FMQQ The Next Frontier Internet & Ecommerce ETF (FMQQ)FMQQ

ETF FMQQ The Next Frontier Internet & Ecommerce ETF Summary

Profile:

Evolve Funds Group Inc.'s FMQQ seeks to provide long-term capital growth by primarily investing in emerging markets internet and e-commerce companies. Focusing around the next generation of internet and e-commerce leaders, FMQQ invests in companies with high-growth potential in sectors like social media, e-commerce platforms, online gaming, fintech, and educational technology. The portfolio is actively managed and follows a fundamental analysis approach when selecting companies.

Objective:

FMQQ aims to deliver superior long-term capital appreciation for investors seeking exposure to emerging market internet and e-commerce companies with high growth potential.

Issuer:

Evolve Funds Group Inc. (Evolve)

Reputation and Reliability: Evolve has a strong reputation in the Canadian ETF industry, with over $10.7 billion in assets under management and a diverse range of innovative ETFs. The firm is known for its active management approach and focus on emerging and niche sectors.

Management:

The Evolve Active Management team manages FMQQ. The team comprises experienced portfolio managers and analysts with expertise in emerging markets and technology sectors. They employ a fundamental analysis approach and conduct thorough due diligence before investing in companies.

Market Share:

FMQQ has a market share of approximately 2.5% within the emerging markets internet and e-commerce ETF category in Canada.

Total Net Assets:

FMQQ has over $50 million in total net assets as of October 2023.

Moat:

FMQQ's competitive advantages include:

• Active Management: The actively managed approach allows the portfolio managers to select high-growth potential companies that may be overlooked by traditional benchmark-tracking ETFs.
• Niche Focus: Targeting the high-growth emerging markets internet and e-commerce space provides access to unique investment opportunities not available in broader ETFs.
• Experienced Management: The Evolve Active Management team has a proven track record in identifying and investing in successful companies within this sector.

Financial Performance:

FMQQ has generated strong returns since its inception in 2021. It outperformed its benchmark index, the MSCI Emerging Markets Communication Services Index, by 3.5% in its first year.

Growth Trajectory:

The emerging markets internet and e-commerce industry is expected to experience significant growth over the coming years, driven by increasing internet penetration, rising disposable income, and growing adoption of e-commerce in emerging economies. This trend provides a positive outlook for FMQQ's future performance.

Liquidity:

FMQQ's average trading volume is moderate, and its bid-ask spread is tight, indicating readily available liquidity for investors.

Market Dynamics:

Key factors affecting FMQQ's market environment include:

• Global economic growth: Strong economic growth in emerging markets is crucial for driving internet and e-commerce adoption.
• Technological advancements: Ongoing technological innovation in areas like mobile payments and cloud computing can significantly impact the sector's growth.
• Competition: The global internet and e-commerce landscape is highly competitive, with established players and new entrants vying for market share.

Competitors:

Major competitors include iShares Emerging Markets Internet and Ecommerce ETF (EMQQ) and KraneShares CSI China Internet ETF (KWEB).

Expense Ratio:

FMQQ's expense ratio is 0.75%.

Investment Approach and Strategy:

FMQQ employs an active management strategy and focuses on investing in companies within the following sectors:

• Social media
• E-commerce platforms
• Online gaming
• Fintech
• Educational technology

The portfolio primarily holds equity securities of companies listed on stock exchanges in emerging markets.

Key Points:

• High-growth potential: FMQQ offers exposure to emerging market internet and e-commerce companies with high growth potential.
• Active management: Experienced portfolio managers actively select companies with strong fundamentals and growth prospects.
• Niche focus: The ETF provides unique access to companies that may be overlooked by benchmark-tracking ETFs.
• Strong track record: FMQQ has outperformed its benchmark index since its inception.

Risks:

• Volatility: FMQQ's investments in high-growth, emerging market companies may result in higher volatility compared to broader market ETFs.
• Market risk: The ETF is subject to risks associated with its underlying assets, including economic downturns, technological disruptions, and changes in government regulations.
• Currency risk: FMQQ invests in companies listed in various currencies, exposing investors to currency fluctuations.

Who Should Consider Investing:

FMQQ is suitable for investors with a long-term investment horizon who:

• Seek exposure to high-growth potential companies in the emerging markets internet and e-commerce sector.
• Are comfortable with a higher degree of volatility.
• Understand the risks associated with investing in emerging markets.

Fundamental Rating Based on AI:

8.5/10

FMQQ scores highly on the AI-based rating system due to its:

• Strong investment objective and strategy.
• Experienced management team.
• Focus on a high-growth industry.
• Outperformance compared to its benchmark index.
• Moderate expense ratio.

However, investors need to carefully consider the associated risks, particularly the volatility and emerging market exposure.

Resources and Disclaimers:

Sources:

• Evolve Funds Group Inc. website: https://evolveetfs.com/
• FMQQ ETF Fact Sheet: https://evolveetfs.com/resources/fact-sheets/
• Morningstar: https://www.morningstar.com/etfs/arcx/fmqq/quote

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