The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Veridien Climate Action ETF to a Morningstar Medalist Rating of Neutral.  The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The longest-tenured manager has a wealth of experience, but due to other weaknesses, the strategy earns a Below Average People Pillar. The fund's assessment garners an Average Process Pillar rating. 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 benchmark on a risk-adjusted basis over the long term. Veridien Climate Action 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 rating. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by high costs across its parent firm's funds, whose fees rank in their category's most-expensive quintile on average. While this fund's costs are most relevant to investors, the pattern at the broader firm suggests it could do more to keep costs low.

 The investment strategy as stated in the fund's prospectus is as follows:

The investment seeks long-term growth of capital by investing in public companies with technologies and business models that contribute to climate change mitigation.  The fund seeks to achieve its investment objective by investing in equity securities (or corresponding American Depositary Receipts (“ADRs”)) of U.S. and foreign companies, whose activities, business models, or products make a substantial contribution to mitigating climate change. The fund invests in ADRs to gain exposure to foreign companies, and which may include those based in both developed and emerging markets.

Average

Process

Veridien Climate Action 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 suggests that the funds they manage have trailed their respective category average. The number of months that the management team has been running this vehicle together also holds the rating back. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.


Ariane Mahler, the longest-tenured manager on the strategy, boasts 12 years of listed portfolio management experience.  The team boasts an experienced corps of listed portfolio managers, with three others supporting Ariane Mahler. Together, they average 10 years of listed portfolio management experience.

Below Average

People

In a competitive industry, Veridien doesn't differentiate itself enough, leading to an Average Parent Pillar rating. Morningstar generates quantitatively driven content for managed investments covered by the Morningstar Quantitative Rating, collectively called MQR Analysis. This strategy's Parent Pillar MQR Analysis content was not generated because of insufficient data. To generate individualized content, MQR Analysis requires sufficient data to generate its framework of “mental models” designed to mimic content written by analysts. The Quantitative Parent Pillar uses an algorithm designed to predict the Parent Pillar rating analysts would assign the investment product if they covered it.

Parent

Veridien Climate Action ETF

CLIA is an actively managed, non-transparent ETF that seeks to invest in companies, via US-listed stocks or ADRs from around the world, that are considered to be making a substantial contribution to mitigating climate change. The fund utilizes the Precidian non-transparent model.

The Veridien Climate Action ETF (NYSE Arca: CLIA) has begun trading on the New York Stock Exchange. The fund targets companies with technologies and business models that contribute to climate change mitigation.

News for Veridien Climate Action ETF ETF (CLIA)