The combination of an Average People Pillar rating and a Below Average Process Pillar rating limit  Motley Fool Global Opportunities ETF to a Morningstar Medalist Rating of Negative.  The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 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 underweight position in quality exposure and liquidity exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And a low liquidity exposure is rooted in stocks with lower trading volumes, limiting managers' flexibility. The management team invests alongside the strategy's shareholders, which helps it earn an Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like overall reasonable fees and a commendable risk-adjusted track record. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Amazon

ICON

Watsco

Axon Enterprise

Mastercard

Waste Connections

Alphabet

Canadian National Railway Company

Costco

salesforce.com

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. Motley Fool Global Opportunities ETF earns a Below Average Process Pillar rating. 

The process benefits from the size of its portfolio management team. With four portfolio managers at the helm, the fund is reasonably well-resourced. However, the rating is held back by the parent firm's five-year retention rate of 71%, which suggests it could do more to retain its portfolio managers. The parent firm's five-year risk-adjusted success ratio of 25% also holds the process back. 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's subpar success ratio suggests that the firm could do better across its fund lineup.

 This strategy tends to pick smaller market-cap firms compared with the average fund in its peer group, the Global Large-Stock Growth Morningstar Category.  But in terms of investment style, it is on par with peers. Analyzing additional factors, this strategy tilts consistently toward stocks with lower quality or the shares of companies with more financial leverage and lower profitability, compared with Morningstar Category peers over the past few years. Lacking this ballast, the fund's prospects could rest on its ability to beat peers during economic booms. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. Given the low trading volume of holdings, this strategy also has higher liquidity risk exposure in these years, consistently over its peers. 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. Similarly, in recent months, the strategy also had less exposure to the Liquidity factor than peers. Additionally, the strategy has demonstrated a contrarian approach with relatively low exposure to momentum stocks during these years. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. In recent months, the strategy also had less Momentum factor exposure than 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 industrials and real estate relative to the category average by 17.7 and 9.3 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 22.3 and 4.7 percentage points of assets, respectively. The portfolio is composed of 41 holdings and is quite concentrated. In particular, 44.7% of the portfolio's assets are housed within the top 10 holdings, versus the category average of 32.1%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 4% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Below Average

Process

Motley Fool Global Opportunities ETF earns an Average People Pillar rating. The largest contributor to the rating is the portfolio managers' outperformance of peers at the funds they run, as measured by their combined three-year manager excess returns. The size of the portfolio management team also supports the rating. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the rating is limited by the turnover of talent across its parent firm. The firm's asset-weighted manager tenure of seven years suggests it could do more to retain portfolio managers.


The team is backed by Anthony L. Arsta, the longest-tenured manager on the strategy, who brings 14 years of listed portfolio management experience. The average Morningstar Rating of the strategies they manage is 3.3 stars, demonstrating above-average risk-adjusted performance versus category peers. The highest personal investment in the fund by any of its managers is between $100,000 and $500,000. That's on the low side--it would need to be more than $1 million for us to see the investment as sufficient to promote the strong alignment of their interests with the strategy's investors. The fund has had about average portfolio manager turnover compared to other teams. Long-term stability strengthens a team's rating as it tends to support positive results. However, the most recent documented departure was 10 months ago.

Average

People

In a competitive industry, Motley Fool doesn't differentiate itself enough, leading to an Average Parent Pillar rating. An area of strength is the firm’s favorable fees for open-end and exchange-traded funds, demonstrating a firm-wide commitment to minimizing costs and maximizing investors’ returns. Fees for funds are, on average, within the lowest quintile of similarly distributed strategies. Motley Fool's risk-adjusted performance compares similarly to competitors. Across its open-end and exchange-traded funds, the firm’s average five-year Morningstar Rating is 3.3 stars, which is about standard. The firm has not had a durable product lineup. Specifically, its five-year risk-adjusted success ratio demonstrates that only 25% of products were both able to survive and beat 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

Motley Fool Global Opportunities ETF

TMFG is an actively-managed portfolio of global companies of any size with quality growth characteristics, selected based on qualitative and quantitative factors.

The Motley Fool Global Opportunities ETF had a strong 2023 with a return of 28.1%, outperforming the S&P 500 and MSCI World Index. TMFG is managed to seek out high-quality businesses with healthy balance sheets, high free cash flows, and attractive valuations. The Fund has historically underperformed passive global funds and exhibits greater volatility, making it a less attractive option for global exposure.

TMFG: Boom Bust Global Fund

Motley Fool Mid-Cap Growth ETF

CHADDS FORD, Pa.--(BUSINESS WIRE)--The RBB Fund, Inc (“RBB”), today announced the completion of the Mutual Fund to ETF conversions for two funds advised by Motley Fool Asset Management: The MFAM Global Opportunities Fund (Tickers: FOOLX/FOIIX) converted into the Motley Fool Global Opportunities ETF (Ticker: TMFG) and the MFAM Mid-Cap Growth Fund (Tickers: TMFGX/FOGIX) converted into the Motley Fool Mid-Cap Growth ETF (Ticker: TMFM), at the close of business on December 10, 2021. Together, the f

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