Weakness in Mindful Conservative 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 second-costliest quintile among peers.  

 The strategy earns a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in the Europe-Developed region and the healthcare sector compared with category peers. 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 a lack of inside investments from portfolio managers and a relatively inexperienced portfolio management team. 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 determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. Mindful Conservative 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 limited by the experience of the management team, which averages two years at this fund. Being an actively managed strategy also detracts from the process. Historical data, such as Morningstar's Active/Passive Barometer, shows that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy maintains a fixed-income allocation similar to Moderate Allocation peers but is underweight comparatively in equities, with a 31% to 31% fixed-income to equity composition. Its equity sleeve has demonstrated a consistent bias to both smaller market-cap and value-oriented stocks as opposed to category peers. The strategy has three region or sector biases compared to category peers. The most meaningful is its consistent underweight in the Developed Europe region. It also maintains an underweight bias to the healthcare sector. And finally, in the fund's most recent portfolio, more assets were allocated to emerging markets regions. Although, this bias has not existed over time. 

 The portfolio is overweight in energy and utilities relative to the category average by 3.4 and 3.1 percentage points, respectively. The sectors with low exposure compared to category peers are technology and communication services, underweight the average by 7.7 and 3.2 percentage points of assets, respectively. The portfolio is not significantly overweight in any region compared to the category. The regions with low exposure compared to their category peers are Developed Europe and Japan; however, the allocations are only 1.5 percentage points and 0.7 percentage points underweight the average, respectively.

 The fund’s bond sleeve has less credit and interest rate risk than the average category peer. More concretely, the strategy has an average credit rating of A versus the category average’s BBB and has a shorter average duration of 2.8 years versus the category average of 5.1 years.

Below Average

Process

Mindful Conservative ETF earns a Below Average People Pillar rating. The team is supported by the firm's five-year retention rate of 100%. However, the rating is weakened 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.

People

Mohrfunds is a relative newcomer with only a two-year record. There have yet to be signs suggesting that Mohrfunds is a topnotch steward. As a result, it is assigned a Below Average Parent rating until there's contrary evidence. Mohrfunds currently runs six vehicles 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.  

 The Mohrfunds open-end and exchange-traded fund lineup is moderately priced, with its average net expense ratio falling in the middle quintile of asset managers.  

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

Parent

Mindful Conservative ETF

MFUL is an actively managed ETF that aims to seek current income using an adaptive, conservative strategy that aims to performs adequately during a recovery. The fund invests in a variety of asset classes using a tactical go-anywhere approach.

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News for Mindful Conservative ETF ETF (MFUL)