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MUSQ launched its first-ever ETF named MUSQ Global Music Industry ETF (MUSQ - Free Report) early this week. The fund offers a unique “pure play” exposure to the $26.6 billion global music industry. This is a pioneering move that promises to reshape the economic landscape of the music industry. This novel financial instrument offers investors a unique opportunity to tap into the music industry's financial rhythm, marking a significant evolution in the perception and approach toward music-related investments.
MUSQ in Focus
The new ETF aims to offer investors a way to align their portfolios with the entire music industry ecosystem, including streaming services (34.2%), content and distribution (35.3%), live events and ticketing (9.47%), satellite and broadcast radio (7%), as well as music equipment and technology (13.17%). It tracks the MUSQ Global Music Industry Index and holds 48 stocks in its basket (see: all the World ETFs here).
MUSQ is skewed toward the top three firms – Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) and Alphabet (GOOGL - Free Report) – with more than 7% share each. Other firms do not hold more than 3.6% of the total portfolio. Some of the other music names include Universal Music, Warner Music, Live Nation, Spotify, Sony Music, Hybe and SM Entertainment.
The new ETF comes with an expense ratio of 0.78%.
How Will it Fit in a Portfolio?
The ETF could be an intriguing choice for investors seeking exposure to the fast-growing music industry, which has come a long way since the days of the phonograph in 1877. It could be an attractive way to tap global growth opportunities with the development of new monetization methods, rising global paid streaming penetration, as well as the resurgence of live music events post-pandemic.
The global music industry has technologically transformed over the years from reel-to-reel, 8-tracks, cassettes, and CDs, to the digital age. There has been a drastic change in the way individuals consume music, both live and recorded. Currently, the music industry is experiencing a renaissance fueled by the advent of digitization, AI, social media and streaming platforms (read: Why AI ETFs Will Continue to Prevail in the Long Run).
The global music industry witnessed record revenues of $26.2 billion in 2022, representing a 9% increase over 2021. According to the ETF issuer, the global music market is expected to grow at a compound annual rate of 11.8% from 2022-2026. Global paid streaming penetration is expected to double by 2030 while paid streaming revenues are projected to witness a 10% CAGR through 2030. Music publishing revenues are expected to witness a 6% CAGR to reach $11.7 billion by 2030. Goldman Sachs predicts the global music industry to rise at a compound annual rate of 12% to reach $53.2 billion by 2030, according to data cited in the product’s white paper.
ETF Competition
The new product is expected to get a first-mover advantage as it is the only pure-play ETF tracking the music industry. However, it follows last year’s launch of KPOP & Korean Entertainment ETF (KPOP - Free Report) , which invested in firms associated with the fast-growing Korean pop music industry. The fund has garnered $2.8 million in AUM.
Another fund, the Clouty Tune ETF , launched last month, provides exposure to a global portfolio of companies identified as being engaged in the music, media and entertainment industries. TUNE has amassed $0.5 million in its asset base.
Bottom Line
It will not be difficult for the new ETFs to garner sufficient investor interest, redefine the financial landscape of the music industry and generate decent total returns net of expense ratio. Investors, as it is, are looking for exposure to this underserved corner of the space.
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Tune Into the Launch of the First Music ETF
MUSQ launched its first-ever ETF named MUSQ Global Music Industry ETF (MUSQ - Free Report) early this week. The fund offers a unique “pure play” exposure to the $26.6 billion global music industry. This is a pioneering move that promises to reshape the economic landscape of the music industry. This novel financial instrument offers investors a unique opportunity to tap into the music industry's financial rhythm, marking a significant evolution in the perception and approach toward music-related investments.
MUSQ in Focus
The new ETF aims to offer investors a way to align their portfolios with the entire music industry ecosystem, including streaming services (34.2%), content and distribution (35.3%), live events and ticketing (9.47%), satellite and broadcast radio (7%), as well as music equipment and technology (13.17%). It tracks the MUSQ Global Music Industry Index and holds 48 stocks in its basket (see: all the World ETFs here).
MUSQ is skewed toward the top three firms – Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) and Alphabet (GOOGL - Free Report) – with more than 7% share each. Other firms do not hold more than 3.6% of the total portfolio. Some of the other music names include Universal Music, Warner Music, Live Nation, Spotify, Sony Music, Hybe and SM Entertainment.
The new ETF comes with an expense ratio of 0.78%.
How Will it Fit in a Portfolio?
The ETF could be an intriguing choice for investors seeking exposure to the fast-growing music industry, which has come a long way since the days of the phonograph in 1877. It could be an attractive way to tap global growth opportunities with the development of new monetization methods, rising global paid streaming penetration, as well as the resurgence of live music events post-pandemic.
The global music industry has technologically transformed over the years from reel-to-reel, 8-tracks, cassettes, and CDs, to the digital age. There has been a drastic change in the way individuals consume music, both live and recorded. Currently, the music industry is experiencing a renaissance fueled by the advent of digitization, AI, social media and streaming platforms (read: Why AI ETFs Will Continue to Prevail in the Long Run).
The global music industry witnessed record revenues of $26.2 billion in 2022, representing a 9% increase over 2021. According to the ETF issuer, the global music market is expected to grow at a compound annual rate of 11.8% from 2022-2026. Global paid streaming penetration is expected to double by 2030 while paid streaming revenues are projected to witness a 10% CAGR through 2030. Music publishing revenues are expected to witness a 6% CAGR to reach $11.7 billion by 2030. Goldman Sachs predicts the global music industry to rise at a compound annual rate of 12% to reach $53.2 billion by 2030, according to data cited in the product’s white paper.
ETF Competition
The new product is expected to get a first-mover advantage as it is the only pure-play ETF tracking the music industry. However, it follows last year’s launch of KPOP & Korean Entertainment ETF (KPOP - Free Report) , which invested in firms associated with the fast-growing Korean pop music industry. The fund has garnered $2.8 million in AUM.
Another fund, the Clouty Tune ETF , launched last month, provides exposure to a global portfolio of companies identified as being engaged in the music, media and entertainment industries. TUNE has amassed $0.5 million in its asset base.
Bottom Line
It will not be difficult for the new ETFs to garner sufficient investor interest, redefine the financial landscape of the music industry and generate decent total returns net of expense ratio. Investors, as it is, are looking for exposure to this underserved corner of the space.