The Emles Made in America ETF (AMER) seeks investment results that correspond, before fees and expenses, to the price and yield performance of the Emles American Manufacturing Index, an index designed to provide exposure to U.S. equities, predominantly companies headquartered and focused on the production of goods within the U.S.
For the quarter ended June 30, 2022, Fund positions delivered -9.99% at NAV, exceeding its benchmark return of -12.31% by the Russell 1000 Pure Domestic Exposure Index over the same period.
- Contributors: Food Producers
- Detractors: Materials Companies
- Outlook: Inflation and labor supply, among other factors, remain headwinds to manufacturers as a critical labor base adds to inflated costs of goods. We remain hopeful that sustained demand and normalizing supply chains will drive manufacturing performance.
Quarter in review
- Inflated food costs aided food producers in contributing 76bp of 2Q2022 performance for the AMER portfolio. In the same vein, poultry giant Sanderson Farms executed a merger with a syndicate led by Cargill nearly 50bp above a deal price of $203 a share.
- Materials continue their decline in 2Q2022 as follow-on effects of soaring commodity prices crimp demand and guidance. Once high-flying Nucor Corporation is expected to halve earnings per share (EPS) estimates going into 2Q2023 as year-over-year growth slows by 5.5% and net income plummets 13.3%
- Low trend growth and contractionary Purchasing Managers' Index (PMI) survey results stage a cautious tone for U.S. manufacturing names. Nonetheless, White House, legislative, and Fed efforts to temper inflation may bode well for AMER names as progress is made towards lowering costs of goods sold and onshoring high-capacity manufacturing.