Segall Bryant & Hamill Select Equity ETF's Average Process Pillar and People Pillar ratings result in a Morningstar Medalist Rating of Neutral. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in momentum exposure and quality exposure compared with category peers. Momentum exposure is attributed to holding stocks currently on a winning streak and selling those that are on a downtrend. And a high quality exposure is rooted in holding stocks that are consistently profitable, growing, and have solid balance sheets. The strategy's industry-standard management team still needs to prove it has a competitive advantage and earns an Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like a commendable risk-adjusted track record and a favorable lineup success ratio. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Microsoft

Alphabet

Reinsurance Group of America

Quanta Services

Visa

UnitedHealth Group

Ares Management

Palo Alto Networks

JPMorgan Chase & Co

ServiceNow

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. Segall Bryant & Hamill Select Equity ETF earns an Average Process Pillar rating. 

The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 63%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent firm's impressive risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also contributes to the process. Lastly, the process is limited by the small size of its portfolio management team of one.

 This strategy leans toward smaller, higher-growth companies than its average peer in the Large Blend Morningstar Category. Analyzing additional factors, this strategy has continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last few years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. 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 exhibited a tendency to hold fewer stocks with high dividend or buyback yields over peers in recent years. Its preference for stocks with lower yields may well lead to a growthier portfolio. However, growth stocks court additional risks if their forecasts do not come to fruition and are often more volatile than companies with stable dividends. In recent months, the strategy also had less Yield 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 financial services and healthcare relative to the category average by 11.3 and 4.9 percentage points, respectively. The sectors with low exposure compared to category peers are technology and energy, underweight the average by 6.1 and 3.9 percentage points of assets, respectively. The strategy owns 21 securities and is relatively top-heavy. Of the strategy's assets, 60.3% are concentrated within the top 10 holdings, compared to the typical peer's 49.5%. And in closing, in terms of portfolio turnover, this fund trades less frequently than the category’s average, potentially limiting costs to investors.

Average

Process

Segall Bryant & Hamill Select Equity ETF earns an Average People Pillar rating. The most important factor influencing the rating is its parent firm's five-year success ratio of 59%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. A reasonable expense ratio also improves the rating, with fees ranking in its category's middle quintile. Lastly, the rating is limited by the parent firm's five-year retention rate of 66%, which suggests it could do more to retain its portfolio managers.

People

Segall Bryant & Hamill is an industry-standard asset manager, resulting in an Average Parent Pillar rating. The firm's risk-adjusted performance compares similarly to competitors. Across its open-end and exchange-traded funds, the firm's average 10-year Morningstar Rating is 3.3 stars. The product lineup at Segall Bryant & Hamill has exhibited exemplary durability compared with peer asset managers when looked at over the past five years. Notably, its five-year risk-adjusted success ratio stands at 63%, meaning that 63% of its products have both survived and beaten their respective category median on a risk-adjusted basis. Despite other redeeming qualities as a firm, Segall Bryant & Hamill has seen some disruption among its portfolio management ranks in the past five years, denoted by elevated turnover compared to peer asset-management firms. Long-term stability tends to support positive results.

Parent

Segall Bryant & Hamill Select Equity ETF

USSE is an actively managed fund that seeks long-term capital appreciation by investing in US companies of any size. Investments are managed based on quantitative analysis, fundamental research, and ESG practices, selecting companies believed to have the potential for superior returns.

Segall Bryant & Hamill Asset Management has launched the actively managed Segall Bryant & Hamill Select Equity ETF (NYSE Arca: USSE). The fund targets companies believed to have superior growth potential that are trading at a discount to their intrinsic value.

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