Amplify BlackSwan Growth & Treasury Core ETF (SWAN)

Overview

The Amplify BlackSwan Growth & Treasury Core ETF (SWAN) aims to provide capital appreciation while mitigating downside risk by investing primarily in U.S. Treasury securities and S&P 500 call options. The ETF uses a 'defined outcome' strategy, seeking to participate in market upside while limiting potential losses.

Reputation and Reliability

Amplify ETFs is a known issuer, offering a range of thematic and strategic ETFs. They are generally considered reputable and reliable.

Management Expertise

The management team consists of experienced professionals with expertise in options strategies and fixed income management.

Goal

The primary investment goal is to provide capital appreciation while protecting against significant market downturns.

Investment Approach and Strategy

Strategy: SWAN utilizes a covered call options strategy, investing primarily in U.S. Treasury securities (around 90%) and a small portion in S&P 500 call options (around 10%).

Composition The ETF holds U.S. Treasury securities for safety and S&P 500 call options to capture potential market upside.

Market Share: SWAN's market share in the defined-outcome ETF category is notable, though smaller than broad market ETFs.

Total Net Assets (AUM): 859713299

Key Competitors

• FT Cboe Vest U.S. Equity Deep Buffer ETF - January (DJAN)
• Innovator U.S. Equity Power Buffer ETF - January (PJAN)
• AGFiQ U.S. Market Neutral Anti-Beta ETF (BTAL)

Competitive Landscape

The defined-outcome ETF space is competitive, with various funds offering different downside protection strategies. SWAN's advantage lies in its simplicity and focus on U.S. Treasuries. Disadvantages include potential underperformance during strong bull markets compared to unhedged equity ETFs and the cost of the option strategy.

Historical Performance: Historical performance data varies depending on the market environment. SWAN tends to outperform during flat or down markets and underperform during strong bull markets. The five-year return is 3.48% as of 2024-05-22.

Benchmark Comparison: The ETF's performance is best compared to a blend of U.S. Treasury bonds and the S&P 500 index. It should outperform bonds during moderate equity market gains and underperform the S&P 500 during strong rallies.

Expense Ratio: 0.49

Average Trading Volume

SWAN exhibits moderate liquidity with its average daily trading volume.

Bid-Ask Spread

The bid-ask spread is generally tight, reflecting adequate liquidity.

Market Environment Factors

Economic uncertainty, interest rate movements, and equity market volatility significantly impact SWAN's performance. Flight-to-safety trades benefit Treasury holdings, while equity market gains boost option value.

Growth Trajectory

The ETF's growth is tied to increasing investor demand for downside protection and alternative investment strategies. Strategy and holdings remain consistent.

Competitive Edge

SWAN's competitive edge is its simple approach to downside protection using U.S. Treasuries and S&P 500 options. This approach provides a relatively transparent and easy-to-understand strategy. The combination of a high allocation to Treasuries offers inherent safety, while the options strategy offers the potential for participation in market upside. Its defined-outcome nature makes it appealing to risk-averse investors seeking equity exposure.

Volatility

SWAN exhibits lower volatility compared to the S&P 500 due to its large allocation to U.S. Treasuries and downside protection strategy.

Market Risk

The primary market risk is the potential for underperformance during strong bull markets when the S&P 500 rallies significantly. Options strategies can also be complex, and their value can be affected by various factors.

Ideal Investor Profile

The ideal investor is risk-averse and seeks capital appreciation with downside protection. Investors concerned about market volatility or nearing retirement may find SWAN suitable.

Market Risk

SWAN is best suited for long-term investors seeking to mitigate risk while participating in market gains. It can also be used as a tactical allocation to reduce portfolio volatility.

The Amplify BlackSwan Growth & Treasury Core ETF offers a unique investment strategy that combines the safety of U.S. Treasury securities with the potential upside of S&P 500 call options. This strategy allows investors to participate in market gains while protecting against substantial losses, making it an attractive option for risk-averse investors. However, it's important to recognize that SWAN may underperform during strong bull markets. Overall, SWAN provides a distinct approach to balancing risk and reward in a portfolio.

Data Sources:

• Amplify ETFs website
• ETF.com
• Morningstar
• Yahoo Finance

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Past performance is not indicative of future results. Consult with a financial advisor before making any investment decisions.