A simple idea powers the Fool 100:
We’d rather own high-quality businesses, rather than low-quality businesses.
We believe that, over the long-term, stronger companies will outperform weaker companies. As shareholders, we will eventually reap the rewards of this outperformance.
It’s just common sense really! And yet many popular indices ignore this simple principle. Take the S&P 500, the world’s most widely followed index, as an example. Instead of focusing on quality, the S&P 500 blindly picks the market’s largest companies by market cap. That means when you buy any financial product tied to the S&P 500 such as an ETF or index fund... Yes, you may end up with exposure to some of the best companies in the world, but you may also end up with exposure to some low-quality business for no other reason than these low-quality businesses happento be big.
A few painful examples: Enron was included in the S&P 500 in 2001, and Lehman Brothers was included in 2008. That’s not to say that every company included in the Fool 100 will be a winner, because we will surely have some losers. The point, simply, is that we believe we possess a better chance of avoiding exposure to companies like Enron and Lehman Brothers, because the Fool 100 tries to only include high quality companies with smart management teams.
That is why we believe an index of high-quality companies with smart management teams can outperform a portfolio built by blindly picking 500 of the market’s biggest stocks.
What is the Motley Fool 100 Index?
The "Fool 100" is a new market-cap weighted index that measures the performance of The Motley Fool’s 100 largest investment ideas.
Every company included in the Motley Fool 100 index is incorporated and listed in the US and is either an open-buy recommendations in one of our research publications, Motley Fool Stock Advisor and Motley Fool Rule Breakers, or ranks among the top 150 US stocks in The Motley Fool’s Fool IQ research database.
This means a company can only be included in the Fool 100 after undergoing a painstaking selection and review process by our analysts. The same review and selection process has led to the success of many of the Motley Fool’s publications, and this process gives the Fool 100 an advantage over indices that blindly pick companies based on size.
How has the Motley Fool 100 Index performed over time?
The Fool 100 significantly outpaces the S&P 500 ever since analysis begain in 2007. Head over to the Performance page to see the entire analysis.
What are the constituents of the Motley Fool 100 Index?
The Fool 100 is made up of the 100 largest open recommendations and highest rated stocks in the Motley Fool's "Fool IQ" research database.
Here is the breakdown by sector for the Motley Fool 100 Index:
Here are the Top 10 holdings within the Motley Fool 100 Index:
|Alphabet Inc C-Shares||7.4%|
|Berkshire Hathaway Inc-Cl B||3.4%|
|Visa Inc-Class A Shares||3.2%|
|Johnson & Johnson||3.1%|
|Mastercard Inc-Class A||2.4%|
|Unitedhealth Group Inc||2.0%|
Head over to the Methodology page for more details.
How do I invest in the Motley Fool 100 Index?
Because the Fool 100 is an index, you cannot invest in the Fool 100 directly. However, all of the index's constituents meet liquidity requirements. Therefore, the Fool 100 can be used by financial institution to create an index-linked investment product, such as an ETF, which would seek to match the index composition and performance as closely as possible, and certain affiliates of The Motley Fool may offer Fool 100-linked products and services.
- Bloomberg Ticker: FLCUS Index
- ISIN: DE000SLA4Z00
- WKN: SLA4Z0
- Index Inception Date: 12/29/2006
- Dividend Yield: 1.00%
- Country Allocation: USA, 100%
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