Amplify Natural Resources Dividend Income ETF (NDIV) 4th Quarter Commentary 2024
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 -1.58% on a net asset value (NAV) compared to its benchmark, the EQM Natural Resourced Dividend Income Index at -1.37% for the fourth quarter (Q4) 2024. For comparison, the Morningstar Global Upstream Natural Resources Index was -11.2%.
Distribution Rate/Yield as of 12/31/2024
Distribution Rate*: 7.45%
30-Day SEC Yield**: 5.86%
Distribution Frequency: Monthly
Prospectus
Fund inception date: 8/24/2022. NDIV’s total expense ratio is 0.59%. The performance data quoted represents past performance and does not guarantee future results. There is no guarantee that distributions will be made. *Distribution Rate is the normalized current distribution (annualized) over NAV per share. In addition to net interest income, distribution on 12/31/2024 included estimated return of capital of 17%. See Form 19a-1. **30-Day SEC Yield is a standard yield calculation developed by the Securities and Exchange Commission that allows for fairer comparisons among bond funds. It is based on the most recent month end. This figure reflects the income earned from dividends – excluding option income – during the period after deducting the Fund’s expenses for the period.
The power requirements of AI will be another driver of natural resource and energy demand in 2025. Goldman Sachs expects natural gas to satisfy 60% of the incremental power demands of data centers over the next six years, requiring the addition of 6.1 billion cubic feet per day of pipeline capacity.
Among NDIV’s top performers in Q4 were Energy Transfer LP (+24%) and Kinder Morgan (+25%).
Energy Transfer is a midstream company with consistent growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) and distributions with stable and low-risk cash flows based on fee income as opposed to commodity prices.
Strategic acquisitions, like Crestwood Equity Partners and WTG Midstream, have bolstered Energy Transfer's operational footprint and long-term distributable cash flow growth allowing it to distribute an attractive 7% yield.
Also spiking on more natural gas demand was Kinder Morgan. The company is one of the largest energy infrastructure companies in North America, specializing in the transportation and storage of natural gas, crude oil, and refined products. Kinder Morgan recently announced several significant projects, including the $3 billion South System Expansion 4 Project and the expansion of its Gulf Coast Express Pipeline (GCX) in Texas. The company has a strong backlog of potential projects with a value of over $5 billion.
Detractors from performance for the period were Dow (-25%) and Lyondellbasell (-21%)
Dow Chemical missed its Q4 estimates leaving it to review some of its European assets. The review was necessitated by a weak demand recovery in Europe and China and competitive regulatory policies. Lyondellbasell faced similar macro headwinds in 2024, experiencing an earnings decline of 5.9% last year.
Visit the NDIV fund page for more information, including fact sheets, index methodology and regulatory documents.
This material is preceeded or accompanied by a prospectus.
Index Definitions: An index is unmanaged and it’s not possible to invest directly in an index. The EQM Natural Resources Dividend Income Index (NDIVITR) is a gross total return index that seeks to provide investment exposure to dividend-paying equity securities of global companies operating primarily in the natural resource and commodity-related industries. Morningstar® Global Upstream Natural Resources Index measures the performance of stocks issued by companies that have significant business operations in the ownership, management and/or production of natural resources in energy, agriculture, precious or industrial metals, timber and water resources sectors as defined by Morningstar’s industry classification standards.
Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. For most recent month-end performance, visit AmplifyETFs.com/NDIV. Brokerage commissions will reduce returns. NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The closing price is the last price at which the fund traded.
You could lose money by investing in the Fund. There can be no assurance that the Fund's investment objectives will be achieved. Because the Fund is non-diversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund. Diversification does not assure a profit or protect against a loss in a declining market. The Fund is subject to the risks associated with companies in the natural resources and commodities-related industries, energy and material sectors which can cause volatility and affect its value. These industries can be significantly affected by rapid changes in supply and demand, changes in interest rates, government policies and regulations, environmental concerns, worldwide politics, and economic conditions. The Fund will invest in American Depositary Receipts which may be subject to certain risks associated with direct investments in the securities of non-U.S. companies, such as currency, political, economic and market risks because their values depend on the performance of the non-dollar denominated underlying non-U.S. securities. Dividend-Paying Companies are not obligated to pay or continue to pay dividends on their securities. Therefore, there is a possibility that a company could reduce or eliminate the payment of dividends in the future, which could negatively affect the Fund's performance.
Amplify Investments LLC serves as the Investment Adviser to the Fund, and Tidal Investments, LLC serves as the investment sub-adviser. Amplify ETFs are distributed by Foreside Fund Services, LLC.
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in Amplify Funds statutory and summary prospectus, which may be obtained by calling 855-267-3837 or by visiting AmplifyETFs.com. Read the prospectus carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Amplify ETFs are distributed by Foreside Fund Services, LLC.