Weakness in Mohr Industry Nav ETF's Process and People Pillar ratings limits this strategy 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 receives a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and an underweight in momentum exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And low momentum exposure is rooted in holding stocks that are not currently on a winning streak and instead holding those that managers believe are undervalued. The portfolio management team managing the strategy earns a Below Average People Pillar rating. To be considered a quality steward, this strategy's parent organization needs to improve factors like insignificant 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 index on a risk-adjusted basis over the long term. Mohr Industry Nav ETF earns a Below Average Process Pillar rating. 

The process benefits from the firm's five-year retention rate of 100% over the period. However, the rating is weakened by the experience of the management team, which averages two years at this fund. High costs across its parent firm's funds, whose fees rank in their respective category's middle quintile on average, also detract from the rating. While this fund's costs are most relevant to investors, the pattern at the broader firm suggests it could do more to keep fees low.

 This strategy leans toward smaller, more undervalued companies than its average peer in the Large Blend Morningstar Category. Examining additional factor exposure, 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. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has had lower exposure to momentum stocks over peers in recent 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. Similarly, in recent months, the strategy also had less exposure to the Momentum factor than peers. In addition, this strategy has not maintained a defensive tilt, demonstrated by low exposure to the quality factor. This means the fund avoids holding firms that are consistently profitable, growing, and have solid balance sheets. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. In recent months, the strategy also had less Quality 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 basic materials and industrials relative to the category average by 7.9 and 6.4 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 14.5 and 5.7 percentage points of assets, respectively. The strategy has only reported a handful of holdings, and is in a category where 49.5% of assets are typically concentrated in the top 10 holdings.

Below Average

Process

Mohr Industry Nav ETF earns a Below Average People Pillar rating. The team is strengthened by the firm's five-year retention rate of 100%. However, the rating is held back by the experience of the management team, which averages two years at this fund. The number of months that the management team has been running this vehicle together also holds the rating back. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.

People

At this time, Mohrfunds's assessment results in a Below Average Parent rating. In its two-year history as a firm, there has been little evidence to suggest Mohrfunds is a superior steward of capital compared with other asset managers. Mohrfunds currently manages six vehicles, with a total of $42.3 million under management and one portfolio manager. As a consequence of being a new firm, its solo manager brings limited experience, with only two years under their belt.  

 Lofty fees on open-end and exchange-traded funds at Mohrfunds detract from fund performance. Compared with its peers, the average expense ratio of the firm's fund lineup is in the second-costliest quintile.  

 To upgrade the firm's rating, Mohrfunds will be expected to build a consistent track record of positive investor experience.

Parent

Mohr Industry Nav Etf

INAV is an actively managed fund-of-funds that invests in large-cap ETFs linked across various industries within the US market sectors.

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News for Mohr Industry Nav Etf ETF (INAV)