Guinness Atkinson Funds - SmartETFs Sustainable Energy II ETF (SULR)

Overview

The Guinness Atkinson Funds - SmartETFs Sustainable Energy II ETF (SUSA) is an actively managed exchange-traded fund that invests in companies involved in the development and deployment of sustainable energy solutions. Its focus is on the global sustainable energy sector, encompassing areas like renewable energy generation, energy efficiency, and related technologies. The strategy involves selecting companies with strong growth potential and positive environmental impact.

Reputation and Reliability

Guinness Atkinson Asset Management has a history of managing specialized investment strategies, including those focused on emerging technologies and sectors. While perhaps not as large as some global ETF providers, they are known for their research-driven approach.

Management Expertise

The ETF is actively managed, implying a team of portfolio managers with expertise in identifying and selecting companies within the sustainable energy sector. Their strategy relies on in-depth fundamental analysis of individual companies.

Goal

To provide long-term capital appreciation by investing in companies that are leaders or innovators in the sustainable energy sector.

Investment Approach and Strategy

Strategy: The ETF aims to outperform broad market indices by actively selecting a portfolio of global equities in the sustainable energy theme, rather than tracking a specific index.

Composition The ETF primarily holds common stocks of companies across various sub-sectors of sustainable energy, including but not limited to solar, wind, hydroelectric, geothermal, energy storage, and energy efficiency technologies.

Market Share: Data on specific market share for individual ETFs can be dynamic and is often proprietary. As an actively managed ETF in a specific niche, its market share is likely to be smaller than passively managed broad-market ETFs.

Total Net Assets (AUM): This data is subject to change and requires real-time access to financial data providers. As of recent public data, the AUM is in the tens of millions of USD.

Key Competitors

• iShares Global Clean Energy ETF (ICLN)
• Invesco Solar ETF (TAN)
• First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)

Competitive Landscape

The sustainable energy ETF landscape is increasingly competitive with several large, passively managed ETFs dominating market share. The advantages of SUSA lie in its active management approach, potentially allowing for more targeted stock selection and agility in shifting market dynamics within the sector. However, it faces disadvantages in terms of potentially higher expense ratios compared to passive ETFs and lower brand recognition, which can impact inflows and liquidity.

Historical Performance: Historical performance data for SUSA should be reviewed over 1, 3, 5, and 10-year periods. Performance will vary based on market conditions and the specific holdings within the ETF. It's crucial to consult up-to-date financial reports for precise figures.

Benchmark Comparison: As an actively managed fund, SUSA's performance should ideally be compared against a relevant benchmark index for the clean energy sector, such as the S&P Global Clean Energy Index or similar custom benchmarks. The objective is to determine if active management is adding alpha.

Expense Ratio: The expense ratio for SUSA is typically higher than for passive ETFs due to active management and research costs. Specific figures should be obtained from the ETF's prospectus or financial statements, but often fall in the range of 0.60% to 0.80%.

Average Trading Volume

The average trading volume for SUSA is generally lower than larger, more established ETFs, indicating potentially lower daily liquidity.

Bid-Ask Spread

Due to its lower trading volume, SUSA may exhibit a wider bid-ask spread compared to highly liquid ETFs, which can increase transaction costs for investors.

Market Environment Factors

The sustainable energy sector is influenced by global government policies and incentives, technological advancements, commodity prices (especially for raw materials used in renewable tech), and investor sentiment towards ESG (Environmental, Social, and Governance) factors. Shifting geopolitical landscapes and energy security concerns can also significantly impact the sector.

Growth Trajectory

The sustainable energy sector is experiencing significant growth driven by climate change concerns and the transition to a low-carbon economy. SUSA's growth trajectory will depend on its ability to adapt its holdings to evolving technologies and market opportunities within this dynamic sector. Any changes in strategy or holdings would be aimed at capitalizing on emerging trends or mitigating sector-specific risks.

Competitive Edge

Guinness Atkinson Funds - SmartETFs Sustainable Energy II ETF's primary competitive edge lies in its actively managed approach, allowing for nimble adjustments to market shifts and potential identification of undervalued companies within the rapidly evolving sustainable energy sector. The fund managers' specialized knowledge and proprietary research within this niche can uncover unique investment opportunities not captured by passive index strategies. This focus on specific, high-growth companies within sustainable energy can lead to outperformance if successful.

Volatility

The sustainable energy sector, being growth-oriented and subject to policy changes and technological disruption, can exhibit higher volatility than more mature sectors. SUSA's historical volatility should be analyzed relative to broader market indices and its peers.

Market Risk

Specific market risks for SUSA include the cyclical nature of renewable energy project development, potential for regulatory changes that impact subsidies or mandates, technological obsolescence, competition from established energy sources, and commodity price fluctuations impacting the cost of materials for renewable technologies.

Ideal Investor Profile

The ideal investor for SUSA is one with a long-term investment horizon who believes in the growth potential of the sustainable energy sector and is willing to accept higher volatility. They should be comfortable with active management and understand the risks associated with investing in a niche, growth-oriented industry.

Market Risk

SUSA is best suited for long-term investors seeking thematic exposure to sustainable energy. Active traders might find its liquidity a challenge. It is not designed for passive index followers who prefer a low-cost, broad market approach.

The Guinness Atkinson Funds - SmartETFs Sustainable Energy II ETF (SUSA) offers an actively managed approach to investing in the global sustainable energy sector. Its strategy focuses on identifying high-growth companies involved in renewable energy and efficiency technologies. While it faces competition from larger passive ETFs and potential liquidity challenges due to its niche focus, its active management aims to provide outperformance through specialized stock selection. Investors should be aware of the sector's inherent volatility and policy-driven risks.

Data Sources:

• Guinness Atkinson Funds official website (prospectus, fact sheets)
• Financial data providers (e.g., Bloomberg, Refinitiv, Morningstar)
• ETF industry reports and analysis

Disclaimers:

This information is for illustrative purposes only and should not be considered investment advice. ETF performance and holdings are subject to change. Investors should consult with a qualified financial advisor before making any investment decisions. Data accuracy is subject to the availability and timeliness of information from third-party sources.