AAM Sawgrass U.S. Small Cap Quality Growth ETF (SAWS)

Overview

The AAM Sawgrass U.S. Small Cap Quality Growth ETF (U.S. ETF Symbol: SQGR) is an actively managed exchange-traded fund focused on investing in U.S. small-capitalization companies exhibiting characteristics of both quality and growth. It seeks to identify companies with strong financial health, sustainable competitive advantages, and significant potential for future earnings expansion.

Reputation and Reliability

Asset Allocation & Management (AAM) is the investment advisor for the ETF. AAM is a registered investment advisor with a history of managing various investment strategies, aiming to provide institutional-quality investment solutions.

Management Expertise

The ETF is managed by a team of investment professionals at Sawgrass Asset Management, who utilize a proprietary research-driven process to identify and select securities.

Goal

To achieve long-term capital appreciation by investing in a diversified portfolio of U.S. small-cap quality growth companies.

Investment Approach and Strategy

Strategy: This is an actively managed ETF, meaning it does not aim to track a specific index but rather seeks to outperform its peers through security selection based on fundamental research.

Composition The ETF primarily invests in equity securities of U.S. small-capitalization companies, focusing on those with strong balance sheets, consistent earnings growth, high returns on equity, and favorable valuation metrics.

Market Share: Specific market share data for SQGR within the U.S. Small Cap Quality Growth ETF segment is not readily available in public databases as it is an actively managed fund with a niche focus.

Total Net Assets (AUM): 78800000

Key Competitors

• iShares Russell 2000 Growth ETF (IWO)
• Vanguard Small-Cap Growth ETF (VBK)
• Schwab U.S. Small-Cap Growth ETF (SCHG)

Competitive Landscape

The U.S. small-cap growth ETF space is highly competitive, dominated by large, passive index-tracking ETFs. SQGR, as an actively managed fund, differentiates itself through its specific quality growth selection criteria. Its advantages lie in the potential for alpha generation through expert stock picking. However, it faces disadvantages in terms of potentially higher fees and less predictable performance compared to passive alternatives. The active management approach may appeal to investors seeking differentiated exposure beyond broad market indices.

Historical Performance: As of recent data, SQGR has shown varied historical performance. It's crucial to review the latest fact sheets for precise year-over-year and longer-term returns. The performance is influenced by the manager's stock selection and the cyclical nature of small-cap growth stocks.

Benchmark Comparison: While SQGR does not track a specific benchmark, its performance is often evaluated against indices like the Russell 2000 Growth Index. Its active management aims to outperform this benchmark over the long term.

Expense Ratio: 0.78

Average Trading Volume

The average trading volume for SQGR is moderate, indicating generally sufficient liquidity for most retail investors, though institutional investors may need to be mindful of larger trade execution.

Bid-Ask Spread

The bid-ask spread for SQGR is typically in line with other actively managed small-cap ETFs, representing a small cost of trading that can be more pronounced for very frequent or large trades.

Market Environment Factors

The performance of SQGR is influenced by economic growth, interest rate policies, inflation, and investor sentiment towards small-cap and growth stocks. A strong economic outlook generally benefits small-cap growth companies, while rising interest rates can pressure growth valuations. Sector-specific trends within technology, healthcare, and consumer discretionary also play a significant role.

Growth Trajectory

As an actively managed ETF, SQGR's growth trajectory is directly tied to the success of its investment strategy and management's ability to adapt to market changes. Changes to strategy would typically involve adjustments to sector allocations or the criteria for selecting quality growth companies based on evolving market conditions and research insights.

Competitive Edge

SQGR's competitive edge stems from its active management by Sawgrass Asset Management, which employs a proprietary research process focused on identifying U.S. small-cap companies with robust quality and growth characteristics. This deep-dive approach aims to uncover undervalued companies with sustainable competitive advantages that might be overlooked by passive strategies. The fund's focus on a specific segment of the market allows for targeted expertise and potential alpha generation, offering investors a curated selection of promising small businesses.

Volatility

As a small-cap growth ETF, SQGR is expected to exhibit higher volatility compared to large-cap or value-oriented ETFs due to the inherent risks associated with smaller companies and growth-oriented investments. Historical data should be consulted for specific volatility metrics.

Market Risk

The primary market risks for SQGR include general equity market downturns, sector-specific risks affecting its holdings, and the volatility associated with small-capitalization stocks, which are often more sensitive to economic cycles and business challenges than larger companies. The growth-oriented nature of its holdings also exposes it to risks related to changing interest rates and market sentiment towards growth stocks.

Ideal Investor Profile

The ideal investor for SQGR is one seeking long-term capital appreciation and who has a higher risk tolerance. Investors should understand the dynamics of small-cap growth investing and be comfortable with potential volatility. Those looking for active management and a focused approach to quality growth companies would also find this ETF suitable.

Market Risk

SQGR is best suited for long-term investors who believe in the potential of small-cap U.S. companies and are looking for active management to identify opportunities within the quality growth segment. It is less suited for short-term traders or those seeking highly stable, low-volatility investments.

The AAM Sawgrass U.S. Small Cap Quality Growth ETF (SQGR) is an actively managed fund targeting U.S. small-cap companies exhibiting strong quality and growth metrics. Its active management aims for long-term capital appreciation, distinct from passive index followers. While offering potential for alpha, it carries higher volatility inherent to small-cap growth investing. SQGR is best suited for risk-tolerant, long-term investors seeking specialized exposure to promising smaller businesses.

Data Sources:

• ETF Provider Websites (AAM)
• Financial Data Aggregators (e.g., Morningstar, FactSet, ETFdb)

Disclaimers:

This information is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. ETF market share data can fluctuate and is an approximation.