The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  UPAR Ultra Risk Parity ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The longest-tenured manager has a wealth of experience, but due to other weaknesses, the strategy earns a Below Average People Pillar. The strategy gets an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight the Europe-Developed region and has a significant underweight in developed markets regions compared with category peers. The strategy's parent firm has some investor-friendly attributes, like continuity among portfolio managers, but it is held back by an unfavorable lineup success ratio. As a result, the firm gets an Average Parent Pillar rating.

Analyst Rating

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Corteva Inc

Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. UPAR Ultra Risk Parity ETF earns an Average Process Pillar rating. The main contributor to the rating is the firm's five-year retention rate of 100% over the period. The process is limited by its relatively concentrated portfolio, with its top 10 holdings accounting for 107% of assets. Concentration can lead to outperformance, but it amplifies the risk of a blowup.

 Its equity sleeve is consistently tilted toward both smaller market-cap and value-oriented companies as opposed to the category average. The strategy has three region or sector biases compared to category peers. The most noteworthy bias is a consistent overweight in the Developed Europe region. It also maintains an underweight bias to developed markets regions. And finally, the portfolio has a consistent and large overweight in the basic materials sector. 

 The portfolio is overweight in basic materials and energy relative to the category average by 16.2 and 12.2 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 8.9 and 7.3 percentage points of assets, respectively. The portfolio is overweight in Emerging Asia and Australasia regions relative to the category average by 9.1 percentage points and 4.7 percentage points, respectively. The regions with low exposure compared to their category peers are North America and Emerging Europe, with North America underweight the average by 31.8 percentage points and Emerging Europe similar to the average.

Average

Process

UPAR Ultra Risk Parity ETF earns a Below Average People Pillar rating. The team benefits from the firm's five-year retention rate of 100%. However, the rating is held back by the managers' failure to consistently outperform peers at the funds they run, as measured by their combined three-year manager excess returns. The number of months that the management team has been running this vehicle together also holds the rating back.


Michael J. Venuto, the longest-tenured manager on the strategy, boasts 11 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.5 stars, demonstrating underwhelming risk-adjusted performance. Michael J. Venuto has an experienced listed co-manager. Together, they average 11 years of listed portfolio management experience.

Below Average

People

In a competitive industry, Evoke doesn't differentiate itself enough, leading to an Average Parent Pillar rating. Portfolio management turnover has been minimal at the firm since the firm's inception. Long-term stability indicates a strong investment culture. The firm's lineup has had discouraging initial results. Its three-year success ratio is 0%, indicating that of the strategies with a three-year track record, 0% have both survived and beaten their respective category median. A low success ratio not only indicates weak performance but also provides insight into a firm’s discipline around investment strategy and product development. The Evoke roster of open-end and exchange-traded funds has had below-average risk-adjusted performance, as seen in its average three-year Morningstar Rating of 1.0 stars.

Parent

UPAR Ultra Risk Parity ETF

UPAR is actively managed to provide leveraged exposure to an index that allocates to four major asset classes: global equities, US Treasurys, commodities and TIPS based on risk parity.

On Tuesday, Toroso Asset Management launched the UPAR Ultra Risk Parity ETF (UPAR), expanding its line-up of risk parity ETFs with a new product aimed at investors looking for more upside. The new actively managed ETF is designed to provide leverage of 160–180% to a risk-balanced portfolio.

News for UPAR Ultra Risk Parity ETF ETF (UPAR)