Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. JPMorgan ActiveBuilders Intl Eq ETF earns a High Process Pillar rating.
This strategy tends to hold larger, more value-oriented companies compared with its average peer in the Foreign Large Blend Morningstar Category. Analyzing additional factors, this strategy has exposure to high-momentum stocks. 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. The strategy is also historically more exposed compared with Morningstar Category peers. This strategy has also displayed a tendency to hold more companies with high dividend or buyback yields. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks ever force their underlying businesses to cut their dividends. And compared with category peers, the strategy historically has had more exposure. Additionally, this strategy has an underweight bias to the volatility factor, meaning investing in stocks that have a lower standard deviation of returns. These companies have historically been a valuable ballast to steady portfolio returns during market downturns. The portfolio has less exposure than its Morningstar Category 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 financial services by 3.4 percentage points in terms of assets compared with the average portfolio in the category, and its energy allocation is similar to the category. The sectors with low exposure compared to their category peers are consumer cyclical and real estate; however, the allocations are similar to the average category portfolio. The portfolio is positioned across 315 holdings and is quite concentrated. More concretely, 20.7% of the portfolio's assets are housed within the top 10 holdings, compared to the category average of 13.9%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 28% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.