Bill Ackman doesn’t make $64 billion moves by accident. When the Pershing Square Capital Management founder made a bid for Universal Music Group earlier this year, the financial world took notice—and David Schulhof, Founder and CEO of MUSQ, LLC, The Music ETF, wasn’t surprised in the least.
Schulhof launched the MUSQ Global Music Industry Index ETF (ticker: MUSQ) as the first exchange-traded fund built to give investors comprehensive exposure to the music industry. His thesis has always been simple: music is chronically undervalued, and Wall Street is finally paying attention. Ackman’s $64 billion bid on UMG is the latest proof.
“He thinks it’s very undervalued,” Schulhof says of Ackman’s rationale. “So, if you look, it was a $64 billion offer. Shares were up 10%, 12%, but it’s a substantial increase in valuation for UMG. So, he’s definitely thinking this could be a big move in the industry.”
Part of Ackman’s strategy, Schulhof explains, is structural: UMG currently trades on a European exchange, and moving it to the New York Stock Exchange would unlock a broader pool of capital and investor attention. For MUSQ, which has held UMG as a top position—roughly 10% to 12% of the fund—since day one, the development is welcome news.
MUSQ tracks the MUSQ Global Music Industry Index. The fund launched in 2023 and aims to be as close to a pure play on music as a publicly traded vehicle can get—not a media fund with some music exposure tucked in, but a structure purpose-built around the industry’s full commercial footprint, from the biggest streaming platforms to the concert promoters to the companies building the technology that powers it all.
A Fund Built for the Whole Ecosystem
Understanding MUSQ requires stepping back from the familiar vocabulary of media ETFs. The fund isn’t built around a handful of megacap names with “music” somewhere in their business description. It seeks to capture the entire global music industry ecosystem, with rules that are specific and deliberate.
Roughly 80% of holdings are pure-play music companies—those generating more than half their revenue from music. The remaining are diversified companies that still derive at least 20% of revenue from the space. No single position can exceed 12% of the fund, and no company with a market cap below $200 million qualifies for inclusion. Roughly half the holdings are domestic; the other half are international, spanning companies in China, Japan, Taiwan, Australia, India, and beyond.
The sector breakdown is equally balanced: about 35% in streaming, 35% in content and distribution, 15% in live music and ticketing, and the remainder in equipment, technology, and AI.
“It really captures the growth of the entire global music industry ecosystem,” Schulhof says. “It gives investors an opportunity to look at companies internationally that they ordinarily wouldn’t be familiar with.”
A Different Kind of Communications Allocation
For wealth advisors already allocating to the communications sector, MUSQ offers something the traditional vehicles don’t. The Communications Select Sector SPDR Fund (XLC) is, in practice, a market-cap weighted bet on Meta, Alphabet, and Netflix. There’s limited room for anything else, and there’s certainly no room for the music industry.
Schulhof believes the timing is right for a distinct allocation. “It gives investors an opportunity to diversify their portfolio beyond the Mag Seven,” he says. “It’s streaming, it’s content, it’s podcasting, it’s live music, it’s merchandise. It’s a very well-diversified company.”
More importantly, he argues the fund behaves differently from the rest of the market. “We’re a very uncorrelated fund,” he says. “We’re not really impacted by tariffs. We’re not really impacted by interest rates. And the fund has performed very well in the bearish of markets.”
Since MUSQ’s launch, Schulhof says the fund has returned 15–20% over the trailing 12-month period—a figure he puts alongside the best-performing technology funds. His suggested allocation: 5% to 10% of a client’s holdings, used to introduce diversification and reduce exposure to the volatility that’s followed the Magnificent Seven in recent quarters.
Undervalued and Undermonetized—for Now
The broader investment case for music rests on a straightforward imbalance. Streaming services are cheap—and Schulhof thinks the market hasn’t fully reckoned with what happens when that changes. “At $11 a month, that’s half of what you pay for Netflix, for Hulu, for HBO Go,” he notes. “So, we think music should be very much on par with some of these larger existing media companies.”
The companies in the fund reflect that mispricing. “If you look at all the companies, they’re trading at a third of what these other tech and AI companies are trading at,” Schulhof says. As streaming platforms continue to raise prices—Spotify has done so repeatedly—the increased revenue flows downstream to labels and content owners. The Goldman Sachs “Music in the Air” report, which Schulhof recommends as required reading for interested investors, tracks exactly the kind of structural re-rating he’s anticipating.
There’s also the cultural dimension. Music isn’t a discretionary luxury that disappears when markets turn. Schulhof calls it “an indispensable item like food, like water.” Consumers are building streaming costs into their budgets the same way they do utilities—and as that spend grows, the revenue pool for the entire ecosystem expands.
Bringing the Industry to Wall Street
For advisors who want to go deeper, MUSQ is hosting its inaugural Amplify Music Investment Summit on May 8 at Virgin Hotels New York City. Robert Kyncl, CEO of Warner Music Group, is confirmed for a keynote conversation with CNBC’s Jon Fortt, and “we just announced our second major speaker, Clive Davis, who is being interviewed in a one-on-one conversation with his son Fred,” Schulhof notes.
Twenty-five additional speakers are scheduled across six panels covering streaming, content, emerging markets, and music’s intersection with AI. “We’re bringing the music industry to Wall Street,” he emphasizes. Registration and sponsorship information are available at www.amplifyinvestmentsummit.com.
Advisors who want to explore the fund before May can visit musqetf.com, where Schulhof has published a white paper on the music industry alongside a management presentation, fact sheet, and a library of explainer videos. A periodic newsletter is also available for those who want ongoing coverage of the space.
The fund—ticker MUSQ—is built on the premise that consumers are already making room in their budgets for music. The question is whether advisors will make the corresponding room in their clients’ portfolios.
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Risk Disclosures
All investing involves risk, and asset allocation and diversification do not guarantee a profit or protection against a loss. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, might be worth more or less than their original cost. ETFs are subject to risks similar to those of stocks, as well as other risks specific to the particular ETF.
Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. ETF shares are traded on exchanges and are traded and priced throughout the trading day. ETFs permit an investor to purchase a selling interest in a portfolio of stocks throughout the trading day. Because ETFs trade on an exchange, ETF shares are bought and sold at market price (not NAV). The prices of ETFs may sometimes vary significantly from the NAVs of an ETFs’ underlying securities. Brokerage commissions will reduce returns. The returns shown do not represent the returns you would receive if you traded shares at other times. The market price returns are based on the official closing price of an ETF share or, if the official closing price isn’t available, the midpoint between the national best bid and national best offer (“NBBO”) as of the time the ETF calculates current NAV per share. NAVs are calculated using prices as of 4:00 PM Eastern Time.
MUSQ Global Music Industry ETF is offered by prospectus. Carefully consider the investment objectives, risks, charges, and expenses. This and other important information can be found in the MUSQ ETF prospectus, which should be read carefully before investing and can be obtained by visiting our website www.musqetf.com, or by calling 888-MUSQETF (888-687-7383).
Exchange Traded Concepts, LLC serves as the investment advisor to the Fund. The Fund is distributed by SEI Investments Distribution Co (SIDCO). SIDCO is not affiliated with Exchange Traded Concepts, LLC..
