The Motley Fool 100 Index ETF

The Asset Management team of the Motley Fool has jumped into the ETF world and launched a new product called “The Motley Fool 100” (ticker: TMFC). The 25 year old company was founded by brothers Tom and David Gardner and is located in the DC suburb of Alexandria, VA. The fund will be listed on the CBOE ETF marketplace. The ETF will be a market-cap weighted index, which measures the performance of the 100 largest companies in the Motley Fool universe of stock picks centered around all of their services such as their flagship Stock Advisor, Rule Breakers, Hidden Gems, and the Million Dollar Portfolio. The chosen 100 are open buy recommendations from these services.

Having been a member of the Stock Advisor, I bet that such core companies such as AAPL, AMZN, and NVDA will be part of the 100, as well as Netflix. Every company included in the index is incorporated and listed in the U.S.

The Motley Fool has calculated the returns of the 100 as if it were open in 2007, and in 2017 for example, outperformed the S&P 500, 31.19% to 21.83%. In the sector breakdown of the 100 index, the Information Technology sector reigns supreme with a 47.1% weight, with Consumer Discretionary in 2nd with a weight of 19.4%. Healthcare, Financials, and Industrials round out the next 3 spots with a weight of 12.7%, 7.5%, and Industrials 4.6% respectively.

From the Motley Fool, “At the Motley Fool, we are looking for the companies that are going to drive innovation for the next decade and beyond, which may explain the current overweighting of the index to the tech sector and underweighting to the other sectors, such as industrials and energy.”

Here are some weightings of individual stocks in the Motley Fool 100:

Apple: 8.2%
Alphabet: 7.7%
Microsoft: 6.8%
Amazon: 6.5%
Facebook: 5.1%

The TMFC traded at $19.12 on 2/6/2018.