Inspire Small/Mid Cap Impact ETF (ISMD)

ETF Inspire Small/Mid Cap Impact ETF Overview

Profile:

The ETF Inspire Small/Mid Cap Impact ETF (ISMD) is an actively managed exchange-traded fund focusing on small and mid-cap companies demonstrating positive social and environmental impact. It seeks to invest in companies with strong environmental, social, and governance (ESG) practices and aligns with the UN Sustainable Development Goals. ISMD invests mainly in US-based companies across various sectors but excludes those involved in controversial activities like alcohol, tobacco, gambling, and weapons.

Objective:

The primary investment goal of ISMD is to provide investors with long-term capital appreciation while investing in companies driving positive social and environmental impact.

Issuer:

Inspire Investing is the issuer of ISMD.

Reputation and Reliability:

Inspire Investing is a relatively new asset management firm founded in 2019 with a focus on sustainable investing. While the firm is young, its leadership team consists of experienced individuals with strong track records in the finance industry.

Management:

The ETF is managed by Elizabeth Levy, CFA, and Michael Jantzi, CFA, who have extensive experience in sustainable investing and portfolio management.

Market Share:

ISMD is a relatively small ETF with a market share of approximately 0.02% in the impact investing space.

Total Net Assets:

As of October 26, 2023, ISMD has total net assets of approximately $11.2 million.

Moat:

The ETF's competitive advantage lies in its unique combination of impact investing and focus on small and mid-cap companies. This niche strategy allows ISMD to access companies with high growth potential while maintaining a commitment to social and environmental responsibility.

Financial Performance:

Since its inception in October 2021, ISMD has delivered a total return of 10.46% (as of October 26, 2023). This compares favorably to its benchmark, the Russell 2500 Growth Index, which returned 9.23% during the same period.

Growth Trajectory:

The impact investing market is experiencing significant growth, with increasing demand for sustainable investment options. This trend bodes well for ISMD's future growth prospects.

Liquidity:

ISMD has an average daily trading volume of approximately 1,500 shares. The bid-ask spread is typically around 0.10%, indicating moderate liquidity.

Market Dynamics:

Factors affecting ISMD's market environment include the overall performance of small and mid-cap stocks, investor sentiment towards impact investing, and regulatory changes related to ESG investing.

Competitors:

Key competitors in the sustainable small/mid-cap space include:

• Xtrackers MSCI USA ESG Leaders Small Cap UCITS ETF (XSEL) - Market share: 0.05%
• SPDR S&P 500 ESG ETF (EFIV) - Market share: 0.75%

Expense Ratio:

The expense ratio of ISMD is 0.75%, which is slightly higher than the average expense ratio for actively managed impact ETFs.

Investment approach and strategy:

ISMD is an actively managed ETF that utilizes a rigorous ESG screening process to identify companies demonstrating positive social and environmental impact. The portfolio typically holds around 60-80 stocks with a focus on long-term capital appreciation.

Key Points:

• Focuses on small and mid-cap companies with positive social and environmental impact.
• Actively managed with a rigorous ESG screening process.
• Experienced management team with a strong track record.
• Moderate liquidity and slightly above-average expense ratio.

Risks:

• The ETF's small size and focus on a specific niche market may lead to higher volatility and limited diversification.
• The impact investing market is relatively new and may be subject to regulatory changes.
• The ETF's performance is highly dependent on the success of its underlying holdings.

Who Should Consider Investing:

ISMD is suitable for investors seeking long-term capital appreciation while aligning their investments with positive social and environmental impact. Investors should be comfortable with the potential for higher volatility and limited diversification associated with a small and focused ETF.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of ISMD's financials, market position, and future prospects, the ETF receives a 7 out of 10 rating.

Analysis:

ISMD demonstrates strong fundamentals, with a solid track record, experienced management, and a unique investment strategy. The ETF benefits from the growing demand for impact investing and its focus on small and mid-cap companies with high growth potential. However, its small size and limited diversification may present higher volatility risks. Overall, ISMD presents a promising option for investors seeking to align their investments with positive impact while achieving long-term capital appreciation.

Resources and Disclaimers:

Data for this analysis was gathered from the following sources:

• Inspire Investing website
• ETF.com
• Morningstar

This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions.