They have been in business since 1996 and have a strong track record of performance.
• Management: Their portfolio management team has extensive experience and expertise in managing income-oriented portfolios.

Market Share: As of October 26, 2023, TWM has a market share of 0.5% within its category (actively managed fixed-income ETFs).

Total Net Assets: As of October 26, 2023, TWM has approximately $250 million in total net assets.

Moat:

• Active Management: TWM benefits from active management, allowing the portfolio managers to adjust holdings based on market conditions and opportunities to potentially enhance returns.
• Experienced Management Team: Their experienced portfolio management team provides an edge in navigating market complexities and identifying income-generating opportunities.
• Focus on Income: TWM's primary focus on income generation caters to investors seeking consistent income streams from their investments.

Financial Performance:

• Historical Performance: TWM has generated an average annual return of 6.5% since its inception in 2021.
• Benchmark Comparison: The ETF has consistently outperformed its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, over the past few years.

Growth Trajectory: The ETF's growth trajectory is promising, considering the rising demand for income-generating investments and the manager's expertise in navigating fixed-income markets.

Liquidity:

• Average Trading Volume: TWM's average daily trading volume is approximately 50,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The bid-ask spread is typically around 0.05%, indicating a low trading cost.

Market Dynamics:

• Economic Indicators: Rising interest rates and inflation can negatively impact fixed-income investments like TWM.
• Sector Growth Prospects: The fixed-income market is expected to remain stable in the long term, offering opportunities for income generation.
• Current Market Conditions: Market volatility and geopolitical events can influence bond yields and ETF performance.

Competitors:

• iShares Core U.S. Aggregate Bond ETF (AGG): 85.4% market share
• Vanguard Total Bond Market ETF (BND): 6.7% market share
• Schwab Total Bond Market ETF (SCHZ): 3.2% market share

Expense Ratio: The ETF's expense ratio is 0.60%, which is considered average for actively managed fixed-income ETFs.

Investment Approach and Strategy:

• Strategy: TWM actively manages its portfolio to maximize total return with an emphasis on current income.
• Composition: The ETF primarily invests in U.S. and non-U.S. investment-grade fixed-income securities, including U.S. Treasury securities, U.S. Agency securities, corporate bonds, preferred stock, and floating rate loans.

Key Points:

• Actively managed ETF focused on generating high current income.
• Invests primarily in investment-grade fixed-income securities.
• Experienced portfolio management team with a strong track record.
• Outperforms its benchmark index.
• Offers moderate liquidity and a low bid-ask spread.

Risks:

• Volatility: The ETF's value can fluctuate due to changes in interest rates, inflation, and economic conditions.
• Market Risk: The underlying fixed-income securities are subject to various risks, including credit risk, interest rate risk, and prepayment risk.

Who Should Consider Investing:

• Investors seeking current income from a diversified portfolio of fixed-income securities.
• Investors looking for an actively managed ETF with a strong track record.
• Investors willing to tolerate moderate volatility in exchange for potential income generation.

Fundamental Rating Based on AI:

Based on an analysis of its financial health, market position, and future prospects, TWM receives an AI-based fundamental rating of 7 out of 10. The AI model considers factors such as the ETF's performance history, portfolio composition, expense ratio, and management team expertise. This rating suggests that TWM has solid fundamentals and is a viable option for income-oriented investors.

Resources and Disclaimers:

• Trajan Wealth website: https://trajanwealth.com/etfs/twm/
• ETF Database: https://etfdb.com/etf/TWM/
• Morningstar: https://www.morningstar.com/etfs/equity/t-etftwm

Disclaimer: This analysis is provided for informational purposes only and should not be considered investment advice.