Themes US Cash Flow Champions ETF retains its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 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 quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a high quality exposure is rooted in holding stocks that are consistently profitable, growing, and have solid balance sheets. 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 high portfolio manager retention but is held back by portfolio managers with limited tenures at the firm.

Analyst Rating

Exxon Mobil

Broadcom

Chevron

JPMorgan Chase & Co

AbbVie

Pfizer

ConocoPhillips

American Express

Progressive

Chubb

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Themes US Cash Flow Champions ETF earns an Above Average Process Pillar rating. The main 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. The firm's five-year retention rate of 100% also underpins the rating. Lastly, the process is limited by the experience of the management team, which averages three months at this fund.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the performance, before fees and expenses, of the Solactive U.S. Cash Flow Champions Index.  The index is a free-float adjusted, market capitalization weighted index that is designed to provide exposure to U.S. companies that have a high cash flow yield. The fund will invest, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, and in the securities that comprise the index. The fund is non-diversified. 

 The portfolio is overweight in energy and financial services relative to the category average by 17.8 and 12.5 percentage points, respectively. The sectors with low exposure compared to category peers are industrials and communication services, underweight the average by 11.7 and 5.1 percentage points of assets, respectively. The portfolio is composed of 76 holdings and is quite concentrated. Specifically, 41.8% of the strategy's assets are housed within the top 10 holdings, compared to the category’s 27.4% average.

Above Average

Process

Themes ETF Trust’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 held back by the experience of the management team, which averages three months 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

Even though Themes ETF Trust's limited history of three months as a firm is working against its rating, they've proven to be an industry-standard steward, warranting an Average Parent Pillar rating. The firm currently manages 21 vehicles, with a total of $28.5 million under management across a bench of two strategy managers. As a new firm, there is very low manager industry experience--on average, less than six months. The firm's earliest portfolio manager hire, Dingxun(kevin) Shao, has only one year of industry experience. 
 
   

 As Themes ETF Trust builds and continues to develop a track record, its rating will be adjusted accordingly.

Average

Parent

Themes US Cash Flow Champions ETF

USCF invests in large- and midcap US companies with the highest, positive cash flows over the last 3 years.

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News for Themes US Cash Flow Champions ETF ETF (USCF)