Weakness in Cabana Target Leading Sector Mod ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The portfolio maintains a sizable 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 Low People Pillar. The strategy earns a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable underweight position in the Europe-Developed region and has an overweight in the real estate sector compared with category peers. The strategy's parent organization is industry standard, albeit with some strong attributes like overall attractive fees, but is held back by an unstable portfolio manager lineup. This earns the firm an Average Parent Pillar rating.

Analyst Rating

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Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, clearly defined, repeatable execution. Cabana Target Leading Sector Mod ETF earns a Below Average Process Pillar rating. The process is strengthened by the firm's five-year retention rate of 88% over the period. However, the rating is held back by the parent firm's five-year risk-adjusted success ratio of 8%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. Management team experience, which averages five years at this fund, also holds the rating back.

 Its equity sleeve is not meaningfully different than the typical peer's size and value-growth exposure. The strategy has three region or sector biases compared to category peers. The most meaningful is its consistent underweight in the Developed Europe region. It also routinely positions more assets in the real estate sector. And finally, in the fund's most recent portfolio, more assets were allocated to developed markets regions. Although, this bias has not existed over time. 

 The portfolio is overweight in real estate and technology relative to the category average by 41.5 and 23.1 percentage points, respectively. The sectors with low exposure compared to category peers are healthcare and financial services, underweight the average by 12.7 and 11.6 percentage points of assets, respectively. The portfolio is overweight in North America by 15.7 percentage points compared with the category average, and Emerging Europe's allocation is similar to its peers. The regions with low exposure compared to their category peers are Developed Europe and United Kingdom, underweight the average by 7.0 percentage points and 2.5 percentage points, respectively.

 In the portfolio's fixed-income sleeve, credit and interest rate risk are relatively low compared with the category average. More concretely, the portfolio's average credit rating is AAA compared with the category average’s BBB and has a shorter average duration of 0.3 year versus the category average of 5.4 years.

Below Average

Process

Cabana Target Leading Sector Mod ETF earns a Low People Pillar rating. The most important factor influencing the rating is the experience of the management team, which averages five years at this fund. The combined average three-year excess return of each manager also weakens the team. It shows that the funds they manage have lagged their respective category's average return. The parent firm's five-year success ratio of 13% further detracts from the team. 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.


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

People

Cabana is an industry-standard asset manager, leading to an Average Parent Pillar rating. A strength of Cabana is that its product shelf of open-end and exchange-traded funds is, on average, offered at a minimal cost, suggesting that it considers what's best for its investor base. On average, fees for funds are in the second-cheapest quintile of respective category peers. Cabana has undergone a bout of turnover in the past five years, as seen in its lower-than-average portfolio manager retention. This is a concern, as long-term stability tends to support positive results. An average tenure of only five years among the longest-tenured managers at Cabana is concerning. In isolation, seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions.

Average

Parent

Cabana Target Leading Sector Moderate ETF

CLSM seeks long-term growth by allocating to a mix of broad asset class ETFs in response to economic conditions. The fund uses an algorithm to select investments in sectors that it identifies as attractive pursuant to its moderate risk profile.

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FAYETTEVILLE, Ark.--( BUSINESS WIRE )--Cabana Asset Management (“Cabana”), a wholly owned subsidiary of The Cabana Group, LLC and an SEC registered investment adviser providing risk-managed investment portfolios to registered investment advisors (“RIAs”) and individual investors, today announced plans to transfer its two suites of Exchange Traded Funds (“ETFs”) from NYSE to Nasdaq on or about December 12, 2022. The last day of trading on NYSE will be December 9, 2022. Investors in the funds should not expect to see any impact on their trading experience as a result of the transfer.

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On Tuesday, Cabana Asset Management, a wholly-owned subsidiary of The Cabana Group, LLC and an SEC-registered investment adviser providing risk-managed investment products to investors, advisors, and institutions, announced the expansion of its ETF lineup with the launch of the Cabana Target Leading Sector ETFs, CLSC, CLSM, and CLSA, in partnership with private label ETF advisor Exchange [...] The post Cabana Asset Management Launches New Suite of Target Leading Sector ETFs appeared first on ETF Trends.

News for Cabana Target Leading Sector Moderate ETF ETF (CLSM)