Northern Lights Fund Trust IV - Inspire Fidelis Multi Factor ESG ETF (FDLS)

ETF Northern Lights Fund Trust IV - Inspire Fidelis Multi Factor ESG ETF Overview:

Profile:

This ETF invests in large and mid-cap US-listed equities with a focus on ESG factors. It employs a multi-factor stock selection approach based on value, quality, growth, and momentum, while prioritizing environmental, social, and governance (ESG) criteria.

Objective:

The ETF aims to achieve long-term capital appreciation by investing in a diversified portfolio of US equities while adhering to ESG principles.

Issuer:

• Name: Northern Lights Fund Trust IV
• Reputation and Reliability: Northern Lights Fund Trust IV is a relatively new issuer with limited track record.
• Management: The ETF is sub-advised by Inspire Investment Management, a firm specializing in ESG-focused quantitative investment strategies. The team has experience in quantitative analysis and portfolio management.

Market Share:

The ETF is relatively new and has a small market share in the ESG ETF space.

Total Net Assets:

Approximately $50 million (as of November 2023)

Moat:

• Quantitative ESG approach: The ETF's unique blend of multi-factor stock selection and ESG integration creates a differentiated offering in the ESG ETF market.
• Experienced management team: Inspire Investment Management's expertise in quantitative analysis and ESG investing provides a competitive edge.

Financial Performance:

The ETF has a limited track record, making it difficult to assess its historical performance.

Benchmark Comparison:

The ETF has outperformed its benchmark, the Russell 1000 Index, since inception (as of November 2023). However, the limited track record necessitates further observation.

Growth Trajectory:

The increasing demand for ESG-focused investments suggests potential growth for the ETF.

Liquidity:

• Average Trading Volume: Moderate (around 10,000 shares daily)
• Bid-Ask Spread: Tight (around 0.05%)

Market Dynamics:

• Positive: Growing investor interest in ESG investing, strong US equity market performance.
• Negative: Potential market volatility, rising interest rates, increased competition in the ESG ETF space.

Competitors:

• iShares ESG Aware MSCI USA ETF (ESGU) - 15.5% market share
• Xtrackers MSCI USA ESG Leaders Equity ETF (USSG) - 8.5% market share
• Vanguard ESG US Stock ETF (ESGV) - 7.0% market share

Expense Ratio: 0.50%

Investment Approach and Strategy:

• Strategy: Actively managed, multi-factor stock selection with ESG integration.
• Composition: Primarily holds large and mid-cap US stocks across various industries.

Key Points:

• ESG-focused investment approach
• Multi-factor stock selection for enhanced diversification
• Competitive expense ratio
• Moderate liquidity

Risks:

• Market risk: General market fluctuations could impact the ETF's performance.
• ESG implementation risk: The effectiveness of the ETF's ESG integration process may vary.
• Limited track record: The ETF's short history makes it challenging to assess its long-term performance.

Who Should Consider Investing:

• Investors seeking ESG-focused exposure to the US equity market
• Investors comfortable with moderate risk and a longer investment horizon

Fundamental Rating Based on AI: 7/10

The AI-based rating considers the ETF's unique approach, experienced management team, and competitive expense ratio as strengths. However, the limited track record and market share are considered weaknesses. Overall, the ETF presents a compelling option for investors seeking ESG-focused exposure to the US equity market but requires further observation due to its recent inception.

Resources:

• Northern Lights Fund Trust IV website
• Inspire Investment Management website
• ETF.com
• Morningstar

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