The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  Timothy Plan US Large/Mid Cap Core ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy’s management team earns a Below Average People Pillar rating. The People Pillar rating is indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following the pillar section for more details. The strategy merits an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a substantial underweight position in liquidity exposure and has a substantial overweight in quality exposure compared with category peers. Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' flexibility. And a high quality exposure is rooted in holding stocks that are consistently profitable, growing, and have solid balance sheets. To be considered a quality steward, this strategy's parent organization needs to improve factors like a lack of inside investments from portfolio managers and a pricey fund lineup. As a result, the firm obtains a Low Parent Pillar rating.

Analyst Rating

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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. Timothy Plan US Large/Mid Cap Core ETF earns an Average Process Pillar rating. 

The predominant contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. A low expense ratio also contributes to the process, with costs ranking in its category's second-cheapest fifth. Expenses reduce net returns and are one of the most reliable predictors of future performance. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 30%. 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 relatively low success ratio suggests that the firm could do better across its fund lineup.

 This strategy tends to hold larger, more growth-oriented companies compared with its average peer in the Mid-Cap Blend Morningstar Category. Analyzing additional factors, 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. This strategy also has had a position favoring high-quality stocks in recent years, which could contribute to higher downside risk protection. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. In addition, this strategy has an underweight bias to the volatility factor, meaning investing in stocks that have a lower standard deviation of returns. These companies have historically been a valuable ballast to steady portfolio returns during market downturns. In recent months, the strategy also had less Volatility 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 utilities relative to the category average by 5.3 and 5.0 percentage points, respectively. The sectors with low exposure compared to category peers are real estate and financial services, underweight the average by 5.9 and 5.0 percentage points of assets, respectively. The portfolio is positioned across 295 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 5.6% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category average's 15.4%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 30% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Average

Process

Timothy Plan’s team could be improved and displays a disappointing track record, resulting in a Below Average People Pillar rating. There are two managers listed on the fund: Mannik Dhillon, Free Foutz. Together, they manage a total of 10 strategies, with a Bronze asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

Below Average

People

Timothy Plan fails to meet industry-standard stewardship qualities, culminating in a Low Parent Pillar rating. Timothy Plan fails to live up to one of the hallmarks of stewardship, manager investment, to help align portfolio manager and shareholder interests. None of the firm’s assets are covered by an invested manager. Open-end and exchange-traded fund fees are a weakness at the firm, contributing negatively to the rating. On average, the firm charges fees on its funds that are in the second most-expensive quintile of category peers. With the current market environment of fee compression, this is cause for concern, as investors may flock to alternate asset managers over time to get a better deal. A sign of strength at Timothy Plan is its longest-tenured management, which boasts an average tenure of 10 years at the firm. This accumulation of experience builds confidence that the group can navigate a variety of market environments adeptly.

Parent

Timothy Plan US Large/Mid Cap Core ETF

TPLC tracks a volatility-weighted index of US large-cap stocks screened for Christian values.

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News for Timothy Plan US Large/Mid Cap Core ETF ETF (TPLC)