Weakness in Foundations Dynamic Value ETF's Process and People 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 strategy gets a Low Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and momentum exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And momentum exposure is rooted in holding stocks currently on a winning streak. 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 minimal personal investments from portfolio managers and relatively short-tenured portfolio managers. 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 index on a risk-adjusted basis over the long term. Foundations Dynamic Value 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 beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest 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 holds the process back as well, with its top 10 holdings accounting for 89% of assets. Concentration can lead to outperformance, but it amplifies the risk of a blowup.

 This strategy skews toward smaller, more growth-oriented companies compared with its average peer in the Large Value Morningstar Category. Analyzing additional factors, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. Different from its historical appetite, however, the Liquidity factor was in line with the Morningstar Category average in recent months. This strategy has had more exposure to high-momentum stocks over its peers in recent years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. Additionally, the strategy has constantly maintained a defensive tilt, with exposure to high-quality stocks. Such holdings could cause it to trail peers during economic booms, but help it better endure busts. In this month, the strategy also had more exposure to the Quality 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 industrials by 2.8 percentage points in terms of assets compared with the category average, and its consumer defensive allocation is similar to the category. The sectors with low exposure compared to category peers are communication services and energy; however, the allocations are similar to the category. The strategy has only reported a handful of holdings, and is in a category where the typical fund has 27.4% of assets within the top 10 holdings.

Process

Foundations Dynamic Value ETF earns a Low People Pillar rating. The primary factor behind 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 holds the team back. 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 Value ETF

FDVL is an actively managed fund-of-funds that selects value-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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