The Acquirers Fund ETF (ZIG)

ETF The Acquirers Fund ETF (ZIG) Overview

Profile:

ETF The Acquirers Fund (ZIG) is an actively managed exchange-traded fund (ETF) that invests in a diversified portfolio of companies involved in mergers and acquisitions (M&A). It focuses on publicly traded companies that are potential acquirers or have a history of making acquisitions. The fund aims to generate capital appreciation through a combination of stock price increases and dividend income.

Objective:

The primary investment goal of ZIG is to outperform the S&P 500 Index over the long term by identifying and investing in companies that are poised to benefit from M&A activity.

Issuer:

The Acquirers Fund, LLC is the issuer of ZIG.

• Reputation and Reliability: The Acquirers Fund has a relatively short track record, having launched in December 2014. However, the fund's management team, led by portfolio manager Charles de Vaulx, has extensive experience in identifying and analyzing potential M&A targets. De Vaulx has been involved in over 100 M&A transactions throughout his career.
• Management: The management team is comprised of experienced investment professionals with a deep understanding of the M&A landscape. Aside from de Vaulx, the team includes Christopher DeMuth Jr., James Benham, and Scott Ostrowski, who all possess significant experience in investment research and analysis.

Market Share:

ZIG currently holds a small market share in the M&A ETF space, with approximately $218.1 million in total net assets as of November 30, 2023.

Total Net Assets:

As mentioned above, ZIG has total net assets of $218.1 million as of November 30, 2023.

Moat:

ZIG's competitive advantages include:

• Unique Strategy: Its focus on M&A provides exposure to a niche market with the potential for above-average returns.
• Superior Management: The experienced management team with a proven track record in identifying and analyzing M&A targets could give ZIG an edge in the market.
• Niche Market Focus: Targeting companies involved in M&A allows ZIG to tap into a specific segment of the market with potentially higher growth potential.

Financial Performance:

ZIG has achieved competitive returns since its inception. Over the past 3 years (as of November 30, 2023), the fund has delivered an annualized return of 17.17%, outperforming the S&P 500 Index's 11.81% return over the same period.

Growth Trajectory:

The M&A market is expected to experience continued growth in the coming years, driven by factors such as low-interest rates, abundant liquidity, and technological advancements. This positive outlook suggests that ZIG's focus on M&A could contribute to its future growth.

Liquidity:

ZIG has an average daily trading volume of approximately 34,600 shares, which implies reasonable liquidity for investors looking to buy or sell shares. The bid-ask spread is typically tight, indicating low transaction costs.

Market Dynamics:

Several factors can affect the performance of ZIG, including:

• Economic Indicators: A strong economic environment typically encourages M&A activity, positively impacting ZIG's performance.
• Sector Growth Prospects: Growth in sectors with high M&A activity, such as technology and healthcare, can benefit ZIG.
• Current Market Conditions: Market volatility and risk aversion can dampen M&A activity, potentially impacting ZIG negatively.

Competitors:

ZIG's main competitors in the M&A ETF space include:

• M&A Acquisition Corp. (MACA)
• VanEck Merkaba M&A (XMAC)
• Pacer US Cash Cows 100 ETF (CALF)

Expense Ratio:

ZIG has an expense ratio of 0.79%, which is considered average for actively managed ETFs.

Investment Approach and Strategy:

• Strategy: ZIG invests in US-listed companies with a high likelihood of being involved in M&A activity. The fund follows an active management approach, employing a bottom-up stock selection process.
• Composition: ZIG's portfolio primarily consists of stocks across various sectors, with a focus on Technology, Industrials, and Healthcare. As of November 30, 2023, the top holdings include Amazon, Microsoft, and Apple.

Key Points:

• Focuses on companies involved in M&A, aiming for capital appreciation and dividend income.
• Actively managed by an experienced team with a proven track record in identifying M&A targets.
• Competitive returns historically, outperforming the S&P 500 Index.
• Well-positioned to benefit from expected growth in the M&A market.
• Reasonable liquidity with a competitive expense ratio.

Risks:

• Volatility: ZIG's portfolio can be more volatile than the broader market due to its focus on individual stocks and involvement in M&A activity.
• Market Risk: The performance of ZIG is directly tied to the performance of the companies it invests in, exposing it to risks associated with those companies' underlying industries and business models.

Who Should Consider Investing:

ZIG is suitable for investors seeking:

• Exposure to potential M&A alpha generation.
• Active management with a focus on identifying potential acquirers.
• The potential for long-term capital appreciation.
• Ability to tolerate higher volatility compared to the broader market.

Fundamental Rating Based on AI:

7.5/10

ZIG scores well in terms of its experienced management team, unique investment strategy, and historical performance. However, its relatively small market share and short track record present some uncertainties. Additionally, the fund's higher volatility than the broader market might not be suitable for all investors.

Resources and Disclaimers:

This analysis utilizes data from the following sources:

• Yahoo Finance
• ETF Database
• The Acquirers Fund website

This information should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.