Democratic Large Cap Core ETF retains its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the second-lowest 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 a significant overweight position in liquidity exposure and an underweight in yield exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. The team managing this passive strategy earns a Below Average People Pillar rating. The strategy's parent firm has some investor-friendly attributes, like a high lineup success ratio and a competitive average Morningstar Rating. As a result, the firm gets an Average Parent Pillar rating.

Analyst Rating

Apple

Microsoft

Loews

NVIDIA

Costco

Amphenol

Disney

Alphabet

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. Democratic Large Cap Core ETF earns an Above Average Process Pillar rating. The largest 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 underpins the rating. Lastly, the process is limited by the experience of the management team, which averages three years at this fund.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the total return performance, before fees and expenses, of the Democratic Large Cap Core Index.  The index is a subset of the S&P 500® Index designed to provide exposure to large capitalization companies that make political contributions to Democratic Party candidates and political action committees above a certain threshold. Under normal circumstances, and the fund will invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in securities of companies included in the index. 

 The portfolio is overweight in technology and communication services relative to the category average by 7.6 and 5.2 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and healthcare, underweight the average by 4.7 and 4.3 percentage points of assets, respectively. The portfolio is positioned across 54 holdings and its assets are more dispersed than peers in the category. In particular, 37.9% of the strategy's assets are concentrated in the top 10 fund holdings, as opposed to the typical peer's 48.8%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 82% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Above Average

Process

DEMZ’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 held back by the experience of the management team, which averages three years at this fund. The rating is also held back because no manager has invested more than $1 million the fund, which would display confidence in the strategy.

Below Average

People

DEMZ has some investor-friendly attributes, but other attributes warrant caution, leading to an Average Parent Pillar rating.  DEMZ has served investors well through its very competitive risk-adjusted performance, with an average overall Morningstar Rating of 5.0 stars across its open-end and exchange-traded funds. An average tenure of only three years among the longest-tenured managers at DEMZ is concerning. In isolation, seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions.

Average

Parent

Democratic Large Cap Core ETF

DEMZ tracks an index of US large-cap companies whose employees are highly supportive of Democratic candidates.

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