Weakness in AXS Change Finance ESG ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Neutral. The portfolio maintains a sizable cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The team managing the passive strategy earns a Low 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 a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. To be considered a quality steward, this strategy's parent organization needs to improve factors like portfolio managers with limited tenures at the firm and a pattern of portfolio manager churn. As a result, the firm obtains a Low Parent Pillar rating.

Analyst Rating

Micron Technology

Alphabet

QUALCOMM

Carrier Global

Charles Schwab

Texas Instruments

NVIDIA

Arista Networks

Amgen

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. AXS Change Finance ESG ETF earns a Below Average Process Pillar rating. The process benefits from tracking 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. However, the rating is weakened by the fund's weak 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 26% also holds the rating back. 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's relatively low success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the performance, before fees and expenses, of the Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free Index.  The index measures the performance of an equal-weighted portfolio of approximately 100 large-, mid-capitalization equity securities of U.S.-listed companies. The fund adviser attempts to invest all, or substantially all, of its assets in the component securities that make up the index. The adviser expects that, over time, and the correlation between the fund’s performance and that of the index will be 95% or better. 

 The portfolio is overweight in technology and financial services relative to the category average by 5.4 and 2.6 percentage points, respectively. The sectors with low exposure compared to category peers are energy and consumer cyclical, with energy underweighting the average portfolio by 3.9 percentage points of assets and consumer cyclical similar to the average. The portfolio is positioned across 101 holdings and is diversified among those holdings. In its most recent portfolio, 11.0% of the portfolio's assets were concentrated in the top 10 fund holdings, compared to the category average's 49.5%.

Below Average

Process

AXS’s team receives a Low People Pillar rating. The most meaningful detractor from the rating is its parent firm's subpar risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.5 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The parent firm's five-year retention rate of 48% also holds the team back. The turnover of its management team limits the rating further. Specifically, the fund last had a manager change two years ago.

People

AXS fails to meet industry-standard stewardship qualities, culminating in a Low Parent Pillar rating. Longest-tenured managers have three years of average asset-weighted tenure, which is slim compared with peer firms. In isolation, this doesn't bode well as the current managers have limited experience running strategies. AXS management has lacked continuity over the past five years, denoted by higher-than-average portfolio manager turnover, which detracts from the firm's stewardship rating.

Parent

Axs Change Finance ESG ETF

CHGX tracks an index of 100 US large-cap stocks that meet diverse environmental, social, and governance standards.

ESG criteria are being recognized as a comprehensive framework for evaluating companies beyond financial metrics. The AXS Change Finance ESG ETF (CHGX) employs a rigorous screening process to ensure its portfolio aligns with ethical and responsible investing principles.

CHGX: A Solid Equal Weight ESG Approach

AXS Change Finance ESG ETF is a U.S. large cap blend fund that uses a proprietary ESG methodology to select companies for its portfolio. The fund allows investors to avoid companies engaged in harmful activities and focuses on companies that make a positive global impact. ESG investing is a growing but evolving space, with risks and uncertainties as well as potential payoffs for investors.

CHGX: A Solid U.S. Equity ESG ETF

AXS Green Alpha ETF

The fund is managed by Green Alpha Advisors.

AXS Adds Active Sustainability ETF

AXS Change Finance ESG ETF (CHGX) continues the firm's fast-paced build-out of industry-leading family of non-traditional alternatives and ESG solutions NEW YORK , March 21, 2022 /PRNewswire/ -- AXS Investments, a leading asset manager providing access to alternative and sustainable investments for growth, income and diversification, today announced the acquisition of the industry's first-ever certified carbon-neutral ETF (CHGX), which joins the fast-growing lineup of AXS funds. CHGX has earned a 5-Globe Morningstar Sustainability Rating, the highest possible rating, putting the fund at the top of the list for investors seeking the crème de la crème of ESG and sustainable investment exposures to buttress their portfolios.

AXS Investments Acquires Industry's First-Ever Certified Carbon-Neutral ETF (CHGX) Expanding Its ETF and ESG Lineup

A majority women-run asset management firm, Change Finance, announced in a press release today that the Change Finance US Large Cap Fossil Fuel Free ETF (CHGX) is the first fund to be certified carbon-neutral in the U.S. In addition, Change Finance has also partnered with FinTech platform EthosESG to create a process that allows for [...] The post Change Finance Announces Industry's First Certified Carbon-Neutral ETF appeared first on ETF Trends.

Change Finance Announces Industry's First Certified Carbon-Neutral ETF

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News for Axs Change Finance ESG ETF ETF (CHGX)