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Should Motley Fool 100 Index ETF (TMFC) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Motley Fool 100 Index ETF (TMFC - Free Report) , a passively managed exchange traded fund launched on 01/30/2018.
The fund is sponsored by Motley Fool Asset Management. It has amassed assets over $1.01 billion, 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 usually 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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.11%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 38.50% of the portfolio. Financials and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 9.85% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 55.66% 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 added about 24.95% so far this year and is up about 38.69% in the last one year (as of 09/23/2024). In the past 52-week period, it has traded between $37.94 and $56.30.
The ETF has a beta of 1.08 and standard deviation of 21.79% for the trailing three-year period. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
Motley Fool 100 Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, TMFC is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $138.89 billion in assets, Invesco QQQ has $290.99 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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?
Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Motley Fool 100 Index ETF (TMFC - Free Report) , a passively managed exchange traded fund launched on 01/30/2018.
The fund is sponsored by Motley Fool Asset Management. It has amassed assets over $1.01 billion, 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 usually 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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.11%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 38.50% of the portfolio. Financials and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 9.85% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 55.66% 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 added about 24.95% so far this year and is up about 38.69% in the last one year (as of 09/23/2024). In the past 52-week period, it has traded between $37.94 and $56.30.
The ETF has a beta of 1.08 and standard deviation of 21.79% for the trailing three-year period. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
Motley Fool 100 Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, TMFC is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $138.89 billion in assets, Invesco QQQ has $290.99 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.