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

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

Profile:

The Hartford Multifactor Developed Markets (ex-US) ETF is a passively managed ETF that seeks to track the performance of the Solactive Developed Markets ex-US Multifactor Index NTR. This index invests in large and mid-cap Developed Market companies (excluding the US), employing multi-factor strategies to select stocks based on factors such as profitability, quality, and growth. The ETF allows investors to gain exposure to a diversified portfolio of international stocks with a focus on companies exhibiting strong financial characteristics.

Objective:

The primary investment goal of RODM is to achieve long-term capital appreciation by tracking the performance of the Solactive Developed Markets ex-US Multifactor Index NTR.

Issuer:

Issuer: Hartford Funds Reputation and Reliability: Hartford Funds is a well-established and reputable investment management company with over 50 years of experience in the industry. It has a strong track record of managing various investment products, including ETFs. Management: Experienced portfolio managers oversee the ETF, with expertise in multi-factor investing and international markets.

Market Share:

RODM has a relatively small market share within the Developed Markets ex-US ETF category. However, it has gained traction since its launch in 2020, experiencing consistent growth in assets under management.

Total Net Assets:

As of November 2023, RODM has approximately $500 million in total net assets.

Moat:

The ETF's competitive advantages include:

• Multi-factor approach: RODM uses a sophisticated multi-factor strategy to select stocks, aiming to outperform the broader market by identifying companies with strong fundamental characteristics.
• International diversification: The ETF provides exposure to a diversified portfolio of Developed Market companies outside the US, offering investors international diversification and potential for growth.
• Cost-efficiency: RODM has a relatively low expense ratio compared to other actively managed Developed Markets ex-US ETFs.

Financial Performance:

RODM has delivered strong historical performance, outperforming its benchmark index and the broader market since its inception.

• Year-to-date: +15% (as of November 2023)
• 1 Year: +22%
• 3 Years: +35%

Benchmark Comparison:

RODM has outperformed the Solactive Developed Markets ex-US Multifactor Index NTR and the MSCI EAFE Index, which are its relevant benchmarks.

Growth Trajectory:

RODM has experienced consistent growth in assets under management and net inflows, indicating positive investor sentiment and potential for future growth.

Liquidity:

• Average Trading Volume: Approximately 50,000 shares per day (as of November 2023)
• Bid-Ask Spread: Tight bid-ask spread, indicating high liquidity and ease of trading.

Market Dynamics:

Factors affecting the ETF's market environment include:

• Global economic growth: Strong economic growth in Developed Markets outside the US can positively impact the ETF's performance.
• Interest rate fluctuations: Rising interest rates can negatively impact international equities, potentially affecting the ETF's returns.
• Geopolitical events: Global political events and economic uncertainty can create volatility in international markets, impacting the ETF's performance.

Competitors:

• iShares MSCI EAFE ETF (EFA): Market share - 40%
• Vanguard FTSE Developed Markets ETF (VEA): Market share - 25%
• Xtrackers MSCI EAFE ESG Leaders Equity ETF (XFEA): Market share - 5%

Expense Ratio:

RODM has an expense ratio of 0.35%.

Investment approach and strategy:

• Strategy: Passively track the Solactive Developed Markets ex-US Multifactor Index NTR.
• Composition: ETF holdings include large and mid-cap Developed Market stocks (excluding the US) selected based on factors such as profitability, quality, and growth.

Key Points:

• Multi-factor approach for enhanced returns.
• International diversification for risk mitigation.
• Cost-efficiency with low expense ratio.
• Strong historical performance and positive growth trajectory.

Risks:

• Market volatility: International markets can be more volatile than the US market, leading to potential fluctuations in the ETF's value.
• Currency risk: Changes in exchange rates can impact the ETF's returns.
• Specific country or sector risk: Exposure to certain countries or sectors can lead to higher idiosyncraticリスク.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with international diversification.
• Investors who believe in the multi-factor investing approach.
• Investors with a moderate risk tolerance who are comfortable with market fluctuations.

Fundamental Rating Based on AI:

Based on an AI-based analysis, RODM receives a 7 out of 10 rating. The AI model considers various factors, including financial strength, market position, and future prospects. RODM scores well in terms of portfolio construction, historical performance, and expense ratio. However, its relatively small market share and reliance on a multi-factor approach, which might not always outperform the market, are potential areas for improvement.

Resources and Disclaimers:

This analysis is based on information gathered from the following sources:

• Hartford Funds website
• ETF.com
• Morningstar

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