New Music ETF Aims to Tap Into Industry’s Swift Growth

New Music ETF Aims to Tap Into Industry’s Swift Growth

Fund to invest in range of entertainment companies as music revenue tops $26 billion a year.

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Finance Reporter
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Reviewed by: Lisa Barr
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Edited by: Ron Day

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 new fund follows last year’s launch of the KPOP & Korean Entertainment ETF (KPOP), which invested in firms associated with the fast-growing Korean pop music industry. The fund has garnered $2.83 million in assets. Another fund, the Clouty Tune ETF, hasn’t begun trading after its February filing and announcement.  

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 MUSCQ’s white paper, the music industry will reach $52.2 billion in revenue by 2030—growing at a notable compound annual rate of 12%.  

'First of Its Kind' 

MUSQ CEO and founder David Schulhof, who designed MUSQ, told etf.com he doesn’t see other music-focused ETFs as competitors. 

“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.”  

 

Contact Lucy Brewster at [email protected] 

Lucy Brewster is a finance reporter at etf.com covering asset managers, emerging technologies, and regulation. She hosts etf.com webinars and appears on Exchange Traded Fridays, etf.com’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.