The combination of a middling Process Pillar rating and a Low People Pillar rating limit  Aptus Enhanced Yield ETF 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 second-highest quintile among peers.  

 The strategy's management team is about as experienced as others, but due to other weaknesses, the strategy earns a Low People Pillar. The fund's assessment garners an Average Process Pillar rating. The strategy's parent organization doesn't stand out, earning the firm an Average Parent Pillar rating. It has displayed a handful of investor-friendly attributes including a high lineup success ratio but is held back by discontinuity among portfolio managers.

Analyst Rating

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. Aptus Enhanced Yield ETF earns an Average Process Pillar rating.    The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 100%. 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 firm's excellent risk-adjusted performance, as shown by its average overall Morningstar Rating of 3.5 stars, also supports the process. Lastly, the process is limited by the instability of talent across its parent firm. The firm's asset-weighted manager tenure of four years suggests it could do more to retain portfolio managers.

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


The investment seeks current income and capital preservation.  The fund is an actively managed ETF that seeks to achieve its investment objectives through a hybrid fixed income and equity-linked note strategy. The fund invests primarily in U.S. Treasury Bills, U.S. Treasury Notes, and and the securities of U.S. government-sponsored entities (“GSEs”) and invests the remainder of its assets in Equity-Linked Notes (“ELNs”).

 This strategy has an 8.8% 12-month yield, higher than its average peer's 3.6%. While a higher yield may deliver more income, it also tends to indicate higher credit risk.

Average

Process

Aptus Enhanced Yield ETF earns a Low People Pillar rating. The most substantial detractor from the rating is the instability of management across its parent firm. The firm's asset-weighted manager tenure of four years suggests it could do more to retain portfolio managers. Management team experience, which averages five years at this fund, also holds the team back. The combined average five-year excess return of each manager weakens the rating as well. It shows that the funds they manage have trailed their respective category's average return.


None of the portfolio managers here invest in this fund. This hurts the rating because manager investment would align their interests with the strategy's investors.

People

APTUS ETFs's track record as a steward is mixed, leading to an Average Parent Pillar rating. Longevity at the firm has been impressive. Its five-year risk-adjusted success ratio is 100%, meaning that 100% of the products 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. APTUS ETFs has undergone a bout of turnover in the past five years, as seen in its lower-than-average portfolio manager retention. This is a concern, as long-term stability tends to support positive results. APTUS ETFs's longest-tenured managers do not possess comparable experience as teams at other firms, a cause for concern. Specifically, average tenure within the firm is four years. As such, there is less confidence in the group's ability to manage capital through a full market cycle effectively.

Parent

Aptus Enhanced Yield Etf

JUCY is an actively managed fund that holds US treasuries and agency securities, combined with an option writing strategy using equity-linked notes. The fund seeks to provide stability and income.

Aptus Capital Advisors, LLC announces the launch of the Aptus Enhanced Yield ETF (Cboe: JUCY), an actively-managed exchange-traded fund (ETF) combining short-duration government securities with an equity options overlay designed to deliver attractive, distributable income.

News for Aptus Enhanced Yield Etf ETF (JUCY)