Weakness in Kingsbarn Tactical Bond ETF's People and Process 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 highest quintile among peers.  

 The team managing the strategy earns a Low People Pillar. The strategy gets a Low Process 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 unreasonable fees. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

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Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. Kingsbarn Tactical Bond ETF earns a Low Process Pillar rating.    The predominant detractor from the rating is high costs across its parent firm's funds, whose fees rank in their category's highest-cost quintile on average. While this fund's costs are most relevant to investors, the pattern at the broader firm suggests it could do more to keep expenses down. The parent firm's five-year retention rate of 75% also holds the process back. Management team experience, which averages two years at this fund, weakens the process as well.

 Compared with other funds in the Intermediate Core-Plus 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 significantly underweight BBB rated bonds in recent years. In the latest month, the strategy has also relatively underweighted BBB rated bonds compared with Morningstar Category peers. Additionally, there's been a notable overallocation to debt with three- to five-year maturities over the past few years. Compared with category peers, the strategy had more exposure to debt with three- to five-year maturities in the most recent month. Finally, during the past few years, the fund leaned meaningfully towards cash. In recent months, however, the strategy had less exposure to cash compared to its peers.

 This strategy has a modest 2.9% 12-month yield, lower than its average peers' 3.9%. A lower yield tends to indicate lower credit risk. The portfolio holds assets with a higher average surveyed credit quality of A, compared with the category average of BBB, and it holds no non-investment-grade assets, despite the average peers' 8%. Lower-credit-risk strategies are often able to navigate bear markets more effectively.

Process

Kingsbarn Tactical Bond ETF earns a Low People Pillar rating. The most important factor behind the rating is the parent firm's five-year retention rate of 75%, which suggests it could do more to keep its portfolio managers. Management team experience, which averages two years at this fund, also limits the team. The instability of its management team hinders the team further. Specifically, the fund last had a manager change 11 months ago.

People

Kingsbarn Capital is a relative newcomer with only a two-year record. There have yet to be signs suggesting that Kingsbarn Capital is a topnotch steward. As a result, it is assigned a Below Average Parent rating until there's contrary evidence. Kingsbarn Capital currently manages two vehicles, with a total of $581,324 under management and a bench of three fund managers. As a consequence of being a new firm, there is very limited manager experience, on average about one year.  

 Lofty fees on open-end and exchange-traded funds are a drag on performance at the firm, where the average net expense ratio, compared with other firms, is in the most expensive quintile.  

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

Below Average

Parent

Kingsbarn Tactical Bond ETF

KDRN actively manages credit and duration risk by investing between various global bond ETFs and 10-year US Treasury futures.

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News for Kingsbarn Tactical Bond ETF ETF (KDRN)