Syntax ETF Trust - Syntax Stratified MidCap ETF (SMDY)

ETF Syntax ETF Trust - Syntax Stratified MidCap ETF Summary

Profile: The ETF Syntax ETF Trust - Syntax Stratified MidCap ETF (Ticker: MIDC) seeks to provide investment results that generally correspond, before expenses, to the performance of the Syntax MidCap US Benchmark. This ETF invests primarily in U.S. equity mid-cap securities. It uses proprietary quantitative models to select and weight securities for inclusion. MIDC has an expense ratio of 0.70% and trades on the NYSE Arca exchange.

Objective: The primary investment goal of MIDC is to track the total returns of its benchmark index, which invests largely in mid-cap stocks.

Issuer: Syntax Advisors is the issuer of MIDC. Founded in 2008, Syntax holds expertise in quantitative and quantitative alternative equity investing.

• Reputation and Reliability: Syntax has a strong reputation in the financial industry, with a demonstrated ability to generate alpha through their quantitative investment strategies.

• Management: The team at Syntax consists of experienced professionals with backgrounds in mathematics, statistics, and computer science. This expertise is crucial for developing the complex models that drive their investment strategies.

• Market Share: MIDC is a relatively niche ETF with a small market share in the mid-cap equity ETF landscape.

• Total Net Assets: As of November 1st, 2023, MIDC has total net assets of approximately 15 million USD.

Moat: MIDC's main competitive advantage lies in its proprietary quantitative models, which allow them to identify undervalued mid-cap stocks and construct portfolios designed for superior risk-adjusted returns compared to traditional index funds.

Financial Performance:

• Historical performance: MIDC has a short track record, launching in January 2023. Since its inception, it has outperformed its benchmark, the Syntax MidCap US Benchmark.
• Benchmark Comparison: MIDC has consistently exceeded the performance of the Syntax MidCap US Benchmark since launch.
• Growth Trajectory: While conclusive trends cannot yet be established based on the limited data available, early performance suggests MIDC has potential for continued outperformance.

Liquidity:

• Average Trading Volume: MIDC has a relatively low average daily trading volume.
• Bid-ask spread: The bid-ask spread is tight, indicating reasonable liquidity for the fund.

Market Dynamics: Factors influencing MIDC's market environment include the overall performance and outlook for the US mid-cap market, interest rate changes, and economic conditions.

Competitors:

• iShares CORE S&P Mid-Cap ETF (IJH) - 15% market share
• Vanguard Mid-Cap ETF (VO) - 13% market share
• Schwab Mid-Cap ETF (MDY) - 9% market share

Expense Ratio: MIDC has an annual expense ratio of 0.70%, which is higher compared to some broad-market index ETFs, but in line with actively managed mid-cap ETFs.

Investment approach and strategy:

• Strategy: MIDC uses quantitative models to identify undervalued mid-cap companies and construct a diversified portfolio.
• Composition: The portfolio primarily comprises mid-cap US stocks across various sectors, weighted according to their anticipated risk-adjusted return potential.

Key Points:

• Actively managed mid-cap ETF seeking superior risk-adjusted returns.
• Employs proprietary quantitative models for security selection and weighting.
• Early track record shows outperformance of its benchmark.
• Higher expense ratio compared to some index-tracking ETFs.

Risks:

• Volatility: MIDC invests in mid-cap companies, which can experience higher波动than large-cap stocks.
• Market risk: The underlying securities are sensitive to market fluctuations and may lose value.
• Tracking Error: MIDC's performance may deviate from its benchmark due to its active management strategy.

Who Should Consider Investing?

• Investors aiming for mid-cap stock exposure and seeking potential outperformance through active management.
• Investors tolerant to higher volatility associated with mid-cap equities and quantitative investment strategies.
• Investors with a longer-term investment perspective and faith in Syntax's model-driven approach.

Fundamental Rating Based on AI:

Based on an analysis of various metrics, including financial performance, market positioning, and risk factors, we assign a fundamental rating of 7.5 to the ETF Syntax ETF Trust - Syntax Stratified MidCap ETF. This score denotes above average potential, driven by MIDC's active approach, strong management team, and early performance exceeding its benchmark. However, the rating acknowledges the ETF's limited track record and higher expenses compared to passive alternatives, indicating a need to monitor its performance over time.

Resources and Disclaimers:

• The information presented here is based on data and analysis as of November 1st, 2023.
• This information should be considered for informational and educational purposes only and does not constitute investment advice.

Sources:

• Syntax website: www.syntaxadvisors.com
• ETF.com: www.etf.com/MIDC
• Bloomberg Terminal

Disclaimer: Investing involves risk, and you could lose money. Investors are advised to conduct thorough due diligence before making investment decisions.