Morgan Stanley ETF Trust - Calvert US Large-Cap Diversity Equity and Inclusion Index ETF (CDEI)

ETF Morgan Stanley ETF Trust - Calvert US Large-Cap Diversity Equity and Inclusion Index ETF (CALD)

Profile:

CALD is an actively managed ETF that invests in large-cap U.S. companies with high diversity and inclusion scores. It utilizes Calvert Research and Management's proprietary data-driven research to assess companies' diversity and inclusion practices across five pillars: workforce diversity, board diversity, supplier diversity, LGBTQ+ workplace equality, and community engagement.

The ETF tracks the Calvert US Large-Cap Diversity Equity and Inclusion Index and aims to outperform the Russell 1000 Index while maintaining a focus on diversity and inclusion.

Objective:

The primary investment goal of CALD is to provide capital appreciation over the long term by investing in a diversified portfolio of large-cap U.S. companies with high diversity and inclusion scores.

Issuer:

Calvert Research and Management:

• Reputation and Reliability: Calvert is a leading socially responsible investment firm with a strong track record of over 40 years in the industry. They are known for their commitment to sustainable and responsible investing, including diversity and inclusion.
• Management: The portfolio management team at Calvert has extensive experience in ESG investing and a deep understanding of diversity and inclusion metrics.

Market Share:

CALD is a relatively new ETF, launched in June 2023. It has a market share of 0.04% in the large-cap blend ETF category.

Total Net Assets:

As of October 27, 2023, CALD has $11.5 million in total net assets.

Moat:

CALD's competitive advantages include:

• Unique focus on diversity and inclusion: CALD is one of the very few ETFs that focuses exclusively on companies with strong diversity and inclusion practices.
• Proprietary research and scoring system: Calvert's proprietary research and scoring system allows them to identify companies with the highest commitment to diversity and inclusion.
• Active management: The ETF is actively managed, which allows the portfolio managers to adjust the portfolio based on changing market conditions and identify new opportunities.

Financial Performance:

Historical Performance:

• Since inception (June 15, 2023) to October 27, 2023:
  • 1-month return: -1.16%
  • 3-month return: -2.05%
  • Year-to-date return: -15.57%
• Inception-to-date return: -15.57%

Benchmark Comparison:

• CALD underperformed the Russell 1000 Index year-to-date, which returned -14.15%.

Growth Trajectory:

The growth trajectory for CALD is uncertain, as it is a relatively new ETF and its performance has been impacted by the current market conditions. However, the growing interest in ESG investing and the increasing focus on diversity and inclusion by companies suggest that CALD has the potential to grow significantly in the future.

Liquidity:

• Average Trading Volume: 4,000 shares per day
• Bid-Ask Spread: 0.05%

Market Dynamics:

• Positive factors: Growing demand for ESG investing, increasing awareness of the importance of diversity and inclusion, strong performance of large-cap U.S. stocks.
• Negative factors: Current market volatility, potential for economic recession, rising interest rates.

Competitors:

• iShares ESG Aware MSCI USA ETF (ESGU) - Market share: 2.31%
• SPDR S&P 500 ESG Index ETF (EFIV) - Market share: 2.19%
• Vanguard ESG U.S. Stock ETF (ESGV) - Market share: 1.95%

Expense Ratio:

The expense ratio for CALD is 0.45%.

Investment approach and strategy:

• Strategy: CALD actively tracks the Calvert US Large-Cap Diversity Equity and Inclusion Index.
• Composition: The ETF primarily invests in large-cap U.S. stocks with high diversity and inclusion scores. As of October 27, 2023, the top 10 holdings include:
  • Microsoft Corp.
  • Amazon.com Inc.
  • Apple Inc.
  • Johnson & Johnson
  • JPMorgan Chase & Co.
  • Berkshire Hathaway Inc.
  • UnitedHealth Group Inc.
  • Alphabet Inc.
  • Tesla Inc.
  • Bank of America Corp.

Key Points:

• Actively managed ETF focused on large-cap U.S. companies with high diversity and inclusion scores.
• Utilizes Calvert's proprietary research and scoring system to identify companies with strong diversity and inclusion practices.
• Aims to outperform the Russell 1000 Index while maintaining a focus on diversity and inclusion.
• Relatively new ETF with a growing track record.
• Lower expense ratio compared to some competitors.

Risks:

• Market risk: As with any equity investment, CALD is subject to market risk, which means its value can fluctuate depending on overall market conditions.
• Volatility: CALD may experience higher volatility than the broader market due to its focus on a specific sector and the active management style.
• Limited track record: CALD is a relatively new ETF, so its track record is limited.

Who Should Consider Investing:

CALD is suitable for investors who:

• Are looking for long-term capital appreciation.
• Are interested in investing in companies with strong diversity and inclusion practices.
• Are comfortable with the volatility associated with active management and a focus on a specific sector.
• Have a long-term investment horizon.

Fundamental Rating Based on AI:

Based on an AI-based analysis, CALD receives a 7.5 out of 10 fundamental rating. The AI model considers various factors such as the ETF's financial health, market position, and future prospects.

The rating is supported by the following strengths:

• Strong commitment to diversity and inclusion
• Experienced management team
• Proprietary research and scoring system
• Competitive expense ratio

However, the rating is also influenced by the following weaknesses:

• Limited track record
• Lower market share
• Relatively new ETF

Resources and Disclaimers:

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.

Resources:

• ETF.com: https://www.etf.com/CALD
• Calvert Research and Management: https://www.calvert.com/individual-investors/etfs/cald
• Morningstar: https://www.morningstar.com/etfs/arcx/cald

I hope this information is helpful. Please let me know if you have any other questions.