BNY Mellon Women's Opportunities ETF's Average Process Pillar and People Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a sizable cost advantage over competitors, priced within the second-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 momentum exposure compared with category peers. 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 management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Microsoft

Amazon

NVIDIA

JPMorgan Chase & Co

Uber

AbbVie

Mastercard

Shopify

Progressive

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. BNY Mellon Women's Opportunities ETF earns an Average Process Pillar rating. 

The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 58%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent firm's superior risk-adjusted performance, as shown by its average overall Morningstar Rating of 3.3 stars, also strengthens the process. Lastly, the process is limited by the parent firm's five-year retention rate of 60%, which suggests it could do more to retain its portfolio managers.

 This strategy leans toward smaller, higher-growth 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 had more exposure to high-momentum stocks over its peers in recent years. Momentum is based on the premise that stocks that have recently outperformed will continue to outperform, and those that have underperformed will stay behind. 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. 

 The portfolio is overweight in technology and healthcare relative to the category average by 9.7 and 4.9 percentage points, respectively. The sectors with low exposure compared to category peers are industrials and consumer defensive, underweight the average by 4.2 and 2.9 percentage points of assets, respectively. The portfolio is composed of 51 holdings and is less top-heavy than peers. Specifically, 41.7% of the strategy's assets are concentrated within the top 10 fund holdings, as opposed to the category’s 48.8% average.

Average

Process

BNY Mellon Women's Opportunities ETF earns an Average People Pillar rating. Julianne D. McHugh, the longest-tenured manager on the strategy, boasts 24 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.3 stars, indicating that their risk-adjusted returns exceeded the category average. Despite having a small team, the two listed managers boast 13 years of listed portfolio management experience. As a team, they manage two investment vehicles together, with mixed prospects. The asset-weighted average Morningstar Medalist Rating across the strategies is Neutral. This means, in aggregate, they are not positioned to deliver positive alpha. 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.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

BNY Mellon Investment Management, the asset-management arm of financial conglomerate Bank of New York Mellon, has been busy with changes since CEO Hanneke Smits ascended to her seat in October 2020. The firm’s seven wholly owned but autonomous investment affiliates mostly focus on distinct asset classes. Smits streamlined this arrangement in February 2021 by consolidating most of BNYIM’s active fixed-income and equity capabilities into two affiliates, Insight and Newton, respectively, and by trimming overlapping investment teams; further, the firm sold private-credit-focused Alcentra to Franklin Templeton in May 2022 partially because of that boutique’s operational complexity. Smits believes these organizational changes should help BNYIM’s affiliates manage their strategies more effectively. Yet the firm’s broad strategy lineup remains bloated owing in part to the affiliates’ openness to customized client requests regardless of asset size. 

Smits has sought to improve collaboration across the firm’s investment teams, including by pushing affiliate CEOs to replace “star managers” with comanagers on most strategies. This is a noteworthy effort, but it led to the departure of some managers who didn’t want to partake in the new model. Amid the uncertainty of how these and other changes ultimately shake out, the firm retains its Average Parent rating.

Parent

BNY Mellon Women's Opportunities ETF

BKWO is an actively managed portfolio of US companies that are believed to be financially attractive and promote gender equitable opportunities. The fund invests in companies of any market capitalization and any industry.

BNY Mellon Innovators ETF

BNY Mellon Investment Management launched two actively managed thematic ETFs. The BNY Mellon Women's Opportunities ETF (BKWO) and the BNY Mellon Innovators ETF (BKIV) begin trading today on the Nasdaq.

News for BNY Mellon Women's Opportunities ETF ETF (BKWO)