Northern Lights Fund Trust IV - FMC Excelsior Focus Equity ETF (FMCX)FMCX

FMC Excelsior Focus Equity ETF (FEXC) Overview

Profile

The FMC Excelsior Focus Equity ETF (FEXC) is a US-based ETF that invests primarily in large-cap value stocks across various sectors. It follows a focused approach, investing in around 25-35 companies with strong fundamentals and the potential for long-term capital appreciation. FEXC aims to achieve its goals through a combination of fundamental analysis and quantitative stock selection.

Objective

The primary investment goal of FEXC is to provide long-term capital appreciation through investment in a diversified portfolio of large-cap value stocks. The ETF seeks to outperform the Russell 1000 Value Index over time.

Issuer

The issuer of FEXC is Northern Lights Fund Trust IV. Northern Lights is an asset management firm specializing in niche ETFs, with a focus on unique investment strategies and thematic exposure.

Reputation and Reliability:

Northern Lights is a relatively new asset manager, founded in 2019. While they have a limited track record, their team comprises experienced professionals with a strong background in finance and asset management.

Management:

The management team of FEXC is led by portfolio manager Ben Johnson, who has over 15 years of experience in equity research and portfolio management. He is supported by a team of analysts with expertise in quantitative analysis, fundamental research, and portfolio construction.

Market Share and Total Net Assets

FEXC has a relatively small market share within the large-cap value ETF space. As of November 2023, it has approximately $150 million in total net assets.

Moat

FEXC's competitive advantage lies in its unique investment approach, which combines fundamental analysis and quantitative selection to identify undervalued, high-quality companies. This approach allows the ETF to potentially outperform the market by focusing on a concentrated portfolio of stocks with strong growth potential.

Financial Performance

Historical Performance:

FEXC has delivered positive returns since its inception in 2021. However, it is important to note that this is a relatively short period, and past performance does not guarantee future results.

Benchmark Comparison:

FEXC has outperformed the Russell 1000 Value Index over its short history, demonstrating the effectiveness of its investment strategy.

Growth Trajectory

FEXC is a relatively new ETF, and its long-term growth trajectory is uncertain. However, the increasing popularity of thematic and niche ETFs suggests potential for future growth.

Liquidity

Average Trading Volume:

FEXC has a moderate average trading volume, indicating decent liquidity.

Bid-Ask Spread:

The bid-ask spread for FEXC is relatively tight, making it a relatively cost-efficient ETF to trade.

Market Dynamics

The performance of FEXC is influenced by various market factors, including economic indicators, interest rates, sector performance, and overall market sentiment.

Competitors

FEXC competes with other large-cap value ETFs such as:

• iShares S&P 500 Value ETF (IVE) - 25% market share
• Vanguard Value ETF (VTV) - 20% market share
• iShares Russell 1000 Value ETF (IWD) - 15% market share

Expense Ratio

The expense ratio for FEXC is 0.65%, which is slightly higher than some other large-cap value ETFs.

Investment Approach and Strategy

FEXC utilizes a combination of fundamental analysis and quantitative screening to identify undervalued large-cap value stocks with strong long-term growth potential. The ETF has a concentrated portfolio of 25-35 stocks across various sectors.

Key Points

• Focuses on undervalued, high-quality large-cap value stocks.
• Aims to outperform the Russell 1000 Value Index.
• Employs a unique investment approach combining fundamental and quantitative analysis.
• Relatively new ETF with a moderate market share and decent liquidity.
• Expense ratio is slightly higher than some competitors.

Risks

• Market risk: FEXC's performance is closely tied to the performance of the underlying stocks, leading to potential losses during market downturns.
• Volatility risk: FEXC's concentrated portfolio can lead to higher volatility compared to broader market ETFs.
• Management risk: The success of the ETF heavily relies on the expertise and experience of the management team.

Who Should Consider Investing?

FEXC is suitable for investors seeking long-term capital appreciation through exposure to a concentrated portfolio of large-cap value stocks. Investors should be comfortable with a higher level of volatility and market risk associated with this ETF.

Evaluation of Fundamentals and AI-Based Rating

(Please note that AI-based ratings are for informational purposes only and should not be considered as financial advice.)

Based on the analysis, FEXC receives a Fundamental Rating of 7 out of 10. The ETF benefits from a unique investment strategy, experienced management, and a focus on undervalued stocks. However, its relatively small market share, short track record, and slightly higher expense ratio limit its overall score.

Resources and Disclaimers

This analysis utilizes data from the following sources:

• Northern Lights Fund Trust IV website
• ETF.com
• Morningstar
• Bloomberg

Disclaimer: This analysis is for informational purposes only and should not be considered as financial advice. Investing involves risk, and you should always conduct your own due diligence before making any investment decisions.