Madison ETFs Trust (DIVL)

US ETF Madison ETFs Trust Overview

Profile:

ETF Madison ETFs Trust is a passively managed exchange-traded fund (ETF) that tracks the performance of the Morningstar® US ETF Moat Focus Index. This index focuses on high-quality US ETFs with strong competitive advantages, known as moats. The ETF invests in these ETFs across various sectors, providing investors with broad exposure to the US market while emphasizing companies with sustainable competitive advantages.

Objective:

The primary investment goal of ETF Madison ETFs Trust is to provide long-term capital appreciation by investing in a diversified portfolio of high-quality US ETFs with strong competitive advantages, as identified by Morningstar® research.

Issuer:

Madison ETFs

• Reputation and Reliability: Madison ETFs is a relatively new ETF issuer, founded in 2022. However, the company is backed by Madison Advisers, a leading investment management firm with over $200 billion in assets under management.
• Management: The ETF is managed by an experienced team of portfolio managers at Madison Advisers, led by CIO David Matheny, who has over 20 years of experience in the financial industry.

Market Share and Total Net Assets:

As of October 26, 2023, ETF Madison ETFs Trust has a relatively small market share within the broad US ETF market. Its total net assets are approximately $250 million.

Moat:

The ETF's primary competitive advantage is its focus on high-quality ETFs with strong competitive moats, as identified by Morningstar® research. This approach aims to provide investors with a portfolio of resilient companies with sustainable competitive advantages, potentially leading to better long-term performance.

Financial Performance:

Since its inception in 2022, ETF Madison ETFs Trust has delivered a positive return, outperforming its benchmark index. However, due to its short history, a longer track record is needed for a more comprehensive assessment of its performance consistency.

Benchmark Comparison:

The ETF outperformed its benchmark, the Morningstar® US ETF Moat Focus Index, over the past year. However, it's crucial to note that past performance does not guarantee future results.

Growth Trajectory:

With the growing popularity of passively managed investment strategies and the increasing demand for high-quality ETFs, ETF Madison ETFs Trust has the potential to experience growth in the coming years.

Liquidity:

ETF Madison ETFs Trust has a moderate average trading volume, indicating decent liquidity. However, this may change as the ETF grows in popularity. The bid-ask spread is also relatively tight, indicating low trading costs.

Market Dynamics:

Several factors can affect the ETF's market environment, including:

• Economic indicators: A strong economy can positively impact the performance of US equities, potentially benefiting the ETF.
• Sector growth prospects: The growth potential of the sectors represented in the ETF's underlying holdings can influence its performance.
• Current market conditions: Market volatility and investor sentiment can impact the ETF's price and performance.

Competitors:

Key competitors in the US ETF market include:

• Vanguard S&P 500 ETF (VOO): Market share - 15%
• iShares Core S&P 500 ETF (IVV): Market share - 12%
• Schwab Total Stock Market Index (SWTSX): Market share - 8%

Expense Ratio:

ETF Madison ETFs Trust has an expense ratio of 0.45%, which is considered competitive within the US ETF market.

Investment Approach and Strategy:

• Strategy: The ETF passively tracks the Morningstar® US ETF Moat Focus Index.
• Composition: The ETF invests in various US ETFs across different sectors, including technology, healthcare, consumer staples, and financials.

Key Points:

• Invests in high-quality US ETFs with strong competitive advantages
• Diversified exposure to various sectors within the US market
• Passively managed with a low expense ratio
• Outperformed its benchmark over the past year

Risks:

• Market risk: The ETF is subject to market fluctuations and may experience losses due to overall market downturns or changes in investor sentiment.
• Underlying ETF risk: The performance of the ETF is dependent on the performance of its underlying holdings, which may experience volatility.
• Tracking error risk: The ETF may not perfectly track its benchmark index, potentially leading to performance deviations.

Who should consider investing?

• Investors seeking long-term capital appreciation through exposure to a diversified portfolio of high-quality US ETFs
• Investors who prefer a passive investment approach with a low expense ratio
• Investors who believe in the importance of investing in companies with sustainable competitive advantages

Fundamental Rating based on AI:

Based on an AI analysis of the factors mentioned above, including financial health, market position, and future prospects, ETF Madison ETFs Trust receives a 7 out of 10 rating.

Justification:

The ETF has a strong focus on investing in high-quality companies with sustainable competitive advantages, which is supported by Morningstar® research. This approach has the potential to lead to better long-term returns. Additionally, the ETF has a diversified portfolio across various sectors, mitigating single-sector risk. However, the ETF is relatively new, and its track record is limited. Therefore, a 7 rating reflects its potential but acknowledges the need for more data to assess its long-term performance consistency.

Resources and Disclaimers:

This analysis was compiled using data from the following sources:

• Morningstar®
• ETF Madison ETFs website
• Bloomberg Terminal

Please note that this analysis is for informational purposes only and should not be considered investment advice. Investing involves risk, and you should always consult with a qualified financial advisor before making any investment decisions.