Behind the Ticker: Investing in Founders and the FFF ETF

Why It Matters

The Founders 100 ETF provides investors a disciplined way to tap the proven alpha of founder‑led companies, giving advisors a distinctive, high‑conviction product amid a saturated ETF landscape.

Key Takeaways

• Founder-led companies historically outperform S&P by 3‑5% annually
• FFF ETF selects 100 top founder firms from 200 largest
• Portfolio uses modified market‑cap weighting, capping individual holdings at 7%
• 80% rules‑based, 20% discretionary for IPO inclusion and adjustments
• Mid‑cap founder stocks contribute roughly half of fund’s excess returns

Summary

In this episode of Behind the Ticker, Brad Roth interviews Michael, the founder of the Founders 100 ETF (ticker FFF), to unpack the fund’s origin, methodology, and market positioning. Michael traces his three‑act career—from Wall Street to a tech startup and finally to creating an ETF that captures the performance premium of founder‑led public companies. He explains that a “founder” is the original creator still serving as the chief executive, and that a proprietary 30‑year data set shows such firms outpace the S&P 500 by roughly 3‑5% annually. The fund starts with the 200 largest founder‑run companies, then applies a Bernstein‑style factor model to select the 100 best candidates. Holdings are weighted by a modified market‑cap scheme that caps any single stock at 7% to avoid concentration, while the top ten names still account for about half of assets. The strategy is 80% rules‑based with a 20% discretionary sleeve used primarily to add qualifying IPOs between quarterly rebalances. Michael cites concrete examples to illustrate the founder advantage: Nvidia’s Jensen Huang’s relentless execution, Meta’s rapid pivot under Mark Zuckerberg, and Elon Musk’s bold integration of SpaceX and XAI. He emphasizes that founders combine vision with the willingness to make gritty, day‑to‑day decisions—traits that are difficult to replicate in non‑founder‑run firms. The implication for advisors is clear: FFF offers a systematic, low‑volatility vehicle to capture the historically documented founder premium, while differentiating itself in a crowded ETF market through targeted outreach and a blend of quantitative rigor with founder‑centric insight.

Original Description

In this episode of Behind the Ticker, Brad Roth sits down with Michael Monaghan, a Wall Street veteran (Goldman Sachs, Bernstein) turned entrepreneur, to discuss his latest venture: the Founders 100 ETF (FFF).

Monaghan pulls back the curtain on the founder effect—a data-backed phenomenon showing that companies still run by their original creators tend to outperform the S&P 500 by 3–5% annually. The discussion dives deep into the proprietary 30-year database his team built to track 11,000 stocks, uncovering why founders that run their company bring something unique to the table.

Highlights from the conversation include:

Monaghan’s journey took him from Goldman Sachs to building a defense-tech startup, and played an integral role in shaping his investment philosophy.

Finding alpha opportunity in founders, and why they’re the most effective at the helm of a company versus in the wings.

Monaghan gets into the fundamentals of FFF and how the strategy selects the top 100 founder-led companies using a rules-based factor model as well as active management benefits.

Tune into the conversation to find out what Monaghan thinks of SpaceX and what’s on the radar for FFF looking ahead. And as always, you can follow along with the conversation over at: https://www.etf.com/sections/podcasts/behind-ticker-fff-etf