MUSQ – A Global ETF for a Global Music Industry
Given the music industry's global reach, investors might want to consider an investment vehicle with a global approach.
The global music industry is just that, global. While the United States remains the largest market for music by revenue, growth is stronger in many countries and regions around the world.[1] Given that it is global, investors may want to consider a global approach to investing in the music industry.
MUSQ Global Music Industry ETF (MUSQ) takes a global approach to investing in the music industry.
Top Global Music Markets
The top ten music markets by revenue during 2022, the latest year for which data is available, were as follows:
- United States
- Japan
- United Kingdom
- Germany
- China
- France
- South Korea
- Canada
- Brazil
- Australia
Strong Growth Abroad
Growth in the music industry has been particularly strong in regions outside the United States.
To illustrate, in their year-end 2023 report, entertainment data and consulting firm Luminate reported that on-demand song streaming experienced a 12.7% year-over-year (YOY) increase in 2023. However, global streaming volume increased by 22.3% over the comparable period.
The International Federation of the Phonographic Industry (IFPI) also highlighted stronger music industry growth outside of the United States. In its 2022 report (the latest data available), it noted YOY revenue growth for 2022 as follows:
| USA & Canada | +5.0% |
| Sub-Saharan Africa | +34.7% |
| Latin America | +25.9% |
| Middle East & North Africa | +23.8% |
| Asia | +15.4% |
| Australia | +8.1% |
| Europe | +7.5% |
This highlights the strong growth in the global music industry.
Is India About to Overtake the US in Streaming?
The US is the world’s largest streaming market, with 1.454 trillion streams in 2023, according to Luminate. India is a very close second with 1.037 streams in 2023.
However, regarding growth in streaming, India is the clear leader.
Luminate noted that the number of streams increased by 463.7 billion in 2023. This eclipses the 184 billion increase in the US, which showed the second-largest volume growth.
At this rate, India may overtake the US as the top streaming market in the world.
A Global Investment Approach for a Global Industry
Given the importance of global markets to the music industry, we believe investors should take a global approach to investing in the industry.
MUSQ’s Global Approach
The MUSQ Global Music Industry ETF aims to provide exposure to the entire global music industry and leading music companies worldwide.
As of 12/31/23, the fund’s weighting in non-US companies was around half of the fund.
About the Fund
The MUSQ Global Music Industry ETF (MUSQ) seeks to provide investment results that, before fees and expenses, correspond to the total return performance of the MUSQ Global Music Industry Index (MUSQIX). The MUSQIX Index is designed to provide exposure to global, publicly traded companies and royalty funds with a core business interest in the global music industry.
MUSQ may be an attractive vehicle to gain exposure to the global music industry.
For a full list of MUSQ holdings, please click here. Holdings subject to change.
[1] All data sourced from: Global Music Report: 2023, IFPI, 2023 & Luminate Year-End Music Report, Luminate, January 2024
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.