Audio Commentary by Tim Seymour

There’s an old saying in the financial world: Liquidity is like oxygen; you only notice it when it’s gone. And some of the most important – and least noticed – suppliers of that liquidity and therefore stability to the financial system are repurchase agreements, or repos.

It is difficult to imagine a pre-digital world. E-commerce, online banking, using online tools to make doctor’s appointments, and find out test results: Technology is embedded in our daily lives, offering enormous advantages to daily living -- and the broader economy.

COMMENTARY The major equity market indices continued to make new all-time highs during the month of February, but it was no longer the “Magnificent 7” driving all the gains. Certainly a few of them helped but resilient economic data and relatively better-than-expected earnings helped give investors additional confidence to broadly push equities higher. Positive economic data has become a precarious thing; on one hand it’s supportive for a healthy economy but on the other, the strength has investors wondering if will give the Fed confidence to keep interest rates higher for longer. Fixed income, which had done tremendously well since late 2023, sold off slightly during February as investors’ expectations for rate cuts moved further out.

COMMENTARY Amplify Natural Resources Dividend Income ETF (NDIV) seeks investment results that generally correspond to the price and yield of the EQM Natural Resources Dividend Income Index. The Index is comprised of dividend-paying U.S. exchange-listed equities operating primarily in the natural resource and commodity-related industries such as: energy, chemicals, agriculture, metals & mining, paper products, and timber. NDIV returned 1.95% on a net asset value (NAV) compared to its benchmark, the EQM Natural Resources Dividend Income Index at 2.00% for the month, as of February 29, 2024. Oil, gas & consumable fuels (+4.01%) contributed the most to the Fund’s return for the month, whereas metals & mining (-5.63%) and chemicals (-1.90%) detracted.1 Positions that contributed most significantly included Diamondback Energy (FANG), Viper Energy (VNOM) and Kinetik Holdings (KNTK). Positions that detracted most significantly included Glencore (GLNCY), Chemours (CC) and Sasol (SSL).

We find it wonderful that so many new investors are embracing the ease of direct exposure through Spot ETFs. Over the past 6 years we have argued that bitcoin and digital assets are the first new asset class for investors in generations. Most importantly, bitcoin is a natural hedge against any follow-on banking crisis, concerns about excess printing of the US dollar, and inflation. As a result, at certain times when equity markets have weakened, the Fund’s bitcoin exposure has hedged the price decline held by the Fund’s exposure to transforming companies like Block Inc (SQ), Nu Holdings (NU), and Roblox Corp (RBLX). The fact is that growth companies can carry high beta risk, so trading or holding a non-correlated asset or arguably even an inversely correlated asset class can help to manage certain types of systemic risks. To be clear, we do not hold Bitcoin directly in the Fund– it comes through holdings in Spot ETFs, MicroStrategy (MSTR), and companies in the Bitcoin mining industry. Food For Thought: What's Up With The Supply Chain? Equally as important is how companies like Accenture (ACN), Visa (V), and International Business Machines (IBM) are reinventing themselves through investments in companies aligned with Blockchain technology. For example, IBM’s global food supply tracking efforts have made meaningful progress. In a Fresh Produce Journal article, Michael Barker highlights that the SecQuAL project using the IBM platform “finds multiple benefits for the tomato and wider fresh produce industry in its use of blockchain technology that secures storage and transfer of data to form a thread detailing the whole process from farm to fork”.1 Wrapping the IBM brand as an “IBM Trust” that implements blockchain technology helps build confidence that the supply chain solutions packaged by the company are secure, efficient, and with integrity. Let’s face it, our supply chain has many different problems that impact trillions of dollars. Why IBM? Why not! Again, we highlight IBM’s progress with developing its position in blockchain technology to explain the impact that will come from this technology. It will support the production of trillions of dollars’ worth of goods and services, as it affects industries like manufacturing, healthcare, and yes, asset management. This is why tokenization is so important and why a portfolio needs both equities and Spot Bitcoin involved in the build out of digital assets. Think about blockchain as the distributed ledger that creates enduring and unalterable records that can be programed as tokens. Forget price! Think about the benefits of transparent information on a real time basis, that is reliable because it has been verified independently and triple checked. Also, let’s not forget that Bitcoin may not be the only solution that changes this world.

Audio Commentary by Tim Seymour

Chicago, March 26, 2024—Amplify ETFs announces March income distributions for its ETFs.

Audio Commentary by Tim Seymour

The stage is set for a potential rerun of the 2020 election this November and many investors are aware that financial markets usually do well in a presidential election year. Election years present a unique dynamic since the normal market influences are in play plus factors related to the election.