Virtus Stone Harbor Emr Mkt Hi Yld BdETF's Average People Pillar and Process Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy benefits from its experienced portfolio management team. This is a positive driver for the strategy's Average People Pillar rating. The fund's assessment garners an Average Process Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Morningstar's evaluation of this fund's process seeks to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. Virtus Stone Harbor Emr Mkt Hi Yld BdETF earns an Average Process Pillar rating.    The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 53%. 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 size of the portfolio management team also supports the process. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the parent firm's five-year retention rate of 64%, which suggests it could do more to hold onto its portfolio managers.

 The investment strategy as stated in the fund's prospectus is as follows: 


The investment seeks current income and, secondarily, capital appreciation.  Under normal market conditions, the fund will invest not less than 80% of its net assets (plus the amount of any borrowings for investment purposes) in high yield bonds that are economically tied to emerging market countries, and and in derivatives and other instruments that have economic characteristics similar to such investments. It is non-diversified.

 This strategy's 12-month yield is 8.3%, higher than its average peer's 5.9%. Plus, its 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return) sits at 8.0%. Higher yields tend to indicate higher credit risk.

Average

Process

Virtus Stone Harbor Emr Mkt Hi Yld BdETF earns an Average People Pillar rating. The main contributor to the rating is the size of its portfolio management team. With four portfolio managers at the helm, the fund is reasonably well-resourced. A low cost, with fees that rank in its category's least costly fifth, also bolsters the rating. Fees detract from net returns, so the managers have a lower expense hurdle to overcome. Lastly, the rating is limited by the parent firm's five-year retention rate of 64%, which suggests it could do more to retain its portfolio managers.


James E. Craige’s veteran status, with over 25 years of listed portfolio management experience, brings a wealth of experience to the table. The average Morningstar Rating of the strategies they currently manage is 3.2 stars, reflecting average risk-adjusted performance relative to category peers. None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

People

As Virtus Investment Partners evolves its investment affiliate roster and fund lineup, it retains an Average Parent rating.
The publicly traded firm uses a multimanager approach. It fully owns all but one of its 14 affiliated asset managers and also uses subadvisors. Since 2020, it purchased six affiliates, expanding its alternative offerings through its 2021 Westchester Capital Management acquisition and its 2023 purchase of AlphaSimplex. In 2022, Virtus combined its three fixed-income affiliates—Newfleet, Stone Harbor, and Seix—into one legal entity, Virtus Fixed Income Affiliates, though each affiliate maintains its brand and continues to manage money independently.
Virtus has also made some changes to its investment lineup. Voya became a meaningful subadvisor for Virtus, after Voya bought the US business from Allianz Global Investors, which was banned by the SEC from running registered funds in the US for 10 years. Virtus maintained some of the portfolio management teams that moved to Voya but hired affiliates for most of the 17 mandates that AGI ran. More recently, Virtus announced in November 2023 it was moving on from longtime subadvisor Vontobel in favor of affiliate Sustainable Growth Advisors.
Virtus offers distribution and back-office strength, while allowing affiliates investment autonomy. Some managers are strong, such as equity specialist Kayne Anderson Rudnick.

Parent

Virtus Stone Harbor Emerging Markets High Yield Bond ETF

VEMY is an actively managed, broad portfolio of emerging market high yield debt securities. The fund seeks current income and secondarily, capital appreciation.

Virtus Investment Partners

VEMY, first ETF from Stone Harbor, invests in high yield sovereign and corporate debt sectors HARTFORD, Conn. , Dec. 19, 2022 /PRNewswire/ -- Stone Harbor Investment Partners, an affiliated manager of Virtus Investment Partners, Inc. (NASDAQ: VRTS) and Virtus ETF Solutions  have introduced the Virtus Stone Harbor Emerging Markets High Yield Bond ETF (NYSE: VEMY), the first actively managed ETF focused on emerging markets high yield debt.

News for Virtus Stone Harbor Emerging Markets High Yield Bond ETF ETF (VEMY)