Weakness in Foundations Dynamic Growth ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The team managing the strategy earns a Low People Pillar. The strategy gets a Low Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight liquidity exposure and volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The strategy's parent organization still has a way to go to reach the industry standard, evidenced by  personal investments from portfolio managers and portfolio managers with limited tenures at the firm. As a result, the firm obtains a Below Average Parent Pillar rating.

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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. Foundations Dynamic Growth ETF earns a Low Process Pillar rating. 

The most significant detractor from the rating is the parent firm's five-year risk-adjusted success ratio of 0%. 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 subpar success ratio suggests that the firm could do better across its fund lineup. Management team experience, which averages five months at this fund, also holds the rating back. The fund's concentrated portfolio limits the process as well, with its top 10 holdings accounting for 99% of assets. Concentration can lead to outperformance, but it amplifies the risk of a blowup.

 This strategy targets smaller plays than its peers’ average in the Large Growth Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Examining additional factor exposure, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over 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 exhibited a tilt toward high-volatility stocks over these years, meaning it has invested in companies that have a higher historical standard deviation of returns. This is a higher-risk, higher-reward approach. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. Moreover, this strategy has been underweighting momentum stocks during these years. Momentum investors tend to expect stocks that have done well recently to continue to do so in the short term. Momentum approaches can entail higher turnover and trading costs since the top stocks can often change. In recent months, the strategy also had less Momentum factor exposure than 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 technology by 3.6 percentage points in terms of assets compared with the category average, and its real estate allocation is similar to the category. The sectors with low exposure compared to category peers are healthcare and financial services, underweight the average by 3.7 and 2.7 percentage points of assets, respectively. The strategy has only reported a handful of holdings, and is in a category where the typical fund has 53.2% of assets within the top 10 holdings.

Process

Foundations Dynamic Growth ETF earns a Low People Pillar rating. The most significant detractor from the rating is the experience of the management team, which averages five months at this fund. The parent firm's subpar risk-adjusted performance, as shown by its average overall Morningstar Rating of 2.0 stars, also limits the team. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The number of months that the management team has been running this vehicle together detracts from the rating further. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.

People

In an increasingly competitive industry, Regents Park Funds falls behind on a number of key metrics, resulting in a Below Average Parent Pillar rating. A quality holding back Regents Park Funds from the top tier of stewards is its managers' limited personal investments in their respective products, which helps to align portfolio manager and shareholder interests. Currently, none of the firm’s assets are covered by invested managers. Regents Park Funds's longest-tenured managers do not possess the same experience as management teams at other firms, a detractor from its rating. Specifically, average asset-weighted tenure within the firm is only four years.

Below Average

Parent

Foundations Dynamic Growth ETF

FDGR is an actively managed fund-of-funds that selects growth-focused US equity securities based on the level of intraday volatility of the market. It has a bias towards large-caps but may still hold mid- to small-caps.

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