JPMorgan Global Select Equity ETF JGLO

The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.

The management team's considerable industry experience drives an Above Average People Pillar rating for the strategy. The strategy's investment approach stands out and earns an Above Average Process Pillar rating. Momentum exposure is attributed to holding stocks currently on a winning streak and selling those that are on a downtrend. And a high quality exposure is rooted in holding stocks that are consistently profitable, growing, and have solid balance sheets. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Jpmorgan Global Select Equity ETF earns an Above Average Process Pillar rating.

The most important driver of the rating is the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The parent firm's five-year risk-adjusted success ratio of 56% also influences the rating. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Their respectable success ratio suggests that the firm does well for investors and that this fund may benefit from that. Lastly, the process is limited by the number of months that the management team has been running this vehicle together.

This strategy tends to hold larger, more growth-oriented companies than its average peer in the Global Large-Stock Blend Morningstar Category. Looking at additional factor exposure, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. This strategy also has had a defensive tilt, with exposure to higher-quality stocks compared with peers in recent years. This means that the fund holds companies that are profitable, growing, and have solid balance sheets. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. In addition, the portfolio has tended to underweight yield, as shown in its lower exposure to companies that pay dividends or buy back shares than peers over these years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide consistent income payments, they may cut payouts if their earnings decline. In recent months, the strategy also had less Yield factor exposure than its peers. 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 technology and consumer cyclical relative to the category average by 6.9 and 4.3 percentage points, respectively. The sectors with low exposure compared to category peers are industrials and communication services, underweight the average by 6.9 and 4.0 percentage points of assets, respectively. The strategy owns 80 securities and is relatively concentrated. Specifically, 38.8% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 25.7% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 28% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

The most significant contributor to the rating is its parent firm's five-year success ratio of 56%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The portfolio managers' outperformance at the funds they run, as measured by their combined three-year manager excess returns, also influences the rating. Lastly, the rating is limited because none of the managers have invested more than$ 1 million in the fund.

Helge Skibeli, the longest-tenured manager on the strategy, provides strong guidance, bringing forward 19 years of listed portfolio management experience. The average Morningstar Rating of the strategies they manage is 4.9 stars, demonstrating stellar risk-adjusted performance. Helge Skibeli has an experienced listed co-manager. Together, they average 13 years of listed portfolio management experience.

As of 2022, this investment stalwart manages more than USD 2.5 trillion in AUM. Composed of various global cohorts and diverse asset classes, the firm has more tightly integrated its capabilities in recent years, notably through the development of proprietary analytical and risk systems. Investment teams are robustly staffed and helmed by seasoned contributors. The firm’s strategies tend to produce reliable portfolios, and several flagship offerings are Morningstar Medalists. Manager incentives align with fundholders'; compensation reflects longer-term performance factors, and portfolio managers invest in the firm’s strategies as part of their compensation plans.

The firm’s funds tend to be well-priced, but they aren’t as competitive as many highly regarded peers of similar scale. Recent product launches include thematic and single-country strategies, both of which carry the potential for volatile performance and flows, along with misuse by investors. The firm remains intrepid when it comes to developing an environmental, social, and governance-focused framework and continues to move into other areas such as direct indexing through its 55iP acquisition and China through its joint venture, but these complicated initiatives take time to assess any real and lasting effect.

However, its track record is too short to draw a meaningful conclusion. In the past six months, this share class has returned 25.5%, compared with the 20.1% return of the category benchmark, the MSCI ACWI Index, for the same period. During that time, it also outperformed the category average's 18.2% return for the period.

It is good practice to weigh them heavily in any investment evaluation. This share class is within the cheapest quintile of its Morningstar Category. Its affordable fee, considered jointly with the fund’s People, Process, and Parent Pillars, suggests that this share class should be able to deliver positive alpha relative to its category benchmark, explaining its Morningstar Medalist Rating of Silver.