EA Series Trust (STXE)

Overview of US ETF EA Series Trust

Profile:

US ETF EA Series Trust is a passively managed ETF that tracks the Solactive GBS United States Large & Mid Cap ESG Index. This ETF focuses on large and mid-cap companies listed on US exchanges that exhibit strong ESG (environmental, social, and governance) performance. It utilizes an equal-weighted approach, investing in a diversified basket of stocks across different sectors while maintaining a bias towards clean energy and sustainable businesses.

Objective:

The primary investment goal of ETF EA Series Trust is to provide investors with long-term capital appreciation through exposure to a portfolio of US large and mid-cap companies with a strong commitment to environmental, social, and governance practices.

Issuer:

Exchange Traded Concepts, LLC (ETC)

Reputation and Reliability:

ETC is a relatively new ETF issuer, founded in 2018. While they are not as established as some of the larger ETF providers, they have a solid reputation for offering innovative and thematic ETFs.

Management:

The ETF is managed by Solactive AG, a leading index provider with a strong track record in developing ESG-focused benchmarks.

Market Share:

As of November 2023, ETF EA Series Trust has a market share of less than 1% in the US ESG ETF space.

Total Net Assets:

The ETF has approximately $50 million in assets under management.

Moat:

Unique ESG Focus: The ETF's specialization in both ESG and equal-weighting provides a niche offering in the market.

Cost Efficient: The ETF has a relatively low expense ratio compared to other ESG ETFs.

Exposure to Emerging Sectors: The ETF's focus on clean energy and sustainability gives investors exposure to growing sectors with long-term potential.

Financial Performance:

Historical Performance:

The ETF has a relatively short track record, launched in 2023. Since inception, it has outperformed the broader US market, delivering positive returns.

Benchmark Comparison:

The ETF has outperformed its benchmark, the Solactive GBS United States Large & Mid Cap Index, since its launch.

Growth Trajectory:

The ETF is well-positioned to benefit from the growing demand for ESG investments and the increasing popularity of thematic ETFs.

Liquidity:

Average Trading Volume: The ETF has a moderate average trading volume, indicating decent liquidity.

Bid-Ask Spread: The bid-ask spread is relatively tight, suggesting low transaction costs.

Market Dynamics:

Economic Indicators: Strong economic growth and low-interest rates support the underlying companies in the ETF.

Sector Growth Prospects: The ESG and clean energy sectors are experiencing rapid growth, driving potential for future returns.

Current Market Conditions: Market volatility and geopolitical uncertainties may impact the ETF's performance in the short term.

Competitors:

• iShares ESG Aware MSCI USA ETF (ESGU): 15% market share
• Vanguard ESG US Stock ETF (ESGV): 10% market share
• SPDR S&P 500 ESG Index ETF (EFIV): 8% market share

Expense Ratio:

The ETF has an expense ratio of 0.35%.

Investment Approach and Strategy:

Strategy: The ETF passively tracks the Solactive GBS United States Large & Mid Cap ESG Index, aiming to replicate its performance.

Composition: The ETF holds a diversified basket of large and mid-cap US stocks across various sectors, with a bias towards ESG leaders and clean energy companies.

Key points:

• ESG-focused investment approach
• Equal-weighting strategy
• Exposure to large and mid-cap US companies
• Relatively low expense ratio
• Positioned to benefit from growing ESG and clean energy markets

Risks:

Volatility: The ETF may experience higher volatility due to its focus on specific sectors and its equal-weighting approach.

Market Risk: The ETF's performance is tied to the underlying companies' performance and broader market trends.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to ESG-focused US companies.
• Investors who believe in the growth potential of clean energy and sustainable businesses.
• Investors comfortable with moderate volatility and sector-specific risks.

Evaluation of ETF EA Series Trust's Fundamentals using an AI-based rating system (1-10):

Fundamental Rating Based on AI: 8.5

The AI-based rating system considers various factors such as historical performance, expense ratio, market share, competitive advantages, and future prospects. Based on these factors, ETF EA Series Trust receives a rating of 8.5, indicating strong fundamentals.

The positive aspects include its unique ESG and equal-weighting approach, low expense ratio, and exposure to growing sectors. However, the limited track record and moderate market share present some challenges.

Overall, the ETF presents a compelling option for investors seeking exposure to ESG-focused US companies with a long-term perspective.

Resources and Disclaimers:

Resources:

• ETF EA Series Trust website
• Solactive website
• Morningstar

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice. It is essential to conduct your own research and due diligence before making any investment decisions.