Motley Fool Asset Management Plans Big Expansion into ETFs

The court jester would like to offer the duke a suite of ETFs.

That’s right — The Motley Fool’s asset management business is prepping a line of new funds, with plans to more than triple the number of ETFs it currently provides. On Tuesday, Motley Fool Asset Management, which is owned by the personal finance publication, filed for Securities and Exchange Commission approval of  15 ETFs. Those products differ significantly from the three active and three passive ETFs in its roster, expanding into themes such as equal weight and low volatility.

“When we talk to advisors and investors, we know that every investor comes to the table with a different risk factor and set of assets they own,” said Bill Mann, chief investment strategist at Motley Fool Asset Management. “The funds that we now have provide good service to certain types of investors, but we wanted to come out with a much broader suite that will allow Motley Fool Asset Management to meet people where they are.”

Not Even Fooling Around

The firm is planning to roll out the forthcoming ETFs slowly — not all 15 will launch at once, Mann said. He did not say which products would come to market first, but that may depend on the SEC’s approval process. The new line of funds is all index-based, so the company is not adding any asset-management staff in connection with the product expansion. “An index runs itself,” Mann said. “Once you’ve designed an index, it becomes a perpetual motion machine.”

Many people are familiar with the widely-read publication but potentially less aware of the company’s financial products. Motley Fool Asset Management launched at the “inauspicious time” of 2008, in part as a response to the poor judgment that individual investors often show when markets take a dive, exiting holdings with bad timing, Mann said.

The firm’s $2.5 billion ETF line includes:

• Active products, all of which have been converted from mutual funds: The Motley Fool Global Opportunities ETF (TMFG), Small-Cap Growth ETF (TMFS) and Mid-Cap Growth ETF (TMFM).
• Passive ETFs: The Motley Fool 100 Index ETF (TMFC), Capital Efficiency 100 Index ETF (TMFE) and Next Index ETF (TMFX).
• The forthcoming products: The Motley Fool Aggressive Growth Factor, Smart Volatility Factor, Crowdsource, 100 Equal Weight, Value Factor, Next Equal Weight, Enhanced Income, 100 Minimum Volatility, International Opportunities, Next Minimum Volatility, Large Cap Growth, Rising 100, Momentum Factor, Rising 100 Minimum Volatility and Multi Factor ETFs.

Fool’s Game: If there is a commonality among the forthcoming products, it’s that they are designed to reach a wider audience. That, and they would invest in stocks chosen by the parent company’s research. “They are based entirely on the proprietary research, along with, for a few of them, the analysis of the MFAM investing team,” Mann said. “The Motley Fool has been doing this for more than 30 years.”

Editor’s note: The Motley Fool is a minority investor in The Daily Upside.