This ETF tracks the Motley Fool 100 Index. The index selects 100 stocks, based on liquidity criteria, from the top names in Motley Fool's investment newsletters (Stock Advisor, Rule Breakers and others) and its own database of analyst opinions, with a focus on growth-oriented large caps.

It suits long-term investors who share the Motley Fool investment philosophy and want to diversify across growth-focused US stocks.

Launched by Motley Fool Asset Management in 2018, it is a passively managed ETF that tracks an index.

The Motley Fool 100 Index selects 100 stocks from a pool of Motley Fool newsletter recommendations and top-rated names from its own analyst ratings, using liquidity and market capitalization criteria. Because it reflects Motley Fool's proprietary selection criteria rather than simple market-cap weighting, its portfolio composition may differ from that of a typical broad-index ETF.

• Tracks a proprietary selection index based on Motley Fool newsletters
• Higher weighting in growth and innovative companies than a standard market-cap-weighted index

Assets under management (AUM) stand at $2.1B, and the expense ratio is 0.50% per year.

Compared with broad-market ETFs of similar size, its fee level is on the high side. This reflects the cost of the Motley Fool brand and of running a proprietary index, so it is worth considering in advance how the fee difference could affect cumulative returns over a long holding period.

Given its growth-heavy portfolio, returns tend to be sensitive to the interest rate environment and the technology stock cycle. It tends to perform relatively well when technology and consumer stocks are strong, while in markets that favor value and defensive stocks it may show relative weakness against the broad market.

Retail investor interest in the Motley Fool brand and demand for growth-stock themes are the main drivers of inflows. Its fund flows follow a pattern similar to that of thematic ETFs focused on technology and innovative companies, and part of the demand is tactical in nature, which differs from core-allocation demand for broad-market ETFs.

Its growth-stock selection strategy offers the potential for excess returns in rising markets, but investors should also weigh its fee level and the concentration risk of growth stocks.

ITOT and SCHB shown in the table are low-cost broad ETFs that track the entire US market, while OEF covers S&P 100 large caps and IWV covers the entire Russell 3000 market. These carry lower fees than TMFC. Growth-oriented large-cap ETFs such as XLG, MGK and IWF are also worth comparing. What sets TMFC apart is that it uses a proprietary index reflecting Motley Fool's selection criteria.

Here are the key points to confirm before investing in TMFC. As an ETF based on a proprietary Motley Fool index, it is important to review its fee level, stock concentration and strategic fit thoroughly in advance.

Given its concentrated growth-stock portfolio, drawdowns may be larger than for broad-market ETFs during technology corrections or periods of rising rates. Its non-diversified index structure and relatively high fee level are also factors to consider from a long-term perspective.

Investors who share Motley Fool's investment philosophy and stock selection criteria can use it as a differentiated approach to a growth-stock portfolio. If cost efficiency is the priority, low-cost broad ETFs such as ITOT and SCHB are alternatives, and those who want to keep growth exposure while lowering fees can also look at IWF and MGK.