Michael Monaghan, founder and portfolio manager of the Founder 100 ETF (FFF), argues that founder-led companies are better equipped to navigate economic uncertainties and the AI arms race. These leaders possess the vision, motivation, and authority to pivot their companies through challenges. Monaghan notes that only 17% of S&P 500 companies and 23% of NASDAQ 100 companies are founder-led, highlighting FFF's concentrated exposure to this entrepreneurial leadership.
The FFF ETF, launched on December 18, 2025, aims to capitalize on what Monaghan's research, spanning 11,000 stocks over 30 years, suggests is a historical outperformance of 3% to 5% annually against broader equity benchmarks. The fund currently holds companies like Palantir Technologies, NVIDIA, Oracle, and Meta Platforms. Despite being down approximately 5% year-to-date, it has seen a nearly 10% gain in the last month.
Monaghan provided specific examples of founder-led companies in the fund's portfolio. He defended Oracle founder Larry Ellison's use of debt for AI infrastructure, calling it a prudent investment. He also highlighted Palantir's strong financial performance, noting its "rule of 40" score of 127, which is well above the "spectacular" threshold of 40. Furthermore, he praised Meta Platforms CEO Mark Zuckerberg's ability to redirect capital towards high-growth areas after past metaverse investment criticisms, suggesting Wall Street may be underestimating his strategic flexibility.
The Founders 100 ETF (FFF) is actively managed but primarily systematic, tracking the Founder-Led Index. This index selects 50 founder-led companies based on free float adjusted market capitalization and liquidity criteria, with a strict definition of "founder-led" meaning the original creator must still be in a C-suite or equivalent role. The fund's construction begins with the 200 largest publicly traded founder-led companies, utilizing a factor model to select the top 100. It employs a modified market-cap weighting with a 7% position cap at quarterly rebalancing, allowing excess capitalization to flow to smaller, faster-growing companies. The expense ratio is 0.75%.
Monaghan views FFF as an improvement over indexes like the NASDAQ, which he believes have diluted their innovation focus. FFF exhibits an 85% active share against the S&P 500 and 70% against the QQQ, indicating significant differentiation from traditional active managers. The fund's ability to add IPOs between quarterly rebalances helps capture emerging founder-led opportunities, which is a key part of its 80% rules-based and 20% discretionary construction.
