This is a passive ETF that tracks an index of US small and mid-cap stocks that meet biblical values criteria. It excludes companies that conflict with faith-based standards and diversifies across small and mid-sized businesses.

It suits investors who want to invest in US small and mid-cap stocks while reflecting faith-based values, and who can tolerate the volatility of smaller companies.

It is an ETF managed by Inspire using a passive (index-tracking) approach.

The ETF tracks an index that excludes companies engaged in businesses that conflict with biblical values criteria and diversifies across US small and mid-cap stocks that meet those standards. Unlike a typical small/mid-cap index, it applies faith-based criteria to filter holdings, while keeping a structure that spreads exposure across small and mid-sized companies.

• Biblical values criteria applied
• Faith-based selection of small and mid-cap stocks

Assets under management (AUM) stand at $320.9M, and the expense ratio (Expense Ratio) is 0.53% per year.

The main point of comparison is the faith-based screening criteria, versus general small/mid-cap ETFs that invest in small and mid-cap stocks without such screening.

US small and mid-cap stocks are driven by the economic cycle, interest rates, and risk appetite. They tend to be strong during economic recoveries and weak during slowdowns. Because faith-based screening excludes a limited number of stocks, performance tends not to differ greatly from that of a general small/mid-cap index.

Fund flows into small and mid-cap stocks split depending on the economic outlook, risk appetite, and demand for values-based investing. When interest in faith-based investing rises, money sometimes moves into related product groups. It is also worth noting that performance varies with the economy and risk appetite.

Its strengths are the reflection of values and small/mid-cap diversification, while small/mid-cap volatility, tracking differences, and market risk are considerations.

For fundamentally weighted large-cap exposure without such screening, FNDX is a direct alternative, and for another fundamentally weighted option, a product like PRF is also worth comparing. For fundamentally weighted small and mid-cap stocks, a product like FNDA can be reviewed as well. The three products shown in the table, FNDX, PRF, and FNDA, are managed on a fundamental-weighting basis without faith-based screening, so they differ in market cap range and selection method. This ETF's differentiator is its selection of small and mid-cap stocks based on biblical values criteria.

Here are the points to review before investing in ISMD. The reflection of values and small/mid-cap diversification are attractive, but small/mid-cap volatility, tracking differences, and market risk should be confirmed in advance. It is also a good idea to compare it with small/mid-cap and fundamentally weighted products that are managed without such screening.

Small-cap weakness during an economic slowdown and tracking differences from faith-based screening are the main variables for long-term performance, and screening can make its composition differ from a general small/mid-cap index. Declines can be steep during periods of small and mid-cap weakness.

It is a suitable candidate for investors who want to invest in US small and mid-cap stocks while reflecting faith-based values. For fundamentally weighted investing without such screening, consider products like FNDX and FNDA. If you want faith-based small/mid-cap exposure, it is advisable to compare this product alongside them before choosing.