JPMorgan Carbon Transition US Eq ETF earns a High Process Pillar rating.
The most significant 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. The parent firm's five-year risk-adjusted success ratio of 57% also bolsters the rating. 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 respectable success ratio suggests that the firm does well for investors and that this fund may benefit from that. The parent firm's excellent risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, influences the rating as well.
The investment strategy as stated in the fund's prospectus is:
The investment seeks investment results that closely correspond, before fees and expenses, and to the performance of the JPMorgan Asset Management Carbon Transition U.S. Equity Index. The fund will invest at least 80% of its assets in securities included in index. The index is designed to capture the performance of companies which have been identified through its rules-based process as better positioned to benefit from a transition to a lower carbon economy while also providing broader U.S. market exposure.
The portfolio is overweight in technology by 4.2 percentage points in terms of assets compared with the category average, and its real estate allocation is similar to the category. The sectors with low exposure compared to category peers are industrials and consumer defensive; however, the allocations are similar to the category. The strategy owns 411 securities and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 29.9% of the portfolio's assets were concentrated in the top 10 fund holdings, compared to the category average's 50.3%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 20% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.