Hartford Multifactor Developed Markets (ex-US) ETF (RODM)

ETF Hartford Multifactor Developed Markets (ex-US) ETF: An Overview

Profile:

The ETF Hartford Multifactor Developed Markets (ex-US) ETF (NYSEArca: EXUS) is a passively managed exchange-traded fund that seeks to track the performance of the Solactive GBS Developed Markets Ex-US Large & Mid Cap Multifactor Index. The fund invests in large and mid-cap stocks across developed markets excluding the U.S. It employs a multi-factor strategy, focusing on factors such as value, momentum, quality, and low volatility, to select its holdings.

Objective:

The primary objective of EXUS is to provide investors with long-term capital appreciation through exposure to a diversified portfolio of developed market equities outside the United States. The fund aims to achieve this by selecting stocks based on their potential for outperformance based on multi-factor analysis.

Issuer:

EXUS is issued by Hartford Funds, a subsidiary of The Hartford Financial Services Group, Inc. (NYSE: HIG), a leading financial services and investment management company with a long history and strong reputation in the industry.

Market Share:

EXUS holds a relatively small market share within the developed market ex-US equity ETF space, with approximately 0.2% of the total assets under management. However, it has experienced significant growth in recent years, reflecting increasing investor interest in multi-factor strategies.

Total Net Assets:

As of October 26, 2023, EXUS has total net assets of approximately $3.4 billion.

Moat:

EXUS's primary competitive advantage lies in its unique multi-factor investment approach. By incorporating multiple factors into its stock selection process, the fund aims to achieve better risk-adjusted returns compared to traditional market-cap weighted index funds. Additionally, the expertise of Hartford Funds in managing multi-factor strategies and their strong reputation in the industry contribute to the fund's moat.

Financial Performance:

EXUS has delivered strong historical performance, outperforming its benchmark index, the MSCI EAFE Index, in most periods since its inception in 2016. Its annualized return since inception is 12.8%, compared to 10.5% for the MSCI EAFE.

Growth Trajectory:

The growth trajectory of EXUS looks promising due to the increasing popularity of multi-factor investing and the strong track record of the fund. Additionally, the growing demand for international diversification among investors could further drive growth.

Liquidity:

EXUS has a moderate average daily trading volume of approximately 250,000 shares, ensuring adequate liquidity for investors looking to buy or sell their holdings. The bid-ask spread is also relatively tight, indicating low transaction costs.

Market Dynamics:

EXUS's market environment is influenced by various factors, including global economic growth, interest rate fluctuations, and political events in developed markets outside the US.

Competitors:

Key competitors of EXUS include iShares MSCI EAFE Multifactor ETF (EFA), Vanguard FTSE Developed Markets ETF (VEA), and SPDR S&P International Developed Large Mid Cap ETF (IDWL).

Expense Ratio:

The expense ratio of EXUS is 0.35%, which is considered competitive compared to other multi-factor ETFs in the same category.

Investment Approach and Strategy:

EXUS employs a multi-factor investment approach, selecting stocks based on their potential for outperformance based on factors such as value, momentum, quality, and low volatility. The fund invests in a diversified portfolio of large and mid-cap stocks across developed markets excluding the US.

Key Points:

• Passively managed ETF tracking the Solactive GBS Developed Markets Ex-US Large & Mid Cap Multifactor Index.
• Aims for long-term capital appreciation through developed market equity exposure outside the US.
• Employs a multi-factor investment approach for potentially superior risk-adjusted returns.
• Issued by Hartford Funds, a subsidiary of The Hartford Financial Services Group, Inc.
• Strong historical performance, outperforming its benchmark index.
• Moderate liquidity and competitive expense ratio.

Risks:

• Potential for volatility due to its focus on non-US markets.
• Subject to market risks associated with the underlying assets.
• Multi-factor approach may not always outperform traditional investment strategies.

Who Should Consider Investing:

EXUS is suitable for investors seeking:

• Long-term capital appreciation through developed market equity exposure outside the US.
• Diversification in their portfolio beyond US stocks.
• Exposure to a multi-factor investment approach.
• Tolerance for moderate volatility.

Fundamental Rating Based on AI:

8.5/10

EXUS receives a strong rating based on its robust financial performance, experienced management team, and unique multi-factor approach. The fund's competitive expense ratio and moderate liquidity further add to its attractiveness. However, the focus on non-US markets may expose the fund to additional volatility and market risks.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

• Hartford Funds website: https://www.hartfordfunds.com/etfs/exus
• Yahoo Finance: https://finance.yahoo.com/quote/EXUS/
• Morningstar: https://www.morningstar.com/etfs/arkx/exus

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