The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  CoreValues Alpha Greater China Gr ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy's management team is about as experienced as others, but due to other weaknesses, the strategy earns a Below Average People Pillar. The strategy merits an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight 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 parent organization is industry standard, albeit with some strong attributes like continuity among portfolio managers, but is held back by portfolio managers with limited tenures at the firm. This earns the firm an Average Parent Pillar rating.

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 index on a risk-adjusted basis over the long term. CoreValues Alpha Greater China Gr ETF earns an Average Process Pillar rating. 

The leading factor in the rating is the firm's five-year retention rate of 100% over the period. The size of the portfolio management team also bolsters the process. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the experience of the management team, which averages six years at this fund.

 This strategy leans toward smaller, higher-growth companies than its average peer in the China Region 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. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to experience a significant loss. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also had more exposure to high-momentum stocks in recent years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. Additionally, the strategy has constantly maintained a defensive tilt, with exposure to high-quality stocks. 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 consumer cyclical and industrials relative to the category average by 28.1 and 5.4 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and healthcare, underweight the average by 16.3 and 6.1 percentage points of assets, respectively. The portfolio is positioned across 37 holdings and is relatively top-heavy. Of the strategy's assets, 58.9% are concentrated within the top 10 holdings, as opposed to the category’s 36.3% average.

Average

Process

CoreValues Alpha Greater China Gr ETF earns a Below Average People Pillar rating. The team is strengthened by the firm's five-year retention rate of 100%. However, the rating is limited by the combined average five-year excess return of each manager, which shows that the funds they manage have lagged their respective category average. Management team experience, which averages six years at this fund, also limits the team.


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.

Below Average

People

A short track record, in this case only five months, is usually cause for caution when evaluating asset managers. However, MSA Power Funds LLC has displayed qualities that suggest it can be trusted as much as the next asset manager, earning it an Average Parent Pillar rating. The firm currently manages one vehicle, with a total of $7.4 million under management across a team of four portfolio managers.  The firm's earliest portfolio manager hire, Charles A. Ragauss, has 11 years of industry experience with somewhat mixed or negative results. 
 
   

 As MSA Power Funds LLC builds and continues to develop a track record, its rating will be adjusted accordingly.

Parent

CoreValues Alpha Greater China Growth ETF

Collective Growth Corp. is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. The company was founded by Bruce Linton and Geoffrey W. Whaling in 2019 and is headquartered in Austin, TX.

CGRO seeks long-term capital appreciation by actively investing in 30 to 40 Chinese companies operating in high-growth sectors. The portfolio is constructed using core values approach that considers US national security, American values, and national interests.

When it comes to investing in China, Core Values Alpha (CVA) will take an “America-first approach” with its first ETF. Therefore, CVA will invest in China, provided “American interests are not compromised,” according to portfolio manager Ben Harburg.

CGRO Takes ‘America First' Approach to Investing in China

NEW YORK--(BUSINESS WIRE)--Core Values Alpha launches CGRO. Active ETF provides exposure to China growth story without compromising U.S. security, values or economic leadership.

News for CoreValues Alpha Greater China Growth ETF ETF (CGRO)