Q: If I were to reduce my overweight positions in a few FANGMA stocks and instead use Evolve’s TECH.U ETF for more balanced long-term tech exposure, how would you assess the trade-off? Other than the MER, are there any concerns with TECH.U—such as index methodology, rebalance schedule, liquidity, tracking error, or concentration—that should factor into the decision?”
5i Research Answer:
TECH.U is not huge, about $130M in assets, but that should be liquid enough if one is not a giant trader. It follows an equal weight index, so is rebalanced to prevent a single stock from having too high of a weighting. But there are variabilities prior to rebalancing. Right now there is a 5 percentage point gap between the size of the largest and smallest positions. But other than this, we would not see any additional concerns here in terms of its set up nor methodology.