Monarch fails to live up to one of the hallmarks of stewardship, manager investment, to help align portfolio manager and shareholder interests. None of the firm’s assets are covered by an invested manager. Open-end and exchange-traded fund fees are a weakness at the firm, contributing negatively to the rating. On average, the firm charges fees on its funds that are in the highest quintile of category peers. With the current market environment of fee compression, this is cause for concern, as investors may flock to alternate asset managers over time to get a better deal. Monarch has faced above-average manager turnover in the past five years. This is a concern, as long-term stability tends to support positive results.
Monarch has a ways to go to become an industry-standard steward, resulting in a Below Average Parent Pillar rating.