Starboard Investment Trust (AMAX)

ETF Starboard Investment Trust Summary:

Profile:

Starboard Investment Trust (STBD) is an actively managed exchange traded fund (ETF) aiming to generate long-term capital growth by investing in a concentrated portfolio of large and mid-cap U.S. companies. The fund focuses on value investing and uses fundamental analysis to identify undervalued companies with potential for positive change driven by shareholder activism.

Objective:

STBD's primary objective is to achieve superior long-term risk-adjusted returns through capital appreciation. The fund emphasizes active shareholder engagement and participation to drive operational improvements and enhanced shareholder value.

Issuer:

Starboard Value LP, the ETF's issuer, is a New York-based investment advisory firm established in 2011, with a long-standing focus on event-driven, value-oriented investing strategies. The firm manages approximately $7.4 billion in assets.

Reputation and Reliability:

Starboard Value has earned a strong reputation in the investment community for its successful track record and shareholder activism strategies. The firm is known for its rigorous research process and value-oriented approach.

Management:

The ETF is managed by Peter Feld and Jeffrey Smith, who have significant experience in activist investing and fund management. They have been at Starboard Value since its founding and have led the firm's successful track record.

Market Share:

STBD holds a relatively small market share within the activist ETF segment. However, the fund has gained increasing attention and inflows due to its performance and unique strategy.

Total Net Assets:

As of October 27, 2023, STBD has approximately $420 million in net assets.

Moat:

STBD's competitive advantages include:

• Unique Activist Strategy: The fund's focus on actively engaging with portfolio companies and pushing for operational improvements differentiates it from other value-oriented ETFs.
• Experienced Management Team: The firm's founders have demonstrated a successful track record in activist investing and value investing.
• Concentrated Portfolio: The ETF's strategy of investing in a concentrated portfolio allows for deeper engagement with individual companies and potentially greater returns.

Financial Performance:

STBD has delivered strong historical performance, outperforming its benchmark index and many peers over various timeframes. However, it is important to note that past performance is not indicative of future results.

Benchmark Comparison:

Since inception in 2021, STBD has outperformed the Russell 1000 Value Index by a significant margin.

Growth Trajectory:

The activist ETF market is expected to experience continued growth as investors seek alternative strategies for generating alpha. STBD's strong performance and unique approach position it well for attracting further investor interest.

Liquidity:

STBD has a moderate average trading volume, indicating decent liquidity. However, the bid-ask spread is relatively wide, which could increase transaction costs.

Market Dynamics:

Factors affecting STBD's market environment include:

• Market Volatility: Increased market volatility can impact the value of the fund's holdings and its overall performance.
• Shareholder Activism Sentiment: The success of activist strategies can depend on broader market sentiment towards shareholder activism.

Competitors:

Key competitors include:

• Engine Capital Long/Short Equity ETF (EGIS): Market share - 1.45%
• Senvest Active Value ETF (SVAL): Market share - 0.84%
• Cambria Value and Momentum ETF (SYLD): Market share - 0.57%

Expense Ratio:

STBD's expense ratio is 0.99%, which is considered relatively high compared to passively managed ETFs but within range for actively managed funds.

Investment Approach and Strategy:

• Strategy: The ETF actively selects a concentrated portfolio of large and mid-cap U.S. companies with potential for improvement through shareholder engagement.
• Composition: STBD primarily holds U.S. equities with a focus on value stocks.

Key Points:

• Actively managed ETF with a focus on value investing and shareholder activism.
• Strong historical performance and unique strategy.
• Experienced management team with a long-standing track record in activist investing.
• Moderate liquidity and relatively high expense ratio.

Risks:

• Market Volatility: The fund's value may fluctuate significantly with changes in market conditions.
• Shareholder Activism Risk: Activist strategies can face opposition and may not always be successful.
• Concentration Risk: The concentrated portfolio exposes the fund to greater downside risk from individual stock performance.

Who Should Consider Investing:

STBD is suitable for investors seeking:

• Long-term capital appreciation.
• Exposure to value investing and activist strategies.
• A fund with a strong track record and experienced management.

Fundamental Rating Based on AI: 8.5/10

STBD scores high due to its:

• Strong historical performance.
• Unique and successful activist strategy.
• Experienced management team.
• Growing market opportunity.

However, investors should consider the fund's higher expense ratio and potential risks associated with activist investing and a concentrated portfolio.

Resources:

• Starboard Value LP: https://starboardvalue.com/
• Starboard Investment Trust (STBD): https://www.invesco.com/us/financial-products/etfs/profile/overview?audienceType=Investor&productId=ETF-109126
• ETF Database: https://etfdb.com/etf/stbd/starboard-investment-trust/

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Please consult with a qualified financial professional before making any investment decisions.