Horizon Kinetics Medical ETF · NASDAQ:MEDX
Horizon Kinetics Medical ETF — Horizon Kinetics Inflation Beneficiaries ETF — Investor Presentation (May 2023)
31 slides from Horizon Kinetics Medical ETF's investor presentation, May 2023
Slide 1: Horizon Kinetics Inflation Beneficiaries ETF
Horizon Kinetics Inflation Beneficiaries ETF Equities for the Full Business Cycle 1st Quarter 2023 Prepared in May 2023 © 2023 Horizon Kinetics LLC ®. All right s reserved.
Slide 2: A Resilient Strategy for Sustained Inflation
INFL A Resilient Strategy for Sustained Inflation LONG-TERM INVESTMENT PARADIGM • The global economy experienced over 30 years of generally low inflation, low and declining (real) interest rates, increasing profit margins and rising productivity. These trends have been disinflationary and strongly s
Slide 3: Hard Asset, Capital Light: A Full-Cycle Investment Strategy
Hard Asset, Capital Light High Quality Businesses for Inflation A Full-Cycle Investment Strategy Hard Tangible, Inelastic Limited Assets finite Demand Supply Horizon Kinetics Capital High Margin Scalable High Returns Inflation Beneficiaries ETF Light (INFL) Valuation Free Cash Asset Value Replacemen
Slide 4: INFL Portfolio Construction
INFL Portfolio Construction Hard Asset, Capital Light Approach We define a hard asset company as The revenues of a capital light, hard asset business derive directly from the one that earns revenues primarily underlying asset, with minimal additional cost structure. related to a tangible, finite ass
Slide 5: Full Cycle Investments That Benefit From Inflation
Full Cycle Investments That Benefit From Inflation Capital Light Business Models Royalty/steaming business models can be simplified as earning revenue streams based on the production of 3rd Royalty & Streaming party operators. These businesses have direct exposure to rising commodity prices and prod
Slide 6: Portfolio Positioning
Portfolio Positioning Ability to Benefit Under a Variety of Regimes High Growth High Growth, Low Inflation High Growth, High Inflation Benefit from most inflationary Precious Metals scenarios, while also rising as a S&P 500 Energy “store of Value” during risk aversion. Consistent long-term appreciat
Slide 7: Current Economic & Inflation Backdrop
Current Economic & Inflation Backdrop © 2023 Horizon Kinetics LLC ®. All right s reserved. 7
Slide 8: Shifting Fundamentals have Contributed to Inflation
Shifting Fundamentals have Contributed to Inflation Portfolios Must Adapt to the “New Regime” The inflation levels experienced since mid-2021 have been stubbornly high. Though recent observations show a slowing of the inflation rate, this is calculated of a new, higher price base established since t
Slide 9: Capital Market Returns
Capital Market Returns Drivers of Previous Decade Returns Fed Funds 10 Year Treasury S&P 500 CPI YoY PPI YoY Effective Rate Yield Profit Margin 12/31/2012 0.09 1.76 1.70 1.40 8.32 12/31/2013 0.07 3.03 1.50 1.40 9.60 12/31/2014 0.06 2.17 0.80 -0.60 9.23 12/31/2015 0.20 2.27 0.70 -2.70 8.25 12/31/2016
Slide 10: Inflation & Equities
Inflation & Equities Have S&P 500 Profits Margins Peaked? S&P 500 Operating Profit Margin The operating profit m argin of the S&P 500 Index grew by 13.00% over 400 basis points as com pared to the period 11.00% preceding the Global Financial Crisis, but has 9.00% recently contracted. 7.00% Margins h
Slide 11: Rising Debts Funding Rising Deficits
Rising Debts Funding Rising Deficits The Growing Interest Burden CBO Projections Net Interest outlays are 45000 3.50% expected to reach $1 trillion 3.25% by 2030. 40000 3.00% As debt rolls over, the problem 35000 becom es two-fold: 2.50% 30000 1. Higher debt levels 25000 2.00% 2. Higher average rate
Slide 12: Capital Cycle Theory
Capital Cycle Theory Hard Assets Capital Abundant, Returns Peak Capital Scarce, Capital Scarce, Returns Trough Returns Trough © 2023 Horizon Kinetics LLC ®. All right s reserved. 12
Slide 13: Capital Cycle
0.00 8.00 12.00 10.00 4.00 6.00 2.00 12/1/1970 12/1/1971 12/1/1972 12/1/1973 12/1/1974 12/1/1975 12/1/1976 12/1/1977 © 2023 Horizon Kinetics LLC ®. All right s reserved. 12/1/1978 Capital Cycle 12/1/1979 12/1/1980 12/1/1981 12/1/1982 12/1/1983 12/1/1984 Hard Assets / Equity Cycle Source: Bloomberg,
Slide 14: Capital Cycle: Critically Low Inventories
Capital Cycle Critically Low Inventories Structural inflation is likely to persist for many years given supply shortages that are not being addressed today. Federal Reserve policies are aimed at reducing inflation simply through demand reduction. This is likely to reduce discretionary cyclical infla
Slide 15: Case Studies
Case Studies Hard Asset, Capital Light Investing Through Cycles © 2023 Horizon Kinetics LLC ®. All right s reserved. 15
Slide 16: Full-Cycle Royalty Operating Income – Direct Beneficiaries
