Weakness in Unusual Whales Subversive Dem Trd ETF's Process and People Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The strategy earns a Below 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 strategy suffers from its inexperienced portfolio management team. This largely drives the strategy's Below Average 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 modest portfolio manager turnover and overall low fees.

Analyst Rating

NVIDIA

Microsoft

Amazon

Apple

Alphabet

salesforce.com

Netflix

CrowdStrike

Disney

Tesla

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. Unusual Whales Subversive Dem Trd 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 held back 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 skews toward smaller, higher-growth companies than its average peer in the Large Blend Morningstar Category. Examining additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy also has had an overweight bias to the volatility factor over these years, meaning it has owned companies that have a higher historical standard deviation of returns. Such exposure tends to pay off when markets are hot and to be costly when they are not. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. In addition, this strategy has shown a tendency to hold fewer stocks with high dividend or buyback yields over peers in recent years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide consistent income payments, they may cut payouts if their earnings fall. In recent months, the strategy also had less Yield 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 technology and consumer cyclical relative to the category average by 9.5 and 6.1 percentage points, respectively. The sectors with low exposure compared to category peers are healthcare and financial services, underweight the average by 6.0 and 4.6 percentage points of assets, respectively. The portfolio is positioned across 711 holdings and is less top-heavy than peers. Specifically, 39.1% of the fund’s assets are concentrated within the top 10 fund holdings, compared to the typical peer's 48.8%. And finally, in terms of portfolio turnover, on a year-over-year basis, 44% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Below Average

Process

Unusual Whales Subversive Dem Trd 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 held back 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. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.


The team is guided by the longest-tenured manager Christian Cooper, who brings two years of listed portfolio experience.  The team is small and inadequately equipped, with only one other listed manager supporting it. Together, the two average two years of listed portfolio management experience.

People

Since its inception only two years ago, Subversive Capital has demonstrated that it can be trusted as much as the next asset manager. As a result, it has an Average Parent Pillar rating. Subversive Capital currently manages seven vehicles, with a total of $43.7 million under management and a roster of four fund managers. As a group, however, there is a relative lack of experience. The firm's management ranks have an average of two years of industry experience.  Despite the lack of experienced managers, Subversive Capital has done very well at retaining its team. 

 The firm's average net expense ratio across its open-end and exchange-traded product shelf place the firm within the middle quintile of asset managers.  

 To keep an Average rating, Subversive Capital needs to uphold a consistent track record of positive investor experience.

Average

Parent

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