Weakness in Level Four Large Cap Growth Active ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The team managing the strategy earns a Low People Pillar. The strategy gets a Below Average Process Pillar rating.  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. Even though the strategy's parent organization has some investor-friendly attributes like considerable personal investments from managers, portfolio managers with modest tenures holds it back. As a result, the firm obtains a Low Parent Pillar.

Analyst Rating

Apple

Microsoft

Amazon

Alphabet

NVIDIA

Booking Hlds

BlackRock

Lam Research

PayPal

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Level Four Large Cap Growth Active ETF earns a Below Average Process Pillar rating. 

The process is bolstered by low costs across its parent firm's funds, whose fees rank in their respective category's middle quintile on average. The pattern of low fees at the firm indicates that it is focused on delivering strong results for investors. However, the rating is limited by the parent firm's five-year retention rate of 64%, which suggests it could do more to retain its portfolio managers. The parent firm's five-year risk-adjusted success ratio of 45% also detracts from the process. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

 This strategy skews toward smaller, more undervalued companies compared with its average peer in the Large Growth Morningstar Category. Analyzing additional factors, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. 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 strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. 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 financial services and technology relative to the category average by 5.1 and 4.7 percentage points, respectively. The sectors with low exposure compared to category peers are healthcare and industrials, underweight the average by 7.2 and 2.7 percentage points of assets, respectively. The portfolio is positioned across 51 holdings and is diversified among those holdings. In its most recent portfolio, 40.8% of the fund’s assets were concentrated in the top 10 fund holdings, as opposed to the category’s 53.2% average. And finally, in terms of portfolio turnover, looking at year-over-year movements, 0% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Below Average

Process

Level Four Large Cap Growth Active ETF earns a Low People Pillar rating. The most significant detractor from the rating is the parent firm's five-year retention rate of 64%, which suggests it could do more to hold onto its portfolio managers. The parent firm's five-year success ratio of 41% also limits 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. 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

ALPS has a ways to go to become an industry-standard steward, resulting in a Low Parent Pillar rating. Aside from the overall view, portfolio managers at ALPS have made a notable effort to align their interests with shareholders' by taking a personal stake and investing alongside them. Nearly 41% of the firm’s assets are represented by a manager who invests in their respective product. With an average asset-weighted tenure of eight years among the longest-tenured managers at ALPS, the firm is on par with peers. Seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions. The firm charges fees on its open-end and exchange-traded funds that are on par with category peers. On average, fund fees on its products fall in the middle quintile, giving it neither an advantage nor disadvantage compared with the competition.

Parent

Level Four Large Cap Growth Active ETF

LGRO is an actively managed portfolio of US large cap stocks. Holdings are managed based on quantitative analysis and fundamental research, selecting those companies perceived to have favorable growth potential within their market sector.

The ongoing narrative around the strength of large-cap equities will continue to center around forthcoming rate cuts. Once the Federal Reserve receives the economic data it needs to loosen monetary policy and hit its inflation goal of 2%, it could propel growth-oriented large-cap stocks into the stratosphere.

Interest Rate Cuts Could Benefit This Active ETF

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SS&C ALPS Advisors launched a new ETF on Wednesday, an active large-cap ETF to add to its roster. Collaborating with Level Four Capital Management, the firm has added the Level Four Large Cap Growth Active ETF (LGRO) to its ETF suite.

SS&C ALPS Advisors Launches Active Large-Cap ETF

SS&C Technologies Hlds

The Fund can allocate to companies or sectors in response to changing economic or market conditions DENVER , Aug. 23, 2023 /PRNewswire/ -- SS&C ALPS Advisors, a wholly-owned subsidiary of SS&C Technologies Holdings, Inc. (Nasdaq: SSNC), has partnered with Level Four Capital Management to launch the Level Four Large Cap Growth Active ETF (Nasdaq: LGRO), an active, large-cap equity ETF. "ALPS Advisors is recognized for its collaboration with world-class sub-advisors, and our Level Four Capital Management partnership continues this tradition," said Laton Spahr, President of SS&C ALPS Advisors.

News for Level Four Large Cap Growth Active ETF ETF (LGRO)