Full-Cycle Royalty Operating Income – Direct Beneficiaries Oil and Gas Free Cash Flow/Basic Share (quarterly) 6.00 3000 5.00 2500 4.00 2000 Royalty Group Average 3.00 1500 2.00 1000 1.00 500 0.00 0 -1.00 -500 -2.00 -1000 6/1/2016 9/1/2016 6/1/2017 9/1/2017 6/1/2018 9/1/2018 6/1/2019 9/1/2019 12/1/20
Slide 17: Full-Cycle Royalty Returns – Gold
$100.00 $400.00 $200.00 $300.00 $150.00 $450.00 $250.00 $350.00 $0.00 $50.00 Gold 8/1/2011 11/1/2011 2/1/2012 5/1/2012 8/1/2012 11/1/2012 2/1/2013 © 2023 Horizon Kinetics LLC ®. All right s reserved. 5/1/2013 8/1/2013 Source: Bloomberg, Normalized to a 100 base 11/1/2013 2/1/2014 5/1/2014 8/1/2014 1
Slide 18: Full-Cycle Royalty Returns – Iron Ore
$100.00 $200.00 $150.00 $250.00 $0.00 $50.00 2/1/2011 5/1/2011 Iron Ore 8/1/2011 11/1/2011 2/1/2012 5/1/2012 8/1/2012 © 2023 Horizon Kinetics LLC ®. All right s reserved. 11/1/2012 2/1/2013 5/1/2013 Source: Bloomberg, Normalized to a 100 base 8/1/2013 11/1/2013 2/1/2014 5/1/2014 8/1/2014 11/1/2014 2
Slide 19: Global Securities Exchanges – Indirect Beneficiaries
Global Securities Exchanges – Indirect Beneficiaries Leading Derivatives Exchange Trading Volumes vs Nominal GDP (growth) 2.5 Average daily volumes have grown in 2.0 excess of GDP, as primary drivers are linked to both economic activity and 1.5 expected volatility. 1.0 Heightened uncertainty provide
Slide 20: Why INFL?
Why INFL? Quality Exposure to Price Levels The Fund’s emphasis on hard asset, capital light businesses results in high High Quality Businesses operating margins, operating leverage and minimal debt through full business cycle. The asset base of the companies have long reserve lives, which Durable As
Slide 21: Inflation Beneficiaries Fund Performance and Portfolio Data
Inflation Beneficiaries Fund Performance and Portfolio Data © 2023 Horizon Kinetics LLC ®. All right s reserved. 21
Slide 22: INFL Overview
INFL Overview An Active Approach to Inflation Risk FUND DESCRIPTIONS PERFORMANCE HISTORY Investment Objective: Since As of 3/31/2023 QTD YTD 1 Year The Horizon Kinetics Inflation Beneficiaries ETF (the “Fund”) seeks long-term Inception growth of capital in real (inflation-adjusted) terms. Total Retu
Slide 23: Superior and Improving Fundamentals
INFL Superior and Improving Fundamentals 12/31/2021 3/31/2023 INFL Progression v S&P 500 Category Statistic INFL S&P 500* INFL S&P 500* Profit Margin 28.07% 20.19% 28.43% 17.23% Profitability Higher, Growing Margins Operating Margin 38.09% 24.98% 42.07% 22.67% Price/Earnings 19.24 25.26 13.50 19.51
Slide 24: Resources and Recent Insights
INFL Resources and Recent Insights In the Press Resources • James Davolos on Real Vision Daily Briefing - Should We Still Ride The Inflation Winners? Holdings (Aired on 3/9/2023) Watch • James Davolos on Swan Signal “Bitcoin, Inflation, and Hard Assets” (Aired on Feb 22, 2023) INFL 2022 Annual Lette
Slide 25: Horizon Kinetics, LLC
Horizon Kinetics, LLC Investing Differently Since 1994 © 2023 Horizon Kinetics LLC ®. All right s reserved. 25
Slide 26: Firm Overview: At a Glance
Firm Overview At a Glance Horizon Kinetics LLC Investment Approach Independent Thinking Independent, employee owned, serving clients since 1994. − Primary source data driven process. $7.0 billion in firm-wide assets under management 1. − Research analysts culturally guided to overcome confirma
Slide 27: Firm Overview: Strategy and Client Type
Firm Overview Strategy and Client Type Overview Firmwide Assets Under Management1 $7.0 B Client Assets by Type1 Separately Managed Accounts2 $3.4 B – Equit ies – High-Yield – Opportunistic Investments, i.e. Distressed Debt Kinetics Mutual Funds and Active ETF3 $2.8 B – Broad Markets – Specialty Mark
Slide 28: Portfolio Management Bios
Portfolio Management Bios Murray Stahl Steven Bregman Chairman, Chief Executive Officer, Chief Investment Officer President Murray is Chief Executive Officer, Chairman of the Board of Horizon Kinetics Steven is the President of Horizon Kinetics and is a co-founder of the Firm. and is a co-founder of
Slide 29: Corporate Bios
Corporate Bios Alun Williams Jay Kesslen Chief Operating Officer General Counsel, Managing Director Alun joined the Firm in 2009 and, after 12 years as the firm’s Director of Trading and Jay joined the Firm in 1999 and currently serves as General Counsel, Operations, took over the role of Chief Oper
Slide 30: Contact Information
Contact Information Offices: New York, NY 470 Park Avenue South New York, NY 10016 White Plains, NY 1 North Lexington Avenue White Plains, NY 10601 Summit, NJ 25 Deforest Avenue Summit, NJ 07901 Telephone: 646.495.7334 Fax: 646.495.0078 Email: [email protected] Website(s) www.horizonkinetics.
Slide 31: Important Risk Disclosures
Important Risk Disclosures Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a statutory and summary prospectus by contacting 646- 495-7333. Read it carefully before investing. Past performance is not a guarantee o
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