The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Cboe Vest 10 Yr Intst Rt Hdg ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a sizable cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The longest-tenured manager has a wealth of experience, but due to other weaknesses, the strategy earns a Below Average People Pillar. The fund's assessment results in an Average Process Pillar rating. The strategy's parent organization still has a way to go to reach the industry standard, evidenced by high fees and relatively short-tenured portfolio managers. As a result, the firm obtains a Below Average Parent Pillar rating.

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. Cboe Vest 10 Yr Intst Rt Hdg ETF earns an Average Process Pillar rating.    The main contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 100%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent firm's impressive risk-adjusted performance, as shown by its average overall Morningstar Rating of 3.8 stars, also supports the process. Lastly, the process is limited by the parent firm's five-year retention rate of 67%, which suggests it could do more to retain its portfolio managers.

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


The investment seeks to provide a hedge against, and generate capital appreciation from, rising 10-year interest rates.  The fund is an actively managed ETF whose portfolio is constructed with the aim of delivering positive returns, before any fees and expenses, when the 10-year interest rate rises. The fund is expected to experience losses when the 10-Year Rate falls. To achieve its investment objective of hedging against increases in the 10-Year Rate, the fund invests in various derivatives (including futures, options, interest rate swaps, and and swaptions). It is non-diversified.

 This strategy has a modest 3.3% 12-month yield, lower than its average peers' 4.9%. A lower yield tends to indicate lower credit risk.

Average

Process

Cboe Vest 10 Yr Intst Rt Hdg ETF earns a Below Average People Pillar rating. The team is bolstered by 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 100%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 67% also detracts from the team.


The team is backed by Howard Rubin, the longest-tenured manager on the strategy, who brings 24 years of listed portfolio management experience.  Howard Rubin has an experienced listed co-manager. Together, they average 16 years of listed portfolio management experience.

Below Average

People

vest lags peer asset managers in a number of stewardship qualities, resulting in a Below Average Parent Pillar rating. vest open-end and exchange-traded products are more expensive than similarly distributed funds at other highly-rated asset managers, on average in the second most expensive quintile of category peers. The higher expense profile contributes negatively to the firm's overall stewardship rating and creates a larger performance hurdle. Only four years of average tenure among vest's longest-tenured managers gives us pause. In isolation, seasoned teams tend to have more experience to draw upon should they need to navigate turbulent market conditions. Finally, it's encouraging to see the firm showcase strong risk-adjusted performance across its entire open-end and exchange-traded fund lineup, with an average five-year Morningstar Rating of 3.9 stars.

Parent

Cboe Vest 10 Year Interest Rate Hedge Etf

RYSE aims to generate capital appreciation from rising 10-year interest rates of US Treasurys. The actively managed fund invests in options on interest rate swaps, creating downside limits to losses and upside caps to gains.

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RYSE seeks to provide a hedge against, and generate capital appreciation from, rising 10-year interest rates MCLEAN, VA / ACCESSWIRE / February 6, 2023 / Cboe Vest Financial LLC ("Cboe Vest"), the inventor of Target Outcome Investments®, announced the launch of the Cboe Vest 10-Year Interest Rate Hedge ETF (RYSE). RYSE, which listed on Friday, February 3, 2023, is a first-of-its-kind ETF, seeking to generate capital appreciation from an increase in the 10-year interest rate, while providing a defined limit to losses on the downside and a maximum return on the upside.

News for Cboe Vest 10 Year Interest Rate Hedge Etf ETF (RYSE)