Tidal to Launch ETF Covering Fickle Music Industry
New issue follows KPOP, and will be among the few music-tracking funds.
Tidal ETF Trust, which has issued more than 55 exchange-traded funds, is launching the Clouty Tune ETF (TUNE) and will be among the few funds tracking the fickle music industry.
TUNE is expected to launch during the second quarter, tracking Solactive AG’s Clouty Tune index, which includes 50 companies in music and entertainment, according to a filing with the Securities and Exchange Commission. Companies will be in music industry subsets like radio broadcasting, tickets and events, cable and broadcast and more, the filing said.
Music generally isn’t a well-trod area for investors, as only one other company appears to offer exposure to the industry. It’s also beholden to changing tastes, and the filing says changes in the share price often match with the patterns of listening to digital music.
Some of the companies in the index are facing headwinds—Spotify Technology last month said it would cut headcount by 6%, or 600 employees, as advertising revenue shrunk amid expectations of a slowdown in economic growth. Walt Disney Co. earlier this month said it was laying off 7,000 employees as it reorganized into three divisions.
Niche ETFs are typically purchased by retail investors since institutional investors often shy away from funds with little capital, since liquidity is an issue.
ETFs that focus on certain industries can be appealing to investors, since sometimes the returns can be higher although the risk also increases.
Known for offering niche, or thematic ETFs, Milwaukee-based Tidal has $6.5 billion in assets.
The other option for music investors is the KPOP & Korean Entertainment ETF (KPOP), which began trading last August and has only $3.19 million in assets and no new inflows this year, according to ETF.com data. Still, the fund has gained 36% in the past three months, crushing the 3.9% return of the SPDR S&P 500 ETF Trust (SPY).
Contact Ellen Chang at [email protected]
