Motley Fool converts two mutual funds to ETFs

Dec 13th, 2021 | By | Category: Equities

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Motley Fool Asset Management has completed the conversion of two mutual funds, collectively housing $950 million in assets, into fully transparent, actively managed ETFs.

Motley Fool converts two mutual funds to ETFs

Motley Fool Asset Management has converted two mutual funds worth $950m into fully transparent, actively managed ETFs.

The Motley Fool Global Opportunities ETF (TMFG US) and Motley Fool Mid-Cap Growth ETF (TMFM US) have been listed on Cboe BZX Exchange.

Both ETFs harness Motley Fool’s analyst research to identify and invest in companies with “quality growth” characteristics.

The main difference between the two funds is that TMFG invests worldwide, allocating at least 30% of its assets to firms located outside of the US, while TMFM focuses on mid and small-cap companies listed in the US.

According to the ETFs’ prospectus documents, Motley Fool first screens for high-quality businesses characterized by strong market positions, manageable leverage, and robust free cash flow.

It then seeks to identify companies that are poised for future growth based on four criteria: corporate culture and incentives; the economics of the business; competitive advantages; and industry trajectory.

Each ETF comes with an expense ratio of 0.85%, representing a saving of 25 and 24 basis points for TMFG and TMFM, respectively, compared to the fees charged within the mutual fund wrapper.

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