Exchange-traded funds have exploded in popularity in recent years, and now they’re coming to the music business.
Last year saw the launch of the K-pop and Korean Entertainment ETF, which tracks the stock prices of firms such as JYP Entertainment, HYBE and SM Entertainment.
Earlier this year, Tidal ETF Trust filed paperwork to begin trading its Clouty Tune ETF, which tracks Solactive AG’s Clouty Tune Index, an index of the stock prices of 50 companies involved in the music and entertainment industries, including Spotify and Disney.
Now we can add a new name to the list: The MUSQ Global Music Industry Index ETF, developed by MUSQ LLC, a company founded and run by entertainment exec David Schulhof.
The ETF plans to track the MUSQ Global Music Industry Index, a new measure of music industry stock prices developed by San Diego-based EQM Indexes. The index tracks businesses in a number of segments, including music streaming, music content and distribution, live music events and ticketing, satellite and broadcast radio, and music equipment and technology.
At present, there are 49 companies in the index, including Universal Music Group, Warner Music Group, Live Nation, Spotify, Sony Music, HYBE and SM Entertainment.
New York- and Oklahoma-based investment advisor Exchange Traded Concepts (ETC) is in the process of licensing the ETF with the US Securities and Exchange Commission, and the fund is expected to begin trading “soon,” EQM said in a statement.
The ETF is expected to trade on the New York Stock Exchange once final regulatory approval is received.
“We are enthusiastic about adding this innovative index to our suite of thematic indexes, providing the opportunity to capture the disruptive growth in the global music industry,” EQM Indexes CEO Jane Edmondson said in a statement.
David Schulhof said: “The MUSQ Global Music Industry Index is the first and official music industry index to capture the performance of the global music industry. For investors looking for exposure to global music companies across the entire music industry ecosystem, this index provides a convenient solution.”
Schulhof is known as the founder and CEO of Davey Boy Entertainment. He was previously President of Music Publishing at streaming platform LiveOne, and his resume includes stints with companies such as Dimension Films and Miramax.
ETFs have exploded in popularity over the past few decades. While they started out as a lower-fee alternative to mutual funds that generally tracked major stock indexes, in recent years there has been a proliferation of themed ETFs that track specific industries.
The number of ETFs traded globally has grown from just a few hundred in 2003 to more than 8,700 today. The total market value of these ETFs surpassed USD $10 trillion in late 2021.
“For investors looking for exposure to global music companies across the entire music industry ecosystem, this index provides a convenient solution.”
David Schulhof, MUSQ LLC
The new music ETF comes at a time when the stock prices that are part of the index have put in a mixed performance.
Spotify’s shares have risen by more than 50% YoY, and trading at $153.03 on the NYSE as of market close Tuesday (June 6).
Meanwhile, Live Nation, despite reporting stellar earnings in its most recent quarter, has seen shares slide 13.7% YoY, trading at $82.99 as of market close Tuesday on the NYSE.
AS for the K-pop giants’ stock price performances, HYBE was up 21.2% YoY, trading around KRW 269,000 ($206.69) on the KOSDAQ Wednesday, while rival SM Entertainment stocks are up 52.1% YoY and its shares were trading at KRW 103,300 ($79.37) as of Wednesday.
Those are strong enough performances to propel the K-pop and Korean Entertainment ETF to a 7.1% gain since it launched last September. It closed at $21.90 on the NYSE Tuesday.Music Business Worldwide
