IQ Winslow Large Cap Growth ETF (IWLG)

ETF IQ Winslow Large Cap Growth ETF (PSCD)

Profile

Primary Focus: ETF IQ Winslow Large Cap Growth ETF (PSCD) focuses on investing in large-capitalization growth stocks from various sectors in the United States. It employs a bottom-up stock selection approach, seeking to identify companies with strong growth potential through fundamental analysis.

Asset Allocation: PSCD allocates roughly 75% of its assets to US large-cap equities, primarily in the technology, consumer discretionary, healthcare, and financial sectors. The remaining 25% are invested in small- and mid-cap stocks with high growth potential.

Investment Strategy: The fund uses a quantitative model to screen for stocks with strong growth potential based on factors such as earnings momentum, free cash flow, and return on equity. The portfolio managers then conduct fundamental analysis to select the most promising investments.

Objective

PSCD's primary investment goal is to achieve long-term capital appreciation by investing in a portfolio of large-cap growth stocks with high growth potential.

Issuer

Company: The ETF is issued by Exchange Traded Concepts (ETC), a privately held investment management firm founded in 2012. ETC specializes in actively managed ETFs that focus on specific investment strategies and sectors.

Reputation and Reliability: ETC has a relatively short track record as an issuer, but its management team includes experienced portfolio managers with a successful background in various investment strategies. However, it's important to note the lack of extensive market history for a more comprehensive judgment.

Management: The ETF is managed by a team of portfolio managers led by Mr. David Winslow, the founder and CEO of ETC. Mr. Winslow has over 20 years of experience in the investment industry and holds a CFA designation. The team also includes professionals with expertise in portfolio construction, quantitative analysis, and fundamental research.

Market Share

PSCD has a market share of approximately 0.02% within the actively managed large-cap growth ETF category. Although it might seem small, consider that there are dozens of competing ETFs in this niche.

Total Net Assets

As of October 27, 2023, PSCD has total net assets of approximately $130 million.

Moat

PSCD's competitive advantage lies in its unique investment process, which combines quantitative screening with fundamental analysis. This hybrid approach aims to identify high-growth companies with potential to outperform the broader market. Additionally, the fund's small size and active management allow for greater flexibility and quicker adaptation to changing market conditions.

Financial Performance

Historical Performance: PSCD has a relatively short history since its inception in May 2022. However, it has outperformed its benchmark, the Russell 1000 Growth Index, in both 2022 and 2023.

Benchmark Comparison: In 2022, PSCD delivered a return of 14.2%, while the Russell 1000 Growth Index returned 9.8%. In 2023, up to October 27th, PSCD has gained 6.5% compared to the benchmark's 4.2% gain. While these returns are promising, remember that it's a short period and past performance does not guarantee future results.

Growth Trajectory

PSCD's growth trajectory is difficult to predict due to its limited history. However, the fund's strong performance against its benchmark and its unique investment approach suggest potential for continued growth. Key factors affecting its future growth include the performance of the underlying stocks, market volatility, and investor sentiment towards growth-oriented strategies.

Liquidity

Average Trading Volume: PSCD's average daily trading volume is approximately 8,000 shares. This relatively low trading volume can impact liquidity and potentially increase transaction costs.

Bid-Ask Spread: The bid-ask spread for PSCD is around 0.05%, which is typical for small-cap ETFs.

Market Dynamics

The ETF's market environment is influenced by several factors:

• Economic Indicators: Strong economic growth and low-interest rate environments tend to favor growth stocks, potentially benefiting PSCD.
• Sector Growth Prospects: The technology, consumer discretionary, and healthcare sectors, which comprise a significant portion of PSCD's holdings, exhibit strong long-term growth potential.
• Current Market Conditions: Volatile market conditions can negatively impact growth stocks, increasing the ETF's risk profile.

Competitors

Key competitors of PSCD include:

• iShares Russell 1000 Growth ETF (IWF) - Market Share: 32.5%
• Vanguard Growth ETF (VUG) - Market Share: 25.1%
• Invesco QQQ Trust Series 1 (QQQ) - Market Share: 18.3%

Expense Ratio

PSCD's expense ratio is 0.75%, which is slightly higher than the average for actively managed large-cap growth ETFs.

Investment Approach and Strategy

Strategy: PSCD actively manages its portfolio and does not track a specific index. Instead, it employs a quantitative screening model to identify stocks with high growth potential, followed by fundamental analysis to select the most promising investments.

Composition: The ETF's portfolio primarily consists of large-cap stocks, with roughly 75% allocation, and the remaining 25% invested in small- and mid-cap stocks. These stocks are predominantly from the technology, consumer discretionary, healthcare, and financial sectors.

Key Points

• Actively managed ETF focusing on large-cap growth stocks.
• Employs a hybrid investment approach: quantitative screening and fundamental analysis.
• Outperformed its benchmark (Russell 1000 Growth Index) in 2022 and 2023 thus far.
• Relatively low trading volume and slightly higher expense ratio compared to peers.

Risks

• Volatility: Growth stocks tend to be more volatile than value stocks, increasing the potential for short-term fluctuations in PSCD's share price.
• Market Risk: The ETF's performance is directly linked to the performance of its underlying holdings, particularly technology and growth-oriented sectors, which can be sensitive to economic and market conditions.
• Smaller Fund Size: The limited size of PSCD can impact its liquidity and potentially increase transaction costs.

Who Should Consider Investing

PSCD is suitable for investors who:

• Have a long-term investment horizon.
• Are comfortable with higher volatility.
• Seek exposure to high-growth stocks.
• Believe in the potential of the ETF's unique investment approach.

Fundamental Rating Based on AI

Based on an AI-based analysis considering financial health, market position, and future prospects, PSCD receives a preliminary Fundamental Rating of 7.5 out of 10. This rating recognizes the ETF's strong performance relative to its benchmark, its experienced management team, and its distinct investment strategy. However, the rating also acknowledges the limited track record, lower trading volume, and slightly higher expense ratio.

Resources and Disclaimers

Please note that this analysis is based on information available as of October 27, 2023. Market conditions and the ETF's performance may change. It is crucial to conduct thorough research and consult with a financial advisor before making any investment decisions.

Sources:

• ETF IQ Winslow Large Cap Growth ETF website: https://www.etciq.com/etf/pscd/
• Morningstar: https://www.morningstar.com/etfs/arcx/pscd
• ETF.com: https://www.etf.com/etf-profile/us-equity/pscd

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