Opus Small Cap Value Plus ETF earns a Morningstar Medalist Rating of Neutral with strength in areas such as Process offset by weaker spots such as People. The portfolio maintains a sizable cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy's management team is about as experienced as others, but due to other weaknesses, the strategy earns a Low People Pillar. The strategy's effective investment approach earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a substantial underweight position in liquidity exposure and volatility exposure compared with category peers. Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' flexibility. And low volatility exposure is rooted in stocks that have a lower standard deviation of returns. The strategy's parent organization is industry standard, albeit with some strong attributes like a favorable lineup success ratio, but is held back by high portfolio manager turnover. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Ensign Group

Viper Energy Partners LP

Chemed

Lincoln Electric Hlds

KB Home

Casey's General Stores

Valvoline

Texas Roadhouse

Chord Energy Corp

Northern Oil and Gas

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. Opus Small Cap Value Plus ETF earns an Above Average Process Pillar rating. 

The most important driver of the rating is the parent firm's five-year risk-adjusted success ratio of 100%. 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. Excellent risk-adjusted performance also supports the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Lastly, the process is limited by the parent firm's five-year retention rate of 63%, which suggests it could do more to retain its portfolio managers.

 This strategy is similar to its Small Blend category peers in terms of market-cap and style exposure. Looking at 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. The managers have also shown an underweight risk tilt, demonstrated by lower volatility exposure over peers in recent years. Such holdings can limit a strategy's downside, but cause it to lag in bull markets. Similarly, in recent months, the strategy also had less exposure to the Volatility factor than peers. Additionally, this strategy's portfolio has held more stocks with high dividend or buyback yields than peers over recent years. Stocks with high yields can be more stable, mature companies, but at times extreme market pressure or fundamental deterioration may prompt them to cut their dividends, which tends to hurt stock performance. In this month, the strategy also had more exposure to the Yield 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 industrials and energy relative to the category average by 7.4 and 7.2 percentage points, respectively. The sectors with low exposure compared to category peers are technology and consumer defensive, underweight the average by 10.3 and 4.2 percentage points of assets, respectively. The strategy owns 75 securities and invests 24.3% of assets in its top 10 holdings, similar to the category average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 35% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

Opus Small Cap Value Plus ETF earns a Low People Pillar rating. The main driver of the rating is the instability of talent across its parent firm. The firm's asset-weighted manager tenure of four years suggests it could do more to retain portfolio managers. Management team experience, which averages five years at this fund, also detracts from the team. The combined average five-year excess return of each manager detracts from the rating further. It shows that the funds they manage have lagged their respective category's average return.

People

APTUS ETFs's track record as a steward is mixed, leading to an Average Parent Pillar rating. Longevity at the firm has been impressive. Its five-year risk-adjusted success ratio is 100%, meaning that 100% of the products have both survived and beaten their respective category median on a risk-adjusted basis. A high success ratio indicates good performance and provides insight into a firm’s discipline around investment strategy and product development. APTUS ETFs has undergone a bout of turnover in the past five years, as seen in its lower-than-average portfolio manager retention. This is a concern, as long-term stability tends to support positive results. APTUS ETFs's longest-tenured managers do not possess comparable experience as teams at other firms, a cause for concern. Specifically, average tenure within the firm is four years. As such, there is less confidence in the group's ability to manage capital through a full market cycle effectively.

Average

Parent

Opus Small Cap Value ETF

OSCV is an actively managed fund that selects US small-cap companies and REITs based on valuation plus quality and growth metrics. The fund seeks capital appreciation.

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News for Opus Small Cap Value ETF ETF (OSCV)