Inspire Small/Mid Cap Impact ETF (ISMD)

Overview

The Inspire Small/Mid Cap Impact ETF (ISMD) focuses on investing in small and mid-capitalization U.S. companies that meet specific biblical principles of business ethics and social responsibility. It aims to provide investors with exposure to the growth potential of smaller companies while aligning with faith-based values.

Reputation and Reliability

Inspire Investing is a relatively new but growing player in the socially responsible investing (SRI) and faith-based investing space. They are known for their commitment to their proprietary Inspire Impact Scores, which screen companies based on biblical values. Their reputation is built around their impact-focused approach.

Management Expertise

Inspire Investing's management team has expertise in both investment management and the integration of faith-based values into investment decisions. While specific details on individual fund managers might not be extensively publicized, the firm's overall strategy suggests a dedicated approach to this niche market.

Goal

To provide long-term capital appreciation by investing in a diversified portfolio of U.S. small and mid-capitalization companies that align with Inspire's biblically-based impact investing methodology.

Investment Approach and Strategy

Strategy: The ETF aims to track a proprietary index developed by Inspire Investing, the Inspire Small/Mid Cap Impact Index. This index screens companies not just for financial performance but also for adherence to biblical principles.

Composition The ETF primarily holds U.S. equity securities of small and mid-capitalization companies. The selection process involves rigorous screening to ensure companies align with the issuer's faith-based and ethical criteria.

Market Share: As a niche ETF focusing on faith-based impact investing in the small/mid-cap space, ISMD likely holds a smaller market share compared to broader small/mid-cap ETFs. Specific percentage data is not readily available, but its focus is on a specialized segment.

Total Net Assets (AUM): [object Object]

Key Competitors

• Vanguard S&P Small-Cap 600 ETF (VIOO)
• iShares Core S&P Small-Cap ETF (IJR)
• Schwab U.S. Small-Cap ETF (SCHA)

Competitive Landscape

The competitive landscape for small and mid-cap ETFs is vast and dominated by large, established providers offering broad market exposure at very low costs. ISMD differentiates itself through its unique faith-based impact screening, appealing to a specific investor base. Its disadvantage lies in its niche focus and potentially higher expense ratio compared to passive index trackers, while its advantage is its alignment with specific ethical and religious values.

Historical Performance: Historical performance data for ISMD should be reviewed from reliable financial data providers. As of recent data, its performance may vary, reflecting the volatility inherent in small and mid-cap equities and the added layer of impact screening. A detailed review of year-over-year returns, 3-year, and 5-year annualized returns is recommended.

Benchmark Comparison: ISMD's performance should be compared against a relevant small/mid-cap benchmark, such as the Russell 2000 Index or the S&P SmallCap 600 Index. The comparison should assess whether the impact screening strategy adds value or detracts from returns relative to its peers.

Expense Ratio: [object Object]

Average Trading Volume

The ETF's average daily trading volume is typically moderate, reflecting its specialized nature and attracting a dedicated investor base rather than high-frequency traders.

Bid-Ask Spread

The bid-ask spread for ISMD is generally within acceptable ranges for an ETF of its size and liquidity, though it may be wider than that of larger, more heavily traded ETFs.

Market Environment Factors

ISMD is influenced by broader economic conditions, interest rate policies, and sector-specific trends affecting small and mid-cap companies. The increasing investor interest in ESG and impact investing can be a positive factor, while potential economic downturns could negatively impact its holdings.

Growth Trajectory

The growth trajectory of ISMD is closely tied to the expansion of faith-based and impact investing. As more investors seek to align their portfolios with their values, the ETF could see increased AUM and potentially refine its impact screening methodology and holdings to maintain its appeal.

Competitive Edge

The primary competitive edge of ISMD lies in its unique proprietary methodology for screening companies based on biblical principles. This deep commitment to faith-based impact investing attracts a specific demographic of investors who prioritize aligning their financial goals with their religious and ethical convictions, a niche not broadly addressed by conventional ETFs. This allows it to capture a dedicated segment of the SRI market.

Volatility

As an ETF focused on small and mid-cap companies, ISMD is expected to exhibit higher volatility than ETFs that track large-cap stocks. The impact screening process may also introduce unique risks depending on the performance of companies meeting its criteria.

Market Risk

Market risk for ISMD includes general equity market downturns, sector-specific risks affecting smaller companies (e.g., sensitivity to economic cycles, less diversified operations), and the risk that companies adhering to the ETF's impact criteria may underperform their less-screened peers.

Ideal Investor Profile

The ideal investor for ISMD is an individual or institution with a strong commitment to Christian faith who wishes to invest in accordance with biblical principles. This investor is likely seeking both financial returns and a positive social or ethical impact, prioritizing values over maximizing short-term gains.

Market Risk

ISMD is best suited for long-term investors who believe in the growth potential of small and mid-cap companies and are committed to the specific values-based investment approach. It is not typically designed for active traders seeking short-term price fluctuations.

The Inspire Small/Mid Cap Impact ETF (ISMD) offers a unique investment opportunity for those seeking to align their portfolios with Christian faith-based principles. By focusing on small and mid-cap companies that meet specific ethical criteria, it caters to a niche market within the impact investing space. While it carries the inherent volatility of smaller cap stocks, its competitive advantage lies in its dedicated approach to biblically-responsible investing. Investors should carefully consider its specialized strategy and compare its performance and expense ratio against broader market alternatives.

Data Sources:

• Inspire Investing Official Website
• Financial Data Providers (e.g., Morningstar, ETFdb.com)
• SEC Filings

Disclaimers:

This information is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions.