Deeper Dive: The music industry is growing louder
Seeking Alpha talks about how MUSQ may satisfy investors' appetite for exposure to the music industry.
Below is an excerpt from an article written by Jason Capul and published on Seeking Alpha on 7/12/2023.
More and more investors are tuning into the music industry as a possible area of investment. Earlier this week, the music world heard the volume turn up when Wall Street received a music industry-focused exchange traded fund.
On Monday, the MUSQ Global Music Industry ETF (NYSEARCA: MUSQ) launched, which aims to provide investors with exposure to the entire music ecosystem and track companies with a core business interest in the global music industry.
The music industry is increasing in demand and size, as Goldman Sachs forecasts that the industry’s revenue can reach $53.2B by 2030, which equates to a growing compound annual rate of 12%.
Aside from the two recently launched ETFs, other music industry players have also found themselves in the news. Some names include the likes of Spotify (SPOT), Live Nation Entertainment (LYV), Sirius XM Holdings (SIRI), Sony Group Corporation (SONY), Universal Music Group (OTCPK: UNVGY), and Warner Music Group (WMG).
Spotify is scheduled to announce its Q2 earnings at the end of the month, and investment firm Monness, Crespi, Hardt highlighted that the streaming music giant's user growth has been "surprisingly strong."
At the same time, Live Nation posted its latest round of earnings. The company posted Q1 GAAP EPS of -$0.25, which beat estimates by $0.21 and also topped revenue forecasts by $860M, as the company reported revenue of $3.13B.
In an effort to bring more subscribers to its namesake app, SiriusXM Holdings is reportedly closing its Stitcher podcast app later this year.
In share shifts, while Universal Music Group (OTCPK: UNVGY) and Sony Music (SONY) broadly maintained market share in recorded music in 2022, gains by independents were almost entirely driven by share loss at Warner Music Group (WMG), Goldman said.
The music industry is gaining even more attention and competition as TikTok Music looks to enter the sphere and compete alongside for market share with Apple Music (AAPL) and Spotify (SPOT), which together pretty much lead the music streaming industry.
For a complete list of MUSQ holdings, please click here. Holdings subject to change.
MUSQ Global Music Industry Index ETF is offered by prospectus. Carefully consider the investment objectives, risks, charges, and expenses. This and other important information can be found in the MUSQ ETF prospectus, which should be read carefully before investing and can be obtained by visiting https://musqetf.com or by calling 1-855- MUSQ-ETF(687-7383).
Risk Disclosures
There is no guarantee the Fund will achieve its stated objectives.
In addition to the normal risks associated with investing, international investments may involve the risk of capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles or social, economic or political instability in other nations.
Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume.
In addition to the normal risks associated with investing, investments in small- or mid-capitalization companies typically exhibit higher volatility.
The Fund’s concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors.
The Fund is non-diversified.
The Fund is new and has a limited operating history for investors to evaluate. A new and smaller fund may not attract sufficient assets to achieve investment and trading efficiencies.
The Fund may invest in securities denominated in foreign currencies. Because the Fund's NAV is determined in U.S. dollars, the Fund's NAV could decline if currencies of the underlying securities depreciate against the U.S. dollar or if there are delays or limits on repatriation of such currencies. Currency exchange rates can be very volatile and can change quickly and unpredictably.
All investing involves risk, and asset allocation and diversification do not guarantee a profit or protection against a loss. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, might be worth more or less than their original cost. ETFs are subject to risks similar to those of stocks, as well as other risks specific to the particular ETF.
ETF shares are traded on exchanges, and are traded and priced throughout the trading day. ETFs permit an investor to purchase a selling interest in a portfolio of stocks throughout the trading day. Because ETFs trade on an exchange, ETF shares are bought and sold at market price (not NAV). The prices of ETFs may sometimes vary significantly from the NAVs of a ETFs’ underlying securities. Brokerage commissions will reduce returns.
Exchange Traded Concepts, LLC serves as the investment advisor. The Funds are distributed by SEI Investments Distribution Co., which is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.