Amplify assets top $3bn

Dec 29th, 2020 | By | Category: ETF and Index News

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Amplify ETFs has announced that its suite of ten exchange-traded funds has surpassed $3 billion in assets under management.

Christian Magoon, CEO of Amplify ETFs.

Christian Magoon, CEO of Amplify ETFs.

As of 28 December, Amplify’s AUM stood at $3.1bn representing year-to-date growth of 285%. Each of the firm’s three fund categories – thematic ($1.87bn), core ($770 million), and income ($450m) – have increased during 2021.

Christian Magoon, CEO of Amplify ETFs, commented, “We’re extremely proud of Amplify’s growth to-date, particularly during a year of unprecedented uncertainty and challenging market dynamics.

“We deliver expanded investment strategies for investors seeking growth, income, and capital preservation, and we look forward to continuing that mission.”

While Amplify recorded growth across several funds, two ETFs in particular contributed significantly to the milestone being reached, both of which offer investment strategies that have benefitted during the Covid-19 market environment.

They are the Amplify Online Retail ETF (IBUY US), the first ETF to tap into the e-commerce investment theme, and the Amplify BlackSwan Growth & Treasury Core ETF (SWAN US), which is designed to provide S&P 500 exposure while protecting against rare events causing significant market losses.

IBUY tracks the EQM Online Retail Index, a rules-based index consisting of companies that fall into three online retail categories (marketplace, travel, and merchants) and that generate at least 70% of their revenues from online or virtual sales.

IBUY started the year with AUM of $250m and has grown to more than $1.4bn. The fund has returned over 120% year-to-date, driven by a surge in online shopping from consumers stuck at home during the pandemic. The ETF has also recorded robust net inflows, particularly between April and August when more than $430m flowed into the fund.

SWAN, meanwhile, has grown from $140m on 1 January to approximately $770m. It has gathered over $560m in net new assets during 2020 with positive net inflows recorded every month this year.

The fund tracks the S-Network BlackSwan Core Total Return Index which is composed of a 90% allocation to US Treasury securities (with an average duration that tracks the ten-year Treasury note) and a 10% allocation to in-the-money LEAP call options on the SPDR S&P 500 ETF (SPY US). LEAPs are long-term equity options that typically extend for two years or more.

Equity returns are achieved from the options, while the allocation to Treasuries provides downside protection by capitalizing on the frequently negative correlation between Treasury bonds and US stocks during periods of market volatility.

According to the fund’s prospectus, the methodology results in an approximate 70% exposure to the S&P 500 Index during a full market cycle.

By and large, SWAN delivered on its objective of guarding against significant losses during the worst of the Covid-19 market drawdown. Between 21 February and 23 March (when the S&P 500 bottomed out), SWAN declined by a relatively modest 8.4% compared to a 32.7% fall for SPY.

SPY has, however, actually outperformed SWAN year-to-date owing to its steady recovery since March. It is up 17.7% compared to 16.1% for SWAN.

Other Amplify funds that have had strong growth in 2020 include the Amplify Transformational Data Sharing ETF (BLOK US), which has grown from $96m to $336m, and the Amplify CWP Enhanced Dividend Income ETF (DIVO US), up from $23m to $189m.

BLOK provides actively managed exposure to global companies leading research and investment into blockchain-based and other distributed-ledger technologies, while DIVO invests in quality dividend-paying companies while overlaying a tactical covered call strategy.

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