The Free Markets ETF (FMKT)

On our desk, we are evaluating FMKT strictly through the lens of political catalysts. The fund's premise relies entirely on capturing the upside of the new administration's broad unwinding of federal rules. While the narrative around deregulation acting as the new economic stimulus is compelling—especially with industrial sectors staging powerful rotations—we remain cautious about execution. Discretionary management introduces timing risks that are hard to backtest cleanly.

Reviewing the quantitative metrics, FMKT's risk profile looks quite weak. It carries a Morningstar portfolio risk score of 72, making it aggressive compared to typical large blend peers. Yet, it delivers low relative returns across measured windows, failing the fundamental risk-compensation test. The Sharpe and Sortino ratios simply do not measure up against a passive SandP 500 benchmark tracker.

Looking at the macroeconomic intermarket signals highlighted by Michael Gayed, the timing of the Great Rotation aligns with a normalization of the 10-year/2-year Treasury yield spread and an ISM Manufacturing PMI of 52.7. When analyzing positioning for candidates or portfolio allocations, understanding how these cyclical indicators drive sector shifts into Energy, Materials, and Industrials is critical.

From a market sentiment perspective, FMKT is attempting to front-end a structural policy shift before the broader market fully prices it in. The fund is up roughly 10% since its June 2025 inception, but with only about $15 million in total assets and average daily volume hovering around 6,240 shares, liquidity constraints remain a prominent talking point among our institutional allocators.

As a risk manager, the combination of a 0.76% expense ratio and a non-diversified or specialized active mandate requires strict monitoring. Even with a 1-year beta of 0.81 suggesting some dampening against broader equity volatility, the lack of a robust multi-year track record and thin underlying liquidity means position sizing must be carefully managed to avoid slippage.