Alpha Blue Capital US Sm-Md Cp Dyn ETF's Average Process Pillar and People Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy gets an Average Process Pillar. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and an underweight in momentum exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And low momentum exposure is rooted in holding stocks that are not currently on a winning streak and instead holding those that managers believe are undervalued. The strategy's industry-standard management team still needs to prove it has a competitive advantage and earns an Average People Pillar rating. The strategy's parent organization doesn't stand out, earning the firm an Average Parent Pillar rating. It has displayed a handful of investor-friendly attributes including low portfolio manager turnover but is held back by relatively short-tenured portfolio managers.

Analyst Rating

Vanguard Mid-Cap Value ETF

Vanguard Mid-Cap ETF

Vanguard Small Cap Value ETF

Vanguard Small-Cap ETF

Corteva Inc

RenaissanceRe Hlds

Graphic Packaging Hld

Global Payments

Centene

Arrow Electronics

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Alpha Blue Capital US Sm-Md Cp Dyn ETF earns an Average Process Pillar rating. 

The largest contributor to the rating is the firm's five-year retention rate of 100% over the period. Management team experience, which averages 26 years at this fund, also supports the rating. Lastly, the process is limited by being an actively managed strategy. Historical data, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

 This strategy, over time, has consistently held more undervalued companies, compared with peers in the Mid-Cap Blend Morningstar Category. But in terms of size exposure, it is similar to the average. Analyzing additional factors, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last few years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has had lower exposure to momentum stocks over peers in recent years. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. Similarly, in recent months, the strategy also had less exposure to the Momentum factor than peers. 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. 

 The portfolio is overweight in financial services and energy relative to the category average by 5.4 and 2.7 percentage points, respectively. The sectors with low exposure compared to category peers are industrials and technology, underweight the average by 4.3 and 3.0 percentage points of assets, respectively. The portfolio is composed of 106 holdings and is relatively top-heavy. Of the strategy's assets, 43.6% are concentrated within the top 10 holdings, compared to the category’s 15.4% average.

Average

Process

Alpha Blue Capital US Sm-Md Cp Dyn ETF earns an Average People Pillar rating. The most important factor influencing the rating is the firm's five-year retention rate of 100%. A low cost, with fees that rank in its category's least expensive 20%, also contributes to the rating. A higher expense ratio reduces net returns, so low costs give this team an advantage. Lastly, 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.

People

ALPHA BLUE CAPITAL's short track record of three months has not stopped it from demonstrating that it can be trusted as much as the next asset manager. As a result, it earns an Average Parent Pillar rating. The firm currently manages one vehicle, with a total of $9.5 million under management and only one portfolio manager. ALPHA BLUE CAPITAL may be the new kid on the block, but David M. Dabora is not, bringing over 25 years of industry experience.  
 
   

 As ALPHA BLUE CAPITAL builds and continues to develop a track record, its rating will be adjusted accordingly.

Parent

Alpha Blue Capital US Small-Mid Cap Dynamic ETF

ABCS is an actively managed fund-of-funds that aims for long-term capital appreciation by investing in US small- and mid-cap stocks and ETFs.

Cabana Target Leading Sector Aggressive ETF

Cabana Target Leading Sector Conservative ETF

Cabana Target Leading Sector Moderate ETF

iShares U.S. Fixed Income Balanced Risk Factor ETF

iShares High Yield Bond Factor ETF

iShares Investment Grade Bond Factor ETF

iShares North American Tech-Multimedia Networking ETF

Invesco Raymond James SB-1 Equity ETF

SPDR S&P 500 ETF Trust

Cabana Target Drawdown 10 ETF

Cabana Target Drawdown 13 ETF

iShares USD Bond Factor ETF

VictoryShares Free Cash Flow ETF

VictoryShares Small Cap Free Cash Flow ETF

Texas Capital Texas Small Cap Equity Index ETF

FT Cboe Vest US Equity Moderate Buffer ETF-Decemebr

iShares U.S. Digital Infrastructure and Real Estate ETF

FT Cboe Vest US Equity Buffer & Premium Income ETF - December

The last full week of the year was a busy one, with 18 new ETFs launching. Among the rolled-out funds were offerings from Texas Capital, PlanRock, PGIM, John Hancock, SP Funds, Bancreek, KB Asset Management, ProShares, and WisdomTree.

This Week in ETFs: VictoryShares Adds Small-Cap FCF Fund

GREENBRAE, Calif. , Dec. 19, 2023 /PRNewswire/ -- Alpha Blue Capital Management LP is pleased to announce the launch of Alpha Blue Capital US Small-Mid Cap Dynamic ETF listed on the NASDAQ with the ticker: ABCS.

Alpha Blue Capital Management LP Enters Active ETF Space: Launches Alpha Blue Capital US Small-Mid Cap Dynamic ETF

News for Alpha Blue Capital US Small-Mid Cap Dynamic ETF ETF (ABCS)