Weakness in iMGP Berkshire Dividend Growth ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The longest-tenured manager has a wealth of experience, but due to other weaknesses, the strategy earns a Low People Pillar. The strategy gets a Below Average Process Pillar rating.  Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' 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 parent organization still has a way to go to reach the industry standard, evidenced by portfolio managers with modest tenures and a below-average success ratio across its lineup. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

Microsoft

Chevron

Nucor

Bank of America

JPMorgan Chase & Co

QUALCOMM

AbbVie

Apple

Lockheed Martin

Norfolk Southern

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. iMGP Berkshire Dividend Growth ETF earns a Below Average Process Pillar rating. 

The process is bolstered by the experience of the management team, which averages 22 years at this fund. However, the rating is held back by the parent firm's five-year risk-adjusted success ratio of 33%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 75% also detracts from the process.

 This strategy, over time, has preferred larger market-cap companies, compared with others in the Large Value Morningstar Category.  But in terms of investment style, it is on par with peers. Analyzing additional factors, this strategy continually held some stocks with low trading volume over the last few years. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. In the latest month, the strategy was also less exposed to the Liquidity factor compared with Morningstar Category peers. This strategy has also demonstrated a bias towards lower-momentum stocks over its peers over the past years. Momentum investors tend to expect stocks that have done well recently to continue to do so in the short term. Momentum approaches can entail higher turnover and trading costs since the top stocks can often change. Similarly, in recent months, the strategy also had less exposure to the Momentum factor than peers. During the last few years, this strategy has also tilted in favor of high-quality stocks, those that have demonstrated low financial leverage and solid return on equity. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it weather downturns better than Morningstar Category peers. In this month, the strategy also had more exposure to the Quality factor over 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 technology and industrials relative to the category average by 5.0 and 4.7 percentage points, respectively. The sectors with low exposure compared to category peers are communication services and financial services, underweight the average by 5.7 and 2.6 percentage points of assets, respectively. The portfolio is positioned across 37 holdings and is relatively top-heavy. Of the strategy's assets, 41.6% are concentrated within the top 10 holdings, as opposed to the typical peer's 27.4%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 0% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Below Average

Process

iMGP Berkshire Dividend Growth 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. The parent firm's five-year success ratio of 33% also detracts from the team. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup. The turnover of its management team limits the rating further. Specifically, the fund last had a manager change six months ago.


The team is backed by Kenneth Krogulski, CFA, the longest-tenured manager on the strategy, who brings over 25 years of listed portfolio management experience.  Kenneth Krogulski, CFA is supported by an experienced team, being able to draw on four additional listed managers, who average 22 years of listed portfolio management experience. None of the portfolio managers here invest in this fund. This hurts the rating because manager investment would align their interests with the strategy's investors.

People

iM Global lags peer asset managers in a number of stewardship qualities, resulting in a Below Average Parent Pillar rating. With an average tenure of seven years among the longest-tenured managers at iM Global, the firm is on par with peers. Seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions. The firm’s lineup has demonstrated industry-average durability. Its three-year success ratio is 40%, meaning that 40% of strategies have both survived and beaten their respective category median. A firm's success ratio indicates relative performance and provides insight into a firm’s discipline around investment strategy and product development. iM Global has had high portfolio management turnover over the past five years compared with peers, detracting from its rating, as long-term stability tends to go together with positive results.

Parent

IMGP Berkshire Dividend Growth ETF

BDVG seeks income and long-term capital appreciation through an actively managed portfolio of 30 to 40 US large-cap companies with high, stable, and growing dividends.

Berkshire's (BRK.B) first-quarter results reflect higher earnings in insurance-underwriting and insurance-investment income, other controlled businesses and non-controlled businesses.

Berkshire (BRK.B) Q1 Earnings Rise Y/Y, Segment Results Solid

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Hello! This is markets reporter Isabel Wang bringing you this week's ETF Wrap. In this week's edition, I spoke with CFRA's Aniket Ullal, head of ETF data and analytics, about thematic ETF ideas and investment categories for the second half of 2023.

Here are ETF themes and categories investors may want to consider in the second half of 2023

iM Global Partner has launched a new dividend growth ETF on the New York Stock Exchange with Berkshire Asset Management. The iMGP Berkshire Dividend Growth Equity ETF (NYSE Arca: BDVG) is an active, fully transparent ETF that targets dividend-paying equities.

iMGP Launches Dividend Growth Equity ETF With Berkshire AM

News for IMGP Berkshire Dividend Growth ETF ETF (BDVG)