How does the ISMD ETF work?

The ISMD ETF, or the ""Inspire Small/Mid Cap Impact ETF,"" is a unique financial instrument that stands out in the world of exchange-traded funds (ETFs). In this article, we will delve into the inner workings of the ISMD ETF, exploring its key features, investment strategy, and the impact it seeks to create in the financial market.

ISMD ETF: Underlying and Exposure

To truly understand how the ISMD ETF operates, it's essential to grasp what it tracks and how it accomplishes its objectives. This ETF primarily invests in the component securities of the Small/Mid Cap Weight Index. The Small/Mid Cap Weight Index, curated by Inspire Investing, LLC, targets publicly traded domestic small and mid-cap equity securities of companies with market capitalizations between $1 billion and $3.5 billion.
However, what sets the ISMD ETF apart is its unique Inspire Impact Score® methodology. This proprietary selection approach evaluates a security's alignment with biblical values and its positive impact on customers, communities, workplaces, and the world. Companies with a score of zero or higher are considered eligible for investment, while those involved in activities conflicting with biblical values are excluded. These activities include the production of abortifacients, participation in abortion philanthropy, engagement in abortion legislation, and more.
The ETF's portfolio consists of companies within the market capitalization range of $1 billion to $3.5 billion, with an equal weighting approach. This balance ensures diversification and spreads risk effectively.

ISMD overlap How does work the ISMD ETF?

ISMD ETF: Benefits to Invest

Investing in the ISMD ETF offers numerous advantages to both individual and institutional investors. Here are some key benefits:
Ethical Investing: The ISMD ETF aligns with investors who prioritize ethical and values-based investing. By excluding companies engaged in activities contrary to biblical values and including those with positive impacts, it provides an ethical investment option.
Diversification: With its equal weighting approach and exposure to a broad range of small and mid-cap companies, the ISMD ETF provides diversification, reducing the risk associated with investing in individual stocks.
Long-Term Potential: As the fund focuses on companies with positive impacts and growth potential, investors may benefit from the long-term appreciation of these stocks.
Transparency: The ETF's Inspire Impact Score® methodology ensures transparency in the selection process, allowing investors to understand the criteria used for inclusion and exclusion.

ISMD ETF: Considerations Before Investing

While the ISMD ETF offers several advantages, it's crucial to consider certain factors before investing:
Risk Tolerance: Like all investments, the ISMD ETF carries inherent risks. Investors should assess their risk tolerance and financial goals before investing.
Ethical Alignment: Investors should ensure that the ETF's ethical criteria align with their own values and beliefs.
Market Volatility: As an equity-based ETF, the ISMD ETF is subject to market fluctuations. Investors should be prepared for potential price volatility.
Portfolio Review: Periodically reviewing the ETF's holdings and its alignment with evolving ethical standards is advisable.

Conclusion

In conclusion, the ISMD ETF offers a unique investment opportunity for those seeking both financial returns and ethical alignment in their portfolios. With its Inspire Impact Score® methodology, it distinguishes itself in the ETF market by promoting values-based investing. However, it's essential for investors to conduct thorough research and consider their individual financial goals and values before adding this ETF to their portfolios.

Disclaimer: This article does not provide investment advisory services and is for informational purposes only.

Investing in financial instruments involves risk, including the potential loss of principal. Past performance does not guarantee future results. Before making any investment decisions, consult with a qualified financial advisor."

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