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Is Amplify Etho Climate Leadership U.S. ETF (ETHO) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Growth category of the market, the Amplify Etho Climate Leadership U.S. ETF (ETHO - Free Report) is a smart beta exchange traded fund launched on 11/19/2015.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Amplify Etfs. It has amassed assets over $238.21 million, making it one of the average sized ETFs in the Style Box - All Cap Growth. Before fees and expenses, ETHO seeks to match the performance of the Etho Climate Leadership Index.
The Etho Climate Leadership Index - US tracks the performance of the equity securities of a diversified set of U.S. companies that are leaders in their industry with respect to their carbon impact.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.45% for ETHO, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.36%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 22.90% of the portfolio. Financials and Consumer Discretionary round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 1.18% of the fund's total assets, followed by Advanced Micro Devices Inc (AMD - Free Report) and Williams-Sonoma Inc (WSM - Free Report) .
ETHO's top 10 holdings account for about 7.25% of its total assets under management.
Performance and Risk
The ETF has gained about 0.83% and is up roughly 10.88% so far this year and in the past one year (as of 04/11/2024), respectively. ETHO has traded between $46.46 and $58.49 during this last 52-week period.
The ETF has a beta of 1.11 and standard deviation of 19.99% for the trailing three-year period. With about 259 holdings, it effectively diversifies company-specific risk.
Alternatives
Amplify Etho Climate Leadership U.S. ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ---------------------------------------- and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. JPMorgan Nasdaq Equity Premium Income ETF has $11.97 billion in assets, iShares ESG Aware MSCI USA ETF has $12.48 billion. JEPQ has an expense ratio of 0.35% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Amplify Etho Climate Leadership U.S. ETF (ETHO) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Growth category of the market, the Amplify Etho Climate Leadership U.S. ETF (ETHO - Free Report) is a smart beta exchange traded fund launched on 11/19/2015.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Amplify Etfs. It has amassed assets over $238.21 million, making it one of the average sized ETFs in the Style Box - All Cap Growth. Before fees and expenses, ETHO seeks to match the performance of the Etho Climate Leadership Index.
The Etho Climate Leadership Index - US tracks the performance of the equity securities of a diversified set of U.S. companies that are leaders in their industry with respect to their carbon impact.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.45% for ETHO, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.36%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 22.90% of the portfolio. Financials and Consumer Discretionary round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 1.18% of the fund's total assets, followed by Advanced Micro Devices Inc (AMD - Free Report) and Williams-Sonoma Inc (WSM - Free Report) .
ETHO's top 10 holdings account for about 7.25% of its total assets under management.
Performance and Risk
The ETF has gained about 0.83% and is up roughly 10.88% so far this year and in the past one year (as of 04/11/2024), respectively. ETHO has traded between $46.46 and $58.49 during this last 52-week period.
The ETF has a beta of 1.11 and standard deviation of 19.99% for the trailing three-year period. With about 259 holdings, it effectively diversifies company-specific risk.
Alternatives
Amplify Etho Climate Leadership U.S. ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ---------------------------------------- and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. JPMorgan Nasdaq Equity Premium Income ETF has $11.97 billion in assets, iShares ESG Aware MSCI USA ETF has $12.48 billion. JEPQ has an expense ratio of 0.35% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.