The combination of a middling Process Pillar rating and a Low People Pillar rating limit  Gadsden Dynamic Multi-Asset ETF 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's inexperienced portfolio management team drives the strategy's Low People Pillar.  The strategy's parent firm has some investor-friendly attributes, like a high lineup success ratio, but it is held back by high portfolio manager turnover. As a result, the firm gets an Average Parent Pillar rating.

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Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, clearly defined, repeatable execution. Gadsden Dynamic Multi-Asset ETF earns an Average Process Pillar rating. The predominant contributor to the rating is the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Low expenses across its parent firm's funds, whose fees, on average, rank in the middle quintile of their respective category, also influence the rating. The pattern of low fees at the firm indicates that it is focused on delivering strong results for investors. Lastly, the process is limited by the experience of the management team, which averages four years at this fund.

The investment strategy as stated in the fund's prospectus is as follows: 


The investment seeks total return.  The fund is an actively-managed ETF that seeks to achieve its investment objective by investing in asset classes that the fund's portfolio managers believe offer the most attractive combined risk/return opportunities. The term "asset classes" generally includes, among others, U.S. equities, foreign securities, currencies, bonds, and and REITs. It may invest globally in any asset class or security and may at times have significant exposure to a single asset class.

Average

Process

Gadsden Dynamic Multi-Asset ETF earns a Low People Pillar rating. The main factor influencing the rating is the experience of the management team, which averages four years at this fund. The parent firm's five-year success ratio of 0% also weakens the team. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup. Turnover at its parent firm further limits the team. The firm's asset-weighted manager tenure of 46 years suggests that it could do more to retain portfolio managers.


The team has not run into any turnover issues, with similar management retention to peers. However, the most recent documented departure was 10 months ago.

People

Gadsden Corp is an industry-standard asset manager, leading to an Average Parent Pillar rating. Even with an average pillar rating, Gadsden Corp has had impressive longevity among its product shelf. The firm's risk-adjusted success ratio is 100%, meaning that 100% of its strategies have both survived and beaten their respective category median on a risk-adjusted basis. A high success ratio indicates good performance and provides insight into a firm’s discipline around investment strategy and product development. A negative contributor to Gadsden Corp's rating is its lower-than-average portfolio management retention over the past five years, as elevated turnover bears watching. With an average three-year Morningstar Rating of 2.0 stars, the risk-adjusted performance of Gadsden Corp's open-end and exchange-traded funds falls short of competitors.

Parent

Alpha Architect Gadsden Dynamic Multi-Asset ETF

GDMA is an actively-managed portfolio that may hold any asset class. The fund seeks total return.

GDMA has a very contemporary approach to allocating assets. Frankly, it is one very close to what I did as a manager for decades. However, the ETF's limited history has been long enough to create "reasonable doubt" about whether its managers can consistently protect capital. In 2020's flash decline, they didn't.

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News for Alpha Architect Gadsden Dynamic Multi-Asset ETF ETF (GDMA)