Fees on the firm's open-end and exchange-traded funds are a weakness, contributing negatively to the rating and creating a larger performance hurdle on funds. On average, Redwood Asset charges fees on its funds that are in the second most-expensive quintile of similarly distributed funds. With the current market environment of fee compression, this is cause for concern, as investors may flock over time to alternate asset managers to get a better deal. With an average asset-weighted tenure of seven years among the longest-tenured managers at Redwood Asset, the firm is on par with peers. Seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions. Despite other redeeming qualities as a firm, Redwood Asset 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.
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