The Emles @Home ETF (LIV) seeks investment results that correspond, before fees and expenses, to the price and yield performance of the Emles Home Lifestyle Index, an index comprised of companies that substantially focus on, and could benefit from, the trend of increased and diverse home activities.
Performance summary of Q2 2022
For the quarter ended June 30, 2022, Fund positions returned -23.2% at NAV versus benchmark losses of -22.77% for the NYSE FactSet Global Virtual Work and Life Index over the same period.
- Contributors: n/a
- Detractors: Waning consumer sentiment
- Outlook: In a challenging macro environment, high volatility names can, unfortunately, highlight downside risks of growth. We expect earnings to be tested as waning consumer and corporate spending tempers forward guidance for many names to the "at-home" theme. We remain hopeful that in the long term, thoughtful allocations to semiconductors, leisure, logistics, and communication represent a diversification of impacts to how we live.
Quarter in review
- Despite a slightly positive contribution to 2Q 2022 portfolio return, Verizon faced a volatile quarter as it guided EPS lower despite clearing FAA hurdles for 5G deployment and announcements that it will charge higher rates to customers. That said, we remain market weight Verizon as many of the macro headwinds it faces are shared across communication providers.
- Following its 2nd quarter reconstitution, the Emles Home Lifestyle Index added Expedia Group. We feel the name has upward revision potential as the name is expected to follow a loss quarter with a reversion to profitability fueled by pent-up travel demand in both leisure and business categories. Due to the cyclicality of the travel business, comparisons look to 2019 for projected EBITDA growth and higher average daily user rates going into the summer season.
- A dynamic global reopening encourages ‘@Home’ themes to selectively curate exposures that will not only impact our home lives, but also perform as investments.
- We maintain a view that without a complete return to pre-pandemic normalcy, investors would be remiss to ignore changes to how we live and work at home.