A drop in Parent Pillar rating is the primary driver of Amplify Natural Resources Div Inc ETF's downgrade to a Morningstar Medalist Rating of Bronze from Silver. The portfolio maintains a cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in yield exposure and an underweight in volatility exposure compared with category peers. High yield exposure is attributed to holding more stocks with high dividend or buyback yields. And low volatility exposure is rooted in stocks that have a lower standard deviation of returns. The team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent organization earns the firm a Below Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Diamondback Energy

Kinetik Holdings

Civitas Resources

Viper Energy Partners LP

Devon Energy

Plains GP Hlds

Antero Midstream Partners

Hess Midstream Partners

Chord Energy Corp

Enbridge

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Amplify Natural Resources Div Inc ETF earns an Above Average Process Pillar rating. 

The leading factor in the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. A low expense ratio also contributes to the process, with costs ranking in its category's second-cheapest fifth. Expenses reduce net returns and are one of the most reliable predictors of future performance. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 42%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

 This strategy, over time, has consistently held more undervalued companies, compared with peers in the Natural Resources Morningstar Category. But in terms of size exposure, it does not have much of a bias and resembles the typical portfolio. Analyzing additional factors, this strategy has continually displayed high-yield exposure compared with Morningstar Category peers during recent years, holding more companies returning cash to shareholders via dividends or buybacks. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-volatility stocks in recent years, meaning those that have a lower standard deviation of returns. Such holdings can limit a strategy's downside, but cause it to lag in bull markets. Similarly, in recent months, the strategy also had less exposure to the Volatility factor than peers. This strategy also has tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over these years. Lacking this ballast, the fund's prospects could rest on its ability to beat peers during economic booms. In recent months, the strategy also had less Quality factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in energy by 47.6 percentage points in terms of assets compared with the category average, and its financial services allocation is similar to the category. The sectors with low exposure compared to category peers are basic materials and industrials, underweight the average by 22.9 and 10.6 percentage points of assets, respectively. The portfolio has 63 holdings and is about as top-heavy as the category average, with 25.9% of assets in the top 10 holdings. And in closing, in terms of portfolio turnover, on a year-over-year basis, 135% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Above Average

Process

Amplify’s team earns An Average People Pillar rating. The most significant contributor to the rating is the firm's five-year retention rate of 93%. The size of the portfolio management team also supports the rating. With two portfolio managers, the fund is reasonably well-resourced. Lastly, the rating is limited by the combined average three-year excess return of each manager, which shows that the funds they manage have fallen short of their respective category average.

Average

People

While differentiated from much of the competition, Amplify ETFs' concentrated lineup of largely thematic exchange-traded funds harbors considerable risk. It earns a Below Average Parent Rating.

Amplify targets niches not previously explored by larger ETF firms. This leads to product launches in relatively narrow parts of the market like cannabis, online retail, and battery technology. A recent acquisition of 12 mostly thematic ETFs from ETF Managers Group only enhances this focus. Products like these tend to be extremely concentrated and volatile, inviting significant risks to their investors, not the least of which are ill-timed purchases and sales. Because of these risks, product success is unpredictable and leads to more closures than there are among traditional strategies. Since its 2016 founding, Amplify has merged or liquidated several ETFs that failed to gain traction or produced poor results.

Five subadvisors are responsible for the day-to-day management of Amplify's 29 ETFs. The firm regularly reviews subadvisor activity and performance and risk data but does not have a dedicated risk management team. Overall, its subadvisory relationships seem to emphasize product development and distribution rather than long-term, proven investment merit.

Amplify ETFs does what it sets out to do—offer investors differentiated ETF strategies—and leadership comes with considerable ETF experience. The firm's ETFs are not cheap but neither are they particularly pricey. Many levy category-competitive fees. Few of Amplify's ETFs should be considered core holdings, but they can serve a purpose for investors seeking specific exposures so long as shareholders understand the risks embedded.

Below Average

Parent

Amplify Natural Resources Dividend Income ETF

NDIV tracks an index of 40 to 60 US-listed dividend-paying companies engaged in the natural resources industry. Holdings are selected based on fundamental factors and weighted by dividend yield.

