The combination of a middling Process Pillar rating and a Low People Pillar rating limit  BTD Capital Fund to a Morningstar Medalist Rating of Negative.  Fees are a weakness here. The strategy's lofty fees are a high hurdle to clear, as it is priced within the most expensive quintile among peers.  

 The strategy's inexperienced portfolio management team drives the strategy's Low People Pillar. The strategy merits an Average Process Pillar rating.  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. To be considered a quality steward, this strategy's parent organization needs to improve factors like a lack of inside investments from portfolio managers and a relatively inexperienced portfolio management team. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

Verizon

Mid-America Apartment Communities

Camden Property

Tesla

salesforce.com

Travelers

Amazon

Constellation Energy Corp

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. Btd Capital Fund earns an Average Process Pillar rating. 

The main driver of the rating is the firm's five-year retention rate of 100% over the period. The depth of the portfolio management team also supports the process. With five portfolio managers, the fund is well-staffed. Lastly, the process is limited by high costs across its parent firm's funds, whose fees rank in their category's highest-cost 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 expenses down.

 This strategy skews toward smaller, more undervalued companies compared with its average peer in the Large Blend Morningstar Category. Looking at additional factor exposure, the fund has held stocks with higher trading volumes compared to Morningstar Category Peers in the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also favored low-quality stocks. This means the fund avoids holding companies that are consistently profitable, growing, and have solid balance sheets. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. This contributes to a higher-risk, higher-reward approach. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in utilities and consumer defensive relative to the category average by 11.3 and 8.2 percentage points, respectively. The sectors with low exposure compared to category peers are technology and industrials, underweight the average by 12.4 and 10.1 percentage points of assets, respectively. The strategy owns 27 securities and its assets are more dispersed than peers in the category. In particular, 43.7% of the strategy's assets are concentrated in the top 10 fund holdings, as opposed to the category average's 48.8%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, more than 400% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

Btd Capital Fund earns a Low People Pillar rating. The number one detractor from the rating is the experience of the management team, which averages three years at this fund. The managers' failure to consistently outperform peers at the funds they run, as measured by their combined three-year manager excess returns, also detracts from the team. The number of months that the management team has been running this vehicle together limits the rating further. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.


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

People

Kaiju is a relative newcomer with only a one-year record. There have yet to be signs suggesting that Kaiju is a topnotch steward. As a result, it is assigned a Below Average Parent rating until there's contrary evidence. Kaiju currently runs one vehicle, with a total of $1.1 million under management and a bench of five fund managers. As a consequence of being a new firm, there is very low manager experience on average, three years. However, the firm has proven successful at retaining talent, with only limited manager turnover.  

 High costs on open-end and exchange-traded funds at Kaiju represent a stiff headwind to performance. The average net expense ratio of its funds falls within the most expensive quintile compared with others.  

 To upgrade the firm's rating, Kaiju needs to build a consistent track record of positive investor experience.

Below Average

Parent

BTD Capital Fund

DIP seeks to optimize short-term trading opportunities within US equities. The fund is actively managed, using artificial intelligence and data modeling to select and weight individual stock positions.

RED BANK, NJ / ACCESSWIRE / March 26, 2024 / In October, President Biden issued an executive order on the safe, secure and trustworthy use of artificial intelligence. The executive order laid out a set of basic safety and security standards as companies develop new AI capabilities, emphasizing transparency and accountability.

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RED BANK, NJ / ACCESSWIRE / February 13, 2024 / In a year firmly marked by technological advancements in AI, Kaiju's BTD Capital Fund seems to be an intriguing player in the fusion of finance and artificial intelligence. The fund's Buy the DIP Capital Fund ETF (NYSE:DIP) is powered by Kaiju's advanced ARCⓇ system, which navigated the complexities of 2023's volatile market using the power of AI-driven investment strategies.

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RED BANK, N.J.--(BUSINESS WIRE)--Kaiju ETF Advisors ("KEA"), a leading pure AI-powered ETF investment manager, today announced that it has lowered the annual management fee on its flagship ETF, BTD Capital Fund (Ticker: DIP) from 1.25% to 0.75%. DIP is an actively managed ETF that harnesses the power of AI through a proprietary platform to identify oversold equities that have the highest probability of experiencing quick-return rebounds and capitalizes on them by initiating short order buy and.

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VettaFi's vice chairman Tom Lydon discussed the BTD Capital ETF (DIP) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.” For more news, information, and analysis, visit VettaFi | ETF Trends.

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RED BANK, NJ / ACCESSWIRE / July 6, 2023 / The CEO of Kaiju ETF Advisors, Ryan Pannell, recently gave an interview to talk about the ethics and misconceptions around AI and the future of rules-based investing for retail investors. Kaiju ETF Advisors' inaugural Buy the Dip ETF (NYSE:DIP) is an AI-managed fund trained to identify and act on short-term dips in individual stocks to generate returns.

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CHICAGO , April 10, 2023 /PRNewswire/ -- Kaiju ETF Advisors today announced its intention to transfer its AI-driven, actively managed ETF  BTD Capital Fund (NYSE: DIP), powered by the Kaiju ARC® system, to the New York Stock Exchange from NYSE Arca, effective May 1, 2023.

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Kaiju's AI Applies Rigorous Data Modeling to an Intuitive Investment Strategy — Seeking to Remove the Guesswork When Buying the Dip CHICAGO , Dec. 13, 2022 /PRNewswire/ -- Kaiju ETF Advisors today announced the launch of BTD Capital Fund (NYSE: DIP), an AI-driven actively managed ETF. By harnessing the power of big data and artificial intelligence, the company believes it has eliminated the guesswork in finding dips.

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