Motley Fool Capital Efficiency 100 Index ETF (TMFE)

Overview

The Motley Fool Capital Efficiency 100 Index ETF (TMFE) aims to track the performance of 100 U.S. companies that exhibit high capital efficiency, focusing on firms that effectively generate revenue relative to their invested capital. It generally invests in companies with a high return on invested capital (ROIC) and revenue growth.

Reputation and Reliability

The Motley Fool is a well-known financial media company with a reputation for providing investment advice and analysis. Its reliability as an ETF issuer is growing as its product suite expands.

Management Expertise

The management team leverages the Motley Fool's research capabilities and investment philosophy to select and manage the ETF's holdings.

Goal

The ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Motley Fool Capital Efficiency 100 Index.

Investment Approach and Strategy

Strategy: The ETF aims to track the Motley Fool Capital Efficiency 100 Index. The underlying index focuses on companies with high capital efficiency.

Composition The ETF primarily holds stocks of U.S. companies selected based on their capital efficiency metrics, typically focusing on high ROIC and revenue growth.

Market Share: TMFE's market share is relatively small compared to broader market ETFs, indicating a niche focus on capital efficiency.

Total Net Assets (AUM): 18250000

Key Competitors

• SPDR S&P 500 ETF Trust (SPY)
• Invesco QQQ Trust (QQQ)
• iShares Core S&P 500 ETF (IVV)

Competitive Landscape

The competitive landscape is dominated by large-cap ETFs like SPY, QQQ and IVV. TMFE differentiates itself through its focus on capital efficiency, potentially offering higher growth opportunities but with potentially higher risk compared to broader market ETFs. The advantage of TMFE is that it has a unique investment strategy, but its AUM is significantly smaller.

Historical Performance: Data regarding precise historical performance should be obtained from financial data providers. Historical performance will vary depending on the time period examined.

Benchmark Comparison: The ETF's performance should be compared to the S&P 500 and other relevant growth indices to evaluate its effectiveness in capturing capital efficiency-driven returns.

Expense Ratio: 0.5

Average Trading Volume

TMFE's average trading volume is relatively moderate, which may affect the ease of buying and selling shares, especially in large quantities.

Bid-Ask Spread

The bid-ask spread for TMFE varies but it has been observed at 0.20%, depending on market conditions and trading activity, and can impact the cost of trading.

Market Environment Factors

Economic growth, interest rates, and sector-specific trends impacting capital investments and revenue generation influence TMFE's performance. Strong economic growth and favorable industry conditions generally support the performance of capital-efficient companies.

Growth Trajectory

TMFE's growth trajectory depends on the continued adoption of its capital efficiency investment strategy and the performance of its underlying holdings. Changes to the index methodology and portfolio holdings may occur over time.

Competitive Edge

TMFE's competitive edge lies in its unique investment strategy that focuses on identifying companies with high capital efficiency based on the Motley Fool's research. This approach differentiates it from traditional market-cap weighted ETFs. The ETF aims to capture potentially higher growth opportunities by focusing on efficient capital deployment. This targeted strategy may appeal to investors seeking exposure to companies that can generate more revenue relative to their invested capital and the underlying philosophy of Motley Fool may attract investors.

Volatility

TMFE's volatility can be influenced by the concentration of its holdings and the sensitivity of capital-efficient companies to economic cycles. It may exhibit higher volatility than broad market ETFs.

Market Risk

Market risk includes the potential for declines in the overall stock market, as well as sector-specific risks affecting the industries represented in the ETF. The ETF's performance is also subject to the risk that its capital efficiency-based selection criteria may not consistently identify successful companies.

Ideal Investor Profile

The ideal investor is one seeking growth and looking to add a tilt towards capital efficiency within their portfolio. These investors should be willing to accept moderate to high levels of risk.

Market Risk

TMFE is more suitable for long-term investors who understand the capital efficiency investment strategy and are comfortable with potential volatility.

The Motley Fool Capital Efficiency 100 Index ETF (TMFE) offers exposure to U.S. companies exhibiting high capital efficiency. It aims to track the Motley Fool Capital Efficiency 100 Index, focusing on firms with high return on invested capital and revenue growth. TMFE differentiates itself through its unique investment strategy, but its AUM is relatively small compared to broader market ETFs. Investors should consider TMFE if they are seeking a growth-oriented investment strategy with a focus on capital efficiency and are willing to accept some volatility. The performance of TMFE should be closely monitored alongside competitor ETFs and the underlying benchmark index.

Data Sources:

• Morningstar
• ETF.com
• The Motley Fool

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Investment decisions should be made after consulting with a qualified financial advisor.