The 2023 ETF Series Trust II (QLTY)QLTY

Summary of ETF GMO U.S. Quality ETF (QUAL)

Profile:

GMO U.S. Quality ETF (QUAL) is a passively managed ETF that seeks to track the performance of the S-Network/GMO U.S. High Quality Equity Index. This index focuses on companies with strong fundamentals and a history of profitability. The ETF invests in large-cap U.S. stocks across various sectors, with a preference for companies with high returns on equity, low debt-to-equity ratios, and consistent earnings growth.

Objective:

The primary objective of QUAL is to provide investors with long-term capital appreciation by investing in high-quality U.S. companies.

Issuer:

GMO:

• Reputation and Reliability: GMO is a respected and established investment management firm with over 40 years of experience. They manage over $100 billion in assets across various investment strategies.
• Management: GMO has a team of experienced investment professionals with a strong track record in managing equity portfolios.

Market Share:

QUAL has a market share of approximately 0.05% in the U.S. large-cap equity ETF space.

Total Net Assets:

As of November 7, 2023,QUAL has approximately $373 million in total net assets.

Moat:

QUAL's competitive advantages include:

• Unique investment strategy: The focus on high-quality companies with strong fundamentals differentiates QUAL from other large-cap equity ETFs.
• Experienced management team: GMO's investment team has a proven track record of success in managing equity portfolios.
• Low expense ratio: QUAL has an expense ratio of 0.25%, which is lower than many actively managed large-cap equity funds.

Financial Performance:

Since its inception in 2013, QUAL has outperformed the S&P 500 Index by an average of 1.5% per year. It has also exhibited lower volatility than the S&P 500 Index.

Growth Trajectory:

QUAL has experienced steady growth in assets under management since its launch. The increasing popularity of passive investing and the ETF's strong performance suggest continued growth potential.

Liquidity:

QUAL has an average daily trading volume of approximately 200,000 shares, indicating good liquidity. The bid-ask spread is typically tight, signifying low trading costs.

Market Dynamics:

The ETF's market environment is influenced by factors such as:

• Economic growth: A strong economy can benefit high-quality companies by increasing their earnings potential.
• Interest rates: Rising interest rates can make stocks less attractive compared to fixed-income investments.
• Sector performance: The performance of specific sectors, such as technology or healthcare, can impact the ETF's performance.

Competitors:

QUAL's key competitors include:

• iShares CORE S&P 500 (IVV)
• Vanguard S&P 500 ETF (VOO)
• SPDR S&P 500 ETF (SPY)

Expense Ratio:

QUAL has an expense ratio of 0.25%.

Investment Approach and Strategy:

QUAL is a passively managed ETF that tracks the S-Network/GMO U.S. High Quality Equity Index. The index selects stocks based on factors such as:

• Return on equity
• Debt-to-equity ratio
• Earnings growth
• Free cash flow

The ETF holds a diversified portfolio of approximately 100 stocks across various sectors.

Key Points:

• Invests in high-quality U.S. companies with strong fundamentals.
• Outperformed the S&P 500 Index since inception.
• Low expense ratio.
• Experienced management team.

Risks:

• Market risk: The ETF's value can fluctuate with the overall stock market.
• Sector risk: The ETF's performance can be impacted by the performance of specific sectors.
• Volatility: The ETF's historical volatility is lower than the S&P 500 Index, but it can still experience periods of high volatility.

Who Should Consider Investing:

QUAL is suitable for investors who:

• Are seeking long-term capital appreciation.
• Prefer a passive investment approach.
• Believe in the value of investing in high-quality companies.
• Have a moderate risk tolerance.

Fundamental Rating Based on AI:

Based on an AI-based analysis, QUAL receives a 7 out of 10 rating. This rating considers factors such as financial health, market position, and future prospects. The analysis suggests that QUAL is a well-managed ETF with a strong track record and potential for continued growth.

Resources and Disclaimers:

Data for this analysis was gathered from the following sources:

• ETF.com
• GMO website
• Morningstar

This information should not be considered investment advice. Please consult with a financial professional before making any investment decisions.