CCM Global Equity 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 least expensive 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 an overweight 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 earns an Average People Pillar rating. Management team members could invest more of their own money in the fund. 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 continuity among portfolio managers but is held back by relatively short-tenured portfolio managers.

Analyst Rating

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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. Ccm Global Equity ETF earns an Average Process Pillar rating. 

The main contributor to the rating is the firm's five-year retention rate of 100% over the period. Low costs across its parent firm's funds, whose fees, on average, rank in the cheapest quintile of their respective category, also influence the rating. The pattern of low fees at the firm suggests that it is focused on delivering strong results for investors. Lastly, the process is limited by the experience of the management team, which averages two months at this fund.

 This strategy leans toward smaller, deeper value companies than its average peer in the Global Large-Stock Blend Morningstar Category. Analyzing additional factors, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. 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 strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. This strategy also has tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over these years. 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 energy and real estate relative to the category average by 3.9 and 2.7 percentage points, respectively. The sectors with low exposure compared to category peers are technology and financial services, with technology underweighting the average portfolio by 6.6 percentage points of assets and financial services similar to the average. The portfolio is composed of 341 holdings and is relatively top-heavy. Of the strategy's assets, 44.7% are concentrated within the top 10 holdings, as opposed to the category’s 25.7% average.

Average

Process

Ccm Global Equity ETF earns an Average People Pillar rating. The main contributor to the rating is the firm's five-year retention rate of 100%. A low cost, with fees that rank in its category's cheapest fifth, also strengthens the rating. Fees detract from net returns, so the team has a lower expense hurdle to overcome. Lastly, the rating is limited by the experience of the management team, which averages two months at this fund.


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

People

Even though CCM Investment Group's limited history of two months as a firm is working against its rating, they've proven to be an industry-standard steward, warranting an Average Parent Pillar rating. The firm currently manages one vehicle across a team of two portfolio managers. As a new firm, there is very low manager industry experience--on average, less than six months. The firm's earliest portfolio manager hire, James Yaworski, has only one year of industry experience. 
 
   

 As CCM Investment Group builds and continues to develop a track record, its rating will be adjusted accordingly.

Parent

CCM Global Equity ETF

CCMG is an actively managed fund that broadly invest in equity securities across all market capitalizations from around the world, including emerging markets.

The New York Stock Exchange announced the launch of the CCM Global Equity ETF (NYSE Arca: CCMG) on Thursday. According to its summary prospectus, the actively managed ETF invests primarily in equities selected by its sub-advisor, CCM Investment Group.

News for CCM Global Equity ETF ETF (CCMG)