Themes Natural Monopoly ETF retains its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's investment process inspires confidence and earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The team managing this passive strategy earns a Below Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like modest portfolio manager turnover, but is held back by portfolio managers with limited tenures at the firm. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Synchrony Financial

Arthur J. Gallagher & Co.

Sage Group plc

CoStar Group

Broadcom

General Dynamics

Analog Devices

Blackstone Group

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. Themes Natural Monopoly ETF earns an Above Average Process Pillar rating. The most notable contributor to 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 firm's five-year retention rate of 100% also buttresses the process. Lastly, the process is limited by the experience of the management team, which averages three months at this fund.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the performance, before fees and expenses, of the Solactive Natural Monopoly Index.  The index is designed to provide exposure to companies in the large- and mid- capitalization segments that exhibit a strong competitive advantage in their respective sector. The fund will invest, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, and in securities that comprise the index and in American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”) based on the securities in the index. The fund is non-diversified. 

 The portfolio is overweight in industrials and consumer defensive relative to the category average by 6.5 and 5.4 percentage points, respectively. The sectors with low exposure compared to category peers are technology and consumer cyclical, underweight the average by 8.9 and 5.9 percentage points of assets, respectively. The strategy owns 110 securities and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 32.6% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category’s 49.5% average.

Above Average

Process

Themes ETF Trust’s team earns a Below Average People Pillar rating. The team benefits from the firm's five-year retention rate of 100%. However, the rating is weakened by the experience of the management team, which averages three months at this fund. 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.

Below Average

People

Even though Themes ETF Trust's limited history of three 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 21 vehicles, with a total of $28.5 million under management across a bench of two strategy 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, Dingxun(kevin) Shao, has only one year of industry experience. 
 
   

 As Themes ETF Trust builds and continues to develop a track record, its rating will be adjusted accordingly.

Average

Parent

Themes Natural Monopoly ETF

CZAR is passively managed, tracking an index composed of large- and mid-cap companies that are perceived to showcase competitive strength within their sectors. The fund invests in securities from issuers in the Developed Markets.

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News for Themes Natural Monopoly ETF ETF (CZAR)