Motley Fool Small-Cap Growth ETF

Motley Fool Small-Cap Growth ETF (TMFS) is an actively managed fund. Motley Fool Asset Management picks 30 to 40 small US companies for their quality and growth potential instead of tracking an index. It charges 0.85% a year and paid no distributions in the year through October 27, 2026. Because the portfolio is concentrated and non-diversified, it can swing hard: it fell nearly 40% in 2022.

• Over the year to Oct 27, 2026, TMFS returned -2.1%.
• Its worst full calendar year was 2022 (-33.1%); its best was 2023 (+25.4%).
• The deepest fall in its price history was 39.8% (Dec 31, 2021 to Jun 16, 2022), recovered by Nov 6, 2024.

As of Aug 31, 2026, the fund held 33 securities; the ten largest made up 43.21% of assets, and 16.41% sat in cash and money-market holdings.

• Over the three months to Aug 31, 2026, investors withdrew a net $4.3M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +6.75%, -2.08%, +1.33%.

TMFS is actively managed. Its adviser, Motley Fool Asset Management, picks the stocks rather than copying an index. The fund puts at least 80% of net assets in small US-listed companies with growth traits. "Small" means within the size range of the Russell 2000 Growth Total Return Index. As of October 31, 2025, that index's median company was worth $1.3 billion and its largest $32.8 billion. The index sets only the size limits, not what the fund buys.

The adviser uses a "quality growth" style and judges each company on four points. The first is management, culture and incentives. The second is business economics, such as return on capital and margins. The third is competitive advantage, such as pricing power or network effects. The fourth is trajectory: what the business might look like in ten or more years. The portfolio usually holds 30 to 40 positions. The fund is non-diversified, which means single stocks can carry large weights. It can lean heavily on one sector but keeps any one industry below 25% of assets.

There is no fixed rebalancing schedule. The adviser reviews holdings regularly and sells when a stock looks expensive compared with its value or the business outlook changes. The prospectus reports 40% portfolio turnover, a measure of how much of the portfolio was traded. The fund aims to stay fully invested rather than time the market. It held no derivatives as of August 31, 2026, and it may lend securities to brokers.

• TMFS charges 0.85% a year, versus an average of 0.85% for the similar funds below.
• Using the prospectus's standard example, $10,000 invested would cost about $87 in the first year and $1,049 over 10 years (assuming a 5% annual return).

A concentrated, actively managed small-cap growth fund that pays no income and has fallen close to 40% fits better as a small, higher-risk slice than as a foundation.

TMFS can add exposure to small US growth companies chosen for quality, but the ride has been rough. Its price history starts at the end of 2021, so it doesn't cover 2008 or the 2020 crash, although the prospectus shows a 57.9% gain for calendar 2020. In the 2022 bear market it fell 39.4% between January 3 and June 16, 2022. It didn't regain that level until November 6, 2024, about 29 months later. Its worst calendar year was 2022, with a loss of about 33%. Anyone who had to sell in mid-2022 would have locked in that loss. The fund paid no distributions in the year through October 27, 2026, so it provides no income. In the SEC's standard example, its 0.85% expense ratio costs $87 in the first year on $10,000. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.