Motley Fool Asset Management, which is affiliated with the well-known investor website, announced today that it will be converting its two mutual funds to ETFs by the end of the year. The affected funds are the $677 million MFAM Global Opportunities Fund and the $318 million MFAM Mid Cap Growth Fund.
The two ETFs will list on Cboe Global Markets with expense ratios of 0.85% each. They have not been assigned tickers yet.
The converted funds will join the $526 million Motley Fool 100 Index ETF (TMFC) and the actively managed $186 million MFAM Small-Cap Growth ETF (MFMS), which launched in January and October 2018, respectively.
“We’ve been considering a conversion since we first launched TMFC. We have really been sitting back and watching the first few [mutual-fund-to-ETF conversions] go through. We wanted to focus on doing it right over doing it first,” said Motley Fool Asset Management President Kelsey Mowrey, noting the “shareholder friendly benefits” that ETFs offer such as transparency, lower fees and availability.
While passively managed TMFC relies on an index that uses The Motley Fool’s database of top-ranked U.S. stocks to select its holdings, the actively managed funds all use a similar methodology that focuses on “four core pillars,” which include a company’s management and culture; the economics of its business; its competitive advantage; and trajectory.
The first-ever mutual-fund-to-ETF conversions were carried out by Guinness Atkinson back in March, with Dimensional Fund Advisors following on its heels a few months later. Since then, J.P. Morgan has announced its intention to convert four of its existing mutual funds into ETFs, with the transition set to complete in 2022.
Motley Fool Asset Management Chief Investment Officer Bryan Hinmon said in a press release that the firm was looking forward to launching more products—both passive and actively managed—in the future. The firm is also rebranding itself and embracing its ties to The Motley Fool website it is affiliated with. Future funds will carry the Motley Fool brand name as opposed to the abbreviated version "MFAM."
Contact Heather Bell at [email protected]