If You Invested in The Free Markets ETF (FMKT)

The Free Markets ETF (FMKT) is an actively managed exchange-traded fund that focuses on companies expected to benefit from shifts in the regulatory environment that are supportive of free market dynamics. According to its sponsor and sub-advisers, the fund targets U.S.-listed equity securities of businesses that may profit from deregulation trends across multiple sectors of the economy.

Investment objective and core strategy

The Free Markets ETF seeks to provide long-term total returns. Its approach centers on investing in companies that its investment team believes are well-positioned to gain from regulatory relief and reductions in compliance burdens. The fund’s strategy reflects the view that federal regulation represents a significant cost for U.S. businesses and that easing these constraints can potentially improve productivity and profitability.

The fund is described as actively managed, with portfolio positions determined by an investment committee. The managers focus on firms with high sensitivity to regulatory costs and on areas where deregulatory efforts and executive orders are having a noticeable impact.

Use of AI and research process

The Free Markets ETF employs a proprietary AI-driven screening system as part of its research process. According to the fund’s disclosures, this system cross-references regulatory databases, company filings, and earnings calls to identify companies that are discussing specific regulatory relief opportunities in real time. The AI tool is used as a screen to help find candidates that fit the fund’s investment strategy.

Sub-advisers to the fund, including Point Bridge Capital, SYKON Asset Management, and Tactical Rotation Management, use this artificial intelligence screening to support their analysis. They then apply fundamental financial review and an investment committee process to determine which stocks they believe are most likely to benefit from deregulation.

Actively managed ETF structure

The Free Markets ETF is structured as an exchange-traded fund that trades under the ticker symbol FMKT. It invests primarily in U.S. equity securities across all market capitalizations. The fund’s managers describe a three-step investment process summarized as “target, score, build,” which is used to construct a focused portfolio of companies that, in their view, are best positioned to benefit from regulatory relief.

The ETF may also allocate a limited portion of its assets to U.S.-listed exchange-traded products that seek exposure to digital assets. The fund’s disclosures state that it may invest up to a small percentage of net assets in exchange-traded products that provide exposure to Bitcoin or Ether, while not investing directly in Bitcoin, Ether, or other digital assets.

Deregulation-focused theme

The Free Markets ETF is positioned around the theme of deregulation and free market dynamics. Its managers emphasize the economic impact of regulatory costs on U.S. companies and households, and they seek to identify businesses where reduced regulatory burdens could support margin expansion or operational improvements. The fund’s sub-advisers highlight sectors where they see notable regulatory shifts, including areas such as healthcare, financial services, energy, and cryptocurrency-related industries.

The ETF’s investment thesis is based on the idea that regulatory environments can change due to political, economic, and social factors. The fund’s strategy aims to respond to these changes by focusing on companies that appear to be benefiting from deregulatory measures or are expected by the managers to do so.

Role of sub-advisers and investment committee

The Free Markets ETF is sponsored by Tidal Investments LLC, a Tidal Financial Group company that specializes in bringing exchange-traded funds to market. The fund is sub-advised by multiple firms with experience in regulatory impact analysis and sector-specific investing. These sub-advisers collaborate to apply the AI screening results, evaluate regulatory developments, and select portfolio holdings.

According to the fund’s description, positions are determined by what the investment committee believes are the stocks most likely to benefit from deregulation. This committee-driven approach reflects both quantitative inputs from the AI system and qualitative judgments based on the sub-advisers’ perspectives on regulatory trends.

Digital asset exposure via ETPs

The fund’s strategy allows for indirect exposure to digital assets through underlying exchange-traded products. The disclosures note that the ETF may invest a limited portion of its net assets in U.S.-listed exchange-traded products that seek exposure to Bitcoin or Ether. This introduces risks associated with digital assets and their markets, while the fund itself does not directly hold these digital assets.

The fund’s documents highlight that this indirect exposure is subject to the risks of the underlying digital asset markets, including volatility and regulatory uncertainty. The allocation to such products is capped at a stated percentage of net assets.

Risk considerations

The Free Markets ETF notes several risk factors associated with its strategy. Investing in companies that may benefit from deregulatory measures involves uncertainty, as regulatory trends can shift in ways that are difficult to predict. Political, economic, and social developments can influence whether deregulation continues, reverses, or varies by sector.

The fund is actively managed and may experience high portfolio turnover, which can have implications for trading costs and tax considerations. It is also described as a relatively new fund with limited operating history, which means there is less historical performance data compared with more established products.

In addition, the fund’s potential indirect exposure to digital assets through exchange-traded products introduces risks associated with those assets, including price volatility and evolving regulatory treatment.

Exchange listings and market presence

The Free Markets ETF trades under the symbol FMKT and is listed on NYSE Arca. It has also completed a dual listing on NYSE Texas, an exchange that launched in Texas. According to its sponsor, this additional listing is intended to expand market reach, enhance liquidity, and increase visibility among investors who focus on Texas-based markets.

The dual listing is presented as a way to connect the ETF’s free-market investment thesis with a region described as business-friendly and supportive of deregulation. By trading on both NYSE Arca and NYSE Texas, the fund aims to attract interest from institutional investors, financial advisors, state investment funds, and retail investors who access these venues.

Thematic focus across sectors

The Free Markets ETF’s managers describe the fund as targeting companies across multiple sectors where regulatory changes can have a meaningful impact. Examples mentioned in the fund’s materials include energy, healthcare, financial services, manufacturing, and cryptocurrency-related industries. The common thread is sensitivity to regulatory costs and the potential for deregulation to influence profitability and operations.

By concentrating on this theme, the ETF seeks to offer exposure to companies that, in the view of its managers, stand to gain from regulatory relief. The fund’s approach combines thematic analysis of policy trends with company-level research informed by AI screening and fundamental evaluation.