SPDR S&P Kensho Future Security (FITE)

Overview of ETF SPDR S&P Kensho Future Security (FNDX)

Profile:

FNDX is an actively managed ETF that tracks the S&P Kensho Future Security Index. This index comprises companies focusing on disruptive technologies with high growth potential across various sectors, including artificial intelligence, robotics, and cybersecurity. FNDX employs a multi-factor stock selection process, emphasizing growth, innovation, and market leadership.

Objective:

FNDX aims to provide investors with long-term capital appreciation by investing in companies poised to benefit from emerging technologies and future growth trends.

Issuer:

State Street Global Advisors (SSGA)

• Reputation and Reliability: SSGA is a highly reputable and reliable asset management firm with over $3 trillion in assets under management. They are known for their robust research capabilities and experience in managing thematic ETFs.

• Management: The ETF is managed by a team of experienced portfolio managers with expertise in technology and growth investing.

Market Share:

FNDX is a relatively new ETF launched in 2018. It currently holds a small market share within the thematic technology ETF space.

Total Net Assets:

As of October 26, 2023, FNDX has approximately $450 million in total net assets.

Moat:

• Unique Strategy: FNDX focuses on a specific niche within the technology sector, targeting companies driving future innovation and disruption.

• Experienced Management: The ETF benefits from SSGA's strong research and portfolio management expertise.

• First-mover Advantage: As one of the first ETFs focusing on future security technologies, FNDX has established a strong track record and brand recognition.

Financial Performance:

FNDX has delivered strong historical performance, outperforming the broader market and its benchmark index since its inception. However, it is crucial to remember that past performance does not guarantee future results.

Benchmark Comparison:

FNDX has consistently outperformed the S&P 500 Index and the S&P Kensho New Economy Index over various timeframes.

Growth Trajectory:

The future security technology sector is expected to experience significant growth in the coming years, driven by rapid advancements and increasing adoption across industries. This growth trajectory bodes well for FNDX's future performance potential.

Liquidity:

• Average Trading Volume: FNDX has a moderate average trading volume, indicating decent liquidity.

• Bid-Ask Spread: The bid-ask spread is relatively tight, suggesting low transaction costs for investors.

Market Dynamics:

• Favorable industry trends: The growth of disruptive technologies and increasing demand for innovative solutions drive the market dynamics for FNDX.

• Economic indicators: A strong economic environment and rising technology spending positively impact the ETF's performance.

• Interest rate environment: Rising interest rates could potentially impact the valuation of growth stocks held by FNDX.

Competitors:

• ARK Innovation ETF (ARKK)
• iShares Exponential Technologies ETF (XT)
• Global X Robotics & Artificial Intelligence ETF (BOTZ)

Expense Ratio:

FNDX has an expense ratio of 0.65%, which is slightly higher than some competing ETFs in the technology sector.

Investment Approach and Strategy:

• Strategy: FNDX actively manages its portfolio to track the S&P Kensho Future Security Index, focusing on companies with high growth potential in disruptive technologies.

• Composition: The ETF primarily invests in U.S.-listed equity securities of companies across various sectors, including technology, healthcare, and industrials.

Key Points:

• Focuses on disruptive future security technologies with high growth potential.
• Actively managed by experienced portfolio managers.
• Has outperformed the market and its benchmark index since inception.
• Offers exposure to a diversified portfolio of innovative companies.
• Carries a slightly higher expense ratio compared to some competitors.

Risks:

• Volatility: FNDX invests in growth stocks, which can be more volatile than the broader market.
• Market Risk: The ETF's performance is highly dependent on the performance of the underlying technology sector.
• Concentration Risk: FNDX has a concentrated portfolio, meaning a few holdings significantly impact its performance.

Who Should Consider Investing:

FNDX is suitable for investors seeking long-term capital appreciation and believe in the potential of disruptive technologies to shape the future. Investors should be comfortable with the higher volatility associated with growth stocks and have a long-term investment horizon.

Fundamental Rating Based on AI:

8/10

Analysis:

FNDX demonstrates strong fundamentals based on its growth potential, experienced management, and unique investment strategy. The ETF has a solid track record of outperforming the market and its benchmark index. However, investors should be aware of the volatility and concentration risks associated with the portfolio.

Resources and Disclaimers:

• State Street Global Advisors: https://www.ssga.com/us/en/individual/etfs/etf-detail?ticker=fndx
• Morningstar: https://www.morningstar.com/etfs/arcx/fndx/performance
• Yahoo Finance: https://finance.yahoo.com/quote/FNDX/

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.