Weakness in Foundations Dynamic Income ETF's Process and People Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The portfolio maintains a cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy gets a Low Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in AAA rated bonds and an underweight in cash compared with category peers. The portfolio management team managing the strategy earns a Low People Pillar rating. The strategy's parent organization still has a way to go to reach the industry standard, evidenced by unsubstantial 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.

Analyst Rating

iShares 0-3 Month Treasury Bond ETF

iShares 0-5 Year TIPS Bond ETF

Vanguard Short-Term Inflation-Protected Securities ETF

Vanguard Short-Term Bond ETF

BlackRock Ultra Short-Term Bond ETF

SPDR Portfolio Short Term Corporate Bond ETF

Vanguard Short-Term Corporate Bond ETF

Invesco Capital Management LLC - Invesco Short Term Treasury ETF

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. Foundations Dynamic Income ETF earns a Low Process Pillar rating.    The largest 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 relatively low success ratio suggests that the firm could do better across its fund lineup. Management team experience, which averages five months at this fund, also limits the process. The fund's concentrated portfolio hinders the process as well, with its top 10 holdings accounting for 96% of assets. Concentration can lead to outperformance, but it amplifies the risk of a blowup.

 Compared with other funds in the Nontraditional Bond Morningstar Category, this fund takes on significantly lower credit risk. But in terms of long-term interest-rate sensitivity, it hews closely to its average peer over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Relative to the average strategy in the category, the managers have been overweight AAA rated bonds in recent years. In the latest month, the strategy has relatively overweighted AAA rated bonds compared with its peers as well. Additionally, the fund has exhibited a sector bias away from cash over the past few years. Similarly, in recent months, the strategy also had less exposure to cash than peers. Finally, during the past few years, the fund leaned meaningfully away from debt with longer than 30-year maturities. In recent months, the strategy also had less exposure to debt with longer than 30-year maturities compared to its peers.

  The portfolio holds assets with a higher average surveyed credit quality of A, compared with the typical peers' BB, and 2% of the strategy's assets are rated non-investment-grade compared with its average peers' 24%. Lower-credit-risk strategies are often able to navigate bear markets more effectively.

Process

Foundations Dynamic Income ETF earns a Low People Pillar rating. The main determinant of the rating is the experience of the management team, which averages five months at this fund. The parent firm's disappointing 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 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.

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 Income ETF

FDTB is an actively managed fund-of-funds aiming for current income and long-term capital appreciation. The portfolio consists mainly of broad-based fixed income securities without restriction to instrument type, duration, sector, or credit quality.

ASYMshares ASYMmetric 500 ETF

WisdomTree Chinese Yuan Strategy Fund

WisdomTree Germany Hedged Equity Fund

Innovator US Equity 5 to 15 Buffer ETF-Quarterly

Foundations Dynamic Core ETF

Foundations Dynamic Growth ETF

Foundations Dynamic Value ETF

Formula Folios Hedged Growth ETF

FormulaFolios Smart Growth ETF

FormulaFolios Tactical Growth ETF

FormulaFolios Tactical Income ETF

Innovator Premium Income 9 Buffer ETF-October

iShares iBonds Dec 2023 Term Muni Bond ETF

WisdomTree India ex-State-Owned Enterprises Fund

KraneShares CICC China Leaders 100 Index ETF

KraneShares Emerging Markets Healthcare Index ETF

Innovator Premium Income 15 Buffer ETF-October

Asymmetric Smart Income ETF

Innovator Premium Income 10 Barrier ETF - October

Innovator Premium Income 20 Barrier ETF - October

Innovator Premium Income 30 Barrier ETF - October

Innovator Premium Income 40 Barrier ETF - October

WisdomTree Modern Tech Platforms Fund

Advocate Rising Rate Hedge ETF

SPDR S&P 500 ETF Trust

WisdomTree U.S. Growth and Momentum Fund

Innovator US Equity 10 Buffer ETF

Asymmetric Smart Alpha S&P 500 Etf

Brandes International ETF

Brandes US Small-Mid Cap Value ETF

Brandes US Value ETF

JPMorgan US Tech Leaders ETF

The first week of October saw a flood of new ETFs, with 28 funds debuting on U.S. exchanges. Part of that was due to the first Ethereum futures ETFs being approved to launch on Monday.

This Week in ETFs: October Launches Start Strong

News for Foundations Dynamic Income ETF ETF (FDTB)