This is an actively managed equity ETF that does not track an index. It selects companies with strong competitive advantages, governance and financial health that still trade below intrinsic value, aiming for long-term compounding growth.

It suits investors who want to hold undervalued, high-quality stocks for the long term and rely on a manager's stock-selection skill rather than an index.

It is an ETF run by Longnook using an active (actively managed) approach.

The fund evaluates companies on valuation, competitive advantage, governance, financial structure and downside risk, and holds quality companies trading at a discount to intrinsic value. AI is a tool that supports the analysis, while the portfolio manager makes the trading decisions directly.

• A selective strategy focused on quality companies the market has misclassified
• Management that combines AI-assisted analysis with final human judgment
• No restrictions on region or market cap, with the ability to hold overseas stocks and even other ETFs

Assets under management (AUM) stand at $34.7M, and the expense ratio is 0.75% per year.

As a new, small fund, trading volume and bid-ask spreads may still be thin, so limit orders are recommended.

The fund was listed only recently, so there is not enough history to judge a meaningful return trend. Performance will depend heavily on the manager's stock selection and on how quickly the market re-rates the companies held.

Because it is in the early stage of launch, its asset base is small and its fund-flow history is short. Investor interest in active strategies that combine quality and value is expected to be the key driver of inflows.

Its strengths are a flexible strategy in which the manager hand-picks undervalued quality stocks, while its weaknesses are a short track record, small size and reliance on the manager.

Data on comparable listed funds with the same strategy is limited. Because it invests in undervalued companies with economic moats, it is comparable to wide-moat ETFs such as MOAT, and for those who want quality-stock factor exposure through a low-cost passive fund, quality factor ETFs such as QUAL are also an alternative. Both products track an index, so unlike this ETF, they involve no manager discretion.

These are the points to review before investing in the Longnook Uncommon Compounders ETF. As a new, actively managed fund, it is necessary to check costs, liquidity and track record first.

Depending on the manager's judgment, performance can diverge sharply from the market. Holding emerging-market stocks adds currency and political risk, and small funds also carry the risk of liquidation.

If you agree with an active strategy of holding undervalued quality stocks for the long term, it may be worth considering as a satellite holding. We suggest keeping the position small and watching performance until a track record builds up.