The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Kurv Yield Prm Stgy Apple (AAPL) ETF to a Morningstar Medalist Rating of Negative.  Fees are a weakness here. The strategy's lofty fees are a high hurdle to clear, as it is priced within the second-costliest quintile among peers.  

 The longest-tenured manager has a wealth of experience, but due to other weaknesses, the strategy earns a Below Average People Pillar. The strategy merits an Average Process Pillar rating.  High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And momentum exposure is rooted in holding stocks currently on a winning streak. The strategy's parent organization still has a way to go to reach the industry standard, evidenced by a lack of inside investments from portfolio managers and relatively short-tenured portfolio managers. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Kurv Yield Prm Stgy Apple (AAPL) ETF earns an Average Process Pillar rating. 

The most notable contributor to the rating is the firm's five-year retention rate of 100% over the period. The size of the portfolio management team also strengthens the process. With three portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by high costs across its parent firm's funds, whose fees rank in their category's highest-cost quintile on average. While this fund's costs are most relevant to investors, the pattern at the broader firm suggests it could do more to keep fees down.

 This strategy leans toward smaller, more growth-oriented companies than its average peer in the Large Blend Morningstar Category. Analyzing additional factors, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also had more exposure to high-momentum stocks in recent years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. In addition, this strategy has not maintained a defensive tilt, demonstrated by low exposure to the quality factor. This means the fund avoids holding firms that are consistently profitable, growing, and have solid balance sheets. Lacking this ballast, the fund's prospects could rest on its ability to beat peers during economic booms. In recent months, the strategy also had less Quality factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

Average

Process

Kurv Yield Prm Stgy Apple (AAPL) ETF earns a Below Average People Pillar rating. The team is strengthened by the firm's five-year retention rate of 100%. However, the rating is limited by the number of months that the management team has been running this vehicle together. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy. Management team experience, which averages seven years at this fund, also detracts from the team.

Below Average

People

Kurv ETFs is a relative newcomer with only five months of operation as a firm under its belt. It is too nascent to prove whether it has an advantage over peer asset managers, earning it a Below Average Parent Pillar rating. The firm currently manages 35 vehicles, with a total of $4.8 million under management across a team of three strategy managers.  The firm's earliest portfolio manager hire, Garrett Paolella, has 10 years of industry experience. 
 
   

 As Kurv ETFs builds and continues to develop a track record, its rating will be adjusted accordingly.

Parent

Kurv Yield Premium Strategy Apple AAPL Etf

AAPY seeks to provide current income and capped gains on the Apple stock (AAPL) through a synthetic covered call strategy, collateralized by cash and short-term fixed-income instruments. The actively managed fund uses both standardized exchange-traded and FLEX options.

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