The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Madison Short-Term Strategic Income ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The longest-tenured manager has a wealth of experience, but due to other weaknesses, the strategy earns a Below Average People Pillar. The fund earns an Average Process 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

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. Madison Short-Term Strategic Income ETF earns an Average Process Pillar rating.    The leading factor in the rating is the parent firm's five-year risk-adjusted success ratio of 55%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The stability of talent across its parent firm also strengthens the process. The firm's asset-weighted manager tenure of 21 years demonstrates its ability to retain portfolio managers. Lastly, the process is limited by its parent firm's risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.0 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 as follows: 


The investment seeks to generate a high level of current income.  Under normal market conditions and the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in bonds. The fund may invest up to 10% of its net assets in shares of other registered investment companies that principally invest in fixed income securities.

Average

Process

Madison Short-Term Strategic Income ETF earns a Below Average People Pillar rating. The team is strengthened by the stability of management across its parent firm. The firm's asset-weighted manager tenure of 21 years demonstrates its ability to retain portfolio managers. However, the rating is limited by the parent firm's five-year success ratio of 39%. 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 subpar 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 also holds the rating back. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.


Allen Olson’s veteran status, with 22 years of listed portfolio management experience, brings a wealth of experience to the table. The average Morningstar Rating of the strategies they manage is 3.7 stars, demonstrating above-average risk-adjusted performance. Although the team is small, it is a solid supporting cast. Together, the three listed managers boast more than an average of 15 years of listed portfolio management experience.

Below Average

People

Madison Investments boasts some strengths, but they are not enough to stand out in a fiercely competitive arena of active management. It maintains an Average Parent rating.

This almost half-century-old firm is on solid footing, with over $22 billion in assets under management as of December 2022, grounded in a healthy institutional business (roughly three fourths of its AUM lie here) and a growing models-delivery business. The firm's small but experienced investment team is composed of long-tenured managers who have considerable investment in their strategies and some ownership in the firm, which encourages retention. 

Madison has evolved in some ways. After a five-year stint as CEO, Paul Lefurgey relinquished the role in 2022 as Madison moved back to an executive committee management structure, which it had previously used. Longtime distribution head Steve Carl chairs the committee, and Lefurgey remains a CIO. Madison has also made changes to its performance-based remuneration plan moving to a revenue-sharing target model, with a percentage based off five- and 10-year performance. 

But it underwhelms in some important respects. It levies fees ranking no better and mostly worse than its peers', and its small investment team lacks depth. Overall, the firm is an adequate but not exceptional steward.

Parent

Madison Short-Term Strategic Income ETF

MSTI is actively managed, seeking to generate a high level of income by investing in a diversified portfolio of US debt securities. The fund aims to maintain an average portfolio duration of 3.5 years or less.

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Madison Aggregate Bond ETF

Madison Investments has launched the Madison Short-Term Strategic Income ETF (NYSE Arca: MSTI) on the New York Stock Exchange. The actively managed ETF seeks to generate a high level of current income with diversified exposure to fixed income sectors.

Madison Expands Active, Income-Driven Fund Lineup With Short-Term Strategic Income ETF

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Fourth Fund in the Suite Reinforces Commitment to Dynamic Fixed-Income Solutions Fourth Fund in the Suite Reinforces Commitment to Dynamic Fixed-Income Solutions

News for Madison Short-Term Strategic Income ETF ETF (MSTI)