A strong management team and sound investment process underpin Congress Large Cap Growth ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The management team's considerable industry experience drives an Above Average People Pillar rating for the strategy. The strategy's investment approach stands out and earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in volatility exposure and has an overweight in liquidity exposure compared with category peers. Low volatility exposure is attributed to stocks with a lower standard deviation of returns. And a high liquidity exposure is rooted in stocks with higher trading volumes, lending managers more flexibility. The strategy has a solid parent that earns an Above Average Parent Pillar rating. This firm has had a favorable lineup success ratio and overall reasonable fees.

Analyst Rating

NVIDIA

Eaton

Eli Lilly

Microsoft

Apple

Exxon Mobil

DexCom

Costco

Amazon

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. Congress Large Cap Growth ETF earns an Above Average Process Pillar rating. 

The leading factor in the rating is the parent firm's five-year risk-adjusted success ratio of 100%. 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 firm's five-year retention rate of 83% also buttresses the process. Lastly, the process is limited by being an actively managed strategy. Historical data, such as 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 opted for smaller market-cap companies, compared with others in the Large Growth Morningstar Category.  But in terms of investment style, it is on par with peers. Looking at additional factor exposure, this strategy has continually underweighted stocks that have a lower standard deviation of returns compared with Morningstar Category peers over the past few years. These companies have historically been a valuable ballast to steady portfolio returns during market downturns. Different from its historical appetite, however, the Volatility factor was in line with the Morningstar Category average in recent months. Given the high trading volume of holdings, this strategy has been exposed to liquid assets during these years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. In addition, this strategy has favored high-quality stocks compared to peers over the years, which could be a good option for downside risk protection. 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 basic materials and industrials relative to the category average by 5.8 and 3.6 percentage points, respectively. The sectors with low exposure compared to category peers are communication services and technology, underweight the average by 6.0 and 5.1 percentage points of assets, respectively. The portfolio is composed of 42 holdings and is less top-heavy than peers. Specifically, 34.0% of the strategy's assets are concentrated within the top 10 fund holdings, as opposed to the category’s 53.2% average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 7% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Above Average

Process

Congress Large Cap Growth ETF earns an Above Average People Pillar rating. The most important driver of the rating is its parent firm's five-year success ratio of 100%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The portfolio managers' outperformance at the funds they run, as measured by their combined three-year manager excess returns, also bolsters the rating. 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.


Daniel A. Lagan’s veteran status, with over 25 years of listed portfolio management experience, brings a wealth of experience to the table. The average Morningstar Rating of the strategies they manage is 4.0 stars, demonstrating excellent risk-adjusted performance compared to category peers. Despite having a small team, the two listed managers boast over 25 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

Congress earns an Above Average Parent Pillar rating because of its ability to stand out in an increasingly competitive field. The longevity of the firm's product lineup has been impressive, demonstrated by a five-year risk-adjusted success ratio of 100%. This means 100% of products have both survived and beaten their respective category median on a risk-adjusted basis. A high success ratio indicates good performance and provides insight into a firm’s discipline around investment strategy and product development. The firm stands out from a cost perspective for its open-end and exchange-traded funds, demonstrating a firm-wide commitment to minimizing costs and maximizing investors' returns. On average, the firm's fees on its funds are in the second cheapest quintile of its category. Average tenure of seven years among the longest-tenured managers at Congress is on par with peer firms. In isolation, seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions.

Parent

Congress Large Cap Growth ETF

CAML is an actively managed fund that seeks long-term capital growth through investments in large-cap companies believed to be experiencing or will experience earnings growth.

Congress Smid Growth Etf

Congress Asset Management Company has launched two active equity growth ETFs on the New York Stock Exchange. The ETFs seek long-term capital appreciation by targeting stocks with the potential for above-average long-term earnings and/or cash flow growth.

News for Congress Large Cap Growth ETF ETF (CAML)