Global X Artificial Intelligence & Technology ETF

ARK Innovation ETF

Amplify Transformational Data Sharing ETF

Global X Robotics & Artificial Intelligence ETF

Amplify Seymour Cannabis ETF

SPDR S&P Global Natural Resources ETF

First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund

FlexShares Morningstar Global Upstream Natural Resources Index Fund

iShares US Infrastructure ETF

iShares Robotics & Artificial Intelligence Multisector ETF

Global X Lithium & Battery Tech ETF

Amplify Alternative Harvest ETF

AdvisorShares Pure US Cannabis ETF

MSUS

Global X U.S. Infrastructure Development ETF

First Trust Nasdaq Artificial Intelligence & Robotics ETF

iShares MSCI USA ESG Select ETF

Robo Global Artificial Intelligence ETF

Yieldmax Tsla Option Income Etf

Wisdomtree Artificial Intelligence And Innovation Fund

To close out the year, I thought it would be interesting to see which thematic categories experienced the most inflows in 2023, demonstrating proverbially “where the puck was going.” This data, sourced from Bloomberg and VettaFi's internal data, is interesting because it does not necessarily align with performance.

Disruptive Tech Theme of the Week: Top Thematic ETF Flows 2023

Amplify Cash Flow Dividend Leaders ETF

Amplify CWP Dividend & Option Income ETF

Amplify Cash Flow High Income Etf

Amplify International Enhanced Dividend Income ETF

YieldShares High Income ETF

CHICAGO, Nov. 28, 2023 (GLOBE NEWSWIRE) -- Amplify ETFs announces November income distributions for its ETFs.

Amplify ETFs Declares November Income Distributions for its ETFs

Alerian MLP ETF

Kraneshares China Internet And Covered Call Strategy Etf

UBS ETRACS Alerian MLP Infrastructure Index ETN Series B

Global X MLP & Energy Infrastructure ETF

Parametric Equity Premium Income ETF

Energy Select Sector SPDR Fund

SPDR Bloomberg 1-3 Month T-Bill ETF

GraniteShares HIPS US High Income ETF

JPMorgan Equity Premium Income ETF

Simplify Interest Rate Hedge ETF

Cboe Vest 10 Year Interest Rate Hedge Etf

SPDR S&P 500 ETF Trust

SPDR Portfolio S&P 500 High Dividend ETF

Vanguard High Dividend Yield ETF

Global X S&P 500 Covered Call ETF

Hiya VettaFi Voices! On Friday we're hosting the Income Strategy Symposium, so keeping in the spirit of that event, I wanted to know: Where you see the best places to find income in the markets today?

VettaFi Voices On: Finding Income

CHICAGO, Oct. 27, 2023 (GLOBE NEWSWIRE) -- Amplify ETFs announces October income distributions for its ETFs.

Amplify ETFs Declares October Income Distributions for its ETFs

Avantis U.S. Small Cap Value ETF

YieldMax COIN Option Income Strategy ETF

Pacer US Cash Cows 100 ETF

First Trust Dorsey Wright Focus 5 ETF

iShares Russell 1000 Value ETF

iShares Russell 1000 Growth ETF

iShares MSCI USA Momentum Factor ETF

YieldMax NVDA Option Income Strategy ETF

Invesco DWA Momentum ETF

Invesco S&P 500 Pure Growth ETF

Invesco S&P 500 Pure Value ETF

SPDR Portfolio S&P 500 Growth ETF

SPDR Portfolio S&P 500 Value ETF

T Rowe Price Blue Chip Growth ETF

First Trust NASDAQ Technology Dividend Index Fund

VictoryShares Free Cash Flow ETF

iShares MSCI USA Value Factor ETF

Vanguard Value ETF

Vanguard Growth ETF

Consumer Staples Select Sector SPDR Fund

Good Morning, VettaFi Voices! Growth has blown value out of the water in 2023. It's not even close. The Vanguard Value ETF (VTV) is up less than 1% year to date. Meanwhile, the Vanguard Growth ETF (VUG), the growth fund, is up 32%. That's a big difference, and clearly we're in a growth regime.

VettaFi Voices On: The Nature of Value

Amplify BlackSwan ISWN ETF

Amplify BlackSwan Tech & Treasury ETF

Amplify Blackswan Growth & Treasury Core ETF

CHICAGO, Sept. 27, 2023 (GLOBE NEWSWIRE) -- Amplify ETFs announces September income distributions for its ETFs.

Amplify ETFs Declares September Income Distributions for its ETFs

Legg Mason Low Volatility High Dividend ETF

Legg Mason International Low Volatility High Dividend ETF

Broad-based dividend strategies haven't performed very well in 2023. But panelists at VettaFi's Equity Symposium argued that there is value in dividend ETFs — investors just need to know where to look.

There's Value in Dividend ETFs. Investors Just Need to Know Where to Look

CHICAGO, Aug. 29, 2023 (GLOBE NEWSWIRE) -- Amplify ETFs announces August income distributions for its ETFs.

Amplify ETFs Declares August Income Distributions for its ETFs

CHICAGO, June 28, 2023 (GLOBE NEWSWIRE) -- Amplify ETFs announces June income distributions for its ETFs.

Amplify ETFs Declares June Income Distributions for its ETFs

Amplify ETFs, sponsored by Amplify Investments, has over $4.2 billion in assets across its suite of ETFs (as of 3/31/2023). Amplify believes the ETF structure empowers investors through efficiency, transparency, and flexibility. Amplify ETFs delivers expanded investment opportunities for investors seeking growth, income, and risk-managed strategies.

Amplify ETFs Declares April Income Distributions for its ETFs

CHICAGO, March 29, 2023 (GLOBE NEWSWIRE) -- Amplify ETFs announces March income distributions for its ETFs.

Amplify ETFs Declares March Income Distributions for its ETFs

CHICAGO, Jan. 27, 2023 (GLOBE NEWSWIRE) -- Amplify ETFs announces January income distributions for its income ETFs.

Amplify ETFs Declares January Income Distributions for its Income ETFs

Amplify Lithium & Battery Technology ETF

Amplify Emerging Markets FinTech ETF

Amplify Inflation Fighter ETF

CHICAGO, Dec. 30, 2022 (GLOBE NEWSWIRE) -- Amplify ETFs announces December income distributions across its income, core, and thematic ETFs. In addition, none of Amplify ETFs will pay a 2022 capital gain distribution.

Amplify ETFs Declares December Income Distributions for its Income, Core, and Thematic ETFs

Investors can focus on dividend income payers and related exchange traded fund strategies to shore up their investment portfolios and help generate monthly income to wait out the ongoing risks.

Dividend ETF Ideas for Income-Focused Investors in Today's Market Environment

CHICAGO, Sept. 28, 2022 (GLOBE NEWSWIRE) -- Amplify ETFs announces September monthly and quarterly distributions across its income and core ETFs. Launched in the last month, the Amplify Natural Resources Dividend Income ETF (NDIV) and the Amplify International Enhanced Dividend Income ETF (IDVO) are making their first distributions to shareholders.

Amplify ETFs Declares Monthly and Quarterly Income Distributions for its Income and Core ETFs

Amplify ETFs just launched a new ETF called the Amplify Natural Resources Dividend Income ETF (NDIV) which owns a portfolio of global dividend-paying companies in natural resources commodity-related industries. Thanks to rising energy and commodity prices, many companies in these industries are generating excessive amounts of free cash flow that will be returned to shareholders.

New ETF NDIV Offers High, Inflation-Resistant Yield

Amplify ETFs has launched an index-based ETF investing in dividend-paying U.S. exchange-listed equities operating primarily in natural resource and commodity-related industries. The Amplify Natural Resources Dividend Income ETF (NDIV), listed on the NYSE on August 24, seeks investment results that generally correspond to the price and yield of the EQM Natural Resources Dividend Income Index.

Amplify Launches Natural Resources Dividend Income ETF: NDIV

News for Amplify Natural Resources Dividend Income ETF ETF (NDIV)