2 Motley Fool Mutual Funds Convert To ETFs

Motley Fool Asset Management completed converting two of its mutual funds into ETFs, bringing over about $942 million in assets in the change.

The Motley Fool Global Opportunities ETF (TMFG) and the Motley Fool Mid-Cap Growth ETF (TMFM) debuted on Cboe Global Markets Monday, both with expense ratios of 0.85%. That amounts to a fee cut of 25 and 24 basis points, respectively, from their mutual fund costs.

MFAM first announced plans to convert in late September.

TMFG is an actively managed fund where asset managers select holdings based on a “quality growth” strategy. In normal economic conditions, the ETF will invest at least 40% of its assets into ADRs for non-U.S. companies.

TMFG beat its benchmark FTSE Global All Cap Net Tax Index in 2020 as a mutual fund, with total returns of 35.89% versus the index’s 16.46%. However, it has only returned 4.17% year-to-date.

TMFM aims to outperform the Russell Midcap Growth Total Return Index with an active strategy of holding around 30 stocks at a time. The fund produced returns of 32.57% last year but trailed its benchmark by 2.3% and has produced returns of just 2.44% year-to-date.

The amount of funds brought into the ETF industry by way of mutual fund conversion now stands at about $36.7 billion so far this year as of launch, with the majority coming from Dimensional Fund Advisors’ conversion of $28.65 billion in assets at the time in June.

J.P. Morgan intends to convert four mutual funds into ETFs sometime in 2022, with those funds having a combined value of just over $9 billion as of Dec. 9.

Contact Dan Mika at [email protected], and follow him on Twitter