IQ US Large Cap R&D Leaders ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's investment process inspires confidence and earns an Above 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 volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

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Pfizer

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. IQ US Large Cap R&D Leaders ETF earns an Above Average Process Pillar rating. The most important driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 87% also buttresses the rating. Lastly, the process is limited by its parent firm's disappointing risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.8 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

The investment strategy as stated in the fund's prospectus is:  The investment seeks results that correspond (before fees and expenses) generally to the price and yield performance of its underlying index, the IQ U.S. Large Cap R&D Leaders Index (the “underlying index”).  The underlying index seeks to provide exposure to innovative companies by investing in the equities of U.S. large cap companies that have high research and development (“R&D”) spending. The fund invests, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, and in the investments included in its underlying index. The fund is non-diversified. 

 The portfolio is overweight in healthcare and technology relative to the category average by 11.8 and 10.4 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and industrials, underweight the average by 12.8 and 6.0 percentage points of assets, respectively. The portfolio is composed of 102 holdings and is about as top-heavy as the category average, with 50.2% of assets in the top 10 holdings. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 23% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

New York Life’s team receives An Average People Pillar rating. The most important factor influencing the rating is the firm's five-year retention rate of 87%. A low cost, with fees that rank in its category's cheapest 20%, also supports the rating. A higher expense ratio reduces net returns, so low costs give this team an advantage. Lastly, the rating is limited by the parent firm's five-year success ratio of 44%. 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 relatively low success ratio suggests that the firm could do better across its fund lineup.

Average

People

New York Life Investments' collection of autonomous investment boutiques will have a new leader in May 2023, and it will take time to assess his impact. The firm keeps its Average Parent rating.
New York Life, the insurance giant that owns NYL Investments, tapped Naïm Abou-Jaoudé to be the asset manager's CEO after the previous CEO departed. Abou-Jaoudé inherits a firm that has grown by building internally and through acquisition. The firm offers mandates in partnership with 13 different asset managers--eight of which are wholly or partially owned affiliates – through several global outlets. Most U.S. funds fall under the established MainStay brand, whereas IndexIQ oversees a growing lineup of ETFs managed both internally and by other affiliates. Candriam, at which Abou-Jaoudé has been CEO even prior to its 2014 acquisition by NYL Investments, takes the lead in Europe through its own offerings and through those subadvised by other boutiques.
Plenty of these capabilities are compelling, with Candriam and fellow affiliates MacKay Shields and Ausbil sporting standout teams in several wheelhouses. Yet many of the boutiques have also struggled with managing bloated lineups or with improving lagging teams. NYL Investments hasn't shied from changing subadvisors or merging platforms and doesn't have a spotless record of managing capacity or of avoiding trendy offerings.

Parent

IQ US Large Cap R&D Leaders ETF

LRND tracks an index of 100 large-cap US companies selected and weighted based on the most recently reported one year research and development (R&D) spending.

IQ US Mid Cap R&D Leaders ETF

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News for IQ US Large Cap R&D Leaders ETF ETF (LRND)