THOR Low Volatility ETF retains its Morningstar Medalist Rating of Bronze. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The team managing this passive strategy earns a Below Average People Pillar rating. The strategy's parent organization doesn't stand out, earning the firm an Average Parent Pillar rating. It has displayed a handful of investor-friendly attributes including modest portfolio manager turnover and overall low fees.

Analyst Rating

Utilities Select Sector SPDR Fund

Materials Select Sector SPDR Fund

Consumer Staples Select Sector SPDR Fund

Industrial Select Sector SPDR Fund

Health Care Select Sector SPDR Fund

Financial Select Sector SPDR Fund

Energy Select Sector SPDR Fund

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. Thor Low Volatility ETF earns an Above Average Process Pillar rating. 

The predominant contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 100% also supports the rating. Lastly, the process is limited by the experience of the management team, which averages two years at this fund.

 This strategy skews toward smaller, more value-oriented companies compared with its average peer in the Large Blend Morningstar Category. Looking at additional factor exposure, the fund has held stocks with higher trading volumes compared to Morningstar Category Peers in the past 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 has also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, the managers have tended to overweight yield, shown by the portfolio's high exposure to stocks paying dividends or buying back shares. Higher-yield stocks can provide steady income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. 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 utilities and real estate relative to the category average by 8.4 and 7.7 percentage points, respectively. The sectors with low exposure compared to category peers are technology and communication services, underweight the average by 17.5 and 8.2 percentage points of assets, respectively. The portfolio is positioned across 11 holdings and is relatively concentrated. In particular, 98.6% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 49.5% average. And in closing, in terms of portfolio turnover, this portfolio trades more frequently than the average peer in its category, which may result in higher trading costs for investors and cause a drag on performance.

Above Average

Process

THOR’s team 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. The number of months that the management team has been running this vehicle together also holds the rating back. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.

Below Average

People

Since its inception only one year ago, THOR has demonstrated that it can be trusted as much as the next asset manager. As a result, it has an Average Parent Pillar rating. THOR currently runs one vehicle, with a total of $50.2 million under management and a bench of two portfolio managers. As a consequence of being a young firm, the management team is unseasoned. The small group has an average of two years of industry experience.  

 A pocket of strength is the firm’s below-average fees on its open-end and exchange-traded funds, demonstrating a firmwide commitment to minimizing costs and maximizing investors’ returns. The average net expense ratio of its funds is within the second-cheapest quintile of firms.  

 To keep an Average rating, THOR will be expected to uphold a consistent track record of positive investor experience.

Average

Parent

THOR Low Volatility ETF

THLV aims to provide a low volatility US large-cap equity strategy. The fund tracks an index that selects sectors based on price momentum and historical volatility and equally weights exposure.

According to THOR Financial Technologies' chief investment officer Brad Roth, the problem with most traditional low-volatility funds is that they experience “the full brunt and force of a market drawdown” during “periods of market stress.

NYSE's ETF Leaders: THOR Financial Technologies' Brad Roth

GREENSBURG, Pa. , Sept. 13, 2022 /PRNewswire/ -- THOR Financial Technologies ("THOR") today announced the launch of its first exchange-traded fund (ETF), THOR Low Volatility (NYSE: THLV), an actively managed low volatility equity strategy on the New York Stock Exchange.

News for THOR Low Volatility ETF ETF (THLV)