Motley Fool Value Factor ETF (MFVL)

Overview

MFVL utilizes a passively managed approach aimed at tracking US companies the issuer identifies as undervalued based on their fundamental characteristics. The index meticulously screens high-conviction names within the Motley Fool recommended universe, selecting the top 100 companies that are assessed through rigorous valuation metrics. This selection process integrates three proprietary scores designed to gauge a company's value attractiveness: adjusted book-to-price, gross profits-to-EV (Enterprise Value), and total shareholder yield. The objective is to create a portfolio that reflects companies possessing strong fundamentals yet trading at lower valuations compared to their intrinsic worth. To ensure relevance and performance alignment, the index is rebalanced on a quarterly basis but may concentrate its holdings within specific industries based on market conditions. Additionally, the fund may leverage securities lending practices to enhance its income potential, creating opportunities for further returns on investment.

Products and Services

• Index Fund Tracking

  MFVL tracks an index comprising the top 100 undervalued US companies, which is carefully curated from the Motley Fool’s recommended universe, emphasizing the appeal of companies that exhibit sound fundamentals at low relative valuations.

• Proprietary Valuation Metrics

  The fund employs a unique methodology incorporating three proprietary scores—adjusted book-to-price, gross profits-to-EV, and total shareholder yield—to evaluate companies’ value attractiveness, ensuring informed investment decisions are made based on comprehensive analytical frameworks.

• Quarterly Rebalancing

  To maintain alignment with market dynamics, the index undergoes quarterly rebalancing. This process ensures that the holdings reflect current valuations and trends, optimizing performance against the ever-changing landscape of the stock market.

• Securities Lending

  The fund may engage in securities lending practices as a strategy to boost income. By lending out selected securities, the fund can generate additional revenue, which can contribute positively to overall fund performance.

• Industry Concentration

  While maintaining a focus on valuation, the index may concentrate investments in specific industries, depending on market opportunities. This targeted approach allows for potential enhanced performance when certain sectors exhibit stronger growth or valuation metrics, while also diversifying risk through strategic exposure.