JPMorgan Active Developing Mkts Eq ETF earns a High Process Pillar rating.
The most important driver of the rating is its parent firm's impressive long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.3 stars. The parent firm's five-year risk-adjusted success ratio of 53% also strengthens 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 compelling success ratio suggests that the firm does well for investors and that this fund may benefit from that. Management team experience, which averages 22 years at this fund, contributes to the process as well.
This strategy leans toward larger, higher-growth companies compared with its average peer in the Diversified Emerging Mkts Morningstar Category. Examining additional factor exposure, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last few years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also had more exposure to high-momentum stocks in recent years. Momentum is based on the premise that market outperformers will continue to outperform, and laggards will continue to lag. This means that managers are overweighting stocks currently on a winning streak. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. This orientation tends to pay off most prominently when markets are hot. Nevertheless, the fund's Volatility exposure was in line with peers in the latest month. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.
The portfolio is overweight in financial services and technology relative to the category average by 8.2 and 4.6 percentage points, respectively. The sectors with low exposure compared to category peers are basic materials and industrials, underweight the average by 4.4 and 3.1 percentage points of assets, respectively. The strategy owns 130 securities and is relatively top-heavy. Of the strategy's assets, 31.4% are concentrated within the top 10 holdings, compared to the typical peer's 29.2%.