JPMorgan BetaBuilders Dev APAC ex-JpnETF earns a High Process Pillar rating.
The largest contributor to the rating is that this fund tracks 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. Respectable risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process was successful over that period. The parent firm's five-year risk-adjusted success ratio of 56% supports 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. Their commendable success ratio suggests that this firm does well for investors and that this fund may benefit from that.
The investment strategy as stated in the fund's prospectus is:
The investment seeks investment results that closely correspond, before fees and expenses, to the performance of the Morningstar® Developed Asia Pacific ex-Japan Target Market Exposure IndexSM. The fund will invest at least 80% of its assets in securities included in the underlying index. The underlying index targets 85% of the stocks traded on the primary exchanges in each country or region by market capitalization, and and primarily includes large-and mid-cap companies.
The portfolio is overweight in financial services and basic materials relative to the category average by 13.6 and 10.2 percentage points, respectively. The sectors with low exposure compared to category peers are technology and consumer cyclical, underweight the average by 22.7 and 9.1 percentage points of assets, respectively. The portfolio is composed of 122 holdings and is quite concentrated. Specifically, 44.6% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 29.4% average. And in closing, in terms of portfolio turnover, on a year-over-year basis, 6% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.