Weakness in Strategy Shares Halt Climate Change 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 receives a Low 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 an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The longest-tenured manager has a wealth of experience, but other weaknesses limit it to a Low People Pillar rating. The strategy's parent organization still has a way to go to reach the industry standard, evidenced by  personal 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

Adobe

Tesla

Microsoft

Apple

Oracle

Netflix

Amgen

AbbVie

UnitedHealth Group

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Strategy Shares Halt Climate Change 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 0%. 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 subpar success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 50% also holds the process back. 

 This strategy tends to hold smaller, more undervalued companies than its average peer in the Large Growth Morningstar Category. Looking at additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. The strategy has also had a defensive tilt, demonstrated by lower exposure to the quality factor than peers in recent years. This means the fund has avoided holding companies that are consistently profitable, growing, and have solid balance sheets. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. Such exposure tends to pay off when markets are hot and to be costly when they are not. In this month, the strategy also had more exposure to the Volatility factor over 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 utilities and healthcare relative to the category average by 8.0 and 7.8 percentage points, respectively. The sectors with low exposure compared to category peers are consumer cyclical and technology, underweight the average by 9.6 and 5.2 percentage points of assets, respectively. The portfolio is composed of 92 holdings and is diversified among those holdings. In its most recent portfolio, 30.3% of the fund’s assets were concentrated in the top 10 fund holdings, compared to the category average's 52.5%. And in closing, in terms of portfolio turnover, this portfolio turns over its holdings less quickly than peers, potentially leading to lower costs for investors and eliminating a drag on performance.

Process

Even with strengths like an experienced longest-tenured manager, the team managing Strategy Shares Halt Climate Change ETF has a number of weaknesses, including a lack of manager investment. This warrants a Low People Pillar rating. The team is backed by David Miller, the longest-tenured manager on the strategy, who brings 17 years of portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.6 stars, indicating that their risk-adjusted returns have fallen below the category average. Despite having a small team, the two listed managers boast 11 years of portfolio management experience. As a team, they manage 10 investment vehicles together, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha in aggregate.  None of the portfolio managers here invest in this fund. This hurts the rating because manager investment would align their interests with the strategy's investors.

People

Huntington fails to meet industry-standard stewardship qualities, culminating in a Below Average Parent Pillar rating. Portfolio managers at Huntington tend not to invest alongside their shareholders, detracting from the overall stewardship assessment. None of the firm’s assets are covered by an invested manager. Only five years of average asset-weighted tenure among Huntington's longest-tenured managers gives us pause. In isolation, seasoned teams tend to have more experience to draw upon should they need to navigate turbulent market conditions. The Huntington five-year success ratio stands out versus its peers. In particular, 100% of its products have survived and beaten their respective category median over the past five years.

Below Average

Parent

Strategy Shares Halt Climate Change ETF

NZRO is an actively-managed portfolio of environmentally-friendly companies around the world, focusing on solving climate change through carbon reduction.

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The week ending Sept. 22 marks a strong post-summer resurgence for the industry, with 25 new ETF launches in all.

This Week in ETFs: Launches Ramp Up

NEW YORK--(BUSINESS WIRE)--Strategy Shares, an innovative family of exchange traded funds (ETFs) providing all types of investors with unique and compelling portfolio solutions, is today announcing the launch of the Strategy Shares Halt Climate Change ETF (Nasdaq: NZRO). NZRO is an actively managed ETF designed to invest in companies globally that have adopted environmentally friendly business practices, produce products and services that combat climate change, and, in the view of the fund's po

Strategy Shares Launches the Halt Climate Change ETF (NZRO)

News for Strategy Shares Halt Climate Change ETF ETF (NZRO)