The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  RPAR Risk Parity 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 strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a substantial overweight position in the Latin America region and has a substantial underweight in developed markets regions compared with category peers. The strategy's parent firm has some investor-friendly attributes, like continuity among portfolio managers, but it is held back by a low success ratio across its lineup. As a result, the firm gets an Average Parent Pillar rating.

Analyst Rating

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SPDR Gold MiniShares Trust

Vanguard FTSE Emerging Markets ETF

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Exxon Mobil

Deere & Company

Chevron

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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. RPAR Risk Parity ETF earns an Average Process Pillar rating. The leading factor in the rating is the firm's five-year retention rate of 100% over the period. The process is limited by being an actively managed strategy. Historical data, like Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy produces a fixed-income to equity breakdown that hews closely to the typical Moderately Conservative Allocation category peer, with a 51.7% to 29.8% fixed-income to equity weighting. Its equity sleeve has a consistent bias toward both smaller market-cap and value-oriented companies compared with category peers. The strategy has three region or sector biases compared to category peers. The most significant is a tilt to the Latin America region, where the strategy is consistently overweight. It has also maintained an underweight position in developed markets regions. Finally, the portfolio has consistently invested more in the basic materials sector. 

 The portfolio is overweight in basic materials and energy relative to the category average by 15.1 and 10.9 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 6.4 and 6.4 percentage points of assets, respectively. The portfolio is overweight in Emerging Asia and Australasia regions relative to the category average by 9.5 percentage points and 4.2 percentage points, respectively. The regions with low exposure compared to their category peers are North America and Emerging Europe, with North America underweight the average by 27.6 percentage points and Emerging Europe similar to the average.

Average

Process

RPAR Risk Parity ETF earns a Below Average People Pillar rating. The team is supported by the firm's five-year retention rate of 100%. However, the rating is limited by the combined average five-year excess return of each manager, which shows that the funds they manage have fallen short of their respective category average. The number of months that the management team has been running this vehicle together also holds the rating back.


Michael J. Venuto’s veteran status, with 11 years of listed portfolio management experience, brings a wealth of experience to the table. The average Morningstar Rating of the strategies they currently manage is 2.5 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 listed portfolio management experience.

Below Average

People

Evoke has some investor-friendly attributes, but other attributes warrant caution, leading to an Average Parent Pillar rating. The firm has proven successful at holding onto portfolio management talent, providing continuity for strategies, as displayed by low turnover since the firm's inception compared with asset management peers. The firm's lineup has had discouraging initial results. Its three-year risk-adjusted success ratio is 0%, indicating that of the strategies with a three-year track record, 0% have both survived and beaten their respective category median on a risk-adjusted basis. A low success ratio not only indicates weak performance but also provides insight into a firm’s discipline around investment strategy and product development. The Evoke roster of open-end and exchange-traded funds has had below-average risk-adjusted performance, as seen in its average three-year Morningstar Rating of 1.0 stars.

Parent

RPAR Risk Parity ETF

RPAR is an actively managed fund-of-funds allocating to four major asset classes: global equities, US Treasurys, commodities and TIPS based on risk parity.

Despite a challenging history with a 35% drawdown by late 2023, RPAR's all-weather strategy offers long-term promise. With improved bond yields and a potential monetary policy pivot, RPAR is poised for 6-7% annual gains moving forward. Historical data supports the benefit of RPAR's deep diversification, suggesting recovery and above-average returns ahead.

RPAR Risk Parity ETF: Full Recovery Ahead, Stay Invested

RPAR Risk Parity ETF's heavy fixed-income allocations have acted as a headwind, causing the fund to underperform. Looking forward, I worry the fund's allocation strategy may be based on historical data since 2000 that is biased towards bonds. However, I believe there are structural reasons inflation and interest rates will be secularly higher in the coming years, which would prove to be detrimental to RPAR.

RPAR: Use Upcoming Rally To Reassess (Rating Downgrade)

RPAR ETF aims to generate positive returns during economic growth, preserve capital during economic contraction, and preserve real rates of return during inflation. Diversification and rebalancing boost are key factors in achieving equity-like returns with less risk. RPAR has underperformed expectations due to the higher correlation of commodity producer stocks with both equities and gold, and poor bond performance.

RPAR: Still Too Soon To Buy Despite Higher Interest Rates

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We took a “bucket list” trip to Africa to see the “Great Migration,” the annual wildlife journey. It prompted several market outlook ideas. I offer views on several ETFs for investors to consider researching including RPAR, UTWO, and NUSI, each embodying the traits of different animals. My bottom-line outlook and view: Today's markets are different. Be proactive, consider multiple scenarios, be ready for each one, and consider the potential for "tail risk events."

I Came Back From A Trip To Africa With These 3 Timely ETF Ideas

The RPAR ETF is a convenient way to access risk-parity strategies. The RPAR ETF's design was flawed, as it had a heavy weight in TIPS bonds that was expected to go up in inflationary environments.

RPAR: Should Likely Perform Well In A Recessionary Environment

Despite having been burned in the past by bullish calls that proved premature at best, I remain optimistic about the Risk Parity ETF. In this article, I run through the math that tells me how RPAR could produce 6% to 7% in annual returns for many years to come.

RPAR Risk Parity ETF: Playing The Waiting Game

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RPAR: Risk Parity Is Not Alternative Enough

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Diversified investing has been in the gutter in 2022. I estimate that this year has been the worst for a fund like RPAR since at least 1970. Where there is fear, there can be an opportunity. Macroeconomic fundamentals are far from pristine, but I see a buy-the-dip play here.

RPAR Risk Parity ETF: Buy The Fear

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RPAR's Underperformance Explained

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ETF Trends' editor-in-chief Lara Crigger sat down with Tidal ETF Services' Gavin Filmore for this edition of “ETF Leaders Powered by the NYSE.” Filmore is the head of product for Tidal ETF Services and explained that the company is primarily a platform for other issuers that provides exposure to the ETF market for its products.

ETF Leaders Powered by the NYSE: Tidal ETF Services' Gavin Filmore

RPAR posted its largest daily gain since February on the back of the Federal Reserve's decision to hike interest rates by 50 bps. This could be the catalyst that sends risk parity back towards peak levels. History suggests that such move is not a matter of if, but when.

RPAR: Fed Day Could Trigger Long-Awaited Rally

The RPAR Risk Parity ETF has shown signs of resilience lately, and the recent rebound could be the beginning of a march towards a peak later in 2022.

RPAR: Why This ETF Has Finally Found Support

Seeking alpha? I would much rather seek beta, which is why the Risk Parity ETF is one of my favorite funds to own. If history serves as a guide, the recent dip in RPAR's price suggests that the ETF could recover in the next few months and deliver solid returns.

RPAR Risk Parity ETF: Buy This Dip

Diversified portfolios offer investors strong returns and comparatively low risk, volatility, and losses during downturns. Risk parity portfolios are special types of diversified portfolios with strong, proven performance track records.

RPAR: Diversified Multi-Asset Class ETF, Unique Risk Parity Strategy

The RPAR Risk Parity ETF remains underwater in 2021, when all major stock indices climb relentlessly towards all-time highs. It is during moments of relative weakness that buying into an investment strategy that has consistently performed well makes the most sense.

RPAR Risk Parity ETF: History Says Buy Now

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The RPAR Risk Parity ETF Exceeds $1 Billion AUM

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