Beetles and bees see in the dark, as can multiple fictional superheroes, and fund managers also want to live the dream of predicting an uncertain future.
Most futuristic themed ETFs tend to major on technology, but new ETF, The Nightview Fund, (NITE) makes consumer discretionary its largest sector weight at over 45%, and it has more in financials than in technology, which is weighted at less than 15%. These definitions are however partly a matter of debate. Amazon is classed under consumer discretionary, but if its cloud division is prioritized, it should arguably come under technology.
NITE invests in 15-25 growth stocks at discounts to its estimates of fair value and aims to beat the S&P 500 over 5-year periods.
Though the ETF has only just launched, Nightview Capital has a longer track record since July 2012, which outperformed the S&P 500 by a massive margin of over 10%, as of March 2024: Nightview has annualized at 25.2% versus 14.34% for the index. This is no mean feat when most active managers cannot keep pace with the S&P 500.
However, the return history might be too much of a rollercoaster ride for some investors: it was up by a stonking 228.09% in 2020, but lost 64.6% in 2022, and in fact has still not fully recovered the 2022 drawdown. Though the fund was up 79.07% in 2023, it would need to have made nearly 200% in 2023 to simply recover the 2022 loss. (If you lose 50% and go from 100 to 50, you then need to make 100% to get back to 100. If you lose 66.66% and go from 100 to 33.33, you need to make 200% to get back to break even.) In this regard it is somewhat similar to Cathy Wood’s ARKK which also had a spectacular 2020 but has yet to recover from subsequent losses.
Nightview founder Arne Aslin previously founded Aslin Capital Management, and investors might want to try and dig out that track record for some longer term insight.
Nightview’s top four names as of June 2024: Tesla, Amazon, Alphabet, and Taiwan Semiconductor, do currently overlap with the top ten of many other ETFs.
Another three in the top ten are financials that we see less often: the world’s largest ETF manager, Blackrock; broker Charles Schwab and investment bank Goldman Sachs. Airbnb, which is part of the sharing economy, is also a less widely held name.
This is a fully transparent ETF that lets you download all holdings in an excel sheet. They reveal two gaming names, Las Vegas Sands and Wynn Resorts, which are excluded by some ESG, values-based and faith-based ETFs.
Nightview has developed its own analytical approach of vertical segmentation, value chain analysis, and valuation. Investors who like the approach can sign up for a weekly newsletter, The Nightcrawler.