An incline in its Process Pillar rating is the primary driver of Syntax Stratified US Ttl Mkt Hgd ETF's upgrade to a Morningstar Medalist Rating of Bronze from Neutral. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile. The strategy changed its peer group last March, moving from the Large Blend category to the Mid-Cap Blend Morningstar Category. 

 The strategy's effective investment philosophy supports an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in liquidity exposure and volatility exposure compared with category peers. Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' flexibility. And low volatility exposure is rooted in stocks that have a lower standard deviation of returns. This management team has a wealth of experience, but still gets an Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like a competitive lineup success ratio and a strong risk-adjusted track record. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Syntax ETF Trust - Syntax Stratified LargeCap ETF

Syntax Stratified SmallCap ETF

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Syntax Stratified US Ttl Mkt Hgd ETF earns an Above Average Process Pillar rating. 

The leading factor in 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 outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The size of the portfolio management team also bolsters the rating. With five portfolio managers, the fund is well-staffed. Lastly, the process is limited by the turnover of talent across its parent firm. The firm's asset-weighted manager tenure of four years suggests it could do more to retain portfolio managers.

 This strategy tends to hold larger, deeper value companies compared with its average peer in the Mid-Cap Blend Morningstar Category. Examining additional factor exposure, this strategy consistently held some companies with relatively lower trading volume compared with Morningstar Category peers in the last few years. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. In the latest month, the strategy was also less exposed to the Liquidity factor compared with Morningstar Category peers. The managers have also shown an underweight risk tilt, demonstrated by lower volatility exposure over peers in recent years. These companies have historically been a valuable ballast to steady portfolio returns during market downturns. Similarly, in recent months, the strategy also had less exposure to the Volatility factor than peers. Additionally, this strategy's portfolio has held more stocks with high dividend or buyback yields than peers over recent years. Stocks with high yields can be more stable, mature companies, but at times extreme market pressure or fundamental deterioration may prompt them to cut their dividends, which tends to hurt stock performance. In this month, the strategy also had more exposure to the Yield 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 consumer defensive and communication services relative to the category average by 7.8 and 3.8 percentage points, respectively. The sectors with low exposure compared to category peers are industrials and financial services, underweight the average by 9.0 and 3.8 percentage points of assets, respectively. The strategy has only reported a handful of holdings, and is in a category where the typical fund has approximately 15.4% of assets concentrated in the top 10 holdings. And finally, in terms of portfolio turnover, on a year-over-year basis, 12% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

Syntax Stratified US Ttl Mkt Hgd ETF earns an Average People Pillar rating. The parent firm's five-year success ratio of 100% supports the rating. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. Their respectable success ratio suggests that the firm does well for investors and that this fund may benefit from that. The rating is limited by the combined average five-year excess return of each manager, which suggests that the funds they manage have trailed their respective category average.


Randy Swan’s veteran status, with over 25 years of listed portfolio management experience, brings a wealth of experience to the table.  Randy Swan is supported by an experienced team, being able to draw on four additional listed managers, who average 15 years of listed portfolio management experience.

Average

People

Syntax has some investor-friendly attributes, but other attributes warrant caution, leading to an Average Parent Pillar rating. Even with an average pillar rating, Syntax has had impressive longevity among its product shelf. The firm's success ratio is 100%, meaning that 100% of its strategies have both survived and beaten their respective category median. A high success ratio indicates good performance and provides insight into a firm’s discipline around investment strategy and product development. Syntax has served investors well through its very competitive risk-adjusted performance, with an average five-year Morningstar Rating of 4.0 stars across its open-end and exchange-traded funds. Syntax's longest-tenured managers do not possess comparable experience as teams at other firms, a cause for concern. Specifically, average tenure within the firm is four years. As such, there is less confidence in the group's ability to manage capital through a full market cycle effectively.

Parent

Syntax Stratified US Total Market Hedged ETF

SHUS aims to provide capital growth from an actively managed fund of funds portfolio composed of three stratified-weight US ETFs, while seeking to reduce market risk through a defined risk hedging process.

NEW YORK--(BUSINESS WIRE)---- $SHUS--Syntax Advisors LLC, an ETF sponsor and investment advisor (NYSE Arca: SSPY, SMDY, SSLY, SYUS, SHUS), announced today the appointment of Carly Arison to serve as President and Chief Operating Officer. “Carly has played a key role in the development and growth of Syntax and its predecessor companies for nearly a decade,” said Rory Riggs, Syntax's CEO and founder. “With recent and anticipated launches of new ETFs and product offerings that leverage our unique technology

News for Syntax Stratified US Total Market Hedged ETF ETF (SHUS)