Weakness in RiverFront Dynamic Core Income 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 gets a Below Average Process Pillar rating. The strategy's manager investment level is lacking and is one of the reasons behind its Below Average People Pillar rating. Although this strategy's parent firm still has a way to go to be a high-quality steward, it has bright spots like significant personal investments from managers but could focus on a relatively inexperienced portfolio management team. As a result, the firm receives a Low Parent Pillar.

Analyst Rating

Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. RiverFront Dynamic Core Income ETF earns a Below Average Process Pillar rating.    The process is bolstered by the experience of the management team, which averages 23 years at this fund. However, the rating is held back by the parent firm's five-year retention rate of 62%, which suggests it could do more to retain its portfolio managers. The parent firm's five-year risk-adjusted success ratio of 43% also detracts from the process. 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 relatively low success ratio suggests that the firm could do better across its fund lineup.

 The investment strategy as stated in the fund's prospectus is as follows: 


The investment seeks total return, with an emphasis on income as the source of that total return.  The fund invests in a global portfolio of fixed income securities of various maturities, ratings and currency denominations. It may purchase fixed income securities issued by U.S. or foreign corporations or financial institutions, including debt securities of all types and maturities, and convertible securities and preferred stocks.

 This strategy's 12-month yield is 3.8%, lower than its average peers' 4.2%. Plus, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 4.8%. Typically, a lower yield comes with the benefit of less credit risk.

Below Average

Process

RiverFront Dynamic Core Income ETF earns a Below Average People Pillar rating. The team benefits from the combined average five-year excess return of each manager, which shows that the funds they manage have outperformed an average manager. However, the rating is limited by the parent firm's five-year success ratio of 42%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median 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 62% also holds the rating back.


Tim Anderson, the longest-tenured manager on the strategy, provides strong guidance, bringing forward 23 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.0 stars, indicating that their risk-adjusted returns have been in line with the category average. Tim Anderson has an experienced listed co-manager. Together, they average 23 years of listed portfolio management experience. 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

ALPS has a ways to go to become an industry-standard steward, resulting in a Low Parent Pillar rating. Despite the negative rating, an area of strength of the firm is manager investment.  Over 34% of the firm's assets are covered by invested managers, in an effort to align portfolio manager and shareholder interests. With an average asset-weighted tenure of eight years among the longest-tenured managers at ALPS, the firm is on par with peers. Seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions. The firm charges fees on its open-end and exchange-traded funds that are on par with category peers. On average, fund fees on its products fall in the middle quintile, giving it neither an advantage nor disadvantage compared with the competition.

Parent

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