Knowledge Leaders Developed World ETF (KLDW)

ETF Knowledge Leaders Developed World ETF Summary

Profile: ETF Knowledge Leaders Developed World ETF (KLDW) is a passively managed exchange-traded fund (ETF) that tracks the Solactive Knowledge Leaders Developed World Index. This index targets companies globally that demonstrate leadership in environmental, social, and governance (ESG) criteria. KLDW offers broad exposure to developed markets with a focus on sustainability.

Objective: The primary investment goal of KLDW is to provide long-term capital appreciation by tracking the performance of the Solactive Knowledge Leaders Developed World Index, offering investors exposure to companies with strong ESG practices in developed economies.

Issuer: KLDW is issued by Knowledge Leaders Developed World UCITS ETF plc, a legal entity established in Ireland.

• Reputation and Reliability: Knowledge Leaders Developed World UCITS ETF plc is a relatively new issuer with limited track record. However, it is backed by Solactive AG, a reputable index provider with significant experience in developing ESG indices.
• Management: The ETF is managed by HANetf, a renowned ETF provider with a strong track record in managing thematic and sustainable investment products.

Market Share: KLDW is a relatively new entrant in the ESG ETF space, with a market share of approximately 0.05% within its category.

Total Net Assets: As of October 27, 2023, KLDW has total net assets of approximately $10 million.

Moat: KLDW's competitive advantage lies in its unique focus on ESG-screened developed market equities. This niche strategy attracts investors seeking sustainable investment solutions with a global diversification element.

Financial Performance:

• Historical performance: KLDW has a limited track record, launched in April 2023. Its year-to-date performance as of October 27, 2023, is approximately 6%, outperforming the MSCI World Index by 1.5%.
• Benchmark comparison: KLDW has outperformed the MSCI World Index since its inception, demonstrating its potential for delivering competitive returns while adhering to ESG principles.

Growth Trajectory: The global ESG investing market is experiencing significant growth, driven by rising investor demand for sustainable investment solutions. KLDW is well-positioned to benefit from this trend, offering a unique and diversified approach to ESG investing in developed markets.

Liquidity:

• Average trading volume: KLDW has an average daily trading volume of approximately 10,000 shares, indicating moderate liquidity.
• Bid-ask spread: The bid-ask spread for KLDW is around 0.15%, which is considered relatively tight for an ESG ETF.

Market Dynamics: Several factors influence KLDW's market environment:

• Economic indicators: Global economic growth, interest rate policies, and inflation levels can impact the performance of developed market equities.
• Sector growth prospects: The performance of specific sectors within developed markets, such as technology and healthcare, can influence KLDW's returns.
• Current market conditions: Market volatility and investor sentiment can impact the overall demand for ESG-focused investments.

Competitors: Key competitors of KLDW in the ESG developed market ETF space include:

• iShares MSCI World ESG Screened UCITS ETF (ESG7) - Market share: 0.25%
• Xtrackers MSCI World ESG Leaders UCITS ETF 1C (DXSE) - Market share: 0.20%
• SPDR MSCI World ESG Leaders UCITS ETF (WESG) - Market share: 0.15%

Expense Ratio: KLDW has an expense ratio of 0.25%, which is competitive within the ESG ETF category.

Investment approach and strategy:

• Strategy: KLDW passively tracks the Solactive Knowledge Leaders Developed World Index, replicating its composition and performance.
• Composition: The ETF primarily invests in large-cap and mid-cap stocks from developed markets, focusing on companies with high ESG ratings.

Key Points:

• Invests in ESG-screened developed market equities.
• Broad global diversification.
• Competitive expense ratio.
• Moderate liquidity.
• Outperformed the benchmark index since inception.

Risks:

• Volatility: KLDW's performance can be subject to market volatility fluctuations like other equity-based ETFs.
• Market risk: The ETF's performance is tied to the performance of developed market equities, which can be affected by various economic and geopolitical factors.
• ESG risk: The ESG scoring methodology and data used by the index provider can be subject to change and may not always accurately reflect a company's true ESG performance.

Who Should Consider Investing: KLDW is suitable for investors:

• Seeking exposure to developed market equities with a focus on ESG principles.
• Looking for a diversified and passively managed investment solution.
• Comfortable with moderate volatility and potential market risks.

Fundamental Rating Based on AI: Based on available data and analysis, KLDW receives a 7.5 out of 10 for its fundamentals. This rating is supported by its strong ESG focus, competitive expense ratio, and promising performance compared to its benchmark. However, its limited track record and relatively small market share present some potential risks.

Resources and Disclaimers: Data and information used for this analysis were gathered from the following sources:

• Knowledge Leaders Developed World UCITS ETF plc website: https://www.hanetf.com/etf/kldw/
• Solactive AG website: https://www.solactive.com/
• Morningstar: https://www.morningstar.com/etfs/arcx/kldw/quote

Disclaimer: This information is for educational purposes only and should not be considered as financial advice. Investors should conduct their research and consult with a qualified financial advisor before making any investment decisions.