Akros Monthly Payout ETF retains its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's investment process inspires confidence and earns an Above Average Process Pillar rating, the result of a recent pillar upgrade from Average. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in the financial services sector and the Japan region compared with category peers. The team managing this passive strategy earns a Low People 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 overall low fees but is held back by an unfavorable average Morningstar Rating.

Analyst Rating

Alphabet

Amazon

Apple

Home Depot

Cisco Systems

Accenture Plc

NIKE

Lockheed Martin

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. Akros Monthly Payout ETF earns an Above Average Process Pillar rating.  The largest contributor to 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 88% also strengthens the process. Lastly, the process is limited by the experience of the management team, which averages four years at this fund.

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

 The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Akros Multi-Asset Index.  The fund normally invests in securities comprising the index. The index generally consists of 18 exchange-traded funds (“ETFs”) and 50 U.S. exchange-listed stocks (the “Equity Portfolio Sleeve”), though this may change from time to time. It may invest up to 20% of its assets in investments that are not included in the index, and but that the Adviser believes will help the fund track the performance of the index.  

 The portfolio is overweight in technology and consumer cyclical relative to the category average by 20.3 and 7.9 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and industrials, underweight the average by 11.0 and 5.7 percentage points , respectively. The portfolio is overweight in North America by 15.5 percentage points compared with the category average, and Emerging Europe's allocation is similar to its peers. The regions with low exposure compared to their category peers are Developed Europe and United Kingdom, with Developed Europe underweight the average by 6.9 percentage points and United Kingdom similar to the average.

 In the portfolio's fixed-income allocation, interest rate risk exposure is more significant than comparable managed products in this category. However, this strategy has done so while taking on less credit risk. Specifically, the fund’s average credit rating is A compared with the category average’s BBB but possesses a longer average duration of 12.9 years as opposed to the category average's 5.1 years.

Above Average

Process

Cabana’s team receives a Low People Pillar rating. The largest detractor from the rating is the experience of the management team, which averages four years at this fund. The instability of management across its parent firm also holds the rating back. The firm's asset-weighted manager tenure of four years suggests it could do more to retain portfolio managers. 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

Cabana's track record as a steward is mixed, leading to an Average Parent Pillar rating. A strength of Cabana is that its product shelf of open-end and exchange-traded funds is, on average, offered at a minimal cost, suggesting that it considers what's best for its investor base. On average, fees for funds are in the second-lowest quintile of respective category peers. The firm's risk-adjusted performance is poor. Across all open-end and exchange-traded products, the firm’s average three-year Morningstar Rating is 2.0 stars. The firm has not had a durable product lineup. Specifically, its three-year success ratio demonstrates that only 0% of products were both able to survive and beat their respective category median. A low success ratio indicates poor performance and raises questions about a firm’s discipline around investment strategy and product development.

Average

Parent

Akros Monthly Payout ETF

MPAY is a passively managed, fund-of-funds representing a balanced portfolio of global equities, fixed income securities, and alternative investments which aims to provide monthly distributions.

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