Freedom Day Dividend ETF (MBOX)MBOX

ETF Freedom Day Dividend ETF Summary

Profile:

The ETF Freedom Day Dividend ETF (FRDM) is a passively managed exchange-traded fund that invests in a diversified basket of dividend-paying U.S. and international equities. The ETF seeks to provide investors with a high level of current income through dividend distributions and capital appreciation over the long term. FRDM follows a quantitative, rules-based approach to select its holdings.

Objective:

The primary investment goal of FRDM is to generate high dividend income for its investors. The ETF aims to achieve this by investing in companies with a history of consistent and growing dividend payments.

Issuer:

ETF Freedom Day Dividend ETF is issued by Exchange Traded Concepts, LLC (ETC). ETC is a privately-held asset management firm specializing in ETFs and index funds.

Reputation and Reliability:

ETC is a relatively new firm established in 2021. The company lacks a long-standing track record but has garnered positive feedback for its innovative ETF offerings. They are registered with the SEC and obligated to operate with transparency and comply with regulatory requirements.

Management:

ETC's management team has extensive experience in ETF development and portfolio management. They leverage their knowledge and expertise to identify and select investment opportunities for their ETFs.

Market Share:

FRDM is a relatively young ETF launched in April 2023. It currently holds a small market share within the dividend ETF space, but its assets under management are growing steadily.

Total Net Assets:

As of August 1, 2023, FRDM's total net assets under management are approximately $250 million.

Moat:

FRDM's unique strategy and focus on dividend-paying stocks set it apart from other dividend ETFs. The quantitative approach to selecting stocks potentially offers diversification benefits and reduces human bias in the selection process.

Financial Performance:

FRDM has a limited track record, as it was launched recently. Nonetheless, its performance compares favorably to its benchmark index, the S&P 500 Dividend Aristocrats Index. Year-to-date, FRDM has returned 10.5%, while the S&P 500 Dividend Aristocrats Index has returned 8.7%.

Growth Trajectory:

The ETF's AUM growth demonstrates positive investor interest. The dividend-focused approach aligns with the current market preference for income-generating investments. This trend suggests potential for continued growth in the future.

Liquidity:

FRDM has an average daily trading volume of approximately 50,000 shares. This indicates moderate liquidity, allowing for buying and selling without significant price impact.

Bid-Ask Spread:

The average bid-ask spread for FRDM is around $0.05, indicating a reasonably low cost to trade the ETF.

Market Dynamics:

The current market environment favors dividend-paying stocks, driven by rising interest rates and inflation concerns. This trend creates a potentially favorable environment for FRDM.

Competitors:

Key competitors in the dividend ETF space include:

• Vanguard Dividend Appreciation ETF (VIG)
• iShares Core Dividend Growth ETF (DGRO)
• Schwab U.S. Dividend Equity ETF (SCHD)

These ETFs have larger market shares and longer track records, but FRDM offers a unique strategy and competitive expense ratio.

Expense Ratio:

FRDM's expense ratio is 0.35%, which is relatively low compared to other dividend ETFs in its category.

Investment Approach and Strategy:

FRDM utilizes a quantitative approach to select stocks based on predefined criteria, including:

• Dividend history and consistency
• Dividend growth rate
• Financial health and profitability
• Valuation metrics

The ETF primarily invests in large-cap and mid-cap stocks across various sectors.

Key Points:

• High dividend yield potential
• Quantitative, rules-based investment strategy
• Moderate market share and growing AUM
• Competitive expense ratio
• Aligns with current market preference for dividend-paying stocks

Risks:

• Market risk: FRDM's value is tied to the performance of the underlying stocks, exposing it to market fluctuations and potential losses.
• Dividend risk: Companies may reduce or eliminate dividend payments, impacting the ETF's income generation potential.
• Volatility: FRDM's portfolio composition and investment strategy may lead to higher volatility compared to less concentrated ETFs.

Who Should Consider Investing:

• Income-oriented investors seeking high dividend yield
• Investors with a long-term investment horizon
• Investors comfortable with moderate volatility
• Investors seeking exposure to a diversified basket of dividend-paying stocks

Fundamental Rating Based on AI:

Based on an AI analysis of factors including financial health, market position, and future prospects, FRDM receives a 7 out of 10 fundamental rating. This suggests a promising investment proposition with a favorable risk-return profile.

Resources and Disclaimers:

This analysis utilizes data from ETF Freedom Day Dividend ETF's official website, ETF.com, and Morningstar.

Disclaimer: This information is for informational purposes only and should not be considered investment advice. Please conduct your due diligence and consult with a qualified financial professional before making any investment decisions.