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, VELA Funds 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. Only three years of average asset-weighted tenure among VELA Funds's longest-tenured managers gives us pause. In isolation, seasoned teams tend to have more experience to draw upon should they need to navigate turbulent market conditions. Turnover among VELA Funds portfolio management ranks has been low compared to other firms since the firm's inception. This stability on the personnel front boosts confidence in its staying power.
Category
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