Weakness in Global X India Active ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The longest-tenured manager has a wealth of experience, but due to other weaknesses, the strategy earns a Low People Pillar. The strategy gets a Low Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable underweight position in liquidity exposure and has an overweight in quality exposure compared with category peers. Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' flexibility. And a high quality exposure is rooted in holding stocks with low financial leverage and strong returns on equity. 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

Global X Funds - Global X 1-3 Month T-Bill ETF

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. Global X India Active ETF earns a Low Process Pillar rating. 

The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 28%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 58% also weakens the process. The parent firm's disappointing risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 2.3 stars, detracts from the process as well. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

 This strategy targets larger plays than its peers’ average in the India Equity Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Examining additional factor exposure, this strategy consistently held some companies with relatively lower trading volume compared with Morningstar Category peers in the last few years. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. In the latest month, the strategy was also less exposed to the Liquidity factor compared with Morningstar Category peers. This strategy also has had a defensive tilt, with exposure to higher-quality stocks compared with peers in recent years. This means that the fund holds companies that are profitable, growing, and have solid balance sheets. Though it may trail peers during an economic boom, this orientation contributes to helping it weather periods of economic stress better. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. Additionally, this strategy has demonstrated a tilt toward low-volatility stocks in these years, meaning companies with a lower historical standard deviation of returns over its peers. Such holdings can limit a strategy's downside, but cause it to lag in bull markets. In recent months, the strategy also had less Volatility 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 consumer defensive and energy relative to the category average by 4.2 and 3.3 percentage points, respectively. The sectors with low exposure compared to category peers are industrials and basic materials, underweight the average by 4.8 and 2.6 percentage points of assets, respectively. The portfolio is composed of 32 holdings and is relatively top-heavy. Of the strategy's assets, 50.9% are concentrated within the top 10 holdings, compared to the category’s 34.8% average. And in closing, in terms of portfolio turnover, on a year-over-year basis, 24% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Process

Global X India Active ETF earns a Low People Pillar rating. The number one detractor from the rating is the parent firm's five-year success ratio of 28%. 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 modest success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 58% also detracts from the team. The experience of the management team, which averages seven years at this fund, detracts from the rating as well.


None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

People

Mirae Asset Global Investments is a Korean asset manager and a key player in the Asian financial market. It is a wholly owned subsidiary of Mirae Asset Financial Group, founded by Hyeon Joo Park. Park’s leadership and entrepreneurial spirit have been the driving force behind the global rise of Mirae, and he holds a majority stake in the business. 
Mirae Asset has grown significantly over the years (USD 198 billion as of December 2022) across a diversified platform, of which about 60% of assets are managed in South Korea. We believe that Mirae’s core mutual fund business in the Asia-Pac region is relatively strong. It has a collaborative structure, a strong and large investment team, low manager turnover, competitive fees, and a disciplined approach to product-development pointing toward better stewardship practices relative to peers in these markets. However, this is in stark contrast to its exchange-traded fund business, which accounts for 41% of the total assets. 
The firm’s ETF lineup focuses largely on high-risk thematic strategies that seem gimmicky, emphasizing short-term asset-gathering. The firm appears to leverage trending topics such as robotics and artificial intelligence, virtual reality and gaming, and cloud computing. There’s a notable concern regarding the potential liquidation of these funds since they seem to be designed around investment fads. Furthermore, these products are often expensive, especially compared with broadly diversified index funds and ETFs. Unsurprisingly, Mirae's reflexive product-development strategy has led to an increase in fund closures.
Our experience engaging with the MAGI team to gather critical information for the parent assessment has not been as positive. It hasn’t been as transparent in its disclosures, and unlike its peers, its responsiveness has been inadequate. We prefer firms with a more transparent corporate culture. Overall, these actions hold us back, and the firm retains its Parent Pillar rating of Average.

Average

Parent

Global X India Active ETF

NDIA seeks long-term growth of capital by investing in a concentrated portfolio of Indian equities. The fund uses bottom-up, fundamental analysis to actively select and manage its holdings.

Global X Brazil Active ETF

Global X has launched two active emerging market ETFs. The two new funds provide focused exposure to Brazil and India, two of the largest emerging markets.

News for Global X India Active ETF ETF (NDIA)