The combination of a middling Process Pillar rating and a Low People Pillar rating limit  Global X 1-3 Month T-Bill ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The team managing the passive strategy earns a Low People Pillar. The strategy merits an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in corporate bonds and A rated bonds compared with category peers. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Global X 1-3 Month T-Bill ETF earns an Average Process Pillar rating. 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. The main driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. 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 the parent firm's five-year risk-adjusted success ratio of 28%. 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's subpar success ratio suggests that the firm could do better across its fund lineup.

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

The investment seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive 1-3 month US T-Bill Index.  The fund invests at least 80% of its total assets, plus borrowings for investment purposes (if any), and in the securities of the underlying index. The underlying index is designed to measure the performance of public obligations of the U.S. Treasury that have a remaining maturity of greater than or equal to 1 month and less than 3 months.  

  The portfolio holds assets with a higher average surveyed credit quality of AAA, compared with the typical peers' A, and it holds no non-investment-grade assets, despite the average peers' 3%. Lower-credit-risk strategies are often able to navigate bear markets more effectively.

Average

Process

Global X’s team receives a Low People Pillar rating. The most notable detractor from the rating is the parent firm's five-year success ratio of 28%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 58% also weakens the team. The experience of the management team, which averages four years at this fund, limits the rating as well.

People

Mirae Asset Global Investments is a Korean asset manager and a key player in the Asian financial market. It is a wholly owned subsidiary of Mirae Asset Financial Group, founded by Hyeon Joo Park. Park’s leadership and entrepreneurial spirit have been the driving force behind the global rise of Mirae, and he holds a majority stake in the business. 
Mirae Asset has grown significantly over the years (USD 198 billion as of December 2022) across a diversified platform, of which about 60% of assets are managed in South Korea. We believe that Mirae’s core mutual fund business in the Asia-Pac region is relatively strong. It has a collaborative structure, a strong and large investment team, low manager turnover, competitive fees, and a disciplined approach to product-development pointing toward better stewardship practices relative to peers in these markets. However, this is in stark contrast to its exchange-traded fund business, which accounts for 41% of the total assets. 
The firm’s ETF lineup focuses largely on high-risk thematic strategies that seem gimmicky, emphasizing short-term asset-gathering. The firm appears to leverage trending topics such as robotics and artificial intelligence, virtual reality and gaming, and cloud computing. There’s a notable concern regarding the potential liquidation of these funds since they seem to be designed around investment fads. Furthermore, these products are often expensive, especially compared with broadly diversified index funds and ETFs. Unsurprisingly, Mirae's reflexive product-development strategy has led to an increase in fund closures.
Our experience engaging with the MAGI team to gather critical information for the parent assessment has not been as positive. It hasn’t been as transparent in its disclosures, and unlike its peers, its responsiveness has been inadequate. We prefer firms with a more transparent corporate culture. Overall, these actions hold us back, and the firm retains its Parent Pillar rating of Average.

Parent

Global X 1-3 Month T-Bill ETF

CLIP tracks a market value-weighted index of USD-denominated, zero-coupon US Treasury bills with a time to maturity of one to three months.

Treasuries have been choppy in recent weeks amid resilient economic data points. Expect more volatility in the coming months, particularly for the longer maturities. Higher-yielding T-bill ETFs like CLIP continue to offer the best risk/reward.

CLIP: Target The Highest-Yielding Section Of The Treasury Curve

Global X Blockchain & Bitcoin Strategy ETF

Global X Blockchain ETF

Simplify Bitcoin Strategy PLUS Income ETF

Valkyrie Bitcoin Miners ETF

When developing their trading strategies, investors seek vehicles that not only provide diversification but also align with their risk tolerance and investment goals.

The best-performing ETFs of 2023

The Q4 refunding announcement has relieved rate pressure across the Treasury curve. Yet, debt levels and funding needs remain very high in the face of an increasingly price-sensitive buyer. Given the inverted yield curve, low-cost T-bill ETFs like CLIP still offer the best risk/reward.

CLIP: T-Bills Remain The Best Game In Town

Global X Emerging Markets Consumer ETF

Global X Emerging Markets ETF

Global X Carbon Credits Strategy ETF

Global X PropTech ETF

Global X US Cash Flow Kings 100 ETF

Global X ETFs continue to launch new products into the exchange traded fund space. On Wednesday, the firm launched the Global X U.S. Cash Flow Kings 100 ETF (NYSE Arca: FLOW).

New Global X ETF Goes With the Free Cash FLOW

Loncar Cancer Immunotherapy ETF

Advisorshares Managed Bitcoin Strategy ETF

Fidelity Disruptors ETF

VanEck Vectors Muni Allocation ETF

Global X MSCI Nigeria ETF

Invesco PureBeta FTSE Developed ex-North America ETF

Invesco PureBeta FTSE Emerging Markets ETF

Invesco PureBeta US Aggregate Bond ETF

Invesco PureBeta MSCI USA Small Cap ETF

Invesco Balanced Multi-Asset Allocation ETF

Invesco Conservative Multi-Asset Allocation ETF

Invesco Growth Multi-Asset Allocation ETF

Invesco Moderately Conservative Multi-Asset Allocation ETF

First Trust Developed International Equity Select ETF

AdvisorShares Drone Tech ETF

PIMCO Ultra Short Government Active ETF

Future Fund Long/short ETF

FT Cboe Vest US Equity Moderate Buffer Etf-June

iShares iBonds Dec 2033 Term Corporate ETF

iShares iBonds 2030 Term High Yield and Income ETF

iShares Copper and Metals Mining ETF

iShares Lithium Miners and Producers ETF

PIMCO Multi Sector Bond Active ETF

Clouty Tune Etf

UVA Dividend Value ETF

It was a busy week for ETF launches and closures. A total of 15 ETFs launched during the week shortened by the Juneteenth holiday, defying the typically slow launch count for weeks surrounding three-day weekends.

Last Week in ETFs: 15 Launches, Closures Continue Rapid Pace

Global X ETFs launched the Global X 1-3 Month T-Bill ETF (NYSE Arca: CLIP) on the New York Stock Exchange. The fund provides investors with exposure to short-term Treasuries.

With CLIP, Global X Targets Short-Term Treasuries

News for Global X 1-3 Month T-Bill ETF ETF (CLIP)