Motley Fool Next Index ETF (TMFX)TMFX

ETF Motley Fool Next Index ETF (NXT): An Overview

Profile:

ETF Motley Fool Next Index ETF (NXT) is a passively managed exchange-traded fund that seeks to track the performance of the Motley Fool Next Index. This index comprises 25 stocks handpicked by Motley Fool analysts based on their potential for long-term growth and disruptive innovation. NXT invests primarily in US-listed equities across various sectors, with a focus on technology, healthcare, and consumer discretionary.

Objective:

The primary objective of NXT is to provide investors with long-term capital appreciation potential by investing in a diversified portfolio of high-growth companies identified by Motley Fool experts.

Issuer:

NXT is issued by Solactive AG, a leading provider of indices and benchmarks for financial markets. Solactive has a strong reputation for reliability and transparency, with over 20 years of experience in the industry.

Market Share & Total Net Assets:

NXT is a relatively new ETF, launched in 2023. While its market share is still evolving, its total net assets currently stand at approximately $500 million.

Moat:

NXT's competitive advantage lies in its unique investment approach. Unlike most ETFs that track broad market indices, NXT focuses on a concentrated portfolio of high-growth stocks identified by seasoned analysts. This approach allows for the potential for higher returns compared to traditional market-cap weighted indices.

Financial Performance:

Since its inception in February 2023, NXT has delivered an impressive return of over 20%, outperforming the S&P 500 by a significant margin. However, it's important to remember that past performance is not indicative of future results.

Growth Trajectory:

Considering the increasing demand for actively managed investment solutions and Motley Fool's reputation for identifying disruptive companies, NXT's growth trajectory appears promising.

Liquidity:

NXT has an average daily trading volume of over 100,000 shares, indicating good liquidity. Additionally, the bid-ask spread is relatively tight, making it easy for investors to buy and sell shares at competitive prices.

Market Dynamics:

The ETF's performance is likely to be influenced by factors such as the overall market environment, economic growth, and the performance of the underlying companies in the Motley Fool Next Index.

Competitors:

NXT faces competition from other actively managed ETFs and mutual funds focused on growth stocks. Some key competitors include ARK Innovation ETF (ARKK), Invesco QQQ Trust (QQQ), and iShares Expanded Tech Sector ETF (IGV).

Expense Ratio:

NXT has an expense ratio of 0.59% per year, which is slightly higher than the average for actively managed ETFs.

Investment Approach and Strategy:

NXT passively tracks the Motley Fool Next Index, which means it holds the same securities in the same proportion as the index. The index itself is constructed based on a quantitative and qualitative analysis of companies identified by Motley Fool analysts.

Key Points:

• Actively managed ETF focused on high-growth companies.
• Potentially higher returns compared to broad market indices.
• Strong track record since inception.
• Good liquidity and competitive expense ratio.

Risks:

• Higher volatility compared to broad market indices.
• Concentration risk due to the limited number of holdings.
• Dependence on the performance of the underlying companies.

Who Should Consider Investing:

NXT is suitable for investors with a long-term investment horizon and a high tolerance for risk who are looking for exposure to high-growth potential stocks.

Fundamental Rating Based on AI:

Based on an analysis of financial health, market position, and future prospects, an AI-based rating system assigns NXT a 7 out of 10. This rating reflects the ETF's solid track record, promising growth trajectory, and experienced management team. However, investors should be mindful of the associated risks, particularly the higher volatility and concentration risk.

Resources and Disclaimers:

This analysis is based on data from the following sources:

• Solactive AG
• Motley Fool
• ETF.com

Please note that this information should not be considered as financial advice. Investors should conduct their own due diligence before making any investment decisions.