What is the AMER ETF ?
The AMER ETF is a financial instrument designed to replicate the performance of a specific index. It invests at least 80% of its net assets in the component securities of the index. The index, in this case, is focused on U.S. dollar-denominated equities publicly-listed by U.S. companies and their subsidiaries headquartered in the U.S. The index is also centered around companies involved in the production of goods within North America, excluding Central America. As of October 22, 2021, the index consisted of 66 issues.
AMER ETF Underlying and Exposure: What does it track and how?
The universe of securities from which the AMER ETF's index is constructed includes companies featured on the annual Industry Week Top US Manufacturing Companies list. To be eligible for inclusion, a company must generate 85% or more of its total revenue in the U.S. or Canada, with at least 70% of its total revenue being generated in the U.S. The index excludes companies in the energy or energy-related, financial services, and distribution sectors. The selected companies must have a market capitalization of at least $75 million and a weighted average manufacturing footprint of at least 90% across America, with each individual constituent company having at least a 60% manufacturing footprint based in America. The index is rebalanced quarterly, and certain circumstances may trigger a special rebalance to maintain the index's weighting scheme.
AMER overlap What is the AMER ETF ?
AMER ETF: Benefits to Invest in this ETF
Investing in the AMER ETF offers several advantages. As it aims to replicate the index it tracks, the ETF follows a passive or indexing approach, which means it does not attempt to outperform the index. This approach can lead to lower costs and better after-tax performance compared to actively managed investment companies. Additionally, the AMER ETF provides exposure to U.S. companies with a strong manufacturing presence in America, potentially offering diversification benefits and opportunities to capitalize on the region's economic growth.
AMER ETF: Considerations Before Investing
While the AMER ETF may have its merits, investors should be aware of certain considerations before investing. As with any investment, there are risks involved, and the value of the ETF may fluctuate based on market conditions. Since the ETF aims to replicate its index, it may not perform significantly better than the index, which could be a drawback for investors seeking higher returns. Additionally, investors should carefully review the ETF's prospectus and understand its underlying holdings, investment strategy, and expense ratios before making investment decisions.
Conclusion
The AMER ETF provides investors with an opportunity to gain exposure to U.S. companies with a strong manufacturing presence in America. As with any investment, it's essential for investors to conduct thorough research, consider their risk tolerance, and align their investment goals with the characteristics of the AMER ETF. By understanding the underlying index and carefully weighing the benefits and considerations, investors can make informed decisions to build a diversified and well-balanced investment portfolio.
Disclaimer: The information provided in this article is for educational purposes only and does not constitute investment advice. We are not providing any investment advisory services. Investors should conduct their due diligence and seek advice from a professional financial advisor before making investment decisions.
Sources:
AMER ETF issuer
AMER ETF official page
AMER quote and analysis
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FAQ
What is the AMER ETF?
The AMER ETF, also known as the "AMER Structured Equity ETF," is an actively managed exchange-traded fund that uses a structured outcome strategy. It aims to provide investors with exposure to the market price of the SPDR® S&P 500® ETF Trust (the "Underlying ETF") while offering pre-determined target investment outcomes based on the performance of the Underlying ETF.
How does the AMER ETF's structured outcome strategy work?
The AMER ETF uses FLEX Options to implement its structured outcome strategy. The strategy seeks to produce specific investment outcomes over an approximate one-year Investment Period. It offers a Buffer against certain losses of the Underlying ETF and a Cap on potential returns, as set forth in the provided table.
What are the possible outcomes for investors holding AMER ETF shares for an entire Investment Period?
For investors holding AMER ETF shares for the entire Investment Period, the Fund's structured outcome strategy seeks to achieve the following:
How are the Cap and Buffer levels determined for the AMER ETF's Investment Period?
The Cap and Buffer levels are fixed and calculated in relation to the Underlying ETF's market price and the Fund's net asset value (NAV) at the start of each Investment Period. The Cap represents the maximum percentage return an investor can achieve from an investment in the Fund for an entire Investment Period.
What are the risks and considerations when investing in the AMER ETF?
Investors should be aware that the Fund's returns are subject to the Cap, which means that any percentage gains over the Cap will not be experienced by the Fund. Additionally, investing in the AMER ETF involves the potential for losses, and investors may lose their entire investment. The Fund's outcomes may vary if an investor purchases shares during the Investment Period instead of at the start, as they may experience different return potential and vulnerability to downside risk.