Day Hgn/Nd Dvs Rsch Smt Sct Fxd Inc ETF's Average People Pillar and Process Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The portfolio management team has made an effort to align personal interests with shareholders by investing alongside them. This positively supports the strategy's Average People Pillar rating. The fund earns an Average Process Pillar rating. The strategy's parent firm has some investor-friendly attributes, like high portfolio manager retention, but it is held back by a relatively inexperienced portfolio management team. As a result, the firm gets an Average Parent Pillar rating.

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Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. Day Hgn/Nd Dvs Rsch Smt Sct Fxd Inc ETF earns an Average Process Pillar rating.    The most significant contributor to the rating is the firm's five-year retention rate of 100% over the period. The size of the portfolio management team also strengthens the process. With three portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 0%. 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 parent's subpar success ratio suggests that the firm could do better across its fund lineup.

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


The investment seeks total return, consisting of income and capital appreciation.  The fund is considered a “fund of funds” that, under normal market conditions, seeks to achieve its investment objective by principally investing in unaffiliated fixed income exchange traded funds that invest in fixed income categories. Under normal market conditions, the fund will invest, indirectly through the underlying funds, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, and in fixed income securities and other instruments that have economic characteristics similar to such securities. The fund is non-diversified.

 This strategy has a modest 4.0% 12-month yield, lower than its average peers' 4.9%. Typically, a lower yield comes with the benefit of less credit risk.

Average

Process

Day Hgn/Nd Dvs Rsch Smt Sct Fxd Inc ETF earns an Average People Pillar rating. The main contributor to the rating is the firm's five-year retention rate of 100%. Management team experience, which averages 14 years at this fund, also contributes to the rating. Lastly, the rating is limited by the parent firm's five-year success ratio of 0%. 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 modest success ratio suggests that the firm could do better across its fund lineup.


Portfolio managers have made only a small personal investment in the fund, with the maximum investment by any one manager being between $50,000 and $100,000. That isn't close to being enough to align their interests with those of the strategy's investors.

People

Day Hagan's track record as a steward is mixed, leading to an Average Parent Pillar rating. Portfolio management turnover has been minimal at the firm over the past five years. Long-term stability indicates a strong investment culture. Longest-tenured managers’ average asset-weighted tenure within the firm is ten years, bringing a wealth of knowledge through a complete market cycle and ultimately contributing positively to the rating. Day Hagan strategies have failed to have lengthy success. In particular, the firm's three-year risk-adjusted success ratio demonstrates that only 0% have both survived and beaten their respective category median on a risk-adjusted basis. A low success ratio indicates poor performance and raises questions about a firm’s discipline around investment strategy and product development.

Parent

Day Hagan/Ned Davis Research Smart Sector Fixed Income ETF

SSFI is an actively managed fund-of-funds that uses a proprietary model to allocate exposure to fixed income sectors.

SARASOTA, Fla., Oct. 6, 2021 /PRNewswire/ -- The Day Hagan/Ned Davis Research Smart Sector® Fixed Income ETF (NYSE: SSFI) began trading on the New York Stock Exchange on September 29, 2021.

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