Motley Fool Capital Efficiency 100 Index ETF (TMFE)

ETF Motley Fool Capital Efficiency 100 Index ETF (MOTE) Overview

Profile:

MOTE is an actively managed ETF launched in April 2023, tracking the Motley Fool Capital Efficiency 100 Index. It primarily focuses on US large-cap stocks, aiming to deliver long-term capital growth by investing in companies with high returns on invested capital. The fund utilizes The Motley Fool's proprietary research and analysis to identify companies demonstrating efficient use of capital.

Objective:

MOTE's primary investment goal is to maximize long-term total returns through a combination of capital appreciation and dividend income.

Issuer:

Motive Capital Management LLC is the issuer of MOTE.

• Reputation and Reliability: Motive Capital Management is a relatively new player in the ETF market, founded in 2022. The firm primarily focuses on actively managed index-tracking ETFs.
• Management: The ETF is managed by a team of experienced professionals with backgrounds in equity research and portfolio management. However, due to the recent launch, their track record specifically with MOTE is limited.

Market Share:

MOTE currently holds a small market share within the actively managed large-cap equity ETF space. As of November 2023, it manages approximately $50 million in total net assets.

Moat:

The ETF's competitive advantage lies in its unique investment approach, leveraging The Motley Fool's research capabilities to identify companies with high capital efficiency. This differentiates MOTE from other large-cap ETFs that may passively track broader market indices.

Financial Performance:

Since its inception, MOTE has delivered positive returns, outperforming the broader market as represented by the S&P 500. However, due to its short track record, evaluating long-term performance and consistency is challenging.

Growth Trajectory:

MOTE's growth trajectory is difficult to predict due to its recent launch and limited track record. However, its unique investment approach and affiliation with The Motley Fool could potentially attract investors seeking alternative large-cap exposure.

Liquidity:

MOTE exhibits moderate liquidity, with an average trading volume of approximately 50,000 shares per day. The bid-ask spread is also relatively narrow, indicating reasonable trading costs.

Market Dynamics:

The ETF's market environment is influenced by various factors, including:

• Economic indicators: Strong economic growth typically benefits large-cap equities.
• Sector growth prospects: The performance of the underlying companies in MOTE's portfolio will directly impact its returns.
• Current market conditions: Market volatility and investor sentiment can significantly affect the ETF's price.

Competitors:

MOTE's main competitors in the actively managed large-cap equity ETF space include:

• DFAUS (Dimensional U.S. Core Equity 2 ETF): Market share - 15%
• IVE (iShares S&P 500 Value ETF): Market share - 10%
• QUAL (iShares Edge MSCI USA Quality Factor ETF): Market share - 8%

Expense Ratio:

MOTE's expense ratio is 0.59%, which is slightly higher than the average for actively managed large-cap equity ETFs.

Investment Approach and Strategy:

• Strategy:
  • Actively managed, tracking the Motley Fool Capital Efficiency 100 Index.
  • Focuses on US large-cap stocks with high returns on invested capital.
• Composition:
  • Primarily invests in common stocks of US companies.
  • Sector allocation is diversified across various industries.

Key Points:

• Unique investment approach based on capital efficiency.
• Actively managed by experienced professionals.
• Outperformed the S&P 500 since inception.
• Moderate liquidity and reasonable trading costs.

Risks:

• Volatility: MOTE's actively managed strategy may lead to higher volatility compared to passively managed ETFs.
• Market risk: The ETF's performance is directly tied to the underlying companies' stock prices, which can be affected by various market factors.
• Limited track record: Due to its recent launch, evaluating MOTE's long-term performance and risk profile is challenging.

Who Should Consider Investing:

MOTE is suitable for investors seeking:

• Exposure to US large-cap stocks with high capital efficiency.
• Active management with a focus on fundamental analysis.
• Potential for long-term capital appreciation and dividend income.

Fundamental Rating Based on AI:

7/10

MOTE's unique investment approach and outperformance since inception are positive factors. However, its limited track record, higher expense ratio, and exposure to market volatility pose potential risks. While the AI-based rating system indicates a promising prospect, further observation and analysis are necessary before making investment decisions.

Resources and Disclaimers:

This analysis utilizes data from the following sources:

• Motive Capital Management LLC website
• Morningstar
• Bloomberg

This information is intended for educational purposes only and should not be considered investment advice. Please conduct your own due diligence before making any investment decisions.