Financial market history is littered with examples of high-flying growth companies being founded and steered by true entrepreneurs. The Entrepreneur 30 Fund (NYSEArca: ENTR) is one exchange traded fund that focuses on those firms.
The Entrepreneur 30 Fund tries to reflect the performance of the Entrepreneur 30 Index, which is comprised of 30 U.S. companies with the highest market capitalizations and composite scores based on six criteria referred to as entrepreneurial standards.
“We incorporate a proprietary investment model which applies a global, bottom-up filtering process. Our 15 ‘entrepreneur’ factors utilize both qualitative and quantitative criteria,” according to EntrepeneurShares. “We apply our criteria to identify publicly traded entrepreneurial companies. History has shown that our model is effective across different market caps and geographical locations. We focus on management and leadership.”
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The factors screened include management, which requires set factors regarding a company’s management must be met for a company to be included, such as the turnover among the top five executives within a company as compared to other companies in the broader universe must be met.
Up more than 89% from its March lows, ENTR is proving its unique methodology works. The fund is higher by almost 56% over the past year, beating the S&P 500 by a better than 3-to-1 margin over that span.
ENTR’s profitability and revenue screens are particularly relevant in the current market environment, one that’s dictating that quality matters.
The revenue screen requires a company meet predetermined criteria regarding revenue over a static threshold to be included, including, among other things, the amount and growth of revenue of a company as compared to predetermined benchmarks must be met.
The profitability screen requires a company meet predetermined criteria regarding net income over a static threshold to be included, including the net income of a company as compared to predetermined benchmarks must be met for the company to be included.
Nearly three years old, the $153 million ENTR allocates over 57% of its weight to technology stocks and 22.58% to consumer cyclical names. The top 10 holdings combine for nearly half the fund’s roster.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.