Weakness in Alpha Dog ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. Fees are a weakness here. The strategy's lofty fees are a high hurdle to clear, as it is priced within the second-highest quintile among peers.  

 The team managing the strategy earns a Below Average People Pillar. The strategy earns a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. To be considered a quality steward, this strategy's parent organization needs to improve factors like minimal personal investments from portfolio managers and portfolio managers with limited tenures at the firm. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

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Amazon

NVIDIA

Chipotle

Interactive Brokers

Microsoft

Schlumberger

Valero Energy

Devon Energy

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. Alpha Dog ETF earns a Below Average Process Pillar rating. 

The process is strengthened by the firm's five-year retention rate of 100% over the period. However, the rating is limited by the experience of the management team, which averages two years at this fund. High costs across its parent firm's funds, whose fees rank in their respective category's most-expensive quintile on average, also hold the rating back. While this fund's costs are most relevant to investors, the pattern at the broader firm suggests it could do more to keep fees low.

 This strategy tends to hold smaller, more growth-oriented companies compared with its average peer in the Large Blend Morningstar Category. Analyzing additional factors, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last 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 also has had an overweight bias to the volatility factor over these years, meaning it has owned companies that have a higher historical standard deviation of returns. Such exposure tends to pay off when markets are hot and to be costly when they are not. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. Additionally, this strategy has demonstrated a preference for high-momentum stocks in these years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. In this month, the strategy also had more exposure to the Momentum 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 energy and consumer cyclical relative to the category average by 11.5 and 10.5 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 8.1 and 6.9 percentage points of assets, respectively. The portfolio is composed of 34 holdings and its assets are more dispersed than peers in the category. In particular, 41.0% of the fund’s assets are concentrated in the top 10 fund holdings, compared to the typical peer's 49.5%. And in closing, in terms of portfolio turnover, this fund trades more frequently than its average peer, potentially racking up additional expenses for investors and creating a drag on performance.

Below Average

Process

Alpha Dog ETF earns a Below Average People Pillar rating. The team benefits from the firm's five-year retention rate of 100%. However, the rating is weakened by the experience of the management team, which averages two years at this fund.

People

At this time, GEASPHERE ADVISORS's assessment results in a Below Average Parent rating. In its two-year history as a firm, there has been little evidence to suggest GEASPHERE ADVISORS is a superior steward of capital compared with other asset managers. GEASPHERE ADVISORS currently oversees one vehicle, with a total of $61.2 million under management and one portfolio manager. The firm's solo manager is relatively inexperienced, with only two years of industry experience.  

 High costs on open-end and exchange-traded funds at GEASPHERE ADVISORS represent a stiff headwind to performance. The average net expense ratio of its funds falls within the second-costliest quintile compared with others.  

 To upgrade the firm's rating, GEASPHERE ADVISORS will be expected to build a consistent track record of positive investor experience.

Parent

Alpha Dog ETF

RUFF is an actively managed ETF that invests in large- and mid-cap stocks perceived as leaders in the best performing market sectors in the US.

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