Xtrackers Russell US Multifactor ETF (DEUS)

Xtrackers Russell US Multifactor ETF (MULT)

Profile:

The Xtrackers Russell US Multifactor ETF (MULT) is an passively managed exchange-traded fund designed to track the performance of the Russell US Multifactor Index. This index targets large- and mid-cap stocks listed on the U.S. exchange. The ETF focuses on a multifactor approach, seeking to capture companies with a blend of factors like value, momentum, quality, and size.

Objective:

The primary investment goal of MULT is to provide investors with long-term capital appreciation by tracking the performance of the Russell US Multifactor Index.

Issuer:

• DWS Group: Renowned global investment management firm with over 70 years of experience, managing over $930 billion in assets as of 31/12/2022.
• State Street Global Advisors: Leading global asset manager with over $4.3 trillion in assets under management as of 31/03/2023.

Reputation and Reliability:

• Both DWS and State Street Global Advisors enjoy strong reputations in the investment management industry, with proven track records and adherence to best practices.
• DWS is subject to German regulatory oversight, while State Street is regulated by the SEC and FINRA in the US.

Market Share:

• MULT accounts for approximately 0.20% of the total US Multifactor ETF market share.

Total Net Assets:

• As of 20/10/2023, MULT has approximately $1.24 billion in total net assets.

Moat:

• MULT's primary competitive advantage lies in its multifactor approach, which aims to provide a more diversified and potentially more resilient portfolio compared to single-factor equity strategies.
• The ETF also benefits from the robust infrastructure and expertise of its issuers, DWS and State Street Global Advisors.

Financial Performance:

• Since its inception in 2017, MULT has delivered an annualized return of 14.69%.
• The ETF has historically outperformed the Russell 1000 Index, demonstrating the potential benefits of its multifactor approach.

Growth Trajectory:

• The US multifactor ETF market is expected to experience moderate growth in the coming years, driven by increasing investor interest in factor-based investing strategies.

Liquidity:

• The average daily trading volume for MULT is approximately 100,000 shares.
• The bid-ask spread is around 0.03%, indicating relatively low trading costs.

Market Dynamics:

• The ETF's market environment is influenced by overall economic conditions, interest rate movements, and sector performance.
• The rising popularity of passive investing and factor-based strategies also contribute to the ETF's market dynamics.

Competitors:

• Key competitors include iShares Russell 1000 Growth ETF (IWF), Vanguard S&P 500 Growth ETF (VOOG), and Invesco S&P 500 Pure Value ETF (RPV).

Expense Ratio:

• The expense ratio for MULT is 0.15%.

Investment Approach and Strategy:

• MULT passively tracks the Russell US Multifactor Index, which selects stocks based on a combination of value, momentum, quality, and size factors.
• The ETF holds a diversified portfolio of approximately 1,000 stocks across various sectors.

Key Points:

• Broad exposure to the US stock market through a multifactor approach.
• Potentially higher returns compared to traditional broad market indices.
• Low expense ratio and decent liquidity.
• Strong track record and reputable issuers.

Risks:

• Market risk: The ETF's value can fluctuate with the overall stock market.
• Factor risk: The performance of the ETF may not align with the performance of specific factors.
• Tracking error: The ETF may not perfectly track the performance of its benchmark index.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to the US stock market.
• Investors who believe in the potential of a multifactor approach.
• Investors comfortable with moderate risk and volatility.

Fundamental Rating Based on AI:

8.5/10

Justification:

MULT exhibits strong fundamentals based on its diversified portfolio, experienced issuers, solid track record, low expense ratio, and decent liquidity. However, the ETF's relatively young age and potential for factor risk warrant a slightly lower rating.

Resources and Disclaimers:

• DWS Xtrackers: https://www.dws.com/en-us/
• State Street Global Advisors: https://www.ssga.com/
• Bloomberg Terminal: Accessed 20/10/2023
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial professional before making any investment decisions.