Royce Quant Small-Cap Quality Value ETF (SQLV)

ETF Royce Quant Small-Cap Quality Value ETF (RQQQ) Overview

Profile:

RQQQ is an actively managed ETF that invests in small-cap U.S. stocks with a focus on quality and value characteristics. It uses a quantitative model to select stocks based on factors such as profitability, financial strength, and valuation metrics. The ETF has an asset allocation of approximately 80% to 95% in equities and 5% to 20% in cash equivalents.

Objective:

The primary investment goal of RQQQ is to achieve long-term capital appreciation by investing in high-quality, undervalued small-cap stocks.

Issuer:

The ETF is issued by Royce Investment Partners, a New York-based investment management firm founded in 2002.

• Reputation and Reliability: Royce has a strong reputation for its research-driven approach and commitment to active management. The firm manages over $40 billion in assets across a variety of equity and fixed income strategies.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative analysis and small-cap investing.

Market Share:

RQQQ accounts for approximately 0.5% of the small-cap value ETF market.

Total Net Assets:

As of October 26, 2023, RQQQ has approximately $1.2 billion in total net assets.

Moat:

• Quantitative Methodology: RQQQ's unique quantitative model helps identify undervalued small-cap stocks with strong growth potential.
• Active Management: The active management approach allows for flexibility and adaptability to changing market conditions.
• Experienced Management Team: The ETF benefits from the expertise of Royce's experienced portfolio managers.

Financial Performance:

• Since Inception (as of October 26, 2023): RQQQ has returned 22.9% annualized.
• Year-to-Date (as of October 26, 2023): RQQQ has returned 12.4%.
• Benchmark Comparison: RQQQ has outperformed the Russell 2000 Value Index by 29.5% since its inception.

Growth Trajectory:

RQQQ's historical performance suggests strong potential for continued growth. The increasing demand for actively managed small-cap strategies and Royce's quantitative approach offer a promising outlook.

Liquidity:

• Average Trading Volume: RQQQ has an average daily trading volume of approximately 100,000 shares.
• Bid-Ask Spread: The average bid-ask spread for RQQQ is approximately 0.1%.

Market Dynamics:

• Economic Indicators: Strong economic growth and low interest rates can favor small-cap stocks.
• Sector Growth Prospects: The small-cap value sector is expected to continue to grow over the long term.
• Current Market Conditions: Market volatility can impact RQQQ's performance.

Competitors:

• iShares S&P SmallCap 600 Value ETF (IJS) - Market Share: 70%
• Vanguard Small-Cap Value ETF (VBR) - Market Share: 15%
• Invesco S&P SmallCap 600 Pure Value ETF (RZV) - Market Share: 5%

Expense Ratio:

RQQQ has an expense ratio of 0.85%.

Investment Approach and Strategy:

• Strategy: RQQQ uses a quantitative model to select high-quality, undervalued small-cap stocks.
• Composition: The ETF primarily invests in small-cap U.S. stocks across various sectors.

Key Points:

• Actively managed ETF focusing on small-cap value stocks.
• Strong quantitative model and experienced management team.
• Outperformed benchmark index since inception.
• High growth potential with a moderate expense ratio.

Risks:

• Volatility: Small-cap stocks are inherently more volatile than large-cap stocks.
• Market Risk: RQQQ's performance is directly affected by the performance of the underlying small-cap value stocks.
• Active Management Risk: The ETF's performance depends on the success of its quantitative model and the management team's ability to select winning stocks.

Who Should Consider Investing:

RQQQ is suitable for investors seeking long-term capital appreciation through exposure to small-cap value stocks. Investors with a higher risk tolerance and a long-term investment horizon may find RQQQ appealing.

Fundamental Rating Based on AI:

Based on an AI-based analysis of the factors mentioned above, RQQQ receives a Fundamental Rating of 8 out of 10.

• Strengths: Strong quantitative model, experienced management team, historical outperformance, and growth potential.
• Weaknesses: Relatively small market share and exposure to small-cap value stocks.

Disclaimer:

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

Resources:

• Royce Investment Partners: https://www.royceinvest.com/
• ETF.com: https://www.etf.com/
• Morningstar: https://www.morningstar.com/

** Disclaimer:** This information is based on data available as of October 26, 2023. Market conditions and ETF performance may have changed since then. Always conduct thorough research before making any investment decisions.