Weakness in Newday Ocean Health ETF's Process and People Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The strategy gets a Low Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy's portfolio management team has comparable experience to other strategies in the industry. However, due to other weaknesses, the strategy earns a Low People Pillar rating. The strategy's parent organization still has a way to go to reach the industry standard, evidenced by  personal investments from portfolio managers and a cohort of unseasoned portfolio managers. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

Xylem

Tetra Tech

Ecolab

Kroger

Walmart

Jacobs Solutions Inc

Stantec

Badger Meter

McKesson

Costco

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. Newday Ocean Health ETF earns a Low Process Pillar rating. 

The primary detractor from the rating is the turnover of management across its parent firm. The firm's asset-weighted manager tenure of two years suggests it could do more to retain portfolio managers. Management team experience, which averages six years at this fund, also limits the process. Lastly, being an actively managed strategy detracts from the process. Historical data, such as Morningstar's Active/Passive Barometer, shows that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

 This strategy leans toward smaller, more value-oriented companies compared with its average peer in the Large Blend Morningstar Category. 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 also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Lacking this ballast, the fund's prospects could rest on its ability to beat peers during economic booms. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Moreover, this strategy has been underweighting momentum stocks during these 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. In recent months, the strategy also had less Momentum 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 industrials and consumer defensive relative to the category average by 35.3 and 23.4 percentage points, respectively. The sectors with low exposure compared to category peers are technology and financial services, underweight the average by 24.3 and 13.4 percentage points of assets, respectively. The strategy owns 27 securities and is diversified among those holdings. In its most recent portfolio, 45.8% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category’s 48.8% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 40% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Process

Newday Ocean Health ETF earns a Low People Pillar rating. The largest detractor from the rating is the managers' failure to consistently outperform peers at the funds they run, as measured by their combined three-year manager excess returns. Management team experience, which averages six years at this fund, also holds the rating back. The turnover of its management team detracts from the rating further. Specifically, the fund last had a manager change 11 months ago.


None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

People

Since its inception only one year ago, Newday Impact has not demonstrated qualities that as stewards, build confidence. At this stage, the firm earns a Below Average Parent rating. Newday Impact currently manages two vehicles, with a total of $2.9 million under management and a roster of five portfolio managers.   

 Newday Impact does not differentiate itself on costs. Across the open-end and exchange-traded product lineup, its average net expense ratio places it in the middle quintile of firms.  

 To upgrade the firm's rating, Newday Impact needs to build a consistent track record of positive investor experience.

Below Average

Parent

Newday Ocean Health ETF

AHOY actively invests in companies from around the world that make positive contributions to Ocean Health or those perceived to have concern and attentiveness to CO2 emissions, product waste, and discharge into bodies of water.

NEW YORK , Feb. 2, 2024 /PRNewswire/ -- Newday Impact , a San Francisco-based asset management and financial technology company that brings authentic, responsible investing to those seeking investments that reflect their values, today announced the launch of its new ocean health exchange traded fund AHOY 2.0 (NYSE: AHOY). AHOY 2.0 leverages Newday Impact's deep history in impact investing and strong relationships with grassroots nonprofit organizations on the forefront of ocean conservation and change.

Newday Impact Announces Launch of New AHOY 2.0 Ocean Health ETF

The Newday Ocean Health ETF is managed by an impact manager that provides authentic portfolios for socially responsible investors. AHOY invests in industry-leading companies that contribute positively to Ocean Health, which Newday defines as CO2 emissions, discharges, lifecycle waste, and environmental protectionism.

A First Look At The Newday Ocean Health ETF

Newday Impact, a San Francisco-based asset management and financial technology company focused on socially responsible investing, today launched the Newday Ocean Health ETF (NYSE Arca: AHOY). Newday Impact's first exchange traded fund is focused on protecting and restoring healthy marine ecosystems.

Newday's AHOY Invests in Ocean Health

Over 80% of Portfolio Actively Involved in Protecting Ocean Resources  SAN FRANCISCO , June 7, 2022 /PRNewswire/ -- Newday Impact , a San Francisco-based asset management and financial technology company that brings authentic responsible investing to those seeking investments that reflect their values, today launches the Newday Ocean Health ETF (NYSE: AHOY). The fund – Newday Impact's first exchange traded fund and one of the few ETFs dedicated to protecting and restoring healthy marine ecosystems – builds on the company's five years of impact investing and strong relationships with grassroots nonprofit organizations working to mitigate environmental damage to the world's oceans.

News for Newday Ocean Health ETF ETF (AHOY)