The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  RiverFront Strategic Income ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The management team doesn't personally invest much alongside shareholders. This is a large contributor to the strategy's Below Average People Pillar. The fund's assessment garners an Average Process Pillar rating. Even though the strategy's parent organization has some investor-friendly attributes like portfolio managers who invest a considerable amount in their strategy, a relatively inexperienced portfolio management team holds it back. As a result, the firm obtains a Low Parent Pillar.

Analyst Rating

Morningstar's style-agnostic investment process evaluation looks for strategies that should be able to outperform their Morningstar Category index on a risk-adjusted basis over time. RiverFront Strategic Income Fund earns an Average Process Pillar rating.    The main contributor to the rating is the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. Management team experience, which averages 23 years at this fund, also bolsters the rating. Lastly, the process is limited by the instability of talent across its parent firm. The firm's asset-weighted manager tenure of eight years suggests it could do more to retain portfolio managers.

 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 seeks to achieve its investment objective by investing in a global portfolio of fixed income securities of various maturities, ratings and currency denominations. The fund utilizes various investment strategies in a broad array of fixed income sectors. The fund 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 has a modest 3.7% 12-month yield, lower than its average peers' 5.3%. Plus, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 4.9%. A lower yield tends to indicate lower credit risk.

Average

Process

RiverFront Strategic Income Fund earns a Below Average People Pillar rating. The team benefits from the portfolio managers' outperformance of peers at the funds they run, as measured by their combined three-year manager excess returns. However, the rating is held back 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 weakens the team.


The team is backed by Tim Anderson, the longest-tenured manager on the strategy, who provides 23 years of listed portfolio management experience. The strategies they currently manage have an average Morningstar Rating of 3.0 stars, demonstrating average risk-adjusted performance compared with category peers. The highest personal investment by either manager is less than $10,000. That is too low to promote alignment of their interests with the fund's investors. Management has provided stability, leading to a potential smooth transition of power, with similar manager retention to peers. The most recent documented departure was within the past two years.

Below Average

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

RiverFront Strategic Income Fund

RIGS is an actively managed global fixed-income portfolio that invests in various types of fixed-income securities without currency limitation.

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