New Music ETF Aims to Tap Into Industry’s Swift Growth
ETF.com highlights a potential way to gain exposure to the expected fast growth of the music industry.
Below is an excerpt from an article written by Lucy Brewster and published on ETF.com on 7/10/2023.
While recent music industry exchange-traded funds have a mixed record, that hasn’t stopped the launch of a new fund that aims to tap into what its issuer says is the industry’s 12% annual growth rate.
MUSQ launched its first ETF, the MUSQ Global Music Industry ETF (MUSQ), which began trading July 7. It declined less than half of a percent to $24.83 in afternoon trading Monday.
The firm said it’s offering a unique “pure play” music ETF that seeks to expose investors to the $26.6 billion industry. The fund tracks the MUSQ Global Music Industry Index (MUSQIX).
The fast-growing music industry has seen a boon from the revival of live performances post-pandemic, digital innovation from AI and untapped growth for streaming platform monetization. According to Goldman Sachs data noted in MUSQ’s white paper, the music industry will reach $52.2 billion in revenue by 2030—growing at a notable compound annual rate of 12%.
“There’s nothing like MUSQ on the market,” he said. “Every single one of our companies is a real music company—it's the first of its kind.”
The MUSQIX index was created by Schulhof and is administered by EQM Indexes. It encompasses all aspects of the music industry, including production, distribution and live events, broadcast radio and even equipment. The ETF holds 48 companies including Warner Music Group, Spotify, Live Nation, SiriusXM and Sonos. Its top holdings are Amazon, Apple and Alphabet.
The ETF is structured to ensure companies are weighted with an initial maximum stake of 7%. The minimum market cap to be on the index is $100 million, which means the fund includes small cap, midcap and large cap companies. The liquidity requirement for companies is a minimum of $200,000 of trading volume per day, according to Schulhof. Its expense ratio is 0.92%.
Schulhof said he sees the ETF as tapping into demand from retail investors who used apps like Robinhood and traditionally didn’t have access to the asset class.
“For 25 years, it was really hard to get exposure to music as a retail investor,” Schulhof said. “As an investor myself, I took my experience in music and investing in music and designed a product that is going to hit all the right notes for investors.”
For a complete list of MUSQ holdings, please click here. Holdings are 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).
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