Weakness in WBI BullBear Value 3000 ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. Fees are a weakness here. The strategy's lofty fees are a high hurdle to clear, as it is priced within the highest quintile among peers.  

 The team has personal investments in the strategy, but other weaknesses drive the strategy's Below Average People Pillar. The strategy gets a Below Average Process Pillar rating.  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 strategy's parent organization doesn't stand out, earning the firm an Average Parent Pillar rating, the result of a recent upgrade from Below Average. It has displayed a handful of investor-friendly attributes including low portfolio manager turnover but is held back by a low success ratio across its lineup.

Analyst Rating

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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. WBI BullBear Value 3000 ETF earns a Below Average Process Pillar rating. 

The process benefits from the continuity of management across its parent firm. The firm's asset-weighted manager tenure of 18 years demonstrates its ability to retain portfolio managers. However, the rating is weakened by the fund's unimpressive long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year risk-adjusted success ratio of 0% also weakens the process. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

 This strategy skews toward smaller, higher-growth companies than its average peer in the Large Value Morningstar Category. Looking at additional factor exposure, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy also has had an overweight bias to the volatility factor over these years, meaning it has owned companies that have a higher historical standard deviation of returns. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. In addition, this strategy has taken on exposure to high-momentum stocks in these years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. In this month, the strategy also had more exposure to the Momentum factor over 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 energy and consumer cyclical relative to the category average by 10.1 and 3.9 percentage points, respectively. The sectors with low exposure compared to category peers are healthcare and utilities, underweight the average by 14.8 and 4.8 percentage points of assets, respectively. The strategy owns 34 securities and is relatively top-heavy. Of the strategy's assets, 49.7% are concentrated within the top 10 holdings, as opposed to the typical peer's 27.4%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, more than 400% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Below Average

Process

WBI BullBear Value 3000 ETF earns a Below Average People Pillar rating. The team is supported by the stability of the management team. Specifically, the fund has not seen a manager change in the last five years. However, the rating is limited by the parent firm's five-year success ratio of 0%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup. The managers' failure to consistently outperform peers at the funds they run, as measured by their combined three-year manager excess returns, also limits the team.


Donald R. Schreiber’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 1.5 stars, reflecting below-average risk-adjusted performance compared to category peers. Donald R. Schreiber has an experienced listed co-manager. Together, they average 18 years of listed portfolio management experience.

People

In a competitive industry, WBI doesn't differentiate itself enough, leading to an Average Parent Pillar rating. The firm has proven successful at holding onto portfolio management talent, providing continuity for strategies, as displayed by low turnover in the past five years compared with asset management peers. WBI fails to showcase longevity across its product shelf, as evidenced by its three-year risk-adjusted success ratio. Over this time period, only 25% of its roster has been able to both survive and beat its respective category median on a risk-adjusted basis. A low success ratio indicates poor performance and raises questions about a firm’s discipline around investment strategy and product development. The WBI roster of open-end and exchange-traded funds has had below-average risk-adjusted performance, as evidenced by its average three-year Morningstar Rating of 2.0 stars.

Average

Parent

WBI BullBear Value 3000 ETF

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