Motley Fool Next Index ETF

Motley Fool Next Index ETF (TMFX) tracks an index of small and midsize US companies recommended by The Motley Fool's analysts and newsletters, leaving out the 100 largest picks. It may appeal to investors who want those recommendations in a rules-based basket. The drawbacks: its 0.50% annual fee is well above the 0.09% average of similar small- and mid-cap funds, and it held only about $35 million as of August 31, 2026.

• Over the year to Oct 27, 2026, TMFX returned +12.7%, 3rd of 7 among similar funds.
• Its worst full calendar year was 2022 (-28.2%); its best was 2023 (+18.0%).
• The deepest fall in its price history was 34.3% (Dec 31, 2021 to Jun 16, 2022), recovered by Nov 8, 2024.

As of Aug 31, 2026, the fund held 197 securities; the ten largest made up 17.68% of assets.

• Over the three months to Aug 31, 2026, investors added a net $15K (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +1.34%, +0.79%, +6.84%.

TMFX is an index fund that aims to match the total return, before fees, of the Motley Fool Next Index, built by an affiliate of the fund's adviser, Motley Fool Asset Management. The starting pool is US companies that a Motley Fool newsletter actively recommends or that rank among the 150 highest rated in the firm's analyst database. The 100 largest by market value (a company's total share value) go into a sister index, the Motley Fool 100. The next ones that average at least $1 million a day in trading form the Next Index, usually 150 to 450 stocks.

Each stock is weighted by market value, so larger companies get bigger slices. Members and weights are reset quarterly, with cushion rules that limit how often companies near a cutoff flip in and out. Solactive AG, an independent firm, calculates the index. The fund generally owns every index stock but may hold a smaller sample that mirrors it, and keeps at least 80% of assets in index stocks.

Because it is passive, the fund won't drop a lagging stock unless the index removes it, or turn defensive in a falling market. It is non-diversified, meaning it may hold larger stakes in fewer companies. It may also lend securities to brokers, risking loss or delay if a borrower defaults.

• TMFX charges 0.5% a year, versus an average of 0.09% for the similar funds below (7th of 7, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $51 in the first year and $628 over 10 years (assuming a 5% annual return).

It concentrates in small and midsize US stocks drawn from one firm's recommendations, fell about 34% in 2022 and charges far more than similar index funds, so it fits better as a small add-on than as a foundation.

TMFX could add small and midsize US companies from The Motley Fool's recommendations, such as Moderna and Workday, but it swings hard. Launched in December 2021, it has no record from the 2008 or 2020 crashes. In the 2022 bear market it fell about 34% from its December 31, 2021 peak to June 16, 2022, and needed about 29 months, until November 8, 2024, to recover. Its worst calendar year, 2022, lost 27.9%. Anyone taking withdrawals then would have locked in losses.

Income is minimal: the trailing 12-month yield was 0.04% as of October 27, 2026, paid once a year. Costs are high: the 0.50% annual fee means $51 on $10,000 in year one and $628 over 10 years in the SEC's standard example, versus a 0.09% average for similar funds. Past results don't predict the future, and a plan needs to weigh the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).