PlanRock Market Neutral Income ETF's Average Process Pillar and People Pillar ratings result in a Morningstar Medalist Rating of Neutral. Fees are a weakness here. The strategy's lofty fees are a high hurdle to clear, as it is priced within the most expensive quintile among peers.  

 The strategy gets an Average Process Pillar. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and yield exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The management team invests alongside the strategy's shareholders, which helps it earn an Average People Pillar rating. To be considered a quality steward, this strategy's parent organization needs to improve factors like relatively short-tenured portfolio managers; however, it has displayed minimal portfolio manager turnover. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

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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. Planrock Market Neutral Income ETF earns an Average Process Pillar rating. 

The main driver of the rating is the firm's five-year retention rate of 100% over the period. The size of the portfolio management team also bolsters the process. With three portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by high costs across its parent firm's funds, whose fees rank in their category's second-costliest quintile on average. While this fund's costs are most relevant to investors, the pattern at the broader firm suggests it could do more to keep expenses down.

 This strategy skews toward smaller, deeper value companies than its average peer in the Large Blend Morningstar Category. Examining additional factor exposure, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy's portfolio also has had exposure to more stocks with high dividend or buyback yields over peers in these 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. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. Moreover, this strategy has been underweighting momentum stocks during these years. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. In this month, however, the strategy had more exposure to the Momentum factor 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 energy and financial services relative to the category average by 8.8 and 8.0 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 20.1 and 5.9 percentage points of assets, respectively. The portfolio has 12 holdings, and is in a category where 49.5% of assets are typically concentrated in the top 10 holdings.

Average

Process

Planrock Market Neutral Income ETF earns an Average People Pillar rating. The leading driver of the rating is the firm's five-year retention rate of 100%. The rating is also improved because at least one manager has invested more than $1 million in the strategy. Lastly, the rating is limited by the number of months that the management team has been running this vehicle together. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.


The team is backed by Stephen Hammers, the longest-tenured manager on the strategy, who provides 15 years of listed portfolio management experience.  Stephen Hammers has an experienced backdrop of support. The three listed managers boast 13 years of average listed portfolio management experience.

People

PlanRock Investment Management, with only three months of history as a firm, is too nascent to prove whether it has an edge over the competition, leading to a Below Average Parent Pillar rating. The firm currently manages four vehicles across a group of three strategy managers. Despite its short history as a firm, its portfolio managers have built significant experience elsewhere, with an average of over 13 years in the industry. The firm's earliest portfolio manager hire, Stephen Hammers, has 15 years of industry experience. 
 
   

 As PlanRock Investment Management builds and continues to develop a track record, its rating will be adjusted accordingly.

Below Average

Parent

PlanRock Market Neutral Income ETF

PRMN is actively managed to invest in a long/short equity portfolio. The fund holds high dividend global equities for income, while neutralizing market risk through equity index futures.

PlanRock Alternative Growth ETF

NASHVILLE, Tenn. , Dec. 21, 2023 /PRNewswire/ -- PlanRock Investments announced the launch of their two new alternative ETFs, the PlanRock Alternative Growth ETF (PRAE), and the PlanRock Market Neutral Income ETF (PRMN).

PlanRock Launches Two New Alternative ETFs

PlanRock Investments has launched two new active global ETFs on the New York Stock Exchange. The PlanRock Alternative Growth ETF (NYSE Arca: PRAE) seeks growth during bull and bear markets by rotating between various segments of the global equity markets.

News for PlanRock Market Neutral Income ETF ETF (PRMN)