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JPMorgan International Growth ETF JIG

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Morningstar’s Analysis JIG

Medalist rating as of .

A strong management team and sound investment process underpin JPMorgan International Growth ETF's Morningstar Medalist Rating of Silver.

Our research team assigns Silver ratings to strategies that they have a high conviction will outperform the relevant index, or most peers, over a market cycle on a risk-adjusted basis.

A strong management team and sound investment process underpin JPMorgan International Growth ETF's Morningstar Medalist Rating of Silver.

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Morningstar Manager Research

Summary

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

The strategy’s management team earns an Above Average People Pillar rating. The strategy's sensible investment philosophy earns an Above Average Process Pillar rating. Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' flexibility. 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. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

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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.

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Morningstar Manager Research

Process

Above Average

JPMorgan International Growth ETF earns an Above Average Process Pillar rating.

The most important driver of the rating is the parent firm's five-year risk-adjusted success ratio of 56%. 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. The parent firm's superior risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also bolsters the rating. Lastly, the process is limited by being an actively managed strategy. Historical data, such as Morningstar's Active/Passive Barometer, finds that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

This strategy tends to hold larger, higher-growth companies than its average peer in the Foreign Large Growth Morningstar Category. Looking at additional factor exposure, this strategy consistently held some companies with relatively lower trading volume compared with Morningstar Category peers in the last few years. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. In the latest month, the strategy was also less exposed to the Liquidity factor compared with Morningstar Category peers. 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. Though it may trail peers during an economic boom, this orientation contributes to helping it weather periods of economic stress better. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. Additionally, this strategy has had lower yield exposure than peers, with the portfolio holding fewer stocks with high dividend or buyback yields over these years. This is demonstrated by the portfolio's low exposure to dividends or buybacks. While companies with high yields provide steady income payments, they may cut payouts if their earnings fall. 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 consumer cyclical and technology relative to the category average by 5.6 and 2.5 percentage points, respectively. The sectors with low exposure compared to category peers are healthcare and financial services, underweight the average by 3.5 and 3.3 percentage points of assets, respectively. The portfolio is positioned across 82 holdings and is quite concentrated. Specifically, 31.3% of the fund’s assets are housed within the top 10 holdings, compared to the typical peer's 18.0%. And finally, in terms of portfolio turnover, looking at year-over-year movements, 53% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Rated on Published on

JPMorgan International Growth ETF earns an Above Average People Pillar rating.

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Morningstar Manager Research

People

Above Average

Thomas Murray, the longest-tenured manager on the strategy, boasts over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.1 stars, indicating that their risk-adjusted returns have been in line with the category average. Although the team is small, it is a solid supporting cast. Together, the three listed managers boast more than an average of 18 years of listed portfolio management experience. The highest personal investment in the fund by any of its managers is between$ 100,000 and$ 500,000. That's on the low side--it would need to be more than$ 1 million for us to see the investment as sufficient to promote the strong alignment of their interests with the strategy's investors.

Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

Rated on Published on

A well-resourced, thoughtful, and disciplined steward of client assets, JPMorgan Asset Management maintains an Above Average Parent rating.

Associate Director Emory Zink

Emory Zink

Associate Director

Parent

Above Average

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.

Rated on Published on

This share class has an underwhelming short-term track record.

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Morningstar Manager Research

Performance

Over the past year, it trailed the category index, the MSCI ACWI ex USA Growth Index, by an annualized 77 basis points, and underperformed its average peer by 2.4 percentage points. And more importantly, when looking across a longer horizon, the strategy fell behind the index. On a three-year basis, it underperformed the index by an annualized 2.6 percentage points.

Even when adjusting for risk, the fund is not favorable. The share class had a lower Sharpe ratio, a measure of risk-adjusted returns, than the index over the trailing three-year period. In addition to the poor risk-adjusted performance, the strategy also delivered a bumpy ride for investors with a higher standard deviation of returns, 20.6%, compared with the benchmark, 18.1%. Finally, the share class proved itself ineffective as it was unable to generate alpha, over the same period, against the category group index: a benchmark that encapsulates the performance of the broader asset class.

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It is important to be aware of fees, as lower-cost investments maximize investors' returns.

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Morningstar Manager Research

Price

This share class is in 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 is well-positioned to generate positive alpha against its category benchmark, explaining its Morningstar Medalist Rating of Silver.

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Portfolio Holdings JIG

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 32.3
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

ASML Holding NV

4.43 4.0 Mil
Technology

Tencent Holdings Ltd

4.40 4.0 Mil
Communication Services

Taiwan Semiconductor Manufacturing Co Ltd

3.85 3.5 Mil
Technology

Jpmorgan Prime Moneymarket Fund (Im Share) Fund

3.78 3.4 Mil
Cash and Equivalents

Taiwan Semiconductor Manufacturing Co Ltd ADR

3.69 3.3 Mil
Technology

Novo Nordisk A/S Class B

3.53 3.2 Mil
Healthcare

Nestle SA

2.88 2.6 Mil
Consumer Defensive

Safran SA

2.60 2.4 Mil
Industrials

3i Group Ord

2.43 2.2 Mil
Financial Services

Lvmh Moet Hennessy Louis Vuitton SE

2.29 2.1 Mil
Consumer Cyclical