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Should Motley Fool 100 Index ETF (TMFC) Be on Your Investing Radar?
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Launched on 01/30/2018, the Motley Fool 100 Index ETF (TMFC - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Motley Fool Asset Management. It has amassed assets over $392.37 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.50%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.32%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 42.60% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 14.18% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc (GOOG - Free Report) .
The top 10 holdings account for about 58.08% of total assets under management.
Performance and Risk
TMFC seeks to match the performance of the MOTLEY FOOL 100 INDEX before fees and expenses. The Motley Fool 100 Index is an index of US stocks, recommended by The Motley Fool, LLC (TMF) analysts, either in the Motley Fool IQ analyst opinion database or TMF research publications. From this recommendation pool, the index chooses the 100 largest US companies by market cap and weights them according to market capitalization. The index undergoes quarterly reconstitution.
The ETF has lost about -28.31% so far this year and is down about -24.72% in the last one year (as of 10/27/2022). In the past 52-week period, it has traded between $30.06 and $44.66.
The ETF has a beta of 1.08 and standard deviation of 27.18% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Motley Fool 100 Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, TMFC is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $68.74 billion in assets, Invesco QQQ has $152.18 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Motley Fool 100 Index ETF (TMFC) Be on Your Investing Radar?
Launched on 01/30/2018, the Motley Fool 100 Index ETF (TMFC - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Motley Fool Asset Management. It has amassed assets over $392.37 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.50%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.32%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 42.60% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 14.18% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc (GOOG - Free Report) .
The top 10 holdings account for about 58.08% of total assets under management.
Performance and Risk
TMFC seeks to match the performance of the MOTLEY FOOL 100 INDEX before fees and expenses. The Motley Fool 100 Index is an index of US stocks, recommended by The Motley Fool, LLC (TMF) analysts, either in the Motley Fool IQ analyst opinion database or TMF research publications. From this recommendation pool, the index chooses the 100 largest US companies by market cap and weights them according to market capitalization. The index undergoes quarterly reconstitution.
The ETF has lost about -28.31% so far this year and is down about -24.72% in the last one year (as of 10/27/2022). In the past 52-week period, it has traded between $30.06 and $44.66.
The ETF has a beta of 1.08 and standard deviation of 27.18% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Motley Fool 100 Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, TMFC is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $68.74 billion in assets, Invesco QQQ has $152.18 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.