V-Shares US Leadership Diversity ETF retains its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's effective investment philosophy supports 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 volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The team managing this passive strategy earns a Below Average People Pillar rating. The strategy belongs to a strong firm that earns an Above Average Parent Pillar rating. The firm, for example, has had overall affordable fees and high portfolio management retention.

Analyst Rating

Apple

Microsoft

NVIDIA

Alphabet

UnitedHealth Group

Eli Lilly

Johnson & Johnson

Visa

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. V-Shares US Leadership Diversity ETF earns an Above Average Process Pillar rating. The main driver of the rating is that this fund tracks an index. Historical data, like 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 bolsters the rating. Lastly, the process is limited by the size of its portfolio management team, only two portfolio managers.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results of the ISS ESG U.S. Diversity Index which is composed of U.S. large, mid, and small capitalization stocks of companies exhibiting broad ethnic.  The index is a free float-adjusted market capitalization weighted equity index designed to reflect the equity performance of U.S. companies exhibit broad ethnic and gender representation for Directors and Named Executive Officers (NEO), and as determined by the index provider. The fund seeks to track the investment results of the index before fees and expenses of it. 

 The portfolio is overweight in technology and communication services relative to the category average by 8.9 and 2.7 percentage points, respectively. The sectors with low exposure compared to category peers are consumer cyclical and industrials, underweight the average by 3.3 and 3.2 percentage points of assets, respectively. The portfolio is composed of 608 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 36.7% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category average's 50.3%. And in closing, in terms of portfolio turnover, this fund trades less frequently than the category’s average, potentially limiting costs to investors.

Above Average

Process

V-Shares’s team remains inferior, compared with better-resourced rivals, resulting in a Below Average People Pillar rating. There are two managers listed on the fund: Austin Wen, Rafael Zayas. The team is well equipped, with an average of 10 years of portfolio management experience. Together, they manage a total of nine strategies, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.

Below Average

People

Even though V-Shares has only existed for one year, it stacks up against more-senior asset managers. As a result, it earns an Above Average Parent Pillar rating. V-Shares currently oversees two vehicles, with a total of $4.0 million under management and a roster of two fund managers. As a small group, this management team is quite accomplished with about 11 years of average total industry experience.  

 A pocket of strength is the firm’s inexpensive fees on its open-end and exchange-traded funds, demonstrating a firmwide commitment to minimizing costs and maximizing investors’ returns. The average net expense ratio of its funds is within the cheapest quintile of firms.  

 To retain a positive rating, V-Shares will be expected to uphold a consistent track record of positive investor experience.

Parent

V-Shares US Leadership Diversity ETF

VDNI is passively managed to track an index investing in all-cap equities of US companies that exhibit broad ethnic and gender representation in their Directors and Named Executive Officers.

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