SP Funds Trust (SPWO)

US ETF SP Funds Trust Overview

Profile: US ETF SP Funds Trust invests in a diverse portfolio of U.S. equities, seeking to track the performance of the S&P 500® Index. It offers broad market exposure, emphasizing large-cap companies across various sectors.

Objective: The ETF’s primary goal is to provide investors with investment returns that closely mirror the price and yield performance of the S&P 500® Index, while minimizing tracking error.

Issuer: State Street Corporation (NYSE: STT)

• Reputation and Reliability: State Street is a renowned global financial services provider with a history spanning over 225 years. It manages over $3.95 trillion in assets under custody and administration.
• Management: The ETF is managed by an experienced team of professionals at State Street Global Advisors, recognized for their expertise in index-tracking strategies.

Market Share: As of October 2023, US ETF SP Funds Trust commands approximately 2.5% of the total market share within the S&P 500® Index ETF category.

Total Net Assets: The ETF currently holds approximately $25 billion in total net assets.

Moat: The ETF’s competitive advantages include:

• Low Expense Ratio: It boasts a competitive expense ratio of 0.03%, making it an attractive option for cost-conscious investors.
• High Liquidity: With an average daily trading volume exceeding 1 million shares, investors can easily enter and exit positions.
• Passive Management: The passively managed approach minimizes tracking error and offers consistent performance.

Financial Performance:

• Historical Returns: Over the past 5 years, the ETF has generated an average annual return of 10.5%, closely mirroring the S&P 500® Index performance.
• Benchmark Comparison: The ETF has consistently outperformed the S&P 500® Index by a small margin, demonstrating its efficient tracking capabilities.

Growth Trajectory: The US ETF SP Funds Trust is expected to experience continued growth as investor demand for low-cost, passively managed index-tracking solutions remains strong.

Liquidity:

• Average Trading Volume: The ETF exhibits high liquidity with an average daily trading volume exceeding 1 million shares.
• Bid-Ask Spread: The bid-ask spread is typically narrow, reflecting efficient trading and minimal transaction costs.

Market Dynamics:

• Economic Growth: Strong economic growth can positively impact the ETF's performance as corporate earnings and stock prices tend to rise.
• Interest Rate Hikes: Rising interest rates could potentially lead to decreased investment in equities, impacting the ETF's performance.

Competitors:

• iShares CORE S&P 500 (IVV) - 90% market share
• SPDR S&P 500 ETF (SPY) - 7% market share
• Vanguard S&P 500 ETF (VOO) - 2% market share

Expense Ratio: The ETF’s expense ratio is 0.03%.

Investment Approach and Strategy:

• Strategy: The ETF passively tracks the S&P 500® Index, investing in the same underlying stocks with similar weightings.
• Composition: The ETF holds a diversified portfolio of approximately 500 large-cap stocks across various sectors within the U.S. market.

Key Points:

• Low-cost, passively managed S&P 500® Index tracking.
• Strong historical performance with consistent returns.
• High liquidity and tight bid-ask spread.
• Broad market exposure across various sectors.

Risks:

• Market Volatility: The ETF's performance is directly linked to the volatility of the underlying S&P 500® Index.
• Sector Concentration: The ETF's heavy allocation to large-cap stocks can lead to higher risk in specific sectors.

Who Should Consider Investing:

• Investors seeking broad market exposure aligned with the S&P 500® Index performance.
• Long-term investors looking for a low-cost, passively managed solution.
• Investors comfortable with moderate risk levels associated with equity investments.

Fundamental Rating Based on AI:

8.5/10

The AI-based rating considers the ETF's strong financial performance, competitive advantages, and robust market position. However, moderate risk due to market volatility and sector concentration warrants a slightly lower score.

Resources and Disclaimers:

• Data and information sourced from State Street Global Advisors, ETF.com, and Yahoo Finance.
• This analysis should not be considered financial advice. Investors should conduct their research and due diligence before making investment decisions.