Pinnacle Focused Opportunities ETF (FCUS)FCUS

ETF Pinnacle Focused Opportunities: Overview

Profile:

The ETF Pinnacle Focused Opportunities ETF is an actively managed ETF that invests in a diversified portfolio of U.S. small-cap companies across various sectors. The ETF's primary focus is on identifying and investing in companies with high growth potential and strong fundamentals. It utilizes a bottom-up stock selection approach, analyzing individual companies based on their financials, management teams, and competitive advantages.

Objective:

The ETF aims to achieve long-term capital appreciation by investing in a concentrated portfolio of high-growth small-cap companies. It seeks to outperform the Russell 2000 Growth Index through active management.

Issuer:

The ETF is issued by Pinnacle Investment Management, a subsidiary of The Hartford Financial Services Group, Inc. Pinnacle Investment Management has a strong reputation for its active management strategies and a track record of success in managing small-cap funds.

Market Share:

The ETF has a relatively small market share in the small-cap growth ETF space, with approximately $200 million in assets under management.

Total Net Assets:

As of November 7, 2023, the ETF had approximately $200 million in total net assets.

Moat:

The ETF's competitive advantage lies in its experienced management team with a proven track record in identifying undervalued small-cap companies with strong growth potential. The ETF also benefits from its active management approach, allowing for greater flexibility in selecting and weighting individual holdings.

Financial Performance:

The ETF has outperformed the Russell 2000 Growth Index since its inception in 2020. Over the past three years, the ETF has returned an average of 15% annually, compared to the index's 10% return.

Growth Trajectory:

The long-term growth trajectory of the ETF depends on its ability to continue identifying high-growth small-cap companies and generating alpha through active management. The small-cap market itself is expected to experience growth in the coming years, which could further benefit the ETF.

Liquidity:

The ETF has an average daily trading volume of approximately 20,000 shares, indicating moderate liquidity.

Market Dynamics:

The ETF's market environment is influenced by economic growth, interest rate fluctuations, and investor sentiment towards small-cap stocks. Economic downturns and rising interest rates can negatively impact small-cap companies, leading to decreased investor confidence and lower valuations.

Competitors:

Major competitors in the small-cap growth ETF space include iShares Russell 2000 Growth ETF (IWO), Vanguard Small-Cap Growth ETF (VBK), and SPDR S&P 600 Small Cap Growth ETF (SLYG). These ETFs have larger market shares and lower expense ratios than the ETF Pinnacle Focused Opportunities ETF.

Expense Ratio:

The ETF has an expense ratio of 0.85%, which is slightly higher than the average expense ratio for small-cap growth ETFs.

Investment Approach:

The ETF follows an active management approach, where the portfolio manager selects individual stocks based on their bottom-up analysis. The ETF typically holds a concentrated portfolio of around 50-75 stocks across various sectors.

Key Points:

• Actively managed ETF focused on high-growth small-cap companies.
• Strong track record and experienced management team.
• Moderate liquidity and average trading volume.
• Higher expense ratio compared to some competitors.

Risks:

• Volatility: The ETF is more volatile than the broader market due to its focus on small-cap stocks.
• Market risk: The ETF is subject to risks associated with the small-cap and growth stock markets.
• Concentration risk: The ETF's concentrated portfolio makes it more susceptible to individual stock performance fluctuations.

Who Should Consider Investing:

The ETF is suitable for investors with a high-risk tolerance seeking long-term capital appreciation through exposure to small-cap growth stocks. It is not suitable for investors with a short-term investment horizon or a low risk tolerance.

Fundamental Rating based on AI:

Based on an analysis of various factors including financial health, market position, and future prospects, the ETF Pinnacle Focused Opportunities ETF receives a fundamental rating of 7.5 out of 10.

Justification:

The ETF benefits from strong management, a proven track record, and a concentrated portfolio of high-growth potential companies. However, its higher expense ratio and limited market share compared to competitors are factors that bring down its overall rating.

Resources and Disclaimers:

This analysis is based on publicly available information as of November 7, 2023. The information is not intended as investment advice and does not guarantee future performance.

Sources:

• Pinnacle Investment Management website: https://www.pinnacleim.com/
• ETF Database: https://etfdb.com/
• Morningstar: https://www.morningstar.com/

Disclaimer: Investing involves risk and the value of investments can fluctuate. You could lose money on your investment. Please consult with a qualified financial advisor before making any investment decisions.