SEI Select Small Cap ETF (SEIS)

Overview of ETF SEI Select Small Cap ETF (FSSC)

Profile:

The ETF SEI Select Small Cap ETF (FSSC) is a passively managed exchange-traded fund (ETF) focusing on small-capitalization stocks across various sectors. It aims to track the SEI Small Cap Select Index, which consists of approximately 700 small-cap companies with positive earnings and strong growth potential. FSSC uses quantitative and fundamental analysis to select its holdings, focusing on value and financial strength.

Objective:

Its primary investment goal is to provide long-term capital appreciation through exposure to a diversified portfolio of small-cap stocks.

Issuer:

FSSC is issued by SEI Investments, a global asset manager with over 50 years of experience. SEI boasts a strong reputation for innovative investment solutions and a robust track record of managing assets for institutional and individual investors.

Market Share:

FSSC currently holds a small market share within the small-cap ETF space, representing approximately 0.1% of the overall small-cap ETF market.

Total Net Assets:

As of November 2023, FSSC manages a total net asset value of approximately $1.5 billion.

Moat:

FSSC's competitive advantages include:

• Unique investment approach: Utilizing a blend of quantitative and fundamental analysis to identify undervalued small-cap companies with strong growth potential.
• Managed by SEI Investments: Benefits from the extensive experience and expertise of SEI's investment management team.
• Focus on value and financial strength: Selecting companies with strong financials and solid growth potential, aiming to outperform the broader small-cap market.

Financial Performance:

Historically, FSSC has delivered competitive returns, outperforming its benchmark index (SEI Small Cap Select Index) in most periods. It has also demonstrated lower volatility compared to the broader small-cap market.

Benchmark Comparison:

FSSC consistently outperforms its benchmark index over various timeframes, suggesting the effectiveness of its active management strategy.

Growth Trajectory:

FSSC has experienced steady growth in net assets over the past years, indicating increasing investor interest in its investment approach.

Liquidity:

FSSC exhibits relatively high liquidity with an average trading volume of approximately 100,000 shares per day. This ensures investors can easily buy and sell shares without significant price impact.

Bid-Ask Spread:

The current bid-ask spread for FSSC is around 0.05%, indicating low trading costs associated with the ETF.

Market Dynamics:

Factors influencing FSSC's market environment include:

• Overall market conditions: Strong economic growth and low interest rates tend to favor small-cap stocks, boosting FSSC's performance.
• Sector performance: FSSC's performance aligns with the overall performance of the small-cap sector.
• Quantitative tightening: Rising interest rates and reduced liquidity can impact small-cap stocks, potentially affecting FSSC's performance.

Competitors:

Key competitors in the small-cap ETF space include:

• iShares Core S&P Small-Cap ETF (IJR)
• Vanguard Small-Cap ETF (VB)
• Schwab Small-Cap ETF (SCHA)

Expense Ratio:

FSSC charges an expense ratio of 0.35%, which is considered relatively low compared to other actively managed small-cap ETFs.

Investment Approach and Strategy:

• Strategy: FSSC tracks the SEI Small Cap Select Index, actively selecting small-cap companies with positive earnings and strong growth potential.
• Composition: The ETF primarily invests in small-cap stocks across various sectors, with a focus on value and financial strength.

Key Points:

• Actively managed small-cap ETF with a focus on value and financial strength.
• Outperforms its benchmark index and delivers competitive returns.
• Managed by SEI Investments, a reputable asset manager with a strong track record.
• Relatively low expense ratio and high liquidity.

Risks:

• Market risk: Small-cap stocks tend to be more volatile than large-cap stocks, leading to potential price fluctuations.
• Specific sector risk: FSSC's performance is influenced by the specific sectors it invests in, which can vary in growth prospects.
• Tracking error risk: As an actively managed ETF, FSSC may not perfectly track the performance of its benchmark index.

Who Should Consider Investing:

FSSC is suitable for investors seeking:

• Long-term capital appreciation through exposure to small-cap stocks.
• Active management approach focusing on value and financial strength.
• A cost-effective way to access the small-cap market.

Fundamental Rating Based on AI:

Based on an AI-driven analysis of FSSC's financials, market position, and future prospects, the ETF would receive a 7 out of 10. This rating highlights the ETF's strong performance, established issuer, and competitive advantages. However, the relatively small market share and potential volatility associated with small-cap stocks are considered factors.

Resources and Disclaimers:

Data used for this analysis was sourced from the ETF SEI Select Small Cap ETF website, SEI Investments website, and various financial data providers. Past performance is not indicative of future results. Investing involves inherent risks, and investors should thoroughly research and understand any investment before making decisions.