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JPMorgan USD Emerging Mkts Svr Bd ETF JPMB

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Morningstar’s Analysis JPMB

Medalist rating as of .

JPMorgan USD Emerging Mkts Svr Bd ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Gold.

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

JPMorgan USD Emerging Mkts Svr Bd ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Gold.

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Morningstar Manager Research

Summary

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

The strategy's investment process inspires confidence and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in AAA rated bonds and an overweight in government bonds compared with category peers. The strategy’s management team earns an Average People Pillar rating. 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.

Rated on Published on

Morningstar's style-agnostic investment process evaluation looks for strategies that should be able to outperform their Morningstar Category index on a risk-adjusted basis over time.

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Morningstar Manager Research

Process

High

JPMorgan USD Emerging Mkts Svr Bd ETF earns a High Process Pillar rating.

The most notable 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. Impressive risk-adjusted performance also supports the rating, as shown by the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk.

Compared with other funds in the Emerging Markets Bond Morningstar Category, this fund, historically, hews closely to peers' credit and interest-rate sensitivity over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Compared with the category average, the managers have been significantly underweight AAA rated bonds in recent years. In the latest month, the strategy has also relatively underweighted AAA rated bonds compared with Morningstar Category peers. Additionally, the fund has exhibited a notable sector bias towards government bonds over the past few years. Compared with category peers, the strategy had more exposure to government bonds in the most recent month. Finally, during the past few years, the fund leaned meaningfully towards debt with 20- to 30-year maturities. In this month, the strategy also leaned more towards debt with 20- to 30-year maturities compared with its peers.

This strategy's 12-month yield is 5.9%, which mirrors its average peer. It also has a 6.0% 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return). The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated BB.

Rated on Published on

JPMorgan’s team is good but unexceptional, earning the strategy an Average People Pillar rating.

null Morningstar Manager Research

Morningstar Manager Research

People

Average

There’s a deep bench of five managers listed on the fund. Though they do not manage other products together, managers may manage them individually. The team has undergone a bout of turnover recently, with Eric Isenberg leaving within the last three months. Even though it is a passive fund, high turnover can still hinder the effectiveness of the investment process.

Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

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 had inconsistent outcomes, requiring closer analysis.

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Morningstar Manager Research

Performance

Over the past three-year period, it trailed the category index, the JPMorgan Emerging Markets Global Diversified Bond Index, by an annualized 42 basis points, and underperformed the category average by 91 basis points. Although more significantly, when extended to a longer time frame, the strategy struggled to separate itself from the pack. On a five-year basis, it matched the index.

However, adjusting for risk unveils the fund in a more complementary light. The share class led the index with a higher Sharpe ratio, a measure of risk-adjusted return, over the trailing five-year period. Notably, these strong risk-adjusted results have not come with more volatility for investors. This strategy took on similar risk as the benchmark, as measured by standard deviation. Finally, the share class proved itself effective by generating positive 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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Fees compound over time and reduce returns, making it critical for investors to minimize expenses.

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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 can deliver positive alpha relative to its category benchmark, explaining its Morningstar Medalist Rating of Gold.

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Portfolio Holdings JPMB

  • Current Portfolio Date
  • Equity Holdings
  • Bond Holdings
  • Other Holdings
  • % Assets in Top 10 Holdings 8.9
Top 10 Holdings
% Portfolio Weight
Market Value USD
Sector

South Africa (Republic of) 4.85%

1.04 6.2 Mil
Government

Brazil (Federative Republic) 4.75%

0.99 5.9 Mil
Government

Brazil (Federative Republic) 3.875%

0.92 5.5 Mil
Government

Nigeria (Federal Republic of) 7.375%

0.90 5.4 Mil
Government

Poland (Republic of) 5.5%

0.87 5.2 Mil
Government

Hazine Mustesarligi Varlik Kiralama Anonim Sirketi 7.25%

0.84 5.0 Mil
Government

Qatar (State of) 4.4%

0.83 5.0 Mil
Government

Dominican Republic 4.5%

0.83 5.0 Mil
Government

Brazil (Federative Republic) 6%

0.82 4.9 Mil
Government

Colombia (Republic of) 7.375%

0.81 4.8 Mil
